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title-33•Title 33 — Insurance
Official Code of Georgia Annotated — Title 33. Insurance
Snapshot of the Georgia code as mirrored by FindLaw, current as of 2024-03-28.
This title shall be known and may be cited as the “Georgia Insurance Code.”
As used in this title, the term:
(1) “Commissioner of Insurance” or “Commissioner” means the Commissioner of Insurance of the State of Georgia.
(2) “Department of Insurance” or “department” means the Department of Insurance established by Code Section 33-2-1.
(3) “Health benefit policy,” “health benefit plan,” or other similar terms shall not include limited benefit insurance policies designed, advertised, and marketed to supplement major medical insurance such as accident only, CHAMPUS supplement, dental, disability income, fixed indemnity, long-term care, medicare supplement, specified disease, vision, and any other type of accident and sickness insurance other than basic hospital expense, basic medical-surgical expense, or major medical insurance.
(4) “Insurance” means a contract which is an integral part of a plan for distributing individual losses whereby one undertakes to indemnify another or to pay a specified amount or benefits upon determinable contingencies.
(5) “Insurer” means any person engaged as indemnitor, surety, or contractor who issues insurance, annuity or endowment contracts, subscriber certificates, or other contracts of insurance by whatever name called. Burial associations, health care plans, and health maintenance organizations are insurers within the meaning of this title.
(6) “Natural person” means an individual human being and does not include any firm, partnership, association, corporation, or trust.
(7) “Person” means an individual, insurer, company, association, trade association, organization, society, reciprocal or interinsurance exchange, partnership, syndicate, business trust, corporation, Lloyd's association, and associations, groups, or department of underwriters, and any other legal entity.
(8) “Security,” “security deposit,” “special deposit,” or “deposit,” when used to refer to posted deposits required to be placed in the possession of the Commissioner, shall mean the actual physical evidence of a security, such as a certificate, or an entry made through the federal reserve book-entry system. The federal reserve book-entry system shall be limited in meaning to the computerized systems sponsored by the United States Department of Treasury and certain agencies and instrumentalities of the United States for holding and transferring securities of the United States government and such agencies and instrumentalities, respectively, in federal reserve banks through banks which are members of the Federal Reserve System or which otherwise have access to such computerized systems.
(9) “Transact,” with respect to insurance, includes any of the following:
(A) Solicitation and inducement;
(B) Preliminary negotiations;
(C) Effectuation of a contract of insurance; or
(D) Transaction of matters subsequent to effectuation of the contract and arising out of it.
Every form of insurance document and every rate or other filing lawfully in use immediately prior to January 1, 1961, may continue to be so used or be effective until the Commissioner otherwise prescribes in accordance with this title, except that, before the expiration of one year from and after January 1, 1961, neither this title nor the Commissioner shall prohibit the use of any such document, rate, or filing because of any power, prohibition, or requirement contained in this title which did not exist under laws in force immediately prior to January 1, 1961.
Provisions of this title relating to a particular kind of insurance or to a particular type of insurer or to a particular matter prevail over provisions relating to insurance in general or to insurers in general.
No person shall act as an insurer as defined in Code Section 33-1-2 in this state without complying with the applicable provisions of this title.
Any insurer, or any officer or agent thereof, issuing or delivering to any person in this state any policy in violation of any provision of this title shall be guilty of a misdemeanor, except as otherwise provided.
Any director, officer, agent, or employee of any insurance company who willfully and knowingly subscribes, makes, or concurs in making any annual or other statement required by law containing any material statement which is false shall be guilty of a misdemeanor. It shall be the duty of the Commissioner to report all such misrepresentations and false statements to the appropriate prosecuting attorney of the circuit or county in which they shall occur, except as otherwise provided.
(a) Any natural person who knowingly or willfully:
(1) Makes or aids in the making of any false or fraudulent statement or representation of any material fact or thing:
(A) In any written statement or certificate;
(B) In the filing of a claim;
(C) In the making of an application for a policy of insurance;
(D) In the receiving of such an application for a policy of insurance; or
(E) In the receiving of money for such application for a policy of insurance
for the purpose of procuring or attempting to procure the payment of any false or fraudulent claim or other benefit by an insurer;
(2) Receives money for the purpose of purchasing insurance and converts such money to such person's own benefit;
(3) Issues fake or counterfeit insurance policies, certificates of insurance, insurance identification cards, or insurance binders; or
(4) Makes any false or fraudulent representation as to the death or disability of a policy or certificate holder in any written statement or certificate for the purpose of fraudulently obtaining money or benefit from an insurer
commits the crime of insurance fraud.
(b) Any natural person who knowingly and willfully or with reckless disregard engages in the following activities, either directly or indirectly, as an agent for, as a representative of, or on behalf of an insurer not authorized to transact insurance in this state commits the crime of insurance fraud:
(1) Soliciting, negotiating, procuring, or effectuating insurance or annuity contracts or renewals thereof;
(2) Soliciting, negotiating, procuring, or effectuating any contract relating to benefits or services;
(3) Disseminating information as to coverage or rates;
(4) Forwarding applications;
(5) Delivering policies or contracts;
(6) Inspecting or assessing risk;
(7) Fixing of rates;
(8) Investigating or adjusting claims or losses;
(9) Collecting or forwarding of premiums; or
(10) In any other manner representing or assisting such an insurer in the transaction of insurance with respect to subjects of insurance resident, located, or to be performed in this state.
(c) Any natural person who knowingly and willfully with intent to defraud subscribes, makes, or concurs in making any annual or other statement required by law to be filed with the Commissioner containing any material statement which is false commits the crime of insurance fraud.
(d) In any prosecution under this Code section, the crime shall be considered as having been committed in the county of the purported loss, in the county in which the insurer or the insurer's agent received the fraudulent or false claim or application, in the county in which money was received for the fraudulent application, or in any county where any act in furtherance of the criminal scheme was committed.
(e) A natural person convicted of a violation of this Code section shall be guilty of a felony and shall be punished by imprisonment for not less than two nor more than ten years, or by a fine of not more than $10,000.00, or both.
(f) Subsection (b) of this Code section shall not apply to a contract of insurance entered into in accordance with Article 2 of Chapter 5 of this title.
(a) A person shall be guilty of the crime of staging a collision when, with intent to commit insurance fraud as defined in Code Section 33-1-9, such person does any of the following:
(1) Intentionally causes or attempts to cause a motor vehicle collision; or
(2) Engages in a scheme to fabricate evidence of a motor vehicle collision that did not occur.
Staging a collision shall constitute a felony punishable by no less than one year nor more than five years’ imprisonment.
(b) A person shall be guilty of the crime of aggravated staging of a collision when, with intent to commit insurance fraud as defined in Code Section 33-1-9, such person commits acts in violation of subsection (a) of this Code section which result in serious personal injury to another. Aggravated staging of a collision shall constitute a felony punishable by no less than two years nor more than ten years’ imprisonment.
(c) A person shall be guilty of the crime of making a fraudulent claim related to a staged collision when such person makes, or assists in making, a claim for insurance benefits of any type or brings, or assists in bringing, a civil lawsuit against another seeking monetary damages with knowledge that the injuries for which insurance benefits or monetary damages are sought resulted from a staged collision, or seeks to obtain any benefit to which such claimant is not legally entitled. Making a fraudulent claim related to a staged collision shall constitute a felony and shall be punishable by no less than one year nor more than five years’ imprisonment.
It shall be unlawful for any insurer to designate in any policy, contract, certificate, or otherwise the person, firm, or corporation to conduct the funeral of the insured; or to organize, promote, or operate any enterprise or plan; or to enter into any contract with such insured or with any other person, which plan or contract tends to limit or restrict the freedom of choice in the open market of the person or persons having the legal right of such choice regarding contracts, purchases, and arrangements with reference to any part of a funeral service for such insured.
It shall be unlawful for any insurer writing any type of life insurance, by whatever term described, upon the lives of citizens of this state to enter into any contract with any funeral director or undertaker, providing that such funeral director or undertaker shall conduct the funeral of persons insured by such insurer.
It shall be unlawful for any insurer writing any type of life insurance upon the lives of citizens of this state to enter into any contract with any citizen of this state contracting and agreeing to furnish funeral merchandise or services upon the death of any person insured.
No person, firm, or corporation engaged in the life insurance business shall contract for or receive any compensation or gratuity, directly or indirectly, on account of the employment of any undertaker in connection with a burial or preparation for burial of any person whose life is insured by said company; and no undertaker shall give or agree to give any such compensation or commission to such person, firm, or corporation engaged in the insurance business.
(a) Notwithstanding any other provision of law and except as provided in this Code section, any person, other than an authorized insurer, the state and its instrumentalities, or political subdivisions of the state and their instrumentalities, who provides coverage in this state for medical, surgical, chiropractic, physical therapy, optometry, speech pathology, podiatry, audiology, psychology, pharmaceutical, dental, or hospital services, whether such coverage is by direct payment, reimbursement, or otherwise, shall be presumed to be subject to the jurisdiction of the Department of Insurance, unless the person shows that, while providing coverage for such services, such person is subject to the jurisdiction of an insurance supervisory official of another state or specifically subject to the exclusive jurisdiction of the federal government.
(b) Any person may show that such person is subject to the jurisdiction of an insurance supervisory official of another state or specifically subject to the exclusive jurisdiction of the federal government by providing to the Commissioner the appropriate certificate, license, or document, issued by the insurance supervisory official of another state or specifically issued to such person by an appropriate official or agency of the federal government which permits such person to provide such coverages.
(c) Any such person who is unable to show under subsection (b) of this Code section that such person is subject to the jurisdiction of an insurance supervisory official of another state or specifically subject to the exclusive jurisdiction of the federal government shall submit to an examination by the Commissioner to determine the organization and solvency of the person and to determine whether or not such person complies with the applicable provisions of this title.
(d) Any person unable to show under subsection (b) of this Code section that such person is subject to the jurisdiction of an insurance supervisory official of another state or specifically subject to the exclusive jurisdiction of the federal government shall be subject to all appropriate provisions of this title regarding the conduct of such person's business.
(e)(1) Any production agency or administrator which advertises, sells, transacts, or administers the coverage in this state described in subsection (a) of this Code section and which is required to submit to an examination by the Commissioner under subsection (c) of this Code section shall, if said coverage is not fully insured or otherwise fully covered by an authorized insurer, advise every purchaser, prospective purchaser, and covered person of such lack of insurance or other coverage.
(2) Any administrator which advertises or administers the coverage in this state described in subsection (a) of this Code section and which is required to submit to an examination by the Commissioner under subsection (c) of this Code section shall advise any production agency of the elements of the coverage, including the amount of “stop-loss” insurance in effect.
(f) As used in this Code section, the term “authorized insurer” means any insurer authorized to sell accident and sickness policies, subscriber contracts, certificates, or agreements of any form under Chapter 15, 20, 21, 29, or 30 of this title.
(a) In any case where an insured has executed an affidavit affirming that such insured's motor vehicle has been stolen, the insurer shall be required to accept by-hand delivery of such affidavit from such insured.
(b) It shall be unlawful for any person who executes the affidavit provided for in subsection (a) of this Code section knowing that it purports to be an acknowledgment of a lawful oath or affirmation to hand deliver such affidavit if such person knowingly and willfully made a false statement in such affidavit.
(c) Any person who violates subsection (b) of this Code section shall be guilty of a felony and, upon conviction thereof, shall be punished by imprisonment for not less than one nor more than five years or by a fine of not more than $10,000.00, or both.
(a) For the purposes of this Code section, a person commits a “fraudulent insurance act” if he:
(1) Knowingly and with intent to defraud presents, causes to be presented, or prepares with knowledge or belief that it will be presented, to or by an insurer, purported insurer, broker, or any agent thereof, any written statement as part of, or in support of, an application for the issuance of, or the rating of, an insurance policy, or a claim for payment or other benefit pursuant to an insurance policy, which he knows to contain materially false information concerning any fact material thereto or if he conceals, for the purpose of misleading another, information concerning any fact material thereto; or
(2) Knowingly and willfully transacts any contract, agreement, or instrument which violates this title.
(b) If, by his own inquiries or as a result of information received, the Commissioner has reason to believe that a person has engaged in, or is engaging in, a fraudulent insurance act, the Commissioner may administer oaths and affirmations, request the attendance of witnesses or proffering of matter, and collect evidence. The Commissioner shall not compel the attendance of any person or matter in any such investigation except pursuant to subsection (d) of this Code section.
(c) If matter that the Commissioner seeks to obtain by request is located outside the state, the person so requested may make it available to the Commissioner or his representative to examine the matter at the place where it is located. The Commissioner may designate representatives, including officials of the state in which the matter is located, to inspect the matter on his behalf, and he may respond to similar requests from officials of other states.
(d)(1) The Commissioner may request that an individual who refuses to comply with any such request be ordered by the superior court to provide the testimony or matter. The court shall not order such compliance unless the Commissioner has demonstrated to the satisfaction of the court that the testimony of the witness or the matter under request has a direct bearing on the commission of a fraudulent insurance act or is pertinent or necessary to further such investigation.
(2) Except in a prosecution for perjury, an individual who complies with a court order to provide testimony or matter after asserting a privilege against self-incrimination, to which he is entitled by law, may not be subjected to a criminal proceeding or to a civil penalty with respect to the act concerning which he is required to testify or produce relevant matter.
(3) In the absence of fraud or bad faith, a person is not subject to civil liability for libel, slander, or any other relevant tort by virtue of filing reports, without malice, or furnishing other information, without malice, required by this Code section or required by the Commissioner under the authority granted in this Code section, and no civil cause of action of any nature shall arise against such person:
(A) For any information relating to suspected fraudulent insurance acts furnished to or received from law enforcement officials, their agents, or employees;
(B) For any such information relating to suspected fraudulent insurance acts furnished to or received from other persons subject to the provisions of this title; or
(C) For any such information furnished in reports to the Commissioner or the National Association of Insurance Commissioners.
(4) The Commissioner or any employee or agent is not subject to civil liability for libel, slander, or any other relevant tort, and no civil cause of action of any nature exists against such persons by virtue of the execution of activities or duties of the Commissioner under this Code section or by virtue of the publication of any report or bulletin related to the activities or duties of the Commissioner under this Code section.
(5) This Code section does not abrogate or modify in any way any common law or statutory privilege or immunity heretofore enjoyed by any person.
(e) The papers, documents, reports, or evidence relative to the subject of an investigation under this Code section shall not be subject to public inspection for so long as the Commissioner deems reasonably necessary to complete the investigation, to protect the person investigated from unwarranted injury, or to be in the public interest. Further, such papers, documents, reports, or evidence relative to the subject of an investigation under this Code section shall not be subject to subpoena until opened for public inspection by the Commissioner, unless the Commissioner consents, or until, after notice to the Commissioner and a hearing, a superior court determines the Commissioner would not be unnecessarily hindered by such subpoena. The Commissioner or his employees or agents shall not be subject to subpoena in civil actions by any court of this state to testify concerning any matter of which they have knowledge pursuant to pending investigations of fraudulent insurance acts.
(f) Any person, other than an insurer, agent, or other person licensed under this title, or an employee thereof, having knowledge of or who believes that a fraudulent insurance act is being or has been committed may send to the Commissioner a report of information pertinent to such knowledge of or belief and such additional information relative thereto as the Commissioner may request. Any insurer, agent, or other person licensed under this title, or an employee thereof, having knowledge of or who believes that a fraudulent insurance act is being or has been committed shall send to the Commissioner a report or information pertinent to such knowledge or belief and such additional information relative thereto as the Commissioner or his employees or agents may require. The Commissioner or his employees or agents shall review such information or reports as, in the judgment of the Commissioner or such employees or agents, may require further investigation. The Commissioner shall then cause an investigation of the facts surrounding such information or report to be made to determine the extent, if any, to which a fraudulent insurance act is being committed and shall report any alleged violations of law which the investigations disclose to the appropriate prosecuting attorney having jurisdiction with respect to any such violation. If prosecution by the prosecuting attorney is not begun within 90 days of the report, the prosecuting attorney shall inform the Commissioner of the reasons for the lack of prosecution.
(g) Notwithstanding the provisions of subsection (f) of this Code section, when an insurer or an insured knows or has reasonable grounds to believe that a person committed a fraudulent insurance act and which the insurer reasonably believes not to have been reported to a law enforcement agency in this state, then, for the purpose of notification and investigation, the insurer or an agent authorized by an insurer to act on its behalf or the insured may notify such law enforcement agency of such knowledge or reasonable belief and provide such information relevant to the fraudulent insurance act, including, but not limited to, insurance policy information, including the application for insurance; policy premium payment records; history of previous claims made by the insured; and other information relating to the investigation of the claim, including statements of any person, proofs of loss, and notice of loss. In the absence of fraud or bad faith, no insurer or agent authorized by an insurer to act on its behalf, law enforcement agency, or their respective employees or an insured shall be subject to any civil liability for libel, slander, or related cause of action by virtue of filing reports or for releasing or receiving any information pursuant to this subsection. For the purposes of this Code section, the term “law enforcement agency” shall mean and include any federal, state, county, or consolidated police or law enforcement department and any prosecuting official of the federal, state, county, local, or consolidated government. For the purposes of this Code section, the term “insured” shall mean and include any person who is a named insured or beneficiary under a policy or contract of insurance or a person who is not a named insured or beneficiary under a policy or contract of insurance due to the fraudulent action of another but who in good faith believes himself to be such an insured or beneficiary.
(h) Personnel employed by the Commissioner under this Code section shall have the power to make arrests for criminal violations established as a result of investigations only. The general laws applicable to arrests by peace officers of this state shall also be applicable to such personnel. Such personnel shall have the power to execute arrest warrants and search warrants for the same criminal violations; to serve subpoenas issued for the examination, investigation, and trial of all offenses determined by their investigations; and to arrest upon probable cause without warrant any person found in the act of violating any of the provisions of applicable laws. Personnel empowered to make arrests under this Code section shall be empowered to carry firearms or other weapons in the performance of their duties. It is unlawful for any person to resist an arrest authorized by this Code section or in any manner to interfere, either by abetting or assisting such resistance or otherwise interfering, with personnel employed by the Commissioner under this Code section in the duties imposed upon them by law.
(a) As used in this Code section, the term:
(1) “High-tech drug testing” means testing an individual's specimen for more than one substance and billing and receiving payment separately for each substance tested.
(2) “Person” means an individual, any person who provides coverage under Code Section 33-1-14, and any owner, manager, medical practitioner, employee, or other party involved in a fraudulent insurance act prohibited by this Code section.
(b)(1) For purposes of this Code section, a person commits a fraudulent insurance act if he or she knowingly and with intent to defraud, presents, causes to be presented, or prepares with knowledge or belief that it will be presented, any billing for excessive testing, fraudulent testing, or high-tech drug testing in the treatment of the elderly, the disabled, or any individual affected by pain, substance abuse, addiction, or any related disorder, to or by an insurer, broker, or any agent thereof, or directly or indirectly to an insured or uninsured patient.
(2) Such billing as provided for in paragraph (1) of this subsection shall include, but shall not be limited to:
(A) Upcoding that results in billing for more expensive services or procedures than were actually provided or performed;
(B) For patients undergoing drug abuse treatment, unbundling of such billing whereby a drug test from a single sample that detects a variety of narcotics is separated into multiple tests and billed separately;
(C) Billing an individual for multiple copayment amounts;
(D) Billing for drug testing that was not performed; and
(E) Billing for an excessive number of drug tests that are found to be medically unnecessary for the treatment.
(c) If, by his or her own inquiries or as a result of information received, the Commissioner has reason to believe that a person has engaged in or is engaging in a fraudulent insurance act under this Code section, the Commissioner shall have all the powers and duties pursuant to Code Section 33-1-16 to investigate such matter.
(d) A natural person convicted of a violation of this Code section shall be guilty of a misdemeanor and shall be punished by imprisonment for not more than 12 months, by a fine of not more than $1,000.00 per violation, or both.
(e) This Code section shall not supersede any investigation audit which involves fraud, willful misrepresentation, or abuse under Article 7 of Chapter 4 of Title 49 or any other statutory provisions which authorize investigation relating to insurance.
(a) The General Assembly finds that the proper and expeditious investigation and prosecution of fraudulent insurance acts are beneficial to the public interest. The General Assembly further finds that proper investigation of fraudulent insurance acts, followed by vigorous prosecution of insurance fraud, will bring about lower insurance rates for the citizens of this state.
(b) There is created a Special Insurance Fraud Fund for the purpose of funding the investigation and prosecution of insurance fraud.
(c)(1) The Commissioner shall prepare, on an annual basis, a separate budget request to the General Assembly which sets forth the anticipated cost and expense of funding the investigation and prosecution of insurance fraud in this state for the ensuing 12 months. Such budget request shall set forth the annual cost and expense of the investigation and prosecution of insurance fraud in Georgia for the preceding 12 months.
(2) There is imposed upon each foreign, alien, and domestic insurance company doing business in the state an annual assessment under a formula to be established by regulation promulgated by the Commissioner. The formula shall be calculated such that the total proceeds paid or collected from such assessments for any year shall not exceed the amounts appropriated by the General Assembly pursuant to paragraph (3) of this subsection, which appropriation shall be based upon the budget request setting forth the applicable annual cost and expense of the investigation and prosecution of insurance fraud in Georgia submitted by the Commissioner. Such assessments may be measured by kind of company, kind of insurance, income, volume of transactions, or such other factors as the Commissioner determines appropriate. Assessments based on the annual appropriation shall be due on September 1 of the year of the assessment. Any insurance company which fails to report and pay any such assessment shall be subject to penalties and interest as provided by subsection (d) of Code Section 33-8-6. The Commissioner shall provide by regulation for such other terms and conditions for the payment or collection of such assessments as may be necessary to ensure the proper payment and collection thereof. Notwithstanding the foregoing, the provisions of this Code section shall not apply to an agency captive insurance company, dormant captive insurance company, industrial insured captive insurance company, sponsored captive insurance company (including a protected cell thereof), or pure captive insurance company. Foreign and alien captive insurance companies doing business in Georgia shall, however, pay a fixed amount of $100.00 per year into the Special Insurance Fraud Fund without regard to the amount of the Georgia premium written by such foreign or alien captive. No additional amount shall be assessed against the foreign or alien captive insurance company.
(3) The General Assembly may appropriate funds to the department for the investigation of insurance fraud and for the funding of the prosecution of insurance fraud. The Commissioner is authorized to use such funds for investigation of insurance fraud and to reimburse prosecuting attorneys for some or all of the costs of retaining assistant prosecuting attorneys to prosecute insurance fraud cases. The Commissioner shall provide by regulation for such other terms and conditions for the use of the funds for the investigation, reimbursement, and prosecution contemplated by the terms of this paragraph.
(d) Insurers shall make personnel involved in investigating insurance fraud and any files relating to insurance fraud investigation available to the Commissioner, the Attorney General, local prosecuting officials, special prosecuting attorneys, or other law enforcement agencies as needed in order to further the investigation and prosecution of insurance fraud. Information supplied by an insurer and contained in such files shall upon receipt become part of the investigative file and subject to the provisions of Code Section 50-18-72. The insurer and its employees and agents shall be entitled to immunity as provided in Code Section 33-1-16.
(e) Any expenses incurred by insurers as a result of this Code section shall be defrayed by such insurers from their own funds and shall not be borne by the state or by the Special Insurance Fraud Fund.
(a) As used in this Code section, the term:
(1) “Federal housing tax credit” means the federal tax credit as provided in Section 42 of the Internal Revenue Code of 1986, as amended.
(2) “Median income” means those incomes that are determined by the federal Department of Housing and Urban Development guidelines and adjusted for family size.
(3) “Project” means a housing project that has restricted rents that do not exceed 30 percent of median income for at least 40 percent of its units occupied by persons or families having incomes of 60 percent or less of the median income or at least 20 percent of the units occupied by persons or families having incomes of 50 percent or less of the median income.
(4) “Qualified basis” means that portion of the tax basis of a qualified Georgia project eligible for the federal housing tax credit, as that term is defined in Section 42 of the Internal Revenue Code of 1986, as amended.
(5) “Qualified Georgia project” means a qualified low-income building as that term is defined in Section 42 of the Internal Revenue Code of 1986, as amended, that is located in Georgia.
(b)(1) A tax credit against the taxes imposed under Code Sections 33-5-31, 33-8-4, and 33-40-5, to be termed the Georgia housing tax credit, shall be allowed with respect to each qualified Georgia project placed in service after January 1, 2001. The amount of such credit shall, when combined with the total amount of credit authorized under Code Section 48-7-29.6, in no event exceed an amount equal to the federal housing tax credit allowed with respect to such qualified Georgia project.
(2)(A) If under Section 42 of the Internal Revenue Code of 1986, as amended, a portion of any federal housing tax credit taken on a project is required to be recaptured as a result of a reduction in the qualified basis of such project, the taxpayer claiming any state tax credit with respect to such project shall also be required to recapture a portion of any state tax credit authorized by this Code section. The state recapture amount shall be equal to the proportion of the state tax credit claimed by the taxpayer that equals the proportion the federal recapture amount bears to the original federal housing tax credit amount subject to recapture. The tax credit under this Code section shall not be subject to recapture if such recapture is due solely to the sale or transfer of any direct or indirect interest in such qualified Georgia project.
(B) In the event that recapture of any Georgia housing tax credit is required, any amended return submitted to the Commissioner as provided in this Code section shall include the proportion of the state tax credit required to be recaptured, the identity of each taxpayer subject to the recapture, and the amount of tax credit previously allocated to such taxpayer.
(3) In no event shall the total amount of the tax credit under this Code section for a taxable year exceed the taxpayer's tax liability under Code Sections 33-5-31, 33-8-4, and 33-40-5. Any unused tax credit shall be allowed to be carried forward to apply to the taxpayer's next three succeeding years' tax liability. No such tax credit shall be allowed the taxpayer against prior years' tax liability.
(4) The tax credit allowed under this Code section, and any recaptured tax credit, shall be allocated among some or all of the partners, members, or shareholders of the entity owning the project in any manner agreed to by such persons, whether or not such persons are allocated or allowed any portion of the federal housing tax credit with respect to the project.
(c) The commissioner and the state department designated by the Governor as the state housing credit agency for purposes of Section 42(h) of the Internal Revenue Code of 1986, as amended, shall each be authorized to promulgate any rules and regulations necessary to implement and administer this Code section.
(a) As used in this Code section, the term “health care sharing ministry” means a faith based, nonprofit organization that is tax exempt under the Internal Revenue Code which:
(1) Limits its participants to those who are of a similar faith;
(2) Acts as a facilitator among participants who have financial or medical needs and matches those participants with other participants with the present ability to assist those with financial or medical needs in accordance with criteria established by the health care sharing ministry;
(3) Provides for the financial or medical needs of a participant through contributions from one participant to another;
(4) Provides amounts that participants may contribute with no assumption of risk or promise to pay among the participants and no assumption of risk or promise to pay by the health care sharing ministry to the participants;
(5) Provides a written monthly statement to all participants that lists the total dollar amount of qualified needs submitted to the health care sharing ministry, as well as the amount actually published or assigned to participants for their contribution; and
(6) Provides a written disclaimer on or accompanying all applications and guideline materials distributed by or on behalf of the organization that reads, in substance: “Notice: The organization facilitating the sharing of medical expenses is not an insurance company, and neither its guidelines nor plan of operation is an insurance policy. Whether anyone chooses to assist you with your medical bills will be totally voluntary because no other participant will be compelled by law to contribute toward your medical bills. As such, participation in the organization or a subscription to any of its documents should never be considered to be insurance. Regardless of whether you receive any payment for medical expenses or whether this organization continues to operate, you are always personally responsible for the payment of your own medical bills.”
(b) A health care sharing ministry which has entered into a health care cost-sharing arrangement with its participants shall not be considered an insurance company, health maintenance organization, or health benefit plan of any class, kind, or character and shall not be subject to any laws respecting insurance companies, health maintenance organizations, or health benefit plans of any class, kind, or character in this state or subject to regulation under such laws, including, but not limited to, the provisions of this title, and shall not be subject to the jurisdiction of the Commissioner of Insurance.
(a) As used in this Code section, the term:
(1) “Air ambulance” means any rotary-wing aircraft used or intended to be used for hire for transportation of sick or injured persons who may need medical attention during transport.
(2) “Air ambulance service” means the for hire providing of emergency care and transportation by means of an air ambulance for an injured or sick person to or from a place where medical or hospital care is furnished.
(3) “Membership fees” means amounts collected by a membership provider as consideration for a membership subscription.
(4) “Membership provider” means an entity that is licensed to provide air ambulance services pursuant to Chapter 11 of Title 31.
(5) “Membership subscription” means an agreement where a membership provider's charges to a subscription member for air ambulance services are discounted or are prepaid, but only for charges that are not otherwise covered by a third party.
(6) “Subscription member” means an individual who is the beneficiary of a membership subscription.
(b)(1) The solicitation of membership subscriptions, the acceptance of applications for membership subscriptions, the charging of membership fees, and the furnishing of prepaid or discounted air ambulance service to subscription members by a membership provider shall not constitute the writing of insurance.
(2) A membership subscription shall not constitute a contract of insurance.
In the event of a dispute or complaint wherein an insurer provided any material in a language other than English, the English language version of the policy, as that term is defined in Code Section 33-24-1, shall control the resolution of such dispute or complaint; provided, however, that nothing contained in this Code section shall abrogate or supersede the provisions set forth in Chapter 6 of this title, relating to unfair trade practices.
(a) As used in this Code section, the term “exchange” shall have the same meaning provided for in paragraph (1) of Code Section 33-23-201.
(b) The Commissioner of Insurance shall have the authority to:
(1) Establish any program; promulgate any rule, policy, guideline, or plan; or change any program, rule, policy, or guideline to implement, establish, create, administer, or otherwise operate an exchange;
(2) Apply for, accept, or expend federal moneys related to the creation, implementation, or operation of an exchange; and
(3) Establish any advisory board or committee the Commissioner deems necessary for providing recommendations on the creation, implementation, or operation of an exchange.
(a) As used in this Code section, the term:
(1) “Personal vehicle” means a registered motor vehicle that is used by a transportation network company driver in connection with providing services for a transportation network company.
(2) “Transportation network company” means a corporation, partnership, sole proprietorship, or other entity that uses a digital network or other means to connect customers to transportation network company drivers for the purposes of providing transportation for compensation, including, but not limited to, payment, donation, or other item of value. The term shall not include emergency or nonemergency medical transports.
(3) “Transportation network company customer” or “customer” means an individual who uses a transportation network company to connect with a driver to obtain services in such driver's personal vehicle, from an agreed upon point of departure to an agreed upon destination.
(4) “Transportation network company driver” or “driver” means an individual who uses or permits to be used his or her personal vehicle to provide transportation network company services. Such driver need not be an employee of a transportation network company.
(5) “Transportation network company services” or “services” means:
(A) The period of time a driver is logged on to the transportation network company's digital network and available to accept a ride request until the driver is logged off, except for that time period described in subparagraph (B) of this paragraph; and
(B) The period of time a driver accepts a ride request on the transportation network company's digital network until the driver completes the transaction or the ride is complete, whichever is later.
Transportation network company services shall not include transportation provided using a taxi, a limousine carrier as defined in Code Section 40-1-151, or any other commercially registered motor vehicle and commercially licensed driver.
(b) A transportation network company shall maintain or cause to be maintained a primary motor vehicle insurance policy that:
(1) Recognizes the driver as a transportation network company driver and explicitly covers the driver's provision of transportation network company services as defined in paragraph (5) of subsection (a) of this Code section;
(2) During the time period defined in subparagraph (a)(5)(A) of this Code section, provides a minimum of $100,000.00 for bodily injuries to or death of all persons in any one accident with a maximum of $50,000.00 for bodily injuries to or death of one person and $50,000.00 for loss of or damage to property of others, excluding cargo, in any one accident; and
(3) During the time period defined in subparagraph (a)(5)(B) of this Code section, provides a minimum of $1 million for death, personal injury, and property damage per occurrence and provides uninsured and underinsured motorist coverage as required by Code Section 33-7-11, with minimum limits of $300,000.00 for bodily injuries to or death of all persons in any one accident with a maximum of $100,000.00 for bodily injuries to or death of one person and $25,000.00 for loss of or damage to property of others, excluding cargo, in any one accident.
(c) The requirements of subsection (b) of this Code section may be satisfied by either:
(1) A commercial motor vehicle insurance policy purchased by the transportation network company or the driver that provides coverage that meets the requirements set forth in subsection (b) of this Code section; or
(2) An insurance rider to, an endorsement of, or an express provision of coverage for transportation network company services within the driver's personal private passenger motor vehicle insurance policy required by Code Section 40-9-34 which may be combined with an excess policy provided by the transportation network company to meet the requirements set forth in subsection (b) of this Code section.
(d) A transportation network company that purchases an insurance policy to satisfy any of the requirements under subsection (b) of this Code section shall provide the insurance policy to the Commissioner.
(e) An insurance policy required by subsection (b) of this Code section shall be placed with an insurer licensed under this title or with a surplus lines insurer eligible under Chapter 23 of this title.
(f) To the extent the coverage requirements in subsection (b) of this Code section are met by a driver, then such driver shall submit verification of such coverage to the transportation network company. In the event that the insurance maintained by a driver to fulfill the requirements of subsection (b) of this Code section has lapsed or ceases to exist, then the transportation network company shall provide coverage which shall become primary beginning with the first dollar of a claim.
(g)(1) Nothing in this Code section shall be construed to require a personal vehicle insurance policy to provide primary or excess coverage for transportation network company services.
(2) Insurers that write motor vehicle insurance policies in this state may exclude any and all coverage afforded under the owner's insurance policy for any loss or injury that occurs while a driver is logged on to a transportation network company's digital network or while a driver provides transportation network company services. Notwithstanding any other law, a personal vehicle insurer may, at its discretion, offer a personal vehicle insurance policy, or an amendment or endorsement to an existing policy, that covers a driver's vehicle while being used for transportation network company services during the time period specified in this paragraph, with or without a separate charge, or the policy contains an amendment or an endorsement to provide such coverage, for which a separately stated premium may be charged.
(h) The transportation network company shall comply with the following requirements for each driver:
(1) The driver shall be provided a disclosure from the transportation network company containing:
(A) All information and documentation required for compliance with Code Section 40-6-10 if the transportation network company provides any insurance policy required by subsection (b) of this Code section;
(B) Notice that the driver's personal vehicle insurance policy may exclude any and all coverage for injuries to the driver and to others and may exclude the duty to defend or indemnify any person or organization for liability for any loss or injury that occurs while providing transportation network company services; and
(C) Notice that the driver's personal vehicle insurance policy may exclude coverage for damage to the personal vehicle, medical payments coverage, uninsured and underinsured motorist coverage, and other first-party claims;
(2) Such transportation network company shall make the following disclosure to a driver in the driver's terms of service: “If the vehicle with which you provide transportation network company services has a lien against it, you must notify the lienholder that you provide transportation network company services with such vehicle. Providing such transportation network company services may violate the terms of your contract with the lienholder.”;
(3) The transportation network company shall include the disclosures required by this subsection in the driver's terms of service in a distinctive clause; and
(4) For purposes of claims coverage investigation and upon request of the transportation network company driver's personal vehicle insurer, the transportation network company shall provide, within 15 days of such insurer's request, the date and times at which an accident occurred that involved a transportation network company driver and the precise times in the 12 hours preceding and following the accident that the driver logged on and off the transportation network company network or application or otherwise signified availability to provide transportation network company services. Coverage under a motor vehicle insurance policy maintained by the transportation network company shall not be dependent on a personal vehicle insurer first denying a claim nor shall a personal vehicle insurance policy be required to first deny a claim.
(i) In the event the transportation network company is providing primary insurance coverage under subsection (b) of this Code section, the transportation network company's insurer shall assume the costs of defense and indemnification. The transportation network company shall notify the driver and the driver's insurer of any dispute concerning primary coverage within 25 business days of receiving notice of the accident that gives rise to such claim. A personal vehicle insurer that defends or indemnifies a claim against a driver that is excluded under the terms of its policy shall have a right of contribution against other insurers that provide motor vehicle insurance to the same driver in satisfaction of the coverage requirements of this Code section at the time of loss.
(j) In the event the transportation network company is providing primary insurance coverage under subsection (b) of this Code section and the driver or the driver's insurer is named as a defendant in a civil action for any loss or injury that occurs while a personal vehicle is available to provide transportation network company services, the transportation network company's insurer shall have the duty to defend and indemnify the driver and the driver's insurer.
(a) This Code section shall be known and may be cited as the “Georgia Agribusiness and Rural Jobs Act.”
(b) As used in this Code section, the term:
(1) “Affiliate” means an entity that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with another entity. For the purposes of this Code section, an entity is “controlled by” another entity if the controlling entity holds, directly or indirectly, the majority voting or ownership interest in the controlled entity or has control over the day-to-day operations of the controlled entity by contract or by law.
(2) “Applicable percentage” means 0 percent for the first two credit allowance dates and 15 percent for the next four credit allowance dates.
(3) “Capital investment” means any equity investment in a rural fund by a rural investor that:
(A) Is acquired after July 1, 2017, at its original issuance solely in exchange for cash;
(B) Has 100 percent of its cash purchase price used by the rural fund to make qualified investments in eligible businesses located in this state by the second anniversary of the initial credit allowance date; and
(C) Is designated by the rural fund as a capital investment under this Code section and is certified by the department pursuant to subsection (e) of this Code section. This term shall include any capital investment that does not meet the provisions of subsection (e)(1)(A) of this Code section if such investment was a capital investment in the hands of a prior holder.
(4) “Credit allowance date” means the date on which a capital investment is made and each of the five anniversary dates of such date thereafter.
(5) “Department” means the Department of Community Affairs.
(6) “Eligible business” means a business that, at the time of the initial qualified investment in the company:
(A) Has less than 250 employees; and
(B)(i) Has its principal business operations in one or more rural areas in this state; and
(ii) Produces or provides any goods or services produced in Georgia normally used by farmers, ranchers, or producers and harvesters of aquatic products in their business operations, or to improve the welfare or livelihood of such persons, or is involved in the processing and marketing of agricultural products, farm supplies, and input suppliers, or is engaged in agribusiness as defined by the United States Department of Agriculture, or is engaged in manufacturing, health care, technology, transportation, or related services, or if not engaged in such industries, the department determines that such investment will be beneficial to the rural area and the economic growth of the state. Any business which is classified as an eligible business at the time of the initial investment in said business by a rural fund shall remain classified as an eligible business and may receive follow-on investments from any rural fund, and such follow-on investments shall be qualified investments even though such business may not meet the definition of an eligible business at the time of such follow-on investments.
(7) “Eligible distribution” means:
(A) A distribution of cash to one or more equity owners of a rural investor to fully or partially offset a projected increase in the owner's federal or state tax liability, including any penalties and interest, related to the owner's ownership, management, or operation of the rural investor;
(B) A distribution of cash as payment of interest and principal on the debt of the rural investor or rural fund; or
(C) A distribution of cash related to the reasonable costs and expenses of forming, syndicating, managing, and operating the rural investor or the rural fund, or a return of equity to affiliates of a rural investor or rural fund. Such distributions may include reasonable and necessary fees paid for professional services, including legal and accounting services, related to the formation and operation of the rural fund and an annual management fee that shall not exceed 2 percent of the rural fund's qualified investment authority.
(8) “Principal business operations” means the location where at least 60 percent of a business's employees work or where employees who are paid at least 60 percent of such business's payroll work. A business that has agreed to relocate employees using the proceeds of a qualified investment to establish its principal business operations in a new location shall be deemed to have its principal business operations in such new location if it satisfies these requirements no later than 180 days after receiving a qualified investment.
(9) “Purchase price” means the amount paid to the rural fund that issues a capital investment which shall not exceed the amount of capital investment authority certified pursuant to subsection (e) of this Code section.
(10) “Qualified investment” means any investment in an eligible business or any loan to an eligible business with a stated maturity date of at least one year after the date of issuance, excluding revolving lines of credit and senior secured debt unless the eligible business has a credit refusal letter or similar correspondence from a depository institution or a referral letter or similar correspondence from a depository institution referring the business to a rural fund; provided that, with respect to any one eligible business, the maximum amount of investments made in such business by one or more rural funds, on a collective basis with all of the businesses' affiliates, with the proceeds of capital investments shall be the greater of 20 percent of the rural fund's capital investment authority or $6.5 million, exclusive of investments made with repaid or redeemed investments or interest or profits realized thereon.
(11) “Rural area” means any county of this state that has a population of less than 50,000 according to the latest decennial census of the United States.
(12) “Rural fund” means an entity certified by the department under subsection (e) of this Code section.
(13) “Rural investor” means an entity that makes a capital investment in a rural fund.
(14) “State tax liability” means any liability incurred by any entity under Code Sections 33-3-26 and 33-8-4 or Code Sections 48-7-21 and 48-7-27, or, if such taxes are eliminated or reduced, the term shall also mean any tax liability imposed on an entity or other person that had tax liability under the laws of this state.
(c) Upon making a capital investment in a rural fund, a rural investor earns a vested right to a credit against such entity's state tax liability that may be utilized on each credit allowance date of such capital investment in an amount equal to the applicable percentage for such credit allowance date multiplied by the purchase price paid to the rural fund for the capital investment. The amount of the credit claimed by a rural investor shall not exceed the amount of such entity's state tax liability for the tax year for which the credit is claimed. Any amount of credit that a rural investor is prohibited from claiming in a taxable year as a result of this Code section may be carried forward for use in any subsequent taxable year. It is the intent of this Act that a rural investor claiming a credit under this Code section is not required to pay any additional tax that may arise as a result of claiming such credit.
(d) No credit claimed under this Code section shall be refundable or saleable on the open market. Credits earned by or allocated to a partnership, limited liability company, or S-corporation may be allocated to the partners, members, or shareholders of such entity for their direct use in accordance with the provisions of any agreement among such partners, members, or shareholders, and a rural fund must notify the department of the names of the entities that are eligible to utilize credits pursuant to an allocation of credits or a change in allocation of credits or due to a transfer of a capital investment upon such allocation, change, or transfer. Such allocation shall be not considered a sale for purposes of this Code section.
(e)(1) A rural fund that seeks to have an equity investment certified as a capital investment and eligible for credits under this Code section shall apply to the department. The department shall begin accepting applications within 90 days of July 1, 2017. The rural fund shall include the following:
(A) The amount of capital investment requested;
(B) A copy of the applicant's or an affiliate of the applicant's license as a rural business investment company under 7 U.S.C. Section 2009cc or as a small business investment company under 15 U.S.C. Section 681 and a certificate executed by an executive officer of the applicant attesting that such license remains in effect and has not been revoked;
(C) Evidence that, as of the date the application is submitted, the applicant or affiliates of the applicant have invested at least $100 million in nonpublic companies located in rural areas within the United States;
(D) An estimate of the number of jobs that will be created or retained in this state as a result of the applicant's qualified investments;
(E) A business plan that includes a revenue impact assessment projecting state and local tax revenue to be generated by the applicant's proposed qualified investments prepared by a nationally recognized, third-party, independent economic forecasting firm using a dynamic economic forecasting model that analyzes the applicant's business plan over the ten years following the date the application is submitted to the department; and
(F) A nonrefundable application fee of $5,000.00 payable to the department.
(2) Within 30 days after receipt of a completed application, the department shall grant or deny the application in full or in part. The department shall deny the application if:
(A) The applicant does not satisfy all of the criteria described in paragraph (1) of this subsection;
(B) The revenue impact assessment submitted with the application does not demonstrate that the applicant's business plan will result in a positive economic impact on this state over a ten-year period that exceeds the cumulative amount of tax credits that would be issued to the applicant if the application were approved; or
(C) The department has already approved the maximum amount of capital investment authority under paragraph (6) of this subsection.
If the department denies any part of the application, it shall inform the applicant of the grounds for the denial. If the applicant provides any additional information required by the department or otherwise completes its application within 15 days of the notice of denial, the application shall be considered completed as of the original date of submission. If the applicant fails to provide the information or fails to complete its application within the 15 day period, the application remains denied and must be resubmitted in full with a new submission date.
(3) If the application is complete, the department shall certify the proposed equity investment as a capital investment that is eligible for credits under this Code section, subject to the limitations contained in paragraph (6) of this subsection. The department shall provide written notice of the certification to the rural fund.
(4) The department shall certify capital investments in the order that the applications were received by the department. Applications received on the same day shall be deemed to have been received simultaneously.
(5) For applications that are complete and received on the same day, the department shall certify applications in proportionate percentages based upon the ratio of the amount of capital investments requested in an application to the total amount of capital investments requested in all applications.
(6) The department shall certify $100 million in capital investments pursuant to this Code section.
(7) Within 60 days of the applicant receiving notice of certification, the rural fund shall issue the capital investment to and receive cash in the amount of the certified amount from a rural investor. At least 50 percent of the rural investor's capital investment shall be composed of capital raised by the rural investor from sources, including directors, members, employees, officers, and affiliates of the rural investor, other than the amount of capital invested by the allocatee claiming the tax credits in exchange for such allocation of tax credits. The rural fund shall provide the department with evidence of the receipt of the cash investment within 65 days of the applicant receiving notice of certification. If the rural fund does not receive the cash investment and issue the capital investment within such time period following receipt of the certification notice, the certification shall lapse and the rural fund shall not issue the capital investment without reapplying to the department for certification. Lapsed certifications revert to the authority and shall be reissued pro rata to applicants whose capital investment allocations were reduced pursuant to paragraph (5) of this subsection and then in accordance with the application process.
(f)(1) The department may recapture, from a rural investor that claimed the credit on a tax return, the credit allowed under this Code section if:
(A) The rural fund does not invest 100 percent of its capital investment authority in qualified investments in this state within two years of the closing date, with at least 10 percent of its capital investment authority initially invested in eligible businesses engaged in agribusiness as defined by the United States Department of Agriculture and at least 10 percent of such investment shall be equity investments;
(B) The rural fund, after satisfying subparagraph (A) of this paragraph, fails to maintain qualified investments equal to 100 percent of its capital investment authority until the fifth anniversary of the credit allowance date. For the purposes of this subsection, a qualified investment is considered maintained even if the qualified investment was sold or repaid so long as the rural fund reinvests an amount equal to the capital returned or recovered by the rural fund from the original investment, exclusive of any profits realized, in other qualified investments in this state within 12 months of the receipt of such capital. Amounts received periodically by a rural fund shall be treated as continually invested in qualified investments if the amounts are reinvested in one or more qualified investments by the end of the following calendar year. A rural fund shall not be required to reinvest capital returned from qualified investments after the fourth anniversary of the credit allowance date, and such qualified investments shall be considered held continuously by the rural fund through the fifth anniversary of the credit allowance date;
(C) The rural fund, before exiting the program in accordance with subsection (i) of this Code section, makes a distribution or payment that results in the rural fund having less than 100 percent of its capital investment authority invested in qualified investments in this state or available for investment in qualified investments and held in cash and other marketable securities; or
(D) The rural fund violates subsection (h) of this Code section.
(2) Recaptured credits and the related capital investment authority revert to the department and shall be reissued pro rata to applicants whose capital investment allocations were reduced pursuant to paragraph (5) of subsection (e) of this Code section and then in accordance with the application process.
(g) Enforcement of each of the recapture provisions of paragraph (1) of subsection (f) of this Code section shall be subject to a six-month cure period. No recapture shall occur until the rural fund has been given notice of noncompliance and afforded six months from the date of such notice to cure the noncompliance.
(h) No eligible business that receives a qualified investment under this chapter, or any affiliates of such eligible business, may directly or indirectly:
(1) Own or have the right to acquire an ownership interest in a rural fund or member or affiliate of a rural fund, including, but not limited to, a holder of a capital investment issued by the rural fund; or
(2) Loan to or invest in a rural fund or member or affiliate of a rural fund, including, but not limited to, a holder of a capital investment issued by a rural fund, where the proceeds of such loan or investment are directly or indirectly used to fund or refinance the purchase of a capital investment under this Code section.
(i) On or after the sixth anniversary of the closing date, a rural fund may apply to the department to exit the program and no longer be subject to regulation under this Code section. The department shall respond to the exit application within 30 days of receipt. In evaluating the exit application, the fact that no credits have been recaptured and that the rural fund has not received a notice of recapture that has not been cured pursuant to subsection (g) of this Code section shall be sufficient evidence to prove that the rural fund is eligible for exit. The department shall not unreasonably deny an exit application submitted under this subsection. If the exit application is denied, the notice shall include the reasons for the determination. The state shall receive a 10 percent share of any distributions annually from a rural fund that made a capital investment, other than the amount in excess of equity invested in the rural fund and tax distributions made by the rural fund. A rural fund shall distribute all amounts not held in qualified investments no later than the fourteenth anniversary of the closing date. No claimant of credits pursuant to subsection (c) of this Code section shall receive distributions in excess of an amount that would result in an internal rate of return on capital invested that is more than 20 percent if the number of jobs created is:
(1) Less than 60 percent of the projected jobs in the rural fund's approved business plan, then the state shall receive a penalty of 10 percent of the total tax credits distributed to the rural fund; or
(2) Greater than 60 percent but less than 80 percent of the projected jobs in the rural fund's approved business plan, then the state shall receive a penalty of 5 percent of the total tax credits distributed to the rural fund.
(j) A rural fund, before making a qualified investment, may request from the department a written opinion as to whether the business in which it proposes to invest is an eligible business. The department, not later than the twentieth business day after the date of receipt of such request, shall notify the rural fund of its determination. If the department fails to notify the rural fund of its determination by the twentieth business day, the business in which the rural fund proposes to invest shall be considered an eligible business.
(k)(1) Rural funds shall submit a report to the department within the first 15 business days after the second anniversary of the initial credit allowance date that provides documentation as to the investment of 100 percent of the purchase price of such capital investment in qualified investments. Such report shall include:
(A) The location of each eligible business receiving a qualified investment;
(B) Bank statements of such rural fund evidencing each qualified investment;
(C) A copy of the written opinion of the department set forth in subsection (j) of this Code section or evidence that such business was an eligible business at the time of such qualified investment, as applicable;
(D) The number of employment positions created and retained as a result of qualified investments;
(E) The average annual salary of positions described in subparagraph (D) of this paragraph; and
(F) Such other information required by the department.
(2) Thereafter, rural funds shall submit an annual report to the department within 45 days of the beginning of the calendar year during the compliance period. The report shall include but is not limited to the following:
(A) The number of employment positions created and retained as a result of qualified investments; and
(B) The average annual salary of positions described in subparagraph (A) of this paragraph.
(a) The Governor is hereby authorized to submit one or more applications to the United States Secretaries of Health and Human Services and the Treasury for waiver of applicable provisions of the federal Patient Protection and Affordable Care Act (P. L. 111-148) under Section 1332 1 with respect to health insurance coverage or health insurance products. Any such submission to obtain a state innovation waiver may include multiple waiver submissions. On or after January 1, 2020, upon approval of one or more waivers, the state is authorized to implement such waiver or waivers as provided under Section 1332 of such federal act in a manner consistent with state and federal law.
(b) The authority granted to the Governor in subsection (a) of this Code section to submit one or more applications shall expire on December 31, 2021.
1 42 USCA § 18052.
(a) As used in this Code section, the term:
(1) “Addictive disease” has the same meaning as in Code Section 37-1-1.
(2) “Generally accepted standards of mental health or substance use disorder care” means evidence based independent standards of care and clinical practice that are generally recognized by health care providers practicing in relevant clinical specialties such as psychiatry, psychology, clinical sociology, addiction medicine and counseling, and behavioral health treatment. Valid, evidence based sources reflecting generally accepted standards of mental health or substance use disorder care may include peer reviewed scientific studies and medical literature, consensus guidelines and recommendations of nonprofit health care provider professional associations and specialty societies, and nationally recognized clinical practice guidelines, including, but not limited to, patient placement criteria and clinical practice guidelines; guidelines or recommendations of federal government agencies; and drug labeling approved by the United States Food and Drug Administration.
(3) “Health care plan” means any hospital or medical insurance policy or certificate, health care plan contract or certificate, qualified higher deductible health plan, or health maintenance organization or other managed care subscriber contract.
(4) “Health insurer” means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the Commissioner, that contracts, offers to contract, or enters into an agreement to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services, including those of an accident and sickness insurance company, a health maintenance organization, a health care plan, a managed care plan, or any other entity providing a health insurance plan, a health benefit plan, or a health care plan.
(5) “Medically necessary” means, with respect to the treatment of a mental health or substance use disorder, a service or product addressing the specific needs of that patient for the purpose of screening, preventing, diagnosing, managing or treating an illness, injury, condition, or its symptoms, including minimizing the progression of an illness, injury, condition, or its symptoms, in a manner that is:
(A) In accordance with the generally accepted standards of mental health or substance use disorder care;
(B) Clinically appropriate in terms of type, frequency, extent, site, and duration; and
(C) Not primarily for the economic benefit of the insurer, purchaser, or for the convenience of the patient, treating physician, or other health care provider.
(6) “Mental health or substance use disorder” means a mental illness or addictive disease.
(7) “Mental illness” has the same meaning as in Code Section 37-1-1.
(8) “Nonquantitative treatment limitation” or “NQTL” means limitations that are not expressed numerically, but otherwise limit the scope or duration of benefits for treatment. NQTLs include, but are not limited to, the following:
(A) Medical management standards limiting or excluding benefits based on whether the treatment is medically necessary or whether the treatment is experimental or investigative;
(B) Formulary design for prescription drugs;
(C) Standards for provider admission to participate in a network, including average time to obtain, verify, and assess the qualifications of a health practitioner for purposes of credentialing;
(D) Criteria utilized for determining usual, customary, and reasonable charges for out-of-network services, including the threshold percentile utilized and any industry software or other billing, charges, and claims tools utilized;
(E) Restrictions based on geographic location, facility type, provider specialty, and other criteria that limit the scope or duration of benefits for in-network and out-of-network services;
(F) Standards for providing access to out-of-network providers;
(G) Provider reimbursement rates, including rates of reimbursement for mental health or substance use services in primary care; and
(H) Such other limitations as identified by the commissioner.
(b) Every health insurer that provides coverage for mental health or substance use disorders as part of a health care plan shall provide coverage for the treatment of mental health or substance use disorders in accordance with the Mental Health Parity and Addiction Equity Act of 2008, 42 U.S.C. Section 300gg-26, and its implementing and related regulations in any such health care plan it offers and shall:
(1) Provide such coverage for children, adolescents, and adults;
(2) In addition to the requirements of Chapter 46 of this title, apply the definitions of “generally accepted standards of mental health or substance use disorder care,” “medically necessary,” and “mental health or substance use disorder” contained in subsection (a) of this Code section in making any medical necessity, prior authorization, or utilization review determinations under such coverage;
(3) Ensure that any subcontractor or affiliate responsible for management of mental health and substance use disorder care on behalf of the health insurer complies with the requirements of this Code section; and
(4) No later than January 1, 2023, and annually thereafter, submit a report to the Commissioner that contains the designated comparative analyses and other information designated by the Commissioner for that reporting year for insurers under the Mental Health Parity and Addiction Equity Act of 2008, 42 U.S.C. Section 300gg-26(a)(8)(A) and which delineates the comparative analysis and written processes and strategies used to apply benefits for children, adolescents, and adults. No later than January 1, 2024, and annually thereafter, the Commissioner shall publish on the department's website in a prominent location the reports submitted to the Commissioner pursuant to this paragraph and a list of the designated NQTLs, comparative analyses, and other information required by the Commissioner to be reported in the upcoming reporting year.
(c) The Commissioner shall:
(1)(A) Conduct an annual data call no later than May 15, 2023, and every May 15 thereafter, of health insurers to ensure compliance with mental health parity requirements, including, but not limited to, compliance with the Mental Health Parity and Addiction Equity Act of 2008, 42 U.S.C. Section 300gg-26. Such data calls shall include a focus on the use of nonquantitative treatment limitations. In the event that information collected from a data call indicates or suggests a potential violation of any mental health parity requirement by a health insurer, the department shall initiate a market conduct examination of such health insurer to determine whether such health insurer is in compliance with mental health parity requirements. All health insurers shall timely respond to and provide to the department any and all sufficient data requested by the department; and
(B) Submit an annual report to the Governor, Lieutenant Governor, and Speaker of the House of Representatives no later than August 15, 2023, and every August 15 thereafter, regarding the data call conducted pursuant to this paragraph, including details regarding any market conduct examinations initiated by the department pursuant to any such data call; and
(2) Include mental health parity compliance by health insurers in the examination conducted pursuant to Code Section 33-2-11 by the Commissioner.
(d) No health insurer shall implement any prohibition on same-day reimbursement for a patient who sees a mental health provider and a primary care provider in the same day.
(e) The Commissioner shall implement and maintain a streamlined process for accepting, evaluating, and responding to complaints from consumers and health care providers regarding suspected mental health parity violations. Such process shall be posted on the department's website in a prominent location and clearly distinguished from other types of complaints and shall include information on the rights of consumers under Article 2 of Chapter 20A of Title 33, the “Patient's Right to Independent Review Act,” and other applicable law. To the extent practicable, the Commissioner shall undertake reasonable efforts to make culturally and linguistically sensitive materials available for consumers accessing the complaint process established pursuant to this subsection.
(f) No later than January 1, 2023, the department shall create a repository for tracking, analyzing, and reporting information resulting from complaints received from consumers and health care providers regarding suspected mental health parity violations. Such repository shall include complaints, department reviews, mitigation efforts, and outcomes, among other criteria established by the department.
(g) Beginning January 15, 2024, and no later than January 15 annually thereafter, the Commissioner shall submit a report to the administrator of the Georgia Data Analytic Center and the General Assembly with information regarding the previous year's complaints and all elements contained in the repository.
(h) The Commissioner shall appoint a mental health parity officer within the department to ensure implementation of the requirements of this Code section.
(i)(1) If the Commissioner determines that a health insurer failed to submit a timely or sufficient report required under paragraph (4) of subsection (b) of this Code section or failed to submit timely and sufficient data pursuant to a data call conducted pursuant to paragraph (1) of subsection (c) of this Code section, the Commissioner may impose a monetary penalty of up to $2,000.00 for each and every act in violation, unless the insurer knew or reasonably should have known that he or she was in violation, in which case the monetary penalty may be increased to an amount of up to $5,000.00 for each and every act in violation.
(2) If the Commissioner determines that an insurer failed to comply with any provision of this Code section, the Commissioner may take any action authorized, including, but not limited to, issuing an administrative order imposing monetary penalties, imposing a compliance plan, ordering the insurer to develop a compliance plan, or ordering the insurer to reprocess claims.
(j) Nothing contained in this Code section shall abrogate the protections afforded by federal conscience and antidiscrimination laws as further delineated in 45 C.F.R. Part 88 in effect as of June 30, 2022, all of which shall apply to patients, health care providers, and purchasers of health care plans.
There is created the Department of Insurance of the State of Georgia. The chief officer of such department shall be the Commissioner of Insurance. The purpose and function of the department and the duties and powers of the Commissioner shall be those created and vested by this title.
The Commissioner shall have an official seal of such design as he or she shall select with the approval of the Governor.
The Commissioner shall set up within the department such divisions or sections as he may deem necessary for the appropriate performance of the duties of the department and the proper exercise of the powers vested in the department. Such organization shall proceed along functional lines and shall have as its purpose efficiency in operation and service to the public.
(a) The Commissioner may appoint and prescribe the duties of such assistants, examiners, actuaries, clerks, and employees as may be necessary to discharge the duties placed upon the department by this title. The Commissioner shall fix the compensation of all such personnel.
(b) The Commissioner or any deputy, examiner, actuary, clerk, or any employee of the department shall not be financially interested, directly or indirectly, in any insurer, agency, or insurance transaction except as a policyholder or claimant under a policy; however, as to such matters wherein a conflict of interests does not exist on the part of any such individual, the Commissioner may employ from time to time insurance actuaries or other technicians who are independently practicing their professions even though similarly employed by insurers and others.
(c) The Commissioner or any deputy, examiner, actuary, clerk, or employee of the department shall not be given or receive any fee, compensation, loan, gift, or other thing of value in addition to the compensation and expense allowance provided by law for any service or pretended service either rendered or to be rendered as such Commissioner, deputy, examiner, actuary, clerk, or employee.
(a) Any authority, power, or duty vested in the Commissioner by any provision of this title may be exercised, discharged, or performed by any deputy, assistant, examiner, or employee of the department acting in the Commissioner's name and by his delegated authority.
(b) The Commissioner shall be responsible for the official acts of such persons who act in his name and by his authority.
(a) The Commissioner shall enter in permanent form records of the official transactions, filings, examinations, investigations, and proceedings of his office and shall keep all records, books, and papers pertaining thereto in his office. Such records, books, and papers shall be deemed public records of the state except as may be provided otherwise in this chapter.
(b) Upon the request of any person and the payment of the applicable fee, the Commissioner shall supply a certified copy of any record in his office which is then subject to public inspection.
(c) The Commissioner may destroy or otherwise dispose of all records entered in his office in accordance with the rules and procedures provided for in Part 1A of Article 2 of Chapter 3 of Title 20; provided, however, that filings may be destroyed by direction of the Commissioner when superseded.
(a) The Commissioner shall have full power and authority to make rules and regulations for the following purposes:
(1) To organize the department and to assign duties to members of the staff;
(2) To promulgate any rules and regulations as are reasonably necessary to implement this title;
(3) To promulgate any rules and regulations as are reasonably necessary to conform with the requirements of the federal Health Insurance Portability and Accountability Act of 1996, P.L. 104-191, as said federal Act existed on January 1, 1997;
(4) To issue interpretative rulings or to prescribe forms required to carry out the responsibilities of his or her office; or
(5) To govern the procedure to be followed in the proceedings before the department.
(b) Before any rule or regulation shall become effective or before any amendment or repeal of any rule shall become effective, the proposed rule or regulation or amendment or repeal shall have been on file as a public record in the office of the Commissioner for at least ten days.
(c) Prior to the adoption of any rule or regulation or the amendment or repeal thereof, the Commissioner shall publish or otherwise circulate notice of his intended action and afford interested persons opportunity to submit data or views either orally or in writing.
(d) The Commissioner shall compile and keep on file in his office as a public record a set of such rules and regulations which are in effect and shall prepare copies of such rules and regulations which shall be available upon request. The Commissioner shall fix a price covering such compilation which shall cover costs of preparation and mailing.
(e) Neither the Commissioner, whether acting as Commissioner of Insurance or Safety Fire Commissioner, nor the department, nor the Safety Fire Division of the office of the Commissioner shall propose or adopt rules or regulations relating to the sale or dispensing of gasoline or diesel fuel to the general public by any business entity unless such rules or regulations require such sale or dispensing to be under the direct control and visual supervision of an on-site employee of such business entity.
(a) Orders and notices of the Commissioner shall be effective only when they are in writing and signed by him or by his authority.
(b) Every such order shall state its effective date and shall state concisely:
(1) Its intent or purpose;
(2) The grounds on which it is based; and
(3) The provisions of this title pursuant to which action is taken or proposed to be taken; but failure to designate any provision shall not deprive the Commissioner of the right to rely thereon.
(c) An order or notice may be served by delivery to the person to be ordered or notified or by mailing it, postage prepaid, addressed to him at his principal place of business or last address of record in the Commissioner's office.
(d) In addition to the service provisions set forth in subsection (c) of this Code section, any order of the Commissioner issued to multiple recipients in the form of a general directive, data call, or bulletin may be served by sending it by email, so that receipt is acknowledged by the recipient, to the email address on record in the Commissioner's office. The Commissioner shall also post such general directive, data call, or bulletin contemporaneously on the department's website.
(a) Whenever the Commissioner shall deem it expedient, the Commissioner shall examine, either in person or by some examiner duly authorized by the Commissioner, the affairs, transactions, accounts, records, documents, and assets of each insurer authorized to do business in this state and any other facts relative to its business methods, management, and dealings with policyholders. At least once every five years, the Commissioner shall so examine each domestic insurer. Examination of an alien insurer shall be limited to its insurance transactions in the United States.
(b) Whenever he shall deem it necessary at least once in five years, the Commissioner shall fully examine each rating organization which is licensed in this state. As often as he shall deem it necessary, he may examine each advisory organization and each joint underwriting or joint reinsurance group, association, or organization.
(c) The Commissioner shall in like manner examine each insurer or rating organization applying for authority to do business in this state.
(d) In lieu of an examination under this Code section of any foreign or alien insurer licensed in this state, the Commissioner may accept an examination report on such insurer as prepared by the insurance department of such insurer's state of domicile or port-of-entry state until January 1, 1994. On and after January 1, 1994, such reports may be accepted only if:
(1) The insurance department was, at the time the examination was conducted, accredited under the National Association of Insurance Commissioners' financial regulation standards and accreditation program; or
(2) The examination was performed under the supervision of an accredited insurance department or with the participation of one or more examiners who are employed by an accredited state insurance department and who, after a review of the examination work papers and report, state under oath that the examination was performed in a manner consistent with the standards and procedures required by their insurance department.
(e) Any insurer authorized to transact insurance in this state which changes its domicile from Georgia to another state on or after April 1, 1988, may be examined by the Commissioner once a year for five years, beginning on or after the occurrence of the change in domicile; provided, however, this subsection shall not apply to an insurer which changes its domicile from Georgia to another state as long as it retains in this state its principal place of business and the complete records of its assets, transactions, and affairs.
For the purpose of ascertaining their compliance with this title, when he deems it necessary in the public interest, the Commissioner may examine the affairs, accounts, records, documents, and transactions of:
(1) Any insurance agent, subagent, broker, counselor, adjuster, or any other person licensed under this title;
(2) Any person having a contract under which he enjoys in fact the exclusive or dominant right to control an insurer;
(3) Any person holding the shares of capital stock or policyholder proxies of a domestic insurer for the purpose of control of its management either as voting trustee or otherwise;
(4) Any person engaged in the promotion or formation of a domestic insurer, or insurance holding corporation, or corporation to finance a domestic insurer or the production of its business;
(5) Any other person transacting the business of insurance, whether authorized or unauthorized;
(6) Any person or affiliate of such person who proposes or makes application to acquire any domestic insurer or any affiliate of a domestic insurer; and
(7) Any person seeking to acquire any other person subject to the jurisdiction of the Commissioner pursuant to this title.
(a) Every person being examined, its officers, employees, and representatives shall produce and make freely accessible to the Commissioner the accounts, records, documents, and files in his possession or control relating to the subject of the examination. Such officers, employees, and representatives shall facilitate such examination and aid the examiners as far as it is in their power in making the examination.
(b) If the Commissioner finds the accounts to be inadequate or incorrectly kept or posted, he may employ experts to rewrite, post, or balance such records at the expense of the person being examined, if such person has failed to correct such accounting within 60 days after the Commissioner has given him notice to do so.
(a) The Commissioner may make a full written report of each examination made by him containing only facts ascertained from the accounts, records, and documents examined and from the sworn testimony of witnesses.
(b) The report shall be certified by the Commissioner or by the examiner in charge of the examination and when so certified, after filing as provided in subsection (c) of this Code section, shall be admissible in evidence in any proceeding brought by the Commissioner against the person examined or any officer or agent of such person and shall be prima-facie evidence of the facts stated therein.
(c) The Commissioner shall furnish a copy of the proposed report to the person examined not less than 20 days prior to filing the report. If such person so requests in writing within such 20 day period or such longer period as the Commissioner may grant, the Commissioner shall grant a hearing with respect to the report and shall not so file the report until after the hearing and such modifications have been made therein as the Commissioner may deem proper.
(d) The Commissioner may withhold from public inspection the report of any examination or investigation for so long as he deems it to be in the public interest or necessary to protect the person examined from unwarranted injury.
(e) Nothing contained in this Code section shall be construed to limit the Commissioner's authority to terminate or suspend any examination in order to pursue other legal or regulatory action pursuant to the insurance laws of this state. In such event, the findings of fact and conclusions made pursuant to said examination and prior to any hearing as set forth in subsection (c) of this Code section shall be prima-facie evidence in any legal or regulatory action.
(f) In the event the Commissioner determines that regulatory action is appropriate as a result of any examination, he or she may initiate any proceeding or actions as provided by law.
(g) Notwithstanding the provisions of Article 4 of Chapter 18 of Title 50, relating to the inspection of public records, all work papers, analysis, information, documents, information received from another state, and any other materials created, produced, or obtained by or disclosed to the Commissioner or any other person in the course of an examination made under this chapter or in the course of analysis by the Commissioner of the financial condition or market conduct of a company must be given confidential treatment and are not subject to subpoena and may not be made public by the Commissioner or any other person. Access may be granted to authorized representatives of the National Association of Insurance Commissioners. Such representatives must agree in writing prior to receiving the information to treat such information confidentially as required by this Code section, unless the prior written consent of the company to which it pertains has been obtained.
(h) Nothing contained in this Code section shall be construed to limit the Commissioner's authority to use any preliminary or final examination or company work papers or other documents, or any other information discovered or developed during the course of any examination in the furtherance of any legal or regulatory action which the Commissioner may, in his or her sole discretion, deem appropriate.
(i) Nothing contained in this Code section shall prevent or be construed as prohibiting the Commissioner from disclosing the work papers, analysis, information, or a document described in subsection (g) of this Code section to state, federal, or international regulatory agencies or state, federal, or international law enforcement authorities so long as such recipient agrees in writing to treat such report confidentially and in a manner consistent with this title.
(a) At the direction of the Commissioner, the insurer or other person so examined shall pay all the actual travel and living expenses of the examination. When the examination is made by an examiner who is not a regular employee of the department, the person examined shall pay the proper charges for the services of the examiner and his or her assistants and the actual travel and living expenses incurred by such examiners and assistants in an amount approved by the Commissioner. A consolidated account for the examination shall be filed by the examiner with the Commissioner. No person shall pay and no examiner shall accept any additional emolument on account of any examination. When the examination is conducted in whole or in part by regular salaried employees of the department, payment for such services and proper expenses shall be made by the person examined to the Commissioner, and such payment shall be deposited in the state treasury; provided, however, that, when an agent, broker, solicitor, counselor, or adjuster is examined because of a complaint filed against such agent, broker, solicitor, counselor, or adjuster and when the Commissioner finds that the complaint was not justified, the expenses of the examination shall not be assessed against the agent, broker, solicitor, counselor, or adjuster but shall be borne by the department.
(b) An examiner or other person appointed or authorized by the Commissioner, while participating in an examination conducted under this chapter, shall enjoy the same immunities as those of a regular employee of the department under similar circumstances.
(a) With respect to the subject of any examination, investigation, or hearing conducted by him or his duly authorized representative, the Commissioner may take depositions, subpoena witnesses, administer oaths or affirmations, examine any individual under oath, and compel the production of records, books, papers, and other documents.
(b) Witness fees and mileage, if claimed, shall be allowed as for witnesses appearing in superior court. Witness fees, mileage, and the actual expense necessarily incurred in securing attendance of witnesses and their testimony shall be itemized and shall be paid by the person being examined or investigated, if in the proceedings in which the witness is called such person is found to be in violation of the law, or paid by the person, if other than the Commissioner, at whose request the hearing is held.
(c) Subpoenas of witnesses shall be served in the same manner as if issued by a superior court. If any individual fails to obey a subpoena issued and served under this subsection with respect to any matter concerning which he may be lawfully interrogated, on application of the Commissioner the superior court of the county in which the proceeding is pending at which such individual was so required to appear may issue an order requiring such individual to comply with the subpoena and to testify.
(d) Any person willfully testifying falsely under oath as to any matter material to any such examination, investigation, or hearing shall have committed the offense of false swearing.
(e) In addition to any other liability or punishment prescribed, any person who without just cause fails or refuses to attend and testify or to answer any lawful inquiry or to produce any books, papers, or records in obedience to a lawful subpoena issued by the Commissioner or by his authority shall be guilty of a misdemeanor.
(a) The Commissioner may hold hearings for any purpose within the scope of this title as he may deem necessary.
(b) He shall hold a hearing:
(1) If required by any provision of this title; or
(2) Upon written demand for a hearing made by any person aggrieved by any act, threatened act, or failure of the Commissioner to act if such failure is deemed an act under any provision of this title or by any report, promulgation, or order of the Commissioner, other than an order on a hearing of which such person was given actual notice or at which such person appeared as a party or order pursuant to the order on such hearing.
(c) Any demand for a hearing pursuant to this Code section shall specify in what respects such person is aggrieved and the grounds to be relied upon as a basis for the relief to be demanded at the hearing; and, unless postponed by mutual consent, the hearing shall be held within 30 days after receipt by the Commissioner of the demand for a hearing. Such hearing shall be held only if the Commissioner shall find that the demand for a hearing is made in good faith, that the applicant would be aggrieved, and that such grounds otherwise justify holding such hearing.
(d) Pending the hearing and decision on holding the hearing, the Commissioner may suspend or postpone the effective date of his previous action.
The hearing shall be held at the place designated by the Commissioner and shall be open to the public.
Not less than ten days in advance the Commissioner shall give notice of the time and place of the hearing stating the matters to be considered at the hearing. If the persons to be given notice are not specified in the provision pursuant to which the hearing is held, the Commissioner shall give notice to all persons directly affected by such hearing. In the event all persons directly affected are unknown, notice may be perfected by publication in a newspaper of general circulation in this state at least ten days prior to the hearing.
If any person is entitled to a hearing by any provision of this title before any proposed action is taken, the notice of the proposed action may be in the form of a notice to show cause stating that the proposed action may be taken, unless such person shows cause at a hearing to be held as specified in the notice why the proposed action should not be taken and stating the basis of the proposed action.
(a) The hearing shall be presided over by the Commissioner or his designated representative.
(b) The Commissioner shall allow any party to the hearing to appear in person or by counsel, to be present during the giving of all evidence, to have a reasonable opportunity to inspect all documentary evidence and to examine witnesses, to present evidence in support of his interest, and to have subpoenas issued by the Commissioner to compel attendance of witnesses and production of evidence in his behalf.
(c) The Commissioner shall permit to become a party to the hearing by intervention, if timely, only such persons who may be aggrieved by the Commissioner's order made upon the hearing.
(d) Formal rules of pleading or evidence need not be observed at any hearing.
(e) Upon written request seasonably made by a party to the hearing and at such person's expense, the Commissioner shall cause a full record of the proceedings to be made. If transcribed, a copy of such record shall be furnished to the Commissioner without cost to the Commissioner or the state and shall be a part of the Commissioner's record of the hearing. If so transcribed, a copy of the record shall be furnished to any other party to the hearing at the request and expense of the other party. If no record is made or transcribed, the Commissioner shall prepare an adequate record of the evidence and of the proceedings.
(f) Upon written request of a party to a hearing filed with the Commissioner within 30 days after any order made pursuant to a hearing has been mailed or delivered to the persons entitled to receive the same, the Commissioner may in his discretion grant a rehearing or reargument of the matters involved in such hearing; and notice of the rehearing or reargument shall be given as provided in Code Section 33-2-19.
(a) The Commissioner may adjourn any hearing from time to time and from place to place without other notice of the adjourned hearing than announcement thereof at the hearing.
(b) The validity of any hearing held in accordance with the notice thereof shall not be affected by failure of any person to attend the hearing or to remain in attendance.
(a) Within 30 days after termination of the hearing or of any rehearing or reargument, the Commissioner shall make his order thereon covering matters involved in the hearing and in any rehearing or reargument and shall give a copy of the order to the same persons given notice of the hearing.
(b) The order shall contain a concise statement of the facts as found by the Commissioner, a concise statement of his conclusions therefrom, and the effective date of the order.
(c) The order may affirm, modify, or nullify action theretofore taken or may constitute the taking of new action within the scope of the notice of hearing.
(a) Whenever it may appear to the Commissioner, either upon investigation or otherwise, that any person has engaged in, is engaging in, or is about to engage in any act, practice, or transaction which is prohibited by this title or by any rule, regulation, or order of the Commissioner promulgated or issued pursuant to this title or which is declared to be unlawful under this title, the Commissioner may at his discretion issue an order, if he deems it to be appropriate in the public interest or for the protection of policyholders or the citizens of this state, prohibiting such person from continuing such act, practice, or transaction.
(b) Notwithstanding any other provision of this title, in situations where persons otherwise would be entitled to a hearing prior to an order, the Commissioner may issue a proposed order to be effective upon a later date without hearing, unless persons subject to the order request a hearing within ten days after receipt of the order. Failure to make the request shall constitute a waiver of any provision of law for the hearing. The order shall contain or shall be accompanied by a notice of opportunity for hearing which clearly explains that the opportunity must be requested within ten days of receipt of the order and notice. The order and notice shall be served in person by the Commissioner or his agent or by registered or certified mail or statutory overnight delivery, return receipt requested.
(c) Notwithstanding any other provision of this title, in situations where persons otherwise would be entitled to a hearing prior to an order, the Commissioner may issue an order to be effective immediately, if the Commissioner has reasonable cause to believe: that an act, practice, or transaction is occurring or is about to occur; that the situation constitutes a situation of imminent peril to the public health, safety, or welfare; and that the situation therefore imperatively requires emergency action. The emergency order shall contain findings to this effect and reasons for the determination. The order shall contain or be accompanied by a notice of opportunity for hearing which may provide that a hearing will be held if and only if a person subject to the order requests a hearing within ten days of receipt of the order and notice. The order and notice shall be served by delivery by the Commissioner or his agent or by registered or certified mail or statutory overnight delivery, return receipt requested.
(d) The Commissioner may institute actions or other legal proceedings as may be required for the enforcement of any provisions of this title. If the Commissioner has reason to believe that any person has violated any provision of this title for which criminal prosecution is provided, he shall so inform the prosecuting attorney in whose circuit or jurisdiction such violation may have occurred.
(e) The Commissioner may prosecute an action in any superior court of proper venue to enforce any order made by him pursuant to this title.
(f) In cases in which the Commissioner institutes an action or other legal proceeding in a superior court of this state or prosecutes an action in a superior court to enforce his order, the superior court may among other appropriate relief issue an injunction restraining persons and those in active concert with them, including agents, employees, partners, officers, and directors, from engaging in acts prohibited by orders of the Commissioner or his rules or regulations or made unlawful or prohibited by this title.
(g) In addition to all other penalties provided for under this title, the Commissioner shall have the authority:
(1) To place any person duly licensed under this title on probation for a period of time not to exceed one year for each and every act in violation of this title or of the rules, regulations, or orders of the Commissioner; and
(2) To subject any person duly licensed or that should be licensed under this title to a monetary penalty of up to $2,000.00 for each and every act in violation of this title or of the rules, regulations, or orders of the Commissioner, unless such person knew or reasonably should have known he or she was in violation of this title or of the rules, regulations, or orders of the Commissioner, in which case the monetary penalty provided for in this paragraph may be increased to an amount up to $5,000.00 for each and every act in violation.
(h) The Commissioner may not institute any action or impose any penalty against an insurer because an insurer engages in transactions consistent with the provisions of Chapter 12 of Title 10, the “Uniform Electronic Transactions Act,” or Code Section 33-24-14.
Nothing contained in this chapter is intended to limit or repeal any power or authority elsewhere granted the Commissioner or the superior courts in the enforcement of this title. Nor shall any grant of authority or power contained in this chapter be read to imply that such grant of authority or power was not conferred by a preexisting law.
An appeal from the Commissioner shall be taken only from an order on hearing or with respect to a matter as to which the Commissioner has refused or failed to grant or hold a hearing after demand therefor under Code Section 33-2-17 or as to a matter as to which the Commissioner has refused or failed to make his order on hearing as required by Code Section 33-2-23. Any person who was a party to the hearing or whose pecuniary interests are directly and immediately affected by the refusal or failure to grant a hearing and who is aggrieved by the order, refusal, or failure may appeal from the order on hearing or as to any such matter within 30 days after:
(1) The order on hearing has been mailed or delivered to the persons entitled to receive the same;
(2) The Commissioner's order denying rehearing or reargument has been so mailed or delivered;
(3) The Commissioner has refused or failed to make his order on hearing as required under Code Section 33-2-23; or
(4) The Commissioner has refused or failed to grant or hold a hearing as required under Code Section 33-2-17.
(a) The form of proceeding for judicial review shall be by a petition for review in the Superior Court of Fulton County, a copy of which shall be served upon the Commissioner immediately. The proceedings on the petition for review shall be governed by the provisions of Chapter 3 of Title 5, except to the extent any such provision is in conflict with any provision of this title.
(b) The proceedings shall follow the course which is now or may hereafter be prescribed for civil actions in the superior courts, provided that the reviewing court may by order extend the time required for filing any pleadings or motions. In addition, the reviewing court may provide by order for expeditious hearing or trial of any such proceedings as justice or the public interest may require.
(c) The petition for review or other pleading in which judicial review shall be sought shall plainly specify the action complained of and shall set forth the relief sought and, without excessive detail, the facts and circumstances supporting the petitioner's right to such relief.
(d) Pending judicial review pursuant to any proceeding authorized for the purpose, the Commissioner, if the action has not become effective, may postpone the effective date of the action complained of. Upon such conditions as may be required and to the extent necessary to preserve the status of proceedings or the rights of the parties or to prevent irreparable injury, in any proceeding for judicial review the reviewing court or any appellate court is authorized to issue all necessary and appropriate orders to postpone the effective date of any action or temporarily to grant or extend relief denied or withheld.
(e) Whether or not prayed for, the court may remand the matter for further proceedings or findings on terms specified by order or may require the parties to complete any record found to be inaccurate or inadequate for decision.
(a) Unless review of the action complained of is required by law to be de novo:
(1) In cases in which proceedings have been held before the Commissioner, the Commissioner shall file with his reply to the reviewing court a certified transcript of all such proceedings and all evidence before him in such proceedings; provided, however, that the parties may by written stipulation agree to an abbreviated record including so much of the transcript as shall be necessary to determine the questions under review;
(2) The reviewing court's decision shall be upon the basis of the pleadings and the record so presented;
(3) The findings of the Commissioner as to any fact, if supported by substantial evidence upon consideration of the record as a whole, shall be conclusive;
(4) If issues of fact outside the record shall be made by the pleadings, they may be determined by the court.
(b) Judicial review of any fact determined by the Commissioner shall be de novo unless:
(1) The determination was made after a hearing required or authorized by this title; or
(2) The determination is one committed by law to the Commissioner's discretion.
(c) So far as necessary to decision and where presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of any department action. The court shall:
(1) Compel department action unlawfully withheld or unreasonably delayed; and
(2) Hold unlawful and set aside department action, findings, and conclusions found to be:
(A) Arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;
(B) Contrary to legal or constitutional right, power, privilege, or immunity;
(C) In excess of statutory jurisdiction, authority, or limitations or short of statutory right;
(D) Without observance of procedure required by law;
(E) Unsupported by substantial evidence upon consideration of the record as a whole in cases determined pursuant to paragraphs (2) and (3) of subsection (a) of this Code section; and
(F) Unwarranted by the facts in cases in which the facts are subject to trial de novo by the reviewing court.
(d) In making the determinations called for in subparagraphs (A) through (F) of paragraph (2) of subsection (c) of this Code section, the court shall review the whole record or such portions of the record as may be cited by any party; and due account shall be taken of the rule of prejudicial error.
(e) The reviewing court may also grant such further relief either legal or equitable, or both, as the interest of the public and the aggrieved parties in such proceedings shall require.
The Commissioner shall promptly pay all taxes, fees, dues, charges, and penalties and interest which he is authorized to collect under this title to the Office of the State Treasurer to the credit of the general fund. The Commissioner, however, is authorized to make refunds of or to allow credits for any amounts which have been illegally or erroneously paid or collected pursuant to any provision of this title; and such payments to the Office of the State Treasurer shall be less the amount of any such refunds or credits, provided that no refunds or credits shall be allowed under this Code section unless a written request for such refund or credit is filed with the Commissioner within seven years from the date of payment or collection of the amount for which a refund or credit is claimed.
(a) Except in the case of fraud or failure to file a return required by this title, every notice of a deficiency assessment or the issuance of an execution thereon shall be given within seven years from the date on which such return is filed. In the case of failure to file a return, the notice of a deficiency assessment or the issuance of an execution thereon shall be given within ten years from the date on which such return is due. In the case of fraud there shall be no time limitation.
(b) If, before the expiration of the time prescribed in this Code section for giving of a notice of deficiency assessment or before the issuance of an execution thereon, the taxpayer has consented in writing to the giving of the notice after such time, the notice may be given at any time prior to the expiration of the time agreed upon. The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon.
The Commissioner for good cause shown may extend for no more than 30 days the time for filing a tax return or paying any amount required to be paid with any return. The extension may be granted at any time, provided that a request therefor is filed with the Commissioner within or prior to the period for which the extension may be granted. Any taxpayer to whom an extension is granted shall pay, in addition to the tax, interest at the rate of 1 percent per month or fraction thereof until the date of payment.
(a) Each corporation or individual, of whatever name or class, which now has or which may hereafter have bonds or securities on deposit as the law provides, is required, on or before January 15 of each year, to pay fees in amounts as provided in Code Section 33-8-1.
(b) All fees collected under subsection (a) of this Code section shall be paid into the general fund of the state treasury.
(c) If a fee prescribed in subsection (a) of this Code section has not been paid on or before January 15, the Commissioner shall refuse to accept the deposits required by law and shall not certify their acceptance until the fee is fully paid. The Commissioner shall suspend or revoke the license of the delinquent company or individual until the fee is fully paid.
(a) To encourage insurance companies and persons conducting activities regulated under this title, both to conduct voluntary internal audits of their compliance programs and management systems and to assess and improve compliance with state and federal statutes, rules, and orders, an insurance compliance self-evaluative privilege is recognized to protect the confidentiality of communications relating to voluntary internal compliance audits. The General Assembly hereby finds and declares that protection of insurance consumers is enhanced by companies' voluntary compliance with this state's insurance and other laws and that the public will benefit from incentives to identify and remedy insurance and other compliance issues. It is further declared that limited expansion of the protection against disclosure will encourage voluntary compliance and improve insurance market conduct quality and that the voluntary provisions of this Code section will not inhibit the exercise of the regulatory authority by those entrusted with protecting insurance consumers.
(b) As used in this Code section, the term:
(1) “Insurance compliance audit” means a voluntary, internal evaluation, review, assessment, or audit not otherwise expressly required by law of an insurer or an activity regulated under this title, or other state or federal law applicable to an insurer, or of management systems related to the insurer or activity, that is designed to identify and prevent noncompliance and to improve compliance with those statutes, rules, or orders. An insurance compliance audit may be conducted by the insurer, its employees, or independent contractors.
(2) “Insurance compliance self-evaluative audit document” means any document prepared as a result of or in connection with and not prior to an insurance compliance audit. An insurance compliance self-evaluative audit document may include a written response to the findings of an insurance compliance audit. An insurance compliance self-evaluative audit document may include, but is not limited to, as applicable, field notes and records of observations, findings, opinions, suggestions, conclusions, drafts, memoranda, drawings, photographs, computer generated or electronically recorded information, phone records, maps, charts, graphs, and surveys, provided that this supporting information is collected or developed for the primary purpose and in the course of an insurance compliance audit. An insurance compliance self-evaluative audit document may also include any of the following:
(A) An insurance compliance audit report prepared by an auditor, who may be an employee of the insurer or an independent contractor, which may include the scope of the audit, the information gained in the audit, and conclusions and recommendations, with exhibits and appendices;
(B) Memoranda and documents analyzing portions or all of the insurance compliance audit report and discussing potential implementation issues;
(C) An implementation plan that addresses correcting past noncompliance, improving current compliance, and preventing future noncompliance; or
(D) Analytic data generated in the course of conducting the insurance compliance audit.
(c)(1) An insurance compliance self-evaluative audit document is privileged information and is not admissible as evidence in any legal action in any civil, criminal, or administrative proceeding, except as provided in subsections (d) and (e) of this Code section. Documents, communications, data, reports, or other information created as a result of a claim involving personal injury or workers' compensation made against an insurance policy are not insurance compliance self-evaluative audit documents and are admissible as evidence in civil proceedings as otherwise provided by applicable rules of evidence or civil procedure, subject to any applicable statutory or common law privilege, including, but not limited to, the work product doctrine, the attorney-client privilege, or the subsequent remedial measures exclusion.
(2) If any insurer, person, or entity performs or directs the performance of an insurance compliance audit, an officer or employee involved with the insurance compliance audit, or any consultant who is hired for the purpose of performing the insurance compliance audit, shall not be examined in any civil, criminal, or administrative proceeding as to the insurance compliance audit or any insurance compliance self-evaluative audit document, as defined in this Code section. This paragraph shall not apply if the privilege set forth in paragraph (1) of this subsection is determined under subsection (d) or (e) of this Code section not to apply.
(3) An insurer may voluntarily submit, in connection with examinations conducted under this Code section, an insurance compliance self-evaluative audit document to the Commissioner, or his or her designee, as a confidential document under subsection (g) of Code Section 33-2-14 without waiving the privilege set forth in this Code section to which the insurer would otherwise be entitled. However, the provision permitting the Commissioner to provide access to the National Association of Insurance Commissioners shall not apply to the insurance compliance self-evaluative audit document so voluntarily submitted. Nothing contained in this subsection shall give the Commissioner any authority to compel an insurer to disclose involuntarily or otherwise provide an insurance compliance self-evaluative audit document.
(d)(1) The privilege set forth in subsection (c) of this Code section shall not apply to the extent that it is expressly waived by the insurer that prepared or caused to be prepared the insurance compliance self-evaluative audit document.
(2) In a civil or administrative proceeding, a court of record may, after an in camera review, require disclosure of material for which the privilege set forth in subsection (c) of this Code section is asserted, if the court determines that:
(A) The privilege is asserted for a fraudulent purpose;
(B) The material is not subject to the privilege; or
(C) Even if subject to the privilege, the material shows evidence of noncompliance with state or federal statutes, rules, and orders and the insurer failed to undertake reasonable corrective action or eliminate the noncompliance within a reasonable time.
(3) In a criminal proceeding, a court of record may, after an in camera review, require disclosure of material for which the privilege described in subsection (c) of this Code section is asserted, if the court determines that:
(A) The privilege is asserted for a fraudulent purpose;
(B) The material is not subject to the privilege;
(C) Even if subject to the privilege, the material shows evidence of noncompliance with state or federal statutes, rules, and orders and the insurer failed to undertake reasonable corrective action or eliminate such noncompliance within a reasonable time; or
(D) The material contains evidence relevant to the commission of a criminal offense under this title and:
(i) The Commissioner has a compelling need for the information;
(ii) The information is not otherwise available; and
(iii) The Commissioner is unable to obtain the substantial equivalent of the information by any means without incurring unreasonable cost and delay.
(e)(1) Within 30 days after the Commissioner makes a written request by certified mail for disclosure of an insurance compliance self-evaluative audit document under this subsection, the insurer that prepared or caused the document to be prepared may file with the appropriate court a petition requesting an in camera hearing on whether the insurance compliance self-evaluative audit document or portions of the document are privileged under this Code section or subject to disclosure. The court has jurisdiction over a petition filed by an insurer under this subsection requesting an in camera hearing on whether the insurance compliance self-evaluative audit document or portions of the document are privileged or subject to disclosure. Failure by the insurer to file a petition waives the privilege.
(2) An insurer asserting the insurance compliance self-evaluative privilege in response to a request for disclosure under this subsection shall include in its petition for an in camera hearing all of the information set forth in paragraph (5) of this subsection.
(3) Upon the filing of a petition under this subsection, the court shall issue an order scheduling, within 45 days after the filing of the petition, an in camera hearing to determine whether the insurance compliance self-evaluative audit document or portions of the document are privileged under this Code section or subject to disclosure.
(4) The court, after an in camera review, may require disclosure of material for which the privilege in subsection (c) of this Code section is asserted if the court determines, based upon its in camera review, that any one of the conditions set forth in paragraph (2) of subsection (d) of this Code section is applicable as to a civil or administrative proceeding or that any one of the conditions set forth in paragraph (3) of subsection (d) of this Code section is applicable as to a criminal proceeding. Upon making such a determination, the court may only compel the disclosure of those portions of an insurance compliance self-evaluative audit document relevant to issues in dispute in the underlying proceeding. Any compelled disclosure will not be considered to be a public document or be deemed to be a waiver of the privilege for any other civil, criminal, or administrative proceeding. A party unsuccessfully opposing disclosure may apply to the court for an appropriate order protecting the document from further disclosure.
(5) An insurer asserting the insurance compliance self-evaluative privilege in response to a request for disclosure under this subsection shall provide to the Commissioner at the time of filing any objection to the disclosure:
(A) The date of the insurance compliance self-evaluative audit document;
(B) The identity of the entity conducting the audit;
(C) The general nature of the activities covered by the insurance compliance audit; and
(D) An identification of the portions of the insurance compliance self-evaluative audit document for which the privilege is being asserted.
(f)(1) An insurer asserting the insurance compliance self-evaluative privilege set forth in subsection (c) of this Code section has the burden of demonstrating the applicability of the privilege. Once an insurer has established the applicability of the privilege, a party seeking disclosure under paragraph (2) or (3) of subsection (d) of this Code section has the burden of proving that the privilege is asserted for a fraudulent purpose or that the insurer failed to undertake reasonable corrective action or eliminate the noncompliance within a reasonable time. The Commissioner, in seeking disclosure under paragraph (3) of subsection (d) of this Code section, has the burden of proving the elements set forth in paragraph (3) of subsection (d) of this Code section.
(2) The parties may at any time stipulate in proceedings under subsection (d) or (e) of this Code section to entry of an order directing that specific information contained in an insurance compliance self-evaluative audit document is or is not subject to the privilege provided under subsection (c) of this Code section.
(g) The privilege set forth in subsection (c) of this Code section shall not extend to:
(1) Documents, communications, data, reports, or other information required to be collected, developed, maintained, reported, or otherwise made available to a regulatory agency pursuant to this title or other federal or state law, rule, or order;
(2) Information obtained by observation or monitoring by any regulatory agency; or
(3) Information obtained from a source independent of the insurance compliance audit.
(h) Nothing in this Code section shall limit, waive, or abrogate the scope or nature of any statutory or common law privilege, including, but not limited to, the work product doctrine, the attorney-client privilege, or the subsequent remedial measures exclusion.
As used in this chapter, the term:
(1) “Administrative supervision” means the continued operation of the company under supervision of the Commissioner in accordance with regulations promulgated by the Commissioner.
(2) “Alien” insurer means an insurer formed under the laws of a country other than the United States.
(3) “Charter” means articles of incorporation, articles of agreement, articles of association, or other basic constituent document of a corporation; subscribers' agreement and power of attorney of a reciprocal insurer; or underwriters' agreement and power of attorney of a Lloyd's insurer.
(4) “Domestic” insurer means an insurer formed under the laws of Georgia.
(5) “Foreign” insurer means an insurer formed under the laws of another state or government of the United States.
(6) “State” means any state, commonwealth, territory, or district of the United States.
(7) “United States” includes the states, territories, districts, and commonwealths of the United States.
(a) No person shall act as an insurer and no insurer shall transact insurance in Georgia except as authorized by a subsisting certificate of authority granted to it by the Commissioner, except as to any transactions as are expressly otherwise provided for in this title.
(b) The mere investigation and adjustment of any claim in this state arising under an insurance contract and litigation in connection therewith shall not be deemed to constitute the transacting of insurance in this state.
(c) An insurer not transacting new insurance business in Georgia but continuing collection of premiums on and servicing of policies remaining in force as to residents of or risks located in Georgia is transacting insurance in Georgia for the purpose of premium tax requirements only and is not required to have a certificate of authority therefor.
(d) As to an insurance coverage on a subject of insurance not resident, located, or expressly to be performed in Georgia at time of issuance and solicited, written, and delivered outside Georgia, no certificate of authority shall be required of an insurer as to subsequent transactions in Georgia on account of such insurance; and this title shall not apply to such insurance or insurance coverage, except for the purpose of premium tax requirements.
(a) To qualify for and hold authority to transact insurance in Georgia an insurer must be otherwise in compliance with the provisions of this title and with its charter powers and must be an incorporated stock insurer, an incorporated mutual insurer, a fraternal benefit society, a farmers' mutual fire insurance company, a Lloyd's association, or a reciprocal insurer of the same general type as may be formed as a domestic insurer under this title, except that no foreign or alien insurer shall be authorized to transact insurance in Georgia which does not maintain reserves as required by Chapter 10 of this title applicable to the kind or kinds of insurance transacted in the United States by such insurer.
(b) No certificate of authority or license to transact any kind of insurance business in this state shall be issued, renewed, or continued in effect to any domestic, foreign, or alien insurance company or other insurance entity which is owned or financially controlled in whole or in substantial part by any state of the United States, by a foreign government, or by any political subdivision, instrumentality, or agency of either or which is an agency of such state or foreign government or any political subdivision, instrumentality, or agency of either unless such company or entity was so owned, controlled, or constituted prior to January 1, 1957, and was authorized to do business in this state on or prior to said date.
(c) Membership in a mutual insurer, subscribership in a reciprocal insurer, or supervision of an insurer by a public insurance supervisory authority shall not be deemed to be an ownership, control, or operation of the insurer for the purposes of subsection (b) of this Code section.
An insurer which otherwise qualifies to transact insurance in Georgia may be authorized to transact any one kind or combination of kinds of insurance as defined in Chapter 7 of this title except:
(1) A reciprocal insurer shall not transact life insurance;
(2) A Lloyd's insurer shall not transact life insurance; and
(3) A title insurer shall be a stock insurer and shall be authorized to transact only title insurance and closing protection letters, pursuant to Code Section 33-7-8.1.
For the purpose of this chapter, the kinds of insurance defined in Chapter 7 of this title shall be arranged in the following six classes:
(1) Life, accident, and sickness;
(2) Property, marine, and transportation;
(3) Casualty;
(4) Surety;
(5) Title; and
(6) Health maintenance organization.
Each of the groups numbered (1) through (6) shall constitute a class of insurance.
(a) On or after July 1, 2000, to qualify for an original certificate of authority to transact one or more classes of insurance, an insurer shall possess and thereafter maintain a minimum of $1.5 million in capital stock or in surplus.
(b) As to surplus required for initial qualification to transact one kind of insurance and thereafter to be maintained, domestic mutual insurers shall be governed by Chapter 14 of this title and domestic reciprocal insurers shall be governed by Chapter 17 of this title. Farmers' mutual fire insurance companies shall be governed by Chapter 16 of this title.
In addition to the minimum paid-in capital or minimum surplus of insurers required by this title, an insurer shall possess when first authorized in this state and thereafter maintain surplus or additional surplus equal to the larger of $1.5 million if a stock, mutual, or reciprocal insurer or 50 percent of its paid-in capital stock if a stock insurer or of its surplus if a mutual or reciprocal insurer otherwise required under Code Section 33-3-6 for the kinds of insurance to be transacted.
(a) The Commissioner shall not issue a certificate of authority to transact insurance to any insurer unless the insurer has deposited in trust with this state securities eligible for the investment of capital funds of domestic insurers under this title in an amount not less than that required in subsection (b) of this Code section. This Code section does not apply to farmers' mutual fire insurance companies.
(b)(1) Except as otherwise provided in this subsection, the amount of the deposit required under this Code section for a certificate to transact any one class of insurance shall be $100,000.00; to transact each additional class of insurance, the amount of deposit shall be $25,000.00, subject to the limitation that not more than $200,000.00 total deposit shall be required for any combination of classes.
(2) As to any foreign insurer, in lieu of such deposit or part of such deposit in this state, the Commissioner shall accept the current certificate in proper form of the public official having supervision over insurers in any other state to the effect that a like deposit or part of like deposit by such insurer is being maintained in public custody in such state in trust for the purpose, among other reasonable purposes, of protection of policyholders and creditors or of the protection of all the insurer's policyholders or of all of its policyholders and obligees.
(3) As to any alien insurer, other than a title insurer, which has entered through and the United States branch of which is licensed to transact insurance in another state, in lieu of such deposit or part thereof in this state, the Commissioner shall accept the certificate of the official having supervision over insurance of such other state in the United States, given under his or her hand and seal, that the insurer maintains within the United States by way of deposits with public depositories, or in trust institutions within the United States approved by such official, assets available for discharge of its United States insurance obligations, which assets shall be in an amount not less than the outstanding liabilities of the insurer arising out of its insurance transactions in the United States together with the larger of the following sums: the largest deposit required by this title to be made in this state by any type of domestic insurer transacting like kinds of insurance or $300,000.00.
(4) As to any alien insurer entering through this state to transact insurance in the United States through a United States branch, such insurer shall deposit in accordance with Chapter 12 of this title assets available for discharge of its United States insurance obligations, which assets shall be in an amount not less than the outstanding liabilities of the insurer arising out of its insurance transactions in the United States together with the larger of the following sums: the largest deposit required by this title to be made in this state by any type of domestic insurer transacting like kinds of insurance or $300,000.00.
In those instances in which the Commissioner in his or her judgment shall deem it to be in the best interests of the citizens of this state, no certificate of authority shall be issued by the Commissioner to any foreign and alien insurer nor shall any certificate of authority be renewed for any such insurer unless such insurer shall deposit with the Commissioner securities eligible for the investment of capital funds in such amount as the Commissioner shall require. This deposit and the deposit required by paragraph (1) of subsection (b) of Code Section 33-3-8 shall be administered as provided for in Chapter 12 of this title. Deposits under this Code section shall be held for the protection of the insurer's policyholders in this state and others in this state entitled to the proceeds of its policies.
(a) In addition to the deposits required by Code Sections 33-3-8 and 33-3-9, the Commissioner may require any domestic, foreign, or alien insurer to make such additional special deposits of securities eligible for the investment of capital funds of domestic insurers under this title as he may deem reasonable and necessary for the protection of the public whenever the Commissioner shall determine that the adverse financial condition of the insurer requires such action.
(b) Such additional special deposits shall be deposited with the Commissioner in trust for the protection of all policyholders of the insurer and all others entitled to the proceeds of its policies except in the case of foreign or alien insurers, in which case such additional special deposits shall be deposited with the Commissioner in trust for the protection of all the insurer's policyholders in Georgia and all others in Georgia entitled to the proceeds of its policies.
(c) The deposits provided for under this Code section shall be administered by the Commissioner in accordance with Chapter 12 of this title.
(a) No insurer shall be authorized to transact insurance in Georgia which has or uses a name so similar to that of any insurer already so authorized as to cause uncertainty or confusion, except that, in case of conflict of names between two insurers, the Commissioner may permit or require as a condition to the issuance of an original certificate of authority to an insurer making application therefor that the insurer use in Georgia any supplementation or modification of its name as may reasonably be necessary to avoid a conflict.
(b) No insurer shall be authorized to transact business in Georgia which has or uses a name which would deceptively mislead as to the type of organization of the insurer.
To apply for an original certificate of authority an insurer shall file with the Commissioner its application therefor showing its name, location of its home office or its existing or proposed principal office in the United States if an alien insurer, kinds of insurance to be transacted, date of organization or incorporation, form of organization, state or country of domicile, the names and addresses of all general officers of the company with the number of shares of capital stock of the company held by or for each such general officer or by others for his or her benefit, and the percentage of the total capital stock of the company held by each such general officer, the date on which the company began to do business, the states in which it is admitted to do business, and such additional information as the Commissioner may require, together with the following applicable documents:
(1) A copy of its corporate charter with all amendments thereto certified by the public officer with whom the originals are on file in the state or country of domicile;
(2) A copy of its bylaws, as amended, certified by its secretary or other officer having custody thereof;
(3) If a foreign or alien insurer, a copy of its annual statement as of December 31 of the preceding year in a form approved for current use by the Commissioner and certified by two officers of the company. The annual statement of an alien insurer which has entered through and the United States branch of which is licensed to transact insurance in another state shall relate only to the transactions and affairs in the United States unless the Commissioner requires otherwise;
(4) A copy of report of the last examination, if any, made of the insurer, certified by the insurance supervisory official of its state or country of domicile or of entry into the United States;
(5) If a foreign or alien insurer, a copy of the appointment of the Commissioner as its attorney to receive service of legal process;
(6) If a foreign or alien insurer, a certificate of the public official having supervision of insurance in its state or country of domicile showing that it is authorized to transact the kinds of insurance proposed to be transacted in Georgia;
(7) If an alien insurer, a copy of the appointment and authority of its United States manager certified by its officer having custody of its records;
(8) If a foreign or alien insurer, certificate as to deposit if to be tendered pursuant to Code Section 33-3-8; and
(9) If an alien insurer entering through this state to transact insurance in the United States through a United States branch, an English language translation, as necessary, of any of the documents required under this Code section.
Every original application shall be accompanied by the fee required by Code Section 33-8-1, which shall be returned to the applicant if the application is finally denied.
(a) Upon filing of an application for an original certificate of authority, the Commissioner shall have 90 days in which to approve the application by issuing an appropriate certificate of authority or disapprove the application by issuing an order setting forth the grounds for such disapproval. The Commissioner may extend such 90 day period for an additional 90 days by notifying the applicant in writing of such extension. If the application is not approved or disapproved within such time period or periods, the application shall be deemed approved and the Commissioner shall thereupon issue the appropriate certificate of authority.
(b) The certificate, if issued, shall specify the kind or kinds of insurance the insurer is authorized to transact in Georgia. At the insurer's request, the Commissioner may issue a certificate of authority limited to particular types of insurance included within a kind of insurance as defined in this title.
(c) The Commissioner shall determine if the insurer is a reinsurer and shall so designate on the certificate. As used in this subsection, the term “reinsurer” means an insurer that is principally engaged in the business of reinsurance, does not conduct significant amounts of direct insurance as a percentage of its net premiums, and is not engaged in an ongoing basis in the business of soliciting direct insurance.
(a) All certificates of authority shall expire at 12:00 Midnight on June 30 of the year following date of issuance or renewal. An insurer desiring renewal shall file on March 1 preceding expiration a copy of its annual statement of December 31 of the preceding year in a form approved for current use by the Commissioner. On or before March 1 of each year, each insurer at its expense shall publish in a newspaper of general circulation published in this state a copy of such statement in short form showing income, assets, expenditures, and liabilities in gross as of December 31 of the preceding year to be sworn to by the officer or agent making the same; and such statement so published must be filed with the Commissioner with a copy of the statement as published attached thereto. Notwithstanding the March 1 deadline, the Commissioner may for good cause grant an extension of time for filing such annual statement not to exceed 60 days. If the insurer qualifies, its certificate shall be renewed annually; provided, however, that any certificate of authority shall continue in full force and effect until the new certificate is issued or specifically refused.
(b) The Commissioner may amend a certificate of authority at any time to accord with changes in the insurer's charter or insuring powers.
In addition to any other grounds set forth in this title, the Commissioner may refuse to issue a certificate of authority or after a hearing refuse to renew or may revoke or suspend an insurer's certificate of authority or place an insurer under administrative supervision if the insurer:
(1) Violates any provision of this title other than those as to which refusal, suspension, or revocation is mandatory;
(2) Knowingly fails to comply with or violates any rule, regulation, or order of the Commissioner;
(3) Is found by the Commissioner to be in unsound condition or in such condition as to render its further transaction of insurance in Georgia hazardous to its policyholders or to the public;
(4) As a general scheme or plot without just cause compels claimants to accept less than the amount due them or to bring an action against it to secure full payment thereof;
(5) Refuses to be examined or to produce its accounts, records, and files for examination by the Commissioner when required; or refuses to furnish such other additional information as the Commissioner may deem necessary to consider the application for renewal of such insurer's certificate of authority;
(6) Fails to pay any final judgment rendered against it in Georgia within 30 days after such judgment becomes final; or
(7) Is affiliated with and under the same general management or interlocking directorate or ownership as another insurer which transacts direct insurance in Georgia without having a certificate of authority therefor, except as permitted to a surplus line insurer under Chapter 5 of this title or an insurance holding company under Chapter 13 of this title.
The Commissioner may, without advance notice or a hearing thereon, place an insurer under administrative supervision or suspend immediately the certificate of authority of any insurer:
(1) As to which proceedings for receivership, conservatorship, rehabilitation, or other delinquency proceedings have been commenced in any state by the public insurance supervisory official of such state;
(2) Whose authority to do business in any state has been revoked, suspended, or restricted in any way by the public insurance supervisory official of such state; or
(3) If upon examination or at any other time it appears in the Commissioner's discretion that:
(A) The insurer's condition renders the continuance of its business hazardous to the public or to its insureds;
(B) The insurer exceeded its powers granted under its certificate of authority and applicable law;
(C) The insurer has failed to comply with the applicable provisions of this title;
(D) The business of the insurer is being conducted fraudulently; or
(E) The insurer gives its consent.
The Commissioner shall refuse to issue or to renew or shall revoke or suspend an insurer's certificate of authority:
(1) If such action is required by any provision of this title; or
(2) If the insurer no longer meets the requirements for the authority originally granted on account of deficiency in assets or otherwise.
(a) The Commissioner may, after a hearing, impose upon an insurer an administrative fine if he finds that such insurer through the acts of its officers, employees, agents, or representatives has with such frequency as to indicate its general business practice in this state:
(1) Failed to use due diligence in processing all claims, failed to pay claims in a timely manner, failed to provide proper notice when required with respect to the reasons for the insurer's failure to make claims payments when due, or refused without just cause to pay proper claims arising under coverage provided by its policies, whether the claim is in favor of an insured or in favor of a third person with respect to the liability of an insured to a third person or in favor of any other person entitled to the proceeds of a policy;
(2) Compelled, without just cause, insureds, claimants, or other persons entitled to the proceeds of its policies in this state to accept less than the amount due them or to bring an action against the insurer or an insured to secure full payment or settlement thereof; or
(3) Accepted money, trade stamps, gifts, or other remuneration of any kind in return for referring automobile and other property repair business including glass breakage to a particular automobile repairer, glass company, construction company, or other repair company of any kind.
(b) The administrative fine imposed for violations set forth in paragraph (1), (2), or (3) of subsection (a) of this Code section shall not exceed $1,000.00 for each act of misconduct constituting a violation; provided, however, a fine of not more than $5,000.00 for each act of willful misconduct constituting a violation may be imposed.
(c) For the purposes of this Code section, the term “insurer” shall include any insurer, nonprofit organization, or any other person authorized to sell accident and sickness insurance policies, subscriber contracts, certificates, or agreements of any form under Chapter 15, 20, 21, 29, or 30 of this title.
On or before March 1 in each year after it shall have commenced to do business pursuant to a certificate of authority, every insurer shall make and file with the Commissioner a report of its affairs and operations during the year ending on December 31 of the preceding year. This annual report shall be made in such form and contain such information as the Commissioner may prescribe by regulation from time to time and may require in protecting the public interest, the interest of the policyholders of any insurer, and the interest of the investors in the securities issued by any insurer. The Commissioner may require by regulation any additional periodic reports as he or she may prescribe from time to time as necessary or appropriate for the protection of policyholders, investors, and the public and necessary to ensure the solvency of any insurer, to inform and protect the investors in any insurer, and to assure fair dealing in the securities of any insurer. The Commissioner may require that the reports be verified under oath by any appropriate officers or agents as he or she may designate by regulation and may require the same to be published. Compliance with this Code section shall be a condition to the renewal of a certificate of authority under Code Section 33-3-16.
(a) By rule or regulation, the Commissioner may require each insurer licensed to write property and casualty insurance by the Commissioner to submit a report on a form furnished by the Commissioner showing its direct writings in this state.
(b) The report permitted by subsection (a) of this Code section may include but not be limited to the following types of insurance written by such insurer:
(1) Motor vehicle bodily injury liability insurance, including medical pay insurance;
(2) Products liability insurance;
(3) Medical malpractice insurance;
(4) Architect and engineer malpractice insurance;
(5) Attorney malpractice insurance;
(6) Motor vehicle personal injury protection insurance;
(7) Motor vehicle property liability insurance;
(8) Uninsured motorist insurance;
(9) Underinsured motorist insurance; and
(10) Commercial casualty or property insurance as defined in paragraph (1) of Code Section 33-7-3 or Code Section 33-7-6.
(c) Additionally, the report shall include the following information:
(1) Direct premiums written;
(2) Direct premiums earned;
(3) Net investment income, including net realized capital gains and losses, using appropriate estimates where necessary;
(4) Incurred claims, developed as a sum of, and with figures provided for, the following:
(A) Dollar amount of claims closed with payment; plus
(B) Reserves for reported claims at the end of the current year; minus
(C) Reserves for reported claims at the end of the previous year; plus
(D) Reserves for incurred but not reported claims at the end of the current year; minus
(E) Reserves for incurred but not reported claims at the end of the previous year; plus
(F) Reserves for loss adjustment expense at the end of the current year; minus
(G) Reserves for loss adjustment expense at the end of the previous year;
(5) Actual incurred expenses allocated separately to loss adjustment, commissions, other acquisition costs, general office expenses, taxes, licenses, fees, and all other expenses;
(6) Net underwriting gain or loss; and
(7) Net operation gain or loss, including net investment income.
(d) Any reports provided under this Code section shall be made available to the public for inspection.
(a) As used in this Code section, the term “qualified independent loss reserve specialist” means a person who is not an employee, principal, director, or indirect owner of the insurer and either is a member of the casualty actuarial society or possesses such other experience acceptable to the Commissioner to assure a professional opinion on the adequacy of the loss and loss adjustment expense reserves of the insurer.
(b) Every property and casualty insurer required to file an annual report with the Commissioner which has not filed a statement of opinion relating to loss and loss adjustment expense reserves in connection with its last annual statement on file with the department shall engage, whenever the insurer's loss and loss adjustment expense reserves are outside the standard or average range as designated by the Commissioner and based upon reliable and credible current information, a qualified independent loss reserve specialist to analyze the adequacy of such reserves and file a report with the Commissioner on a date to be specified by the Commissioner.
(a) This Code section shall apply to all domestic, foreign, and alien insurers who are authorized to transact business in this state.
(b)(1) Each domestic, foreign, and alien insurer who is authorized to transact insurance in this state shall file annually on or before March 1 of each year with the National Association of Insurance Commissioners a copy of its annual statement convention blank along with such additional filings as prescribed by the Commissioner for the preceding year. The information filed with the National Association of Insurance Commissioners shall be in the same format and scope as that required by the Commissioner and shall include the signed jurat page and the actuarial certification. Any amendments and addendums to the annual statement filing subsequently filed with the Commissioner shall also be filed with the National Association of Insurance Commissioners.
(2) Foreign insurers that are domiciled in a state which has a law substantially similar to paragraph (1) of this subsection shall be deemed in compliance with this subsection.
(c) In the absence of actual malice, members of the National Association of Insurance Commissioners; their duly authorized committees, subcommittees, and task forces; their delegates; employees of the National Association of Insurance Commissioners; and all others charged with the responsibility of collecting, reviewing, analyzing, and disseminating the information developed from the filing of the annual statement convention blanks shall be acting as agents of the Commissioner under the authority of this Code section and shall not be subject to civil liability for libel, slander, or any other cause of action by virtue of their collection, review, analysis, and dissemination of the data and information collected from the filings required under this Code section.
(d) Notwithstanding any provision of Article 4 of Chapter 18 of Title 50 to the contrary, all financial analysis ratios and examination synopses concerning insurance companies that are submitted to the department with an expectation of confidentiality by the National Association of Insurance Commissioners' Insurance Regulatory Information System shall be confidential and may not be disclosed by the department.
(e) The Commissioner may suspend, revoke, or refuse to renew the certificate of authority of any insurer failing to file its annual statement when due or within any extension of time which the Commissioner, for good cause, may have granted.
The Commissioner by rule and regulation may require each insurer providing product liability insurance in this state to provide reports of its affairs and operations regarding product liability insurance covering risks located in this state with such frequency and in such form as the Commissioner deems necessary.
(a) For the purposes of this Code section, the term:
(1) “Bank holding company” means the definition as set forth in Code Section 7-1-600 and in Section 2 of an act of Congress entitled the Bank Holding Company Act of 1956, 1 as amended.
(2) “Lending institution” means any domestic institution that accepts deposits from the public and lends money, including banks and savings and loan associations.
(b) A lending institution, bank holding company, or subsidiary or affiliate of either of the foregoing doing business in this state, or any officer or employee of any of the foregoing, may be licensed to sell insurance, including but not limited to credit insurance, in this state and may engage in underwriting and act as an underwriter for credit life insurance and credit accident and sickness insurance subject to the provisions of this title and in conformity with rules and regulations promulgated by the Commissioner.
(c) Nothing in this chapter shall prohibit the purchase of mortgage guaranty insurance, also called credit loss insurance, by a lending institution from a mortgage guaranty insurance company directly or indirectly.
(d) No lending institution, bank holding company, or any subsidiary or affiliate of any of the foregoing doing business in this state that was not in the business of selling title insurance on or before April 1, 2000, shall be permitted to sell title insurance.
1 12 U.S.C.A. § 1841.
(a) No institution included in the Farm Credit System as set forth and identified in 12 U.S.C.A., Section 2002 (Pub. Law 92-181, Sec. 1.2, Dec. 10, 1971, 85 Stat. 583), any subsidiary or affiliate of such institution doing business in this state, any officer or employee of any institution included in the Farm Credit System, or any subsidiary or affiliate of any institution may directly or indirectly be licensed to sell or solicit any type of insurance, except the following:
(1) Credit life and accident and health in an amount appropriate to insure repayment of the loan;
(2) Crop hail, hail, or wind damage to crops; or
(3) Insurance against loss of any collateral securing a loan extended by an affiliate bank or association of the Farm Credit System for the full value of such collateral. The right to place collateral insurance, however, shall continue only so long as the underlying loan remains outstanding or until the expiration of the policy, but in no event longer than 12 months from the last day the loan was outstanding.
(b) For purposes of this Code section, “collateral securing a loan” shall include only that property which is subject to the formal security interest granted in connection with the secured loan and duly filed and recorded in the county where the debtor resides; provided, however, “collateral securing a loan” shall not include any property acquired by the debtor after the date the underlying loan was made unless the secured party shall make an advance to the debtor or otherwise give new value which is to be secured in whole or in part by after-acquired property.
(c) For the purposes of this Code section, institutions constituting the Farm Credit System shall include the federal land banks, the federal land bank associations, the federal intermediate credit banks, the production credit associations, the banks for cooperatives, and such other institutions as may be made part of the system, all of which are chartered by and subject to the supervision of the Farm Credit Administration; provided, however, that the types of insurance described in paragraphs (1), (2), and (3) of subsection (a) of this Code section may only be transacted, sold, or solicited for the purposes of protecting loans made for agricultural purposes to farmers by an institution of the Farm Credit System or any subsidiary or affiliate thereof doing business in this state.
(d) Any person holding a license to sell or solicit insurance on April 8, 1977, and disqualified under the terms of subsection (a) of this Code section upon termination of his association as an employee or officer, or both, of any Farm Credit System institution or affiliate or subsidiary thereof shall have his license reissued upon request without the necessity of taking or passing any examination. Applications shall be made within 60 days from the date of termination of such employment.
(a) All homeowner's insurance policies, including tenant homeowner's insurance policies, personal automobile insurance policies, individual life or accident and sickness insurance policies, all certificates of group life or accident and sickness insurance coverage, and all coverage booklets provided by insurers to group life or accident and sickness insurance certificate holders which are issued, delivered, or issued for delivery in this state on or after July 1, 1988, shall be written in a simplified form, shall be divided into logically arranged, captioned sections, and shall contain readable language which complies with the standards prescribed in such rules and regulations as may be promulgated by the Commissioner after due notice and hearing.
(b) In establishing the policy language simplification and reading ease standards for such policies, certificates, and coverage booklets, the Commissioner may utilize a minimum score of 40 on the “Flesch reading ease test” as the basic standard, or such other nationally recognized reading ease standards or tests as would produce comparable policy language simplification and readability results, and may also provide for exceptions thereto by appropriate rules and regulations.
(c) This Code section shall apply to all insurers issuing the kinds of insurance policies described in subsection (a) of this Code section in this state, including all insurers, nonprofit corporations, or other organizations issuing policies or contracts of life or accident and sickness coverage under Chapter 15, 20, 21, 29, or 30 of this title.
(a) When by or pursuant to the laws of any other state or foreign country any taxes, licenses, and other fees in the aggregate and any fines, penalties, deposit requirements, or other material obligations, prohibitions, or restrictions are or would be imposed upon Georgia insurers or upon the agents or representatives of such insurers which are in excess of such taxes, licenses, and other fees in the aggregate or which are in excess of the fines, penalties, deposit requirements, or other obligations, prohibitions, or restrictions directly imposed upon similar insurers or upon the agents or representatives of such insurers of such other state or country under the statutes of this state, so long as such laws of such other state or country continue in force or are so applied, the same taxes, licenses, and other fees in the aggregate or fines, penalties, deposit requirements, or other material obligations, prohibitions, or restrictions of whatever kind shall be imposed by the Commissioner upon the insurers or upon the agents or representatives of such insurers of such other state or country doing business or seeking to do business in Georgia. Any tax, license, or other fee or other obligation imposed by any city, county, or other political subdivision or agency of such other state or country on Georgia insurers or their agents or representatives shall be deemed to be imposed by such state or country within the meaning of this Code section.
(b) The Commissioner may waive any retaliatory obligations, prohibitions, or restrictions that would prohibit entry into this state of any insurer domiciled in another state and that would otherwise be imposed by subsection (a) of this Code section if, in his or her discretion, the entry of such insurer would be expected to enhance competition in this state and would be in the best interests of the citizens of this state. The discretion provided by this subsection shall not extend to any retaliatory taxes, fees, fines, penalties, or deposit requirements.
(c) This Code section shall not apply as to personal income taxes, as to ad valorem taxes on real or personal property, or as to special purpose obligations or assessments imposed by another state in connection with particular kinds of insurance other than property insurance, except that deductions from premium taxes or other taxes otherwise payable allowed on account of real estate or personal property taxes paid shall be taken into consideration by the Commissioner in determining the propriety and extent of retaliatory action under this Code section.
(d) For the purposes of this Code section, the domicile of an alien insurer other than insurers formed under the laws of Canada shall be that state designated by the insurer in writing filed with the Commissioner at the time of admission to this state and may be any one of the following states:
(1) This state if the insurer is entering through this state to transact insurance in the United States through a United States branch;
(2) That in which the insurer was first authorized to transact insurance;
(3) That in which is located the insurer's principal place of business in the United States; or
(4) That in which is held the larger deposit of trusteed assets of the insurer for the protection of its policyholders and creditors in the United States.
(e) If the insurer makes no such designation, its domicile shall be deemed to be that state in which is located its principal place of business in the United States.
(f) In the case of an insurer formed under the laws of Canada or a province thereof, its domicile shall be deemed to be that province in which its head office is situated.
(a) For the purposes of this Code section, the term:
(1) “High/low agreement” means a settlement in which a defendant agrees to pay the plaintiff a minimum recovery in return for the plaintiff's agreement to accept a maximum amount regardless of the outcome of the trial.
(2) “Low payment” means the defendant pays the plaintiff the minimum recovery under a high/low agreement where the court rules in favor of the defendant.
(3) “Medical malpractice claim” means any claim for damages resulting from the death of or injury to any person arising out of health, medical, or surgical service, diagnosis, prescription, treatment, or care rendered by a person authorized by law to practice medicine in this state or by any person acting under such person's supervision and control.
(b) Every insurer providing medical malpractice insurance coverage in this state shall notify in writing the Georgia Composite Medical Board when it pays a judgment or enters into an agreement to pay an amount to settle a medical malpractice claim, other than a low payment under a high/low agreement, against a person authorized by law to practice medicine in this state. Such judgments or agreements shall be reported to the board regardless of the dollar amount. Such notice shall be sent within 30 days after the judgment has been paid or the agreement has been entered into by the parties involved in the claim.
(a)(1) Every insurer providing liability or casualty insurance coverage in this state and which is or may be liable to pay all or a part of any claim shall provide, within 60 days of receiving a written request from the claimant, a statement, under oath, of a corporate officer or the insurer's claims manager stating with regard to each known policy of insurance issued by it, including excess or umbrella insurance, the name of the insurer, the name of each insured, and the limits of coverage. Such insurer may provide a copy of the declaration page of each such policy in lieu of providing such information. The claimant's request shall set forth under oath the specific nature of the claim asserted and shall be mailed to the insurer by certified mail or statutory overnight delivery.
(2) The insured, within 30 days of receiving a written request from a claimant or the claimant's attorney, shall disclose to the claimant or his attorney the name of each known insurer which may be liable to the claimant upon such claim.
(b) If the request provided in subsection (a) of this Code section contains information insufficient to allow compliance, the insurer or insured upon whom the request was made may so state in writing, stating specifically what additional information is needed, and such compliance shall constitute compliance with this Code section.
(c) The information provided to a claimant or his attorney as required by subsection (a) of this Code section shall not create a waiver of any defenses to coverage available to the insurer and shall not be admissible in evidence unless otherwise admissible under Georgia law.
(d) The information provided to a claimant or his attorney as required by subsection (a) of this Code section shall be amended upon the discovery of facts inconsistent with or in addition to the information provided.
(a) Any insurer which is organized under the laws of any other state and is admitted to do business in this state for the purpose of writing insurance may become a domestic insurer by complying with all of the requirements of this title relative to the organization and licensing of a domestic insurer of the same type and by designating its principal place of business at a location in this state. Upon satisfaction of such requirements, the insurer shall be issued a certificate of authority and license to transact business in this state and shall be subject to the authority and jurisdiction of this state as a domestic insurer. The redomesticated insurer may choose to retain its original date of incorporation in lieu of its date of redomestication, provided that the retention of an earlier incorporation date shall not affect the operation or application of other laws.
(b) Any domestic insurer may, upon the approval of the Commissioner, transfer its domicile to any other state in which it is admitted to transact the business of insurance and, upon such a transfer, shall cease to be a domestic insurer and shall be admitted to this state if qualified as a foreign insurer. The Commissioner shall approve any such proposed transfer unless the Commissioner determines such transfer is not in the best interest of the policyholders of this state.
(c) The certificate of authority, agent appointments and licenses, rates, and other items which the Commissioner allows, in his discretion, and which are in existence at the time any insurer licensed to transact the business of insurance in this state transfers its corporate domicile to this or any other state by merger, consolidation, or any other lawful method shall continue in full force and effect upon such transfer if such insurer remains duly authorized to transact the business of insurance in this state. All outstanding policies of any transferring insurer shall remain in full force and effect and need not be endorsed as to the new name of the company or its new location unless so ordered by the Commissioner. Every transferring insurer shall file new policy forms with the Commissioner on or before the effective date of the transfer but may use existing policy forms with appropriate endorsements if allowed by, and under such conditions as approved by, the Commissioner. Every such transferring insurer shall notify the Commissioner of the details of the proposed transfer and shall file promptly any forms, documents, or amendments to forms or documents with the Commissioner. The Commissioner may promulgate rules and regulations necessary to carry out the purposes of this Code section.
(a) Each alien insurer which enters through this state to transact insurance in the United States through a United States branch shall establish and maintain in this state such insurer's principal place of business in the United States, and shall keep in such principal place of business complete records of the assets, transactions, and affairs in accordance with the methods and systems which are customary or suitable as to the kind or kinds of insurance transacted in the United States.
(b) Concealment from the Commissioner or removal from this state of any material part of the records required to be kept in this state under subsection (a) of this Code section, except for any reasonable purposes and periods of time as may be approved by the Commissioner in writing in advance of such removal, is prohibited. The certificate of authority to do business of any alien insurer which removes or attempts to remove any material part of such records from the principal place of business of the insurer in this state with the intent to remove the same from this state or conceals or attempts to conceal the same from the Commissioner in violation of this subsection shall be revoked. Upon any removal or attempted removal of such records or upon retention of such records or material part of such records outside this state beyond the period specified in the Commissioner's consent under which such records were permitted to be removed or upon concealment of or attempts to conceal such records in violation of this subsection, the Commissioner may institute proceedings against the insurer pursuant to Chapter 37 of this title.
(c) This Code section shall not be deemed to prohibit or prevent an alien insurer from establishing and maintaining branch offices or regional home offices in other states where necessary or convenient to the transaction of its business and keeping therein the detailed records customary and necessary for the servicing of the insurance in force in the jurisdiction served by such an office as long as such records are made readily available at such office for examination by the Commissioner at his request.
Except for actions arising against unauthorized insurers or under surplus line contracts which are provided for in Chapter 5 of this title, whenever any person shall have a claim or demand on any insurer, such person may bring an action in any of the following places:
(1) In the county where the principal office of the company is located;
(2) In any county where the company shall have an agent or place of doing business;
(3) In any county where such agent or place of doing business was located at the time the cause of action accrued or the contract was made out of which such cause of action arose; or
(4) In any county where the property covered by an insurance contract upon which an action is brought is located or where the person entitled to the proceeds of an insurance contract upon which action is brought maintains his legal residence. For the purpose of this paragraph, personal property shall be deemed to be located in the county of the legal residence of the owner of such personal property, and, for the purpose of bringing an action under this paragraph, a company which has written a contract of insurance upon persons or property located in a particular county or which has become surety for the performance of an obligation in a particular county shall be deemed to be transacting business in such county and shall be deemed to be a legal resident of such county; provided, further, that any action on the bond of a sheriff or other arresting or law enforcement officer or superior court clerk or deputy clerk or clerk or deputy of any court of record, upon which any guaranty or surety company or fidelity insurance company is bound and obligated as surety, shall be instituted in the county of the residence of the officer and not in any other county; and the county of the residence of the officer is hereby fixed as the venue of any action on such bond; and the officer may be made a party defendant or may by intervention become a party defendant.
Service of process against a domestic insurer may be made upon the insurer corporation in the manner provided by laws applying to corporations generally or upon the insurer's attorney in fact if a reciprocal insurer or a Lloyd's association.
Each authorized alien or foreign insurer shall make the following appointments for service of process:
(1) Each insurer shall file with the Commissioner a power of attorney appointing a person who is a resident of this state to receive service of legal process issued against it in this state upon any cause of action arising from its transactions of business in this state. The power of attorney shall be irrevocable and may only be terminated by the filing of a new appointment by the insurer; and
(2) Each insurer shall appoint the Commissioner as its attorney to receive service of legal process issued against it in this state upon any cause of action arising from its transactions of business in this state. The appointment shall be irrevocable, shall bind any successor, and shall remain in effect as long as there is in force in this state any contract made by the insurer or obligations arising therefrom. Each insurer at time of application for a certificate of authority shall file with the Commissioner the designation of the name and address of the person to whom process against it served upon the Commissioner is to be forwarded. The insurer may change such designation by a new filing. Service of process upon the Commissioner, however, shall only be made when service cannot be effected in this state by serving the attorney in fact appointed by the insurer as provided under paragraph (1) of this Code section.
(a) In addition to other methods of service provided by law, a foreign or alien insurer may be served with legal process by service of duplicate copies of the legal process on the agent for service designated under Code Section 33-4-3 or upon the Commissioner. At the time of service the plaintiff shall pay a fee in an amount as provided in Code Section 33-8-1, taxable as cost in the action. Upon receiving such service the Commissioner shall promptly forward a copy of such service by registered or certified mail or statutory overnight delivery to the person last so designated by the insurer to receive the same.
(b) Process served upon the Commissioner and a copy of such process forwarded as provided in this Code section shall constitute service of such legal process upon the insurer so long as the insurer shall have any obligations or liabilities outstanding, although the company may have withdrawn, have been excluded from, or have ceased to do business in this state.
In actions upon any certificate or policy issued by a nonresident religious or mutual aid society, cooperative, or assessment life insurance company or society, service upon the chief executive officer, or the person acting officially for or as the chief executive officer of a local lodge, shall be sufficient service upon the society or company. In carrying out the purpose of this Code section, officers of local lodges are deemed to be agents of the nonresident societies or companies and the local lodges are deemed to be agencies of said companies or societies.
(a) In the event of a loss which is covered by a policy of insurance and the refusal of the insurer to pay the same within 60 days after a demand has been made by the holder of the policy and a finding has been made that such refusal was in bad faith, the insurer shall be liable to pay such holder, in addition to the loss, not more than 50 percent of the liability of the insurer for the loss or $5,000.00, whichever is greater, and all reasonable attorney's fees for the prosecution of the action against the insurer. The action for bad faith shall not be abated by payment after the 60 day period nor shall the testimony or opinion of an expert witness be the sole basis for a summary judgment or directed verdict on the issue of bad faith. The amount of any reasonable attorney's fees shall be determined by the trial jury and shall be included in any judgment which is rendered in the action; provided, however, that the attorney's fees shall be fixed on the basis of competent expert evidence as to the reasonable value of the services based on the time spent and legal and factual issues involved in accordance with prevailing fees in the locality where the action is pending; provided, further, that the trial court shall have the discretion, if it finds the jury verdict fixing attorney's fees to be greatly excessive or inadequate, to review and amend the portion of the verdict fixing attorney's fees without the necessity of disapproving the entire verdict. The limitations contained in this Code section in reference to the amount of attorney's fees are not controlling as to the fees which may be agreed upon by the plaintiff and the plaintiff's attorney for the services of the attorney in the action against the insurer.
(b) In any action brought pursuant to subsection (a) of this Code section, and within 20 days of bringing such action, the plaintiff shall, in addition to service of process in accordance with Code Section 9-11-4, mail to the Commissioner of Insurance a copy of the demand and complaint by first-class mail. Failure to comply with this subsection may be cured by delivering same.
(a) In the event of a loss because of injury to or destruction of property covered by a motor vehicle liability insurance policy, the insurer issuing such policy has an affirmative duty to adjust that loss fairly and promptly, to make a reasonable effort to investigate and evaluate the claim, and, where liability is reasonably clear, to make a good faith effort to settle with the claimant potentially entitled to recover against the insured under such policy. Any insurer who breaches this duty may be liable to pay the claimant, in addition to the loss, not more than 50 percent of the liability of the insured for the loss or $5,000.00, whichever is greater, and all reasonable attorney's fees for the prosecution of the action.
(b) An insurer breaches the duty of subsection (a) of this Code section when, after investigation of the claim, liability has become reasonably clear and the insurer in bad faith offers less than the amount reasonably owed under all the circumstances of which the insurer is aware.
(c) A claimant shall be entitled to recover under subsection (a) of this Code section if the claimant or the claimant's attorney has delivered to the insurer a demand letter, by statutory overnight delivery or certified mail, return receipt requested, offering to settle for an amount certain; the insurer has refused or declined to do so within 60 days of receipt of such demand, thereby compelling the claimant to institute or continue suit to recover; and the claimant ultimately recovers an amount equal to or in excess of the claimant's demand.
(d) At the expiration of the 60 days set forth in subsection (c) of this Code section, the claimant may serve the insurer issuing such policy by service of the complaint in accordance with law. The insurer shall be an unnamed party, not disclosed to the jury, until there has been a verdict resulting in recovery equal to or in excess of the claimant's demand. If that occurs, the trial shall be recommenced in order for the trier of fact to receive evidence to make a determination as to whether bad faith existed in the handling or adjustment of the attempted settlement of the claim or action in question.
(e) The action for bad faith shall not be abated by payment after the 60 day period nor shall the testimony or opinion of an expert witness be the sole basis for a summary judgment or directed verdict on the issue of bad faith.
(f) The amount of recovery, including reasonable attorney's fees, if any, shall be determined by the trier of fact and included in a separate judgment against the insurer rendered in the action; provided, however, that the attorney's fees shall be fixed on the basis of competent expert evidence as to the reasonable value of the services based on the time spent and legal and factual issues involved in accordance with prevailing fees in the locality where the action is pending; provided, further, that the trial court shall have the discretion, if it finds the jury verdict fixing attorney's fees to be greatly excessive or inadequate, to review and amend the portion of the verdict fixing attorney's fees without the necessity of disapproving the entire verdict. The limitations contained in this Code section in reference to the amount of attorney's fees are not controlling as to the fees which may be agreed upon by the plaintiff and his or her attorney for the services of the attorney.
(g) In any action brought pursuant to subsection (b) of this Code section, and within 20 days of bringing such action, the plaintiff shall, in addition to service of process in accordance with Code Section 9-11-4, mail to the Commissioner a copy of the demand and complaint by first-class mail. Failure to comply with this subsection may be cured by delivering same.
(a) No person in this state shall:
(1) Represent an insurer who is not at the time duly authorized to transact insurance in this state in the solicitation, negotiation, or effectuation of insurance, inspection of risks, fixing of rates, investigation or adjustment of losses, collection of premiums, or in any other manner in the transaction of insurance with respect to subjects of insurance, resident, located, or to be performed in this state; or
(2) Represent any person in the procuring of insurance with an unauthorized insurer upon or with relation to any subject of insurance.
(b) This Code section shall not apply to:
(1) Surplus line insurance which is authorized by this chapter and transactions as to which a certificate of authority is not required of an insurer under Code Section 33-3-2;
(2) Reinsurance as authorized by Code Section 33-7-14;
(3) The services of an adjuster with respect to claims under policies lawfully solicited, issued, and delivered outside of Georgia;
(4) Acceptance of service by the Commissioner pursuant to this title;
(5) The professional services of an attorney; or
(6) Any insurance company or underwriter issuing contracts of insurance to nuclear insureds, nor to any contract of insurance issued to any one or more nuclear insureds, provided that such nuclear insured under a contract procured from an unauthorized insurer shall pay to the Commissioner before March 1 of the succeeding calendar year following the year in which the insurance was so effectuated, continued, or renewed, a premium receipts tax of 4 percent of the gross premiums charged for such insurance. For the purposes of this paragraph, a “nuclear insured” is an insured purchasing policies of insurance on risks on its own nuclear generating plants and other facilities at such plants in this state.
(a) A contract of insurance effectuated by an unauthorized insurer in violation of this title shall be voidable except at the instance of the insurer unless during the life of such contract the insurer is authorized to transact the class or classes of insurance involved.
(b) No publication published in this state or radio or television broadcast or any other agency or means for the dissemination of information operated or located in this state shall publish, broadcast, or otherwise disseminate within this state advertising for or on behalf of any insurer not then authorized to transact insurance in this state; provided, however, that this subsection shall not apply as to publications published in this state principally for circulation in other states, wherein advertising by or on behalf of such unauthorized insurers is not expressly directed toward residents or subjects of insurance in this state.
Any person, firm, or corporation violating any of the provisions of this chapter shall be guilty of a misdemeanor.
This article shall be known and may be cited as “The Surplus Line Insurance Law.”
As used in this article, the term:
(1) “Domestic surplus lines insurer” means a nonadmitted insurer that is domiciled in this state with which a surplus lines broker may place surplus lines insurance;
(1.1) “Exempt commercial purchaser” means any person purchasing commercial insurance that, at the time of placement, meets the following requirements:
(A) The person employs or retains a qualified risk manager to negotiate insurance coverage;
(B) The person has paid aggregate nation-wide commercial property and casualty insurance premiums in excess of $100,000.00 in the immediately preceding 12 months; and
(C)(i) The person meets at least one of the following criteria:
(I) The person possesses a net worth in excess of $20 million as such amount is adjusted pursuant to division (ii) of this subparagraph;
(II) The person generates annual revenues in excess of $50 million as such amount is adjusted pursuant to division (ii) of this subparagraph;
(III) The person employs more than 500 full-time or full-time equivalent employees per individual insured or is a member of an affiliated group employing more than 1,000 employees in the aggregate;
(IV) The person is a not for profit organization or public entity generating annual budgeted expenditures of at least $30 million as such amount is adjusted pursuant to division (ii) of this subparagraph; or
(V) The person is a municipality with a population in excess of 50,000.
(ii) Effective on January 1, 2016, and every five years on January 1 thereafter, the amounts in subdivisions (I), (II), and (IV) of division (i) of this subparagraph shall be adjusted to reflect the percentage change for such five-year period in the Consumer Price Index for All Urban Consumers as reported by the Bureau of Labor Statistics of the United States Department of Labor.
(2) “Home state” means:
(A) The state in which an insured maintains its principal place of business or, in the case of an individual, the individual's principal residence; or
(B) If 100 percent of the insured risk is located outside the state referred to in subparagraph (A) of this paragraph, the state to which the greatest percentage of the insured's taxable premium for that insurance contract is allocated.
If more than one insured from an affiliated group are named insureds on a single nonadmitted insurance contract, the term “home state” means the home state, as determined according to subparagraph (A) of this paragraph, of the member of the affiliated group that has the largest percentage of premium attributed to it under such insurance contract.
(3) “Nonadmitted insurance” means any property and casualty insurance permitted in a state to be placed directly or through a surplus line broker with a nonadmitted insurer eligible to accept such insurance.
(4) “Principal place of business” means the state where the insured maintains its headquarters and where the insured's high-level officers direct, control, and coordinate the business's activities.
(5) “Principal residence” means the state where the individual resides for the greatest number of days during a calendar year.
(6) “Qualified risk manager” means, with respect to a policyholder of commercial insurance, a person who meets all of the following requirements:
(A) The person is an employee of, or third-party consultant retained by, the commercial policyholder;
(B) The person provides skilled services in purchase of insurance and in loss prevention, loss reduction, or risk and insurance coverage analysis;
(C) The person has a bachelor's degree or higher from an accredited college or university in risk management, business administration, finance, economics, or any other field determined by a state insurance commissioner or other state regulatory official or entity to demonstrate minimum competence in risk management and:
(i) Has three years of experience in risk financing, claims administration, loss prevention, risk and insurance analysis, or purchasing commercial lines of insurance;
(ii) Has a designation as a chartered property and casualty underwriter issued by the American Institute for CPCU/Insurance Institute of America;
(iii) Has a designation as an associate in risk management issued by the American Institute for CPCU/Insurance Institute of America;
(iv) Has a designation as certified risk manager issued by the National Alliance for Insurance Education & Research;
(v) Has a designation as a RIMS Fellow issued by the Global Risk Management Institute; or
(vi) Has any other designation, certification, or license determined by the Commissioner to demonstrate minimum competency in risk management; and
(D) The person has:
(i) At least seven years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of insurance;
(ii) Any one of the designations specified in subparagraph (C) of this paragraph; or
(iii) A graduate degree from an accredited college or university in risk management, business administration, finance, economics, or any other field determined by a state insurance commissioner or other state regulatory official or entity to demonstrate minimum competence in risk management.
(7) “Surplus line insurance” means any property and casualty insurance permitted in a state to be placed through a surplus line broker with a nonadmitted insurer eligible to accept such insurance.
(8) “Surplus line broker” or “broker” means an individual who is licensed in this state to sell, solicit, or negotiate insurance on properties, risks, or exposures located or to be performed in this state with nonadmitted insurers.
(a) A nonadmitted insurer that is domiciled in this state shall be deemed a domestic surplus lines insurer if all of the following criteria are satisfied:
(1) The insurer shall possess a policyholder surplus of at least $15 million;
(2) The insurer is an eligible surplus lines insurer in at least one jurisdiction other than this state;
(3) The board of directors of the insurer has passed a resolution seeking to be a domestic surplus lines insurer in this state; and
(4) The Commissioner has issued a certificate of authority or otherwise provided written approval for the insurer to be a domestic surplus lines insurer.
(b) For the purposes of the federal Nonadmitted and Reinsurance Reform Act of 2010, 15 U.S.C Section 8201, et seq, a domestic surplus lines insurer shall be considered a nonadmitted insurer with respect to risks insured in this state.
(c) A domestic surplus lines insurer shall be deemed an eligible surplus lines insurer and authorized to write any kind of insurance that a nonadmitted insurer not domiciled in this state is eligible to write.
(d) Notwithstanding any other statute, the policies issued in this state by a domestic surplus lines insurer shall be subject to taxes assessed upon surplus lines policies issued by nonadmitted insurers, including the surplus lines premium tax, but will not be subject to other taxes levied upon admitted insurers, whether domestic or foreign.
(e) Policies issued by a domestic surplus lines insurer are not subject to the protections or other provisions of the Georgia Insurers Insolvency Pool created by Chapter 36 of this title or the Georgia Life and Health Insurance Guaranty Association created by Chapter 38 of this title.
(f) All financial and solvency requirements imposed by this state's laws upon domestic admitted insurers shall apply to domestic surplus lines insurers unless domestic surplus lines insurers are otherwise specifically exempted.
(g) Policies issued by a domestic surplus lines insurer shall be exempt from all statutory requirements relating to insurance rating plans, policy forms, premiums charged to insureds, and other statutory requirements in the same manner and to the same extent as a nonadmitted insurer domiciled in another state.
(a) Surplus line insurance may be procured from unauthorized insurers subject to the following conditions:
(1) The insurance must be procured through a licensed surplus line broker;
(2) The insurance may only be procured from insurers which meet the financial condition requirements of Code Section 33-5-25;
(3) The insured or the insured's agent has made an effort to procure the desired insurance coverage or benefits from authorized insurers, but such effort has been unsuccessful in obtaining insurance coverage or benefits which are satisfactory to the insured except as provided under subsection (b) of this Code section; and
(4) The insurance shall not be procured under this chapter for personal private passenger motor vehicle coverage or residential dwelling property coverage unless such insurance cannot be obtained from an authorized insurer.
(b) The broker shall not be required to make a due diligence search to determine whether the full amount or type of insurance can be obtained from authorized insurers when the surplus line broker is seeking to procure or place nonadmitted insurance for an exempt commercial purchaser, provided:
(1) The broker procuring or placing the surplus line insurance has disclosed to the exempt commercial purchaser that such insurance may be available from the admitted market that may provide greater protection with more regulatory oversight; and
(2) The exempt commercial purchaser has subsequently requested in writing for the broker to procure or place such insurance from a nonadmitted insurer.
Insurance placed in accordance with this article shall not be subject to the provisions of Chapter 9 of this title or Code Section 33-24-9.
A surplus lines broker shall be licensed in accordance with Code Section 33-23-37.
(a) The Commissioner shall revoke any surplus line broker's license:
(1) If the broker fails to file his quarterly affidavit or to remit the tax as required by law;
(2) If the broker fails to maintain an office in this state, or to keep records, or to allow the Commissioner to examine his records as required by law; or
(3) For any of the causes for which an agent's license may be revoked.
(b) The Commissioner may revoke or suspend any or all such licenses whenever he deems such suspension or revocation to be in the best interests of the people of this state.
(c) The procedures provided in Article 1 of Chapter 23 of this title for the suspension or revocation of agents' licenses shall be applicable to suspension or revocation of a surplus line broker's license.
(d) No broker whose license has been so revoked shall again be so licensed within five years thereafter nor until any penalties or delinquent taxes owing by him or her have been paid.
A licensed surplus line broker may accept and place surplus line business for any insurance agent or broker licensed in this state for the kind of insurance involved and may compensate such agent or broker for the surplus line business.
(a) The broker shall ascertain the financial condition of the unauthorized insurer before placing insurance with the unauthorized insurer and shall not place surplus line insurance with any insurer who does not meet, according to current available reliable financial information, the requirements provided in subsection (b) of this Code section.
(b)(1) The broker shall so insure only:
(A) With an insurance company domiciled in a United States jurisdiction that is authorized to write the type of insurance in its domiciliary jurisdiction and has a capital and surplus or its equivalent under the laws of its domiciliary jurisdiction which equals the greater of:
(i) The minimum capital and surplus requirements of this title; or
(ii) Fifteen million dollars;
The requirements of this subparagraph may be satisfied by an insurer that possesses less than the minimum capital and surplus upon an affirmative finding of acceptability by the Commissioner. The finding shall be based upon such factors as quality of management, capital and surplus of any parent company, company underwriting profit and investment income trends, market availability, and company record and reputation within the industry. In no event shall the Commissioner make an affirmative finding of acceptability when the unauthorized insurer's capital and surplus is less than $4.5 million;
(B) With any group of foreign individual underwriters licensed and domiciled in a state or United States territory if such group maintains a trust or security fund of at least $10 million as security to the full amount thereof for all policyholders and creditors in the United States of each member of the group. If the group includes incorporated and unincorporated underwriters, the incorporated members shall not be engaged in any business other than underwriting as a member of the group and shall be subject to the level of solvency regulation and control by the group's domiciliary regulatory agency as are the unincorporated members; or
(C) With an alien insurer or group of underwriters domiciled outside of the United States, including, but not limited to, any Lloyd's group, that is listed in the Quarterly Listing of Alien Insurers maintained by the International Insurers Department of the National Association of Insurance Commissioners.
(2) An insurer or group of foreign individual underwriters described in subparagraph (A) or (B) of paragraph (1) of this subsection shall annually furnish to the broker a copy of its current annual financial statement and, in the case of a group of foreign individual underwriters, evidence of compliance with required trust or security fund deposits.
(c) For any violation of this Code section, a broker's license may be suspended or revoked as provided in Code Section 33-5-23.
(a) Every insurance contract procured and delivered as a surplus line coverage shall be initialed by or bear the name of the surplus line broker who procured it and shall have printed or stamped upon it the following: “This contract is registered and delivered as a surplus line coverage under the Surplus Line Insurance Law, O.C.G.A. Chapter 33-5.”
(b) No surplus lines policy or certificate in which the policy premium is $5,000.00 per annum or less shall be delivered in this state unless a standard disclosure form or brochure explaining surplus lines insurance is attached to or made a part of the policy or certificate. The Commissioner shall prescribe by rule or regulation the format and contents of such form or brochure.
(a) Upon placing a surplus line coverage, the broker shall promptly issue and deliver to the insured evidence of the insurance consisting either of the policy as issued by the insurer or, if the policy is not then available, the surplus line broker's certificate. The certificate shall be executed by the broker and shall show the description and location of the subject of the insurance, a general statement of the kind and type of insurance purchased, and the term of the insurance, the premium and date charged, taxes collected from the insured, and the name and address of the insured and the insurer. If the direct risk is assumed by more than one insurer, the certificate or the policy, when delivered, shall state the name and address and proportion of the entire direct risk assumed by each insurer.
(b) No broker shall issue any certificate or any cover note or purport to insure or represent that insurance will be or has been granted by any unauthorized insurer unless he has prior written authority from the insurer for the insurance or has received information from the insurer in the regular course of business that the insurance has been granted or an insurance policy providing the insurance actually has been issued by the insurer and delivered to the insured.
(c) If, after the issuance and delivery of any certificate, there is any change as to the identity of the insurers or the proportion of the direct risk assumed by the insurer as stated in the broker's original certificate or in any other material respect as to the insurance coverage evidenced by the certificate, the broker shall promptly issue and deliver to the insured a substitute certificate or endorsement accurately showing the current status of the coverage and the insurers responsible thereunder.
(d) If a policy issued by the insurer is not available upon placement of the insurance and the broker has issued and delivered his certificate as provided in subsection (a) of this Code section, upon request therefor by the insured, the broker shall as soon as reasonably possible procure from the insurer its policy evidencing the insurance and deliver the policy to the insured in replacement of the broker's certificate theretofore issued.
(e) Any surplus line broker who knowingly or negligently issues a false certificate of insurance or who fails promptly to notify the insured of any material change with respect to such insurance by delivery to the insured of a substitute certificate or endorsement as provided in subsection (c) of this Code section shall be subject to the penalties provided by Code Section 33-5-32 or to any greater applicable penalty provided by law.
Each licensed surplus line broker shall keep in his office a separate account of each policy written or renewed showing the exact amount of insurance placed, the name and post office address of the insured, the name and home address of the insurer, the location of the insured property, the gross premium charged therefor, the amount of premium tax paid thereon, the nature of the risk, the number, date, and term of the policy, and any other information as the Commissioner may require. The record shall at all times be open to examination by the Commissioner.
(a) Each surplus line broker shall file with the Commissioner, on a quarterly basis, an affidavit executed by the surplus line broker setting forth the facts referred to in Code Section 33-5-21. Such affidavit shall furnish certificate or cover note number, name of insured, the amount of the premium, the tax paid thereon, and any other information as the Commissioner may require for all surplus line transactions in which premiums were paid to the surplus line broker during the previous quarter. The quarterly affidavit shall be filed with the Commissioner on or before the fifteenth day of April, July, October, and January. Each surplus line broker shall remit a 4 percent tax on direct premiums written, as described in Code Section 33-5-31. The tax shall be remitted with the surplus line broker's quarterly affidavit.
(b) In addition to the information required on the quarterly affidavit, each surplus line broker shall provide the Commissioner with such reports of its affairs and operations regarding insurance covering insured persons, resident or located in this state, for such periods of time as the Commissioner may require. The Commissioner may require from surplus line brokers who are the custodians of relevant records of surplus line insurers reports containing such information as the Commissioner may by regulation or by order prescribe which, as to product liability insurers, may include but shall not be required to be limited to the following information:
(1) The total number of product liability claims, broken down by:
(A) The type or category of claims; and
(B) Whether the claims were:
(i) Reported during a prior period and closed during the reporting period;
(ii) Reported and closed during the reporting period; or
(iii) Reported and not closed during the reporting period;
(2) The total amount paid in settlement or discharge of the claims for each type or category of claims;
(3) The total amount of reserves available to pay those product liability claims which were reported for the last preceding year; provided, however, the information on reserves shall be required to be maintained by the Commissioner in confidence, except that summaries of the combined totals of such reserves shall be subject to inspection by members of the General Assembly upon request;
(4) The total amount of premiums received from insured persons, resident or located in this state, which is attributable to product liability insurance and which must be classified separately with respect to manufacturers, wholesalers or distributors, and retailers;
(5) The total number of insured persons, resident or located in this state, for which the product liability insurance has been provided which must be classified separately with respect to manufacturers, wholesalers or distributors, and retailers;
(6) The total number of insured persons, resident or located in this state, whose product liability insurance coverage the insurer, with which the surplus line broker placed the coverage, canceled or refused to renew and the reasons therefor which must be classified separately with respect to manufacturers, wholesalers or distributors, and retailers; and
(7) The total number of insured persons, resident or located in this state, who failed to renew their product liability insurance policies during the reporting period which information must be classified separately with respect to manufacturers, wholesalers or distributors, and retailers.
Insurance contracts procured as surplus line coverage from unauthorized insurers in accordance with this chapter shall be fully valid and enforceable as to all parties and shall be given recognition in all matters and respects to the same effect as like contracts issued by authorized insurers.
(a) The surplus line broker shall remit to the Commissioner, on or before the fifteenth day of April, July, October, and January, at the time his or her quarterly affidavit is submitted, as a tax imposed for the privilege of doing business as a surplus line broker in this state, a tax of 4 percent on all premiums paid to the surplus line broker during the preceding quarter, less return premiums and exclusive of sums collected to cover state or federal taxes, on surplus line insurance subject to tax transacted by him or her during the preceding quarter as shown by his or her affidavit filed with the Commissioner.
(b) If this state participates in a cooperative agreement, compact, or reciprocal agreement with other states pursuant to Code Sections 33-5-40 through 33-5-44 and a surplus line policy covers risks or exposures located or to be performed both in and out of this state, the sum payable shall be computed based on an amount equal to 4 percent of that portion of the gross premiums allocated to this state plus an amount equal to the portion of premiums allocated to other states or territories on the basis of the tax rates and fees applicable to properties, risks, or exposures located or to be performed outside this state.
If any surplus line broker fails to file his or her quarterly affidavit or fails to remit the tax as provided by law within 30 days after the tax is due, he or she shall be liable for a penalty of either $25.00 for each day of delinquency commencing after the expiration of the 30 day period or an amount equal to 100 percent of the tax, whichever is less, except that for good cause shown, the Commissioner may grant a reasonable extension of time within which the affidavit may be filed and the tax may be paid. The tax may be recovered by distraint and the penalty and tax may be recovered by an action instituted by the Commissioner in any court of competent jurisdiction. The Commissioner shall pay to the Office of the State Treasurer any penalty so collected.
(a) Every insured who in this state procures or causes to be procured or continues or renews insurance with an unauthorized insurer upon a subject of insurance resident, located, or to be performed both within and outside this state, other than insurance procured through a surplus line broker pursuant to this article or exempted from this article under Code Section 33-5-35, shall within 30 days after the date such insurance was so procured, continued, or renewed file a report of the same with the Commissioner in writing and upon forms designated by the Commissioner and furnished to such an insured upon request. The report shall state the name and address of the insured or insureds, name and address of the insurer, the subject of the insurance, a general description of the coverage, the amount of premium currently paid thereon, and such additional information as reasonably requested by the Commissioner.
(b) If this state participates in a cooperative agreement, compact, or reciprocal agreement with other states pursuant to Code Sections 33-5-40 through 33-5-44, then for the general support of the government of this state, there is levied and there shall be collected from every such insured in this state for the privilege of so insuring his property or interests, a tax covering risks or exposures located or to be performed both in and out of this state, after deduction of return premiums, if any. The sum payable shall be computed based upon an amount equal to 4 percent of that portion of the gross premiums allocated to this state plus an amount equal to the portion of premiums allocated to other states or territories on the basis of the tax rates and fees applicable to properties, risks, or exposures located or to be performed outside this state. Such tax shall be paid to the Commissioner coincidentally with the filing of the report provided for in subsection (a) of this Code section.
(b.1) If this state does not participate in a cooperative agreement, compact, or reciprocal agreement with other states pursuant to Code Sections 33-5-40 through 33-5-44, then for the general support of the government of this state, there is levied and there shall be collected from every such insured in this state for the privilege of so insuring his or her property or interests both in and out of this state, a tax at the rate of 4 percent of the gross premium paid for any such insurance, after deduction of return premiums, if any. Such tax shall be paid to the Commissioner coincidently with the filing of the report provided for in subsection (a) of this Code section.
(c) The tax imposed under subsection (b) of this Code section, if delinquent, shall bear interest at the rate of 6 percent per annum, compounded annually.
(d) Such tax shall be collectable by civil action brought by the Commissioner or by distraint and, if with respect to insurance of real property, the tax shall constitute a lien upon such real property while owned by the insured, enforceable in the same manner and through the same procedures as govern the collection of other taxes upon such real property under the laws of this state.
(e) This Code section shall not apply to life or accident and sickness insurance.
(a) An action shall be brought against any unauthorized insurer under any contract issued by it as a surplus line contract pursuant to this chapter in the superior court of the county in which the cause of action arose.
(b) Every unauthorized insurer issuing or delivering a surplus line policy through a surplus line broker in this state shall be deemed thereby to have appointed the Commissioner as its attorney for acceptance of service of all legal process issued in this state in any action or proceeding arising out of the policy, and service of process upon the Commissioner shall be lawful personal service upon the insurer.
(c) Each surplus line policy shall contain a provision stating the substance of subsection (b) of this Code section and designating the person to whom the Commissioner shall mail process as provided in subsection (d) of this Code section.
(d) Duplicate copies of legal process against the insurers shall be served upon the Commissioner and at time of service the plaintiff shall pay a fee in an amount as provided in Code Section 33-8-1, taxable as costs in the action. The Commissioner shall immediately mail one copy of the process so served to the person designated by the insurer in the policy for the purpose, by registered or certified mail or statutory overnight delivery with return receipt requested.
(e) The insurer shall have 30 days after the date of mailing within which to plead, answer, or otherwise defend the action.
This article controlling the placing of insurance with unauthorized insurers shall not apply to reinsurance or to the following insurance when so placed by licensed agents or brokers of this state:
(1) Insurance on property or operation of railroads engaged in interstate commerce; or
(2) Insurance of aircraft owned or operated by manufacturers of aircraft or operated in scheduled interstate flight, or cargo of the aircraft, or against liability, other than workers' compensation and employer's liability, arising out of the ownership, maintenance, or use of the aircraft.
The General Assembly finds the federal Nonadmitted and Reinsurance Reform Act of 2010, which was incorporated into the federal Dodd-Frank Wall Street Reform and Consumer Protection Act, P.L. 111-203, provides that only an insured's home state may require premium tax payment for nonadmitted insurance and authorizes states to enter into a compact or otherwise establish procedures to allocate among the states the nonadmitted insurance premium taxes. The General Assembly further finds that as the states are still in flux as to which proposed plan is best for them to enter, or if any agreement should be entered into by the state, the Commissioner is in a unique position to weigh these options and to determine what is in the best interest of the state financially. Therefore, the General Assembly acknowledges that some flexibility is necessary to determine that the best financial interests of the state are met.
The Governor, on behalf of the state, advised by and in consultation with the Commissioner, is authorized to enter into a cooperative agreement, compact, or reciprocal agreement with another state or states for the purpose of the collection of insurance premium taxes imposed by Code Sections 33-5-31 and 33-5-33.
The cooperative agreement, compact, or reciprocal agreement for the purpose of the collection of insurance premiums imposed by Code Section 33-5-31 shall substantially follow the form of the model Surplus Lines Insurance Multi-State Compliance Compact, also known as SLIMPACT-lite, created by the National Conference of Insurance Legislators or the model Nonadmitted Insurance Multi-State Agreement, also known as NIMA, created by the National Association of Insurance Commissioners, as such documents exist on July 1, 2011.
The Governor with the consultation and advice of the Commissioner shall select the agreement, if any, that provides the best financial advantage to the state. In determining which agreement, if any, provides the best financial advantage to the state, the Governor with the consultation and advice of the Commissioner shall consider the impact on the state's gross receipt of premium tax, the potential additional administrative burden to the state and surplus line brokers procuring or placing surplus line insurance under this chapter, and such other criteria as determined by the Governor with the consultation and advice of the Commissioner.
In the event the Governor enters into a cooperative agreement, compact, or reciprocal agreement with another state or states as authorized under this part, notice of such action shall be communicated to the chairperson of the House Committee on Insurance and the chairperson of the Senate Insurance and Labor Committee. The Commissioner shall thereafter annually issue a report to such committees that assesses whether, in his or her opinion, the agreement continues to be in the best financial interest of the state.
(a) This article constitutes and may be cited as the “Unauthorized Insurers Process Act.”
(b) This article shall be so interpreted as to effectuate its general purpose to make uniform the law of those states which enact it.
The purpose of this article is to subject certain insurers to the jurisdiction of the courts of this state in actions by or on behalf of insureds or beneficiaries under insurance contracts. The General Assembly declares that it is a subject of concern that many residents of this state hold policies of insurance issued or delivered in this state by insurers while not authorized to do business in this state, thus presenting to such residents the often insuperable obstacle of resorting to distant forums for the purpose of asserting legal rights under those policies. In furtherance of the state interest, the General Assembly herein provides a method of substituted service of process upon the insurers and declares that in so doing it exercises its power to protect its residents and to define, for the purpose of this article, what constitutes doing business in this state and also exercises power and privileges available to the state by virtue of Public Law 15, 79th Congress of the United States, Chapter 20, 1st Sess., S. 340, which declares that the business of insurance and every person engaged in the business of insurance shall be subject to the laws of the several states.
Any of the following acts in this state effected, by mail or otherwise, by an unauthorized foreign or alien insurer:
(1) The issuance or delivery of contracts of insurance to residents of this state or to corporations authorized to do business in this state;
(2) The solicitation of applications for said contracts;
(3) The collection of premiums, membership fees, assessments, or other considerations for the contracts; or
(4) Any other transaction of business
is equivalent to and shall constitute an appointment by the insurer of the Commissioner and his successors in office as its attorney upon whom may be served all lawful process in any action or proceeding instituted by or on behalf of an insured or beneficiary arising out of the contracts of insurance; and any such act shall be a signification of this agreement that the service of process is of the same legal force and validity as personal service of process in this state upon the insurer.
(a) Service shall be made by delivery to and leaving with the Commissioner or some person in apparent charge of his office two copies of the action and process.
(b) At the time of such service, the plaintiff shall pay the Commissioner the sum of $15.00, which shall be taxable as cost. The Commissioner shall immediately mail by registered or certified mail or statutory overnight delivery one of the copies of such action and process to the defendant at his last known principal place of business and shall keep a record of all process so served upon him. Such service is sufficient, provided that notice of the service and a copy of the action and process are sent within 15 days thereafter by registered or certified mail or statutory overnight delivery by plaintiff or plaintiff's attorney to the defendant at his last known principal place of business; and the defendant's receipt, or receipt issued by the post office with which the letter is registered or certified, showing the name of the sender of the letter and the name and address of the person to whom the letter is addressed and the affidavit of the plaintiff or plaintiff's attorney showing a compliance with service as provided in this Code section are filed with the clerk of the court in which such action is pending on or before the date the defendant is required to appear or within such further time as the court may allow.
(c) Service upon the Commissioner pursuant to this Code section shall only be made when service pursuant to the manner provided in Code Section 33-5-54 cannot be effectuated.
Service of process in any action or proceeding shall be valid if served upon any person within this state who, in this state on behalf of the insurer, is:
(1) Soliciting insurance;
(2) Making, issuing, or delivering any contract of insurance; or
(3) Collecting or receiving any premium, membership fee, assessment, or other consideration for insurance
and a copy of the process is sent within ten days thereafter by registered or certified mail or statutory overnight delivery by the plaintiff or plaintiff's attorney to the defendant at the last known principal place of business of the defendant; and the defendant's receipt, or the receipt issued by the post office with which the letter is registered or certified, showing the name of the sender of the letter and the name and address of the person to whom the letter is addressed and the affidavit of the plaintiff or plaintiff's attorney showing a compliance with the requirements of this Code section are filed with the clerk of the court in which the action is pending on or before the date the defendant is required to appear or within such further time as the court may allow.
Nothing in this article shall limit or abridge the right to serve any process, notice, or demand upon any insurer in any other manner now or hereafter permitted by law.
No plaintiff or complainant shall be entitled to a judgment by default or to a judgment with leave to prove damages under this Code section until the expiration of 30 days from date of the filing of the affidavit of compliance.
(a) Before any unauthorized insurer shall file or cause to be filed any pleadings in any action or proceeding instituted against it, such unauthorized insurer shall either:
(1) Deposit with the clerk of the court in which such action or proceeding is pending cash or securities or file with the clerk a bond with good and sufficient sureties, to be approved by the court, in an amount to be fixed by the court sufficient to secure the payment of any final judgment which may be rendered in the action; provided, however, the court may in its discretion make an order dispensing with the deposit or bond where the insurer makes a showing satisfactory to the court that it maintains in a state of the United States funds or securities, in trust or otherwise, sufficient and available to satisfy any final judgment which may be entered in the action or proceeding; or
(2) Procure a certificate of authority to transact the business of insurance in this state.
(b) The court in any action or proceeding in which service is made in the manner provided in Code Section 33-5-53 or 33-5-54, in its discretion, may order any postponement as may be necessary to afford the defendant reasonable opportunity to comply with subsection (a) of this Code section and to defend the action.
(c) Nothing in subsection (a) of this Code section is to be construed to prevent an unauthorized insurer from filing a motion to quash a writ or to set aside service of such writ made in the manner provided in Code Section 33-5-53 or 33-5-54 on one or more of the following grounds:
(1) That such unauthorized insurer has not done any of the acts enumerated in Code Section 33-5-52;
(2) That the person on whom service was made pursuant to Code Section 33-5-54 was not doing any of the acts therein enumerated; or
(3) That it is otherwise not properly subject to the jurisdiction of court pursuant to this article.
In any action against an unauthorized foreign or alien insurer upon a contract of insurance issued or delivered in this state or to a resident of this state or to a corporation authorized to do business in this state, if the insurer has failed for 30 days after demand prior to the commencement of the action to make payment in accordance with the terms of the contract, and it appears that such refusal was vexatious and without reasonable cause, the said insurer shall be subject to a penalty of not more than 25 percent of the liability of the insurer for the loss and an allowance for reasonable attorney's fees. The attorney's fees shall be determined by the trial court and shall be included in any judgment which is rendered in the action. Failure of an insurer to defend the action shall be deemed prima-facie evidence that its failure to make payment was vexatious and without reasonable cause. The limitations contained in this Code section in reference to the amount of attorney's fees are not controlling as to the fees which may be agreed upon by the plaintiff and his attorney for the services of the attorney in the action against the unauthorized insurer.
This article shall not apply to any action or proceeding against any unauthorized insurer arising out of any contract of:
(1) Reinsurance effectuated in accordance with the laws of Georgia;
(2) Surplus line insurance authorized by this chapter;
(3) Insurance on property or operations of carriers engaged in interstate commerce;
(4) Insurance against legal liability arising out of the ownership, operation, or maintenance of any property having a permanent situs outside of this state; or
(5) Insurance against loss of or damage to any property having a permanent situs outside of this state where the contract contains a provision designating the Commissioner or a bona fide resident of the State of Georgia to be its true and lawful attorney upon whom may be served all lawful process in any action or proceeding instituted by or on behalf of an insured or beneficiary arising out of the contract or where the insurer enters a general appearance in any such action or proceeding.
The purpose of this article is to regulate trade practices in the business of insurance in accordance with the intent of Congress as expressed in the act of Congress of March 9, 1945 (Public Law 15, 79th Congress), by defining or providing for the determination of all practices in this state which constitute unfair methods of competition or unfair or deceptive acts or practices and by prohibiting the trade practices so defined or determined.
As used in this article, the term “person” means an individual, corporation, association, partnership, reciprocal exchange, interinsurer, Lloyd's insurer, fraternal benefit society, and any other legal entity engaged in the business of insurance, including but not limited to agents, brokers, counselors, and adjusters.
No person shall engage in this state in any trade practice which is defined in this article as or determined pursuant to this article to be an unfair method of competition or an unfair or deceptive act or practice in the business of insurance.
(a) As used in this Code section, the term:
(1) “Gift certificate” shall have the same meaning as provided in Code Section 10-1-393.
(2) “Policy” means any insuring bond issued by an insurer.
(3) “Store gift card” shall have the same meaning as provided in Code Section 10-1-393.
(b) The following acts or practices are deemed unfair methods of competition and unfair and deceptive acts or practices in the business of insurance:
(1) Making, publishing, disseminating, circulating, or placing before the public or causing directly or indirectly to be made, published, disseminated, circulated, or placed before the public in a newspaper, magazine, or other publication or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio station or in any other way an advertisement, announcement, or statement containing any assertion, representation, or statement with respect to the business of insurance or with respect to any person in the conduct of his insurance business, which statement, assertion, or representation is untrue, deceptive, or misleading;
(2) Making, issuing, circulating, or causing to be made, issued, or circulated any estimate, illustration, circular, or statement misrepresenting the terms of any policy issued or to be issued, the benefits or advantages promised thereby, or the dividends or share of the surplus to be received thereon; making any false or misleading statement as to the dividends or share of surplus previously paid on similar policies; making any misleading representation or any misrepresentation as to the financial condition of any insurer, as to the legal reserve system upon which any life insurer operates; using any name or title of any policy or class of policies misrepresenting the true nature thereof; or making any misrepresentation to any policyholder insured in any company for the purpose of inducing or tending to induce the policyholder to lapse, forfeit, or surrender his insurance. A dividend estimate prepared on company forms and clearly indicating, in type equal in size to that used in figures showing amounts of estimated dividends, that the dividends are based on estimates made by the company based upon past experience of the company shall not be considered misrepresentation and false advertising within the meaning of this paragraph;
(3) Making, publishing, disseminating, or circulating directly or indirectly or aiding, abetting, or encouraging the making, publishing, disseminating, or circulating of any oral or written statement or any pamphlet, circular, article, or literature which is false or maliciously critical of or substantially misrepresents the financial condition of an insurer and which is calculated to injure any person engaged in the business of insurance;
(4) Entering into any agreement to commit or by any concerted action committing any act of boycott, coercion, or intimidation resulting in or tending to result in unreasonable restraint of or monopoly in the business of insurance;
(5) Filing with any supervisory or other public official or making, publishing, disseminating, circulating, delivering to any person, or placing before the public or causing directly or indirectly to be made, published, disseminated, circulated, delivered to any person, or placed before the public any false statement of financial condition of an insurer with the intent to deceive;
(6) Making any false entry in any book, report, or statement of any insurer with intent to deceive any agent or examiner lawfully appointed to examine into its condition or into any of its affairs or any public official to whom such insurer is required by law to report or who has authority by law to examine into its condition or into any of its affairs or, with like intent, willfully omitting to make a true entry of any material fact pertaining to the business of such insurer in any book, report, or statement of the insurer;
(7) Issuing or delivering or permitting agents, officers, or employees to issue or deliver agency or company stock or other capital stock, benefit certificates or shares in any common-law corporation, securities, or any special or advisory board contracts of any kind promising returns and profits as an inducement to insurance;
(8)(A)(i) Making or permitting any unfair discrimination between individuals of the same class, same policy amount, and equal expectation of life in the rates charged for any contract of life insurance or of life annuity, in the dividends or other benefits payable thereon, or in any other of the terms and conditions of the contract.
(ii) Making or permitting any unfair discrimination between individuals of the same class and of essentially the same hazard in the amount of premium, policy fees, or rates charged for any policy or contract of accident or sickness insurance, in the benefits payable thereunder, in any of the terms or conditions of the contract, or in any other manner whatever.
(iii) Making or permitting any unfair discrimination in the issuance, renewal, or cancellation of any policy or contract of insurance against direct loss to residential property and the contents thereof, in the amount of premium, policy fees, or rates charged for the policies or contracts when the discrimination is based solely upon the age or geographical location of the property within a rated fire district without regard to objective loss experience relating thereto.
(iv)(I) Unfair discrimination prohibited by the provisions of this subparagraph includes discrimination based on race, color, and national or ethnic origin. In addition, in connection with any kind of insurance, it shall be an unfair and deceptive act or practice to refuse to insure or to refuse to continue to insure an individual; to limit the amount, extent, or kind of coverage available to an individual; or to charge an individual a different rate for the same coverage because of the race, color, or national or ethnic origin of that individual. The prohibitions of this division are in addition to and supplement any and all other provisions of Georgia law prohibiting such discrimination which were previously enacted and currently exist, or which may be enacted subsequently, and shall not be a limitation on such other provisions of law.
(II) A violation of this division shall give rise to a civil cause of action for damages resulting from such violation including, but not limited to, all damages recoverable for breach of insuring agreements under Georgia law including damages for bad faith and attorney's fees and costs of litigation. A violation of this division shall also give rise to the awarding of punitive or exemplary damages in an amount as may be determined by the trier of fact if such violation is found to be intentional. The remedies provided in this division are in addition to and cumulative of all other remedies that may now or hereafter be provided by law.
(B) Knowingly permitting or offering to make or making any contract of insurance or agreement as to the contract other than as plainly expressed in the contract issued thereon; paying, allowing, giving, or offering to pay, allow, or give directly or indirectly, as inducement to any contract of insurance, any rebate of premiums payable on the contract, any special favor or advantage in the dividends or other benefits thereon, or any valuable consideration or inducement whatever not specified in the contract, except in accordance with an applicable rate filing, rating plan, or rating system filed with and approved by the Commissioner; giving, selling, purchasing, or offering to give, sell, or purchase as inducement to such insurance or in connection therewith any stocks, bonds, or other securities of any company, any dividends or profits accrued thereon, or anything of value whatsoever not specified in the contract; or receiving or accepting as inducement to contracts of insurance any rebate of premium payable on the contract, any special favor or advantage in the dividends or other benefit to accrue thereon, or any valuable consideration or inducement not specified in the contract.
(C) Nothing in subparagraphs (A) and (B) of this paragraph shall be construed as including within the definition of discrimination or rebates any of the following practices:
(i) In the case of any contract of life insurance or life annuity, paying bonuses to policyholders or otherwise abating their premiums in whole or in part out of surplus accumulated from nonparticipating insurance, provided that any bonuses or abatement of premiums shall be fair and equitable to policyholders and for the best interest of the company and its policyholders;
(ii) In the case of life or accident and sickness insurance policies issued on the industrial debit or weekly premium plan, making allowance in an amount which fairly represents the saving in collection expense to policyholders who have continuously for a specified period made premium payments directly to an office of the insurer;
(iii) Making a readjustment of the rate of premium for a policy based on the loss or expense experienced at the end of the first or any subsequent policy year of insurance thereunder, which adjustment may be made retroactive only for the policy year;
(iv) Issuing life or accident and sickness insurance policies covering bona fide employees of the insurer at a rate less than the rate charged other persons in the same class;
(v) Issuing life or accident and sickness policies on a salary-saving, payroll deduction, preauthorized, postdated, automatic check, or draft plan at a reduced rate commensurate with the savings made by the use of such plan;
(vi) Paying commissions or other compensation to duly licensed agents or brokers or allowing or returning dividends, savings, or unabsorbed premium deposits to participating policyholders, members, or subscribers;
(vii) Paying by an insurance agent of part or all of the commissions on public insurance to a nonprofit association of insurance agents which is affiliated with a recognized state or national insurance agents' association, which commissions are to be used in whole or in part for one or more civic enterprises;
(viii) Paying for food or refreshments by an insurer or an agent, broker, or employee of an insurer for current or prospective clients during group sales presentations and group seminars, provided that no insurance or annuity applications or contracts are offered or accepted at such presentations or seminars;
(ix) Paying for business meals and entertainment by an insurer or an agent, broker, or employee of an insurer, agent, or broker for current or prospective clients; or
(x) Advertising or conducting promotional programs by insurers or insurance producers whereby prizes, goods, wares, store gift cards, gift certificates, sporting event tickets, or merchandise, not exceeding $100.00 in value per customer in the aggregate in any one calendar year, are given to current or prospective customers; provided, however, that the giving of any item or items of value under this subsection shall not be contingent on the sale or renewal of a policy;
(9) Failing to instruct and require properly that agents shall, in the solicitation of insurance and the filling out of applications of insurance on behalf of policyholders, incorporate therein all material facts relevant to the risk being written, which facts are known to the agent or could have been known by proper diligence;
(10) Encouraging agents to accept applications which contain material misrepresentations or conceal material information which, if stated in the application, would prevent issuance of the policy or which would void a policy from its inception according to its terms even though premiums had been paid on the policy;
(11) Any insurer or agent of same becoming a party to requiring or imposing as a condition to the sale of real or personal property or to the financing of real or personal property, as a condition to the granting of or an extension of a loan which is to be secured by the title to or a lien of any kind on real or personal property, or as a condition to the performance of any other act in connection with the sale, financing, or lending, whether the person thus acts for himself or for anyone else, that the insurance or any renewal thereof to be issued on said property as collateral to said sale or loan shall be written through any particular insurance company or agent, provided that this paragraph shall not apply to a policy purchased by the seller, financier, or lender from his or its own funds and not charged to the purchaser or borrower in the sale price of the property or the amount of the loan or required to be paid for out of his personal funds; provided, further, that such seller, financier, or lender may disapprove for reasons affecting solvency or other sensible and sufficient reasons, the insurance company selected by the buyer or borrower. This paragraph shall not apply to title insurance;
(12)(A) Representing that any insurer or agent is employed by or otherwise associated with any Medicare program as defined in Code Section 33-43-1 or the United States Social Security Administration or that any insurance policy sold or offered for sale has been endorsed or sponsored by the federal or state government.
(B) Knowingly selling or offering to sell Medicare supplement insurance coverage as defined in Code Section 33-43-1 which is not in compliance with the provisions of Chapter 43 of this title, relating to Medicare supplement insurance, or the rules and regulations promulgated by the Commissioner pursuant to Chapter 43 of this title.
(C) Representing that any individual policy is a group policy or that the insurer, agent, or policy is endorsed, sponsored by, or associated with any group, association, or other organization unless such is, in fact, the case.
(D) Knowingly selling to Medicaid recipients substantially unnecessary coverage which duplicates benefits provided under the Medicaid program without disclosing to the prospective buyer that it may not be to the buyer's benefit or that it might actually be to the buyer's detriment to purchase the additional coverage;
(13)(A) Making direct response advertising by an insurer, including radio or television advertisement, of any individual or group life insurance policy in which computation of the death benefit is of such a technical nature that such death benefit cannot reasonably be properly presented in the advertisement and understood by a member of the insuring public. Policies, other than variable life or other interest sensitive policies, which provide for multiple changes in death benefits, combinations of increasing and nonuniformly decreasing term insurance, or increasing life insurance benefits equal to or slightly greater than the premiums paid during the early years of the coverage combined with accidental death benefits are types of contracts within the purview of this subparagraph. Additionally, any life insurance policy which cannot be truthfully, completely, clearly, and accurately disclosed in an advertisement falls within this subparagraph.
(B) Making direct response advertising by an insurer, including radio or television advertisement, of any individual or group accident and sickness or life insurance policy which is misleading in fact or by implication that the coverage is “guaranteed issue” when there are conditions to be met by those persons to be insured, such as limited medical questions or other underwriting guidelines of the insurer.
(C) Making direct response advertising by an insurer, including radio or television advertisement, of any individual or group accident and sickness or life insurance policy where such advertisement has not been approved for use in this state by the Commissioner;
(14) Failing to disclose in printed advertising material that medical benefits are calculated on the basis of usual, customary, and reasonable charges;
(14.1) Engaging in dishonest, unfair, or deceptive insurance practices in marketing or sales of insurance to service members of the armed forces of the United States and, notwithstanding any other provision of this title, the Commissioner may promulgate such rules and regulations as necessary to define dishonest, unfair, or deceptive military marketing and sales practices;
(14.2) Failing to submit all claims data to the Georgia All-Payer Claims Database as required in Article 3 of Chapter 53 of Title 31;
(14.3)(A) As used in this paragraph:
(i) “Covered eye care services” means those health care services and materials related to the care of the eye and related structures and vision care services which a health care insurer is obligated to pay for or provide to covered persons under an eye care benefit plan, which includes services for which reimbursement is available under such plan, or for which reimbursement would be available but for the application of contractual limitations such as deductibles, copayments, coinsurance, waiting periods, annual or lifetime maximums, frequency limitations, alternative benefit payments, or any other limitation.
(ii) “Covered person” means any subscriber, enrollee, member, beneficiary, or participant, or his or her dependent, for whom benefits are payable when such person receives eye care services rendered or authorized by an ophthalmologist licensed under Chapter 34 of Title 43 or an optometrist licensed under Chapter 30 of Title 43.
(iii) “Eye care benefit plan” means any individual or group plan, policy contract, or subscription agreement which includes or is for eye care services that is issued, delivered, issued for delivery, or renewed in this state whether by a health care insurer, health maintenance organization, preferred provider organization, accident and sickness insurer, fraternal benefit society, nonprofit hospital service corporation, nonprofit medical or eye care service corporation, health care plan, or any other person, firm, corporation, joint venture, or other similar business entity that pays for, purchases, or furnishes eye care services to patients, insureds, beneficiaries, or covered dependents in this state.
(iv) “Health care insurer” or “insurer” means an entity, including but not limited to insurance companies, health care corporations, health maintenance organizations, and preferred provider organizations, authorized by the state to offer or provide health benefit plans, eye care benefit plans, programs, policies, subscriber contracts, or any other agreements of a similar nature which compensate or indemnify health care providers for furnishing covered eye care or other health care services.
(B) No insurer shall require an ophthalmologist or optometrist to accept as payment an amount set by such insurer for services that are not covered eye care services under the covered person's eye care benefit plan as a condition to join or participate in its provider network.
(C) No insurer shall draft, publish, disseminate, or circulate any explanations of benefit forms that include language that directly or indirectly states or implies that an ophthalmologist or optometrist should extend discounts to patients for noncovered eye care services.
(D) No insurer shall require an ophthalmologist or optometrist within its provider network to extend any discounts on services that are not covered eye care services.
(E) No insurer shall require an ophthalmologist or optometrist to extend any discounts on services that are not covered eye care services in order to receive increased payments, better reimbursements, preferential treatment, or any other benefit; or
(15)(A) As used in this paragraph, the term:
(i) “Confidential abuse information” means information about acts of family violence or sexual assault, the status of a victim of family violence or sexual assault, an individual's medical condition that the insurer knows or has reason to know is related to family violence or sexual assault, or the home and work addresses and telephone numbers of a subject of family violence or sexual assault.
(ii) “Family violence” means family violence as defined in Code Sections 19-13-1 and 19-13-20 and as limited by Code Section 19-13-1.
(iii) “Sexual assault” means rape, sodomy, aggravated sodomy, sexual battery, and aggravated sexual battery as those terms are defined in Chapter 6 of Title 16.
(B) No person shall deny or refuse to accept an application; refuse to insure; refuse to renew; refuse to reissue; cancel, restrict, or otherwise terminate; charge a different rate for the same coverage; add a premium differential; or exclude or limit coverage for losses or deny a claim incurred by an insured on the basis that the applicant or insured is or has been a victim of family violence or sexual assault or that such person knows or has reason to know the applicant or insured may be a victim of family violence or sexual assault; nor shall any person take or fail to take any of the aforesaid actions on the basis that an applicant or insured provides shelter, counseling, or protection to victims of family violence or sexual assault.
(C) No person shall request, directly or indirectly, any information the person knows or reasonably should know relates to acts of family violence or sexual assault or an applicant's or insured's status as a victim of family violence or sexual assault or make use of such information however obtained, except for the limited purpose of complying with legal obligations, verifying an individual's claim to be a subject of family violence or sexual assault, cooperating with a victim of family violence or sexual assault in seeking protection from family violence or sexual assault, or facilitating the treatment of a family violence or sexual assault related medical condition. When a person has information in their possession that clearly indicates that the insured or applicant is a subject of family violence or sexual assault, the disclosure or transfer of the information by a person to any person, entity, or individual is a violation of this Code section, except:
(i) To the subject of family violence or sexual assault or an individual specifically designated in writing by the subject of family violence or sexual assault;
(ii) To a health care provider for the direct provision of health care services;
(iii) To a licensed physician identified and designated by the subject of family violence or sexual assault;
(iv) When ordered by the Commissioner or a court of competent jurisdiction or otherwise required by law;
(v) When necessary for a valid business purpose to transfer information that includes confidential abuse information that cannot reasonably be segregated without undue hardship. Confidential abuse information may be disclosed pursuant to this division only to the following persons or entities, all of whom shall be bound by this subparagraph:
(I) A reinsurer that seeks to indemnify or indemnifies all or any part of a policy covering a subject of family violence or sexual assault and that cannot underwrite or satisfy its obligations under the reinsurance agreement without that disclosure;
(II) A party to a proposed or consummated sale, transfer, merger, or consolidation of all or part of the business of the person;
(III) Medical or claims personnel contracting with the person, only where necessary to process an application or perform the person's duties under the policy or to protect the safety or privacy of a subject of family violence or sexual assault; or
(IV) With respect to address and telephone number, to entities with whom the person transacts business when the business cannot be transacted without the address and telephone number;
(vi) To an attorney who needs the information to represent the person effectively, provided the person notifies the attorney of its obligations under this paragraph and requests that the attorney exercise due diligence to protect the confidential abuse information consistent with the attorney's obligation to represent the person;
(vii) To the policy owner or assignee, in the course of delivery of the policy, if the policy contains information about family violence or sexual assault status; or
(viii) To any other entities deemed appropriate by the Commissioner.
(D) It is unfairly discriminatory to terminate group coverage for a subject of family violence because coverage was originally issued in the name of the perpetrator of the family violence and the perpetrator has divorced, separated from, or lost custody of the subject of family violence, or the perpetrator's coverage has terminated voluntarily or involuntarily. If termination results from an act or omission of the perpetrator, the subject of family violence shall be deemed a qualifying eligible individual under Code Section 33-24-21.1 and may obtain continuation and conversion of such coverages notwithstanding the act or omission of the perpetrator. A person may request and receive confidential abuse information to implement the continuation and conversion of coverages under this subparagraph.
(E) Subparagraph (C) of this paragraph shall not preclude a subject of family violence or sexual assault from obtaining his or her insurance records. Subparagraph (C) of this paragraph shall not prohibit a person from asking about a medical condition or a claims history or from using medical information or a claims history to underwrite or to carry out its duties under the policy to the extent otherwise permitted under this paragraph and other applicable law.
(F) No person shall take action that adversely affects an applicant or insured on the basis of a medical condition, claim, or other underwriting information that the person knows or has reason to know is family violence or sexual assault related and which:
(i) Has the purpose or effect of treating family violence or sexual assault status as a medical condition or underwriting criterion;
(ii) Is based upon correlation between a medical condition and family violence or sexual assault;
(iii) Is not otherwise permissible by law and does not apply in the same manner and to the same extent to all applicants and insureds similarly situated without regard to whether the condition or claim is family violence or sexual assault related; or
(iv) Except for claim actions, is not based on a determination, made in conformance with sound actuarial and underwriting principles and guidelines generally applied in the insurance industry and supported by reasonable statistical evidence, that there is a correlation between the applicant's or insured's circumstances and a material increase in insurance risk.
(G) No person shall fail to pay losses arising out of family violence or sexual assault against an innocent first-party claimant to the extent of such claimant's legal interest in the covered property, if the loss is caused by the intentional act of an insured against whom a family violence or sexual assault complaint is brought for the act causing this loss.
(H) No person shall use other exclusions or limitations on coverage which the Commissioner has determined through the policy filing and approval process to unreasonably restrict the ability of victims of family violence or sexual assault to be indemnified for such losses.
(I) Any person issuing, delivering, or renewing a policy of insurance in this state at any time shall include with such policy or renewal certificate a notice attached thereto containing the following language:
“NOTICE
The laws of the State of Georgia prohibit insurers from unfairly discriminating against any person based upon his or her status as a victim of family violence.”
(c) Any person violating this Code section by making unlawful, false representations as to the policy sold shall be guilty of a misdemeanor.
In addition to Code Section 33-6-4, violations of the following provisions also are defined as unfair methods of competition and unfair and deceptive acts or practices in the business of insurance:
(1) No insurance company shall issue or cause to be issued any policy of insurance of any type or description upon life or property, real or personal, whenever such policy of insurance is to be furnished or delivered to the purchaser or bailee of any property, real or personal, as an inducement to purchase or bail such property, real or personal; and no other person shall advertise, offer, or give free insurance or insurance without cost or for less than the approved or customary rate in connection with the sale or bailment of real or personal property, except as provided in Chapter 27 of this title;
(2) No person who is not an insurer shall assume or use any name which deceptively implies or suggests that he or she is an insurer;
(3) Where the premium or charge for insurance of or involving real or personal property or merchandise is included in the overall purchase price or financing of the purchase of merchandise or property, the vendor or lender shall separately state and identify the amount charged and to be paid for the insurance and the classifications, if any, upon which based; and the inclusion or exclusion of the cost of insurance in such purchase price or financing shall not increase, reduce, or otherwise affect any other factor involved in the cost of the merchandise or property or financing as to the purchaser or borrower. A vendor or lender shall not be prohibited from charging the purchaser or borrower a finance charge otherwise permitted by law on any premium or charge for insurance included in the cost of the merchandise or property or financing. This paragraph shall not apply to credit life or credit accident and sickness insurance which is in compliance with Code Section 33-31-7;
(4)(A) No insurer shall make, offer to make, or permit any preference or distinction in property, marine, casualty, or surety insurance as to form of policy, certificate, premium, rate, or conditions of insurance based upon membership, nonmembership, or employment of any person or persons by or in any particular group, association, corporation, or organization, making the foregoing preference or distinction available in any event based upon any fictitious grouping of persons.
(B) As used in this paragraph, the term “fictitious grouping” means any grouping by way of membership, nonmembership, license, franchise, employment contract, agreement, or any other method or means resulting in unfair discrimination.
(C) The restrictions and limitations of this paragraph shall not extend to life or accident and sickness insurance; nor shall they apply to any bona fide association group which is composed of members engaged in a common trade, business, or profession and which has had group insurance of the same type continuously in existence for at least five years;
(5) No insurer or agent thereof shall hypothecate, sell, or dispose of a promissory note received in payment of any part of a premium on a policy of insurance applied for prior to acceptance of the risk by the insurer;
(6)(A) No person shall knowingly collect any sum as premium or charge for insurance, which insurance is not then provided or not in due course to be provided subject to acceptance of the risk by the insurer by an insurance policy issued by an insurer as permitted by this title.
(B) No person shall knowingly collect as premium or charge for insurance any sum in excess of or less than the premium or charge applicable to such insurance, which sum is specified in the policy in accordance with the applicable classifications and rates as filed with and approved by the Commissioner. In cases where classifications, premiums, or rates are not required by this title to be filed and approved:
(i) The premiums and charges for insurance, except insurance written in accordance with Chapter 5 of this title, shall not be in excess of or less than those specified in the policy and as fixed by the insurer; and
(ii) The premiums and charges for insurance written in accordance with Chapter 5 of this title shall not be in excess of or less than those specified in the policy.
This subparagraph shall not be deemed to prohibit surplus lines brokers licensed under Chapter 5 of this title from charging and collecting the amount of applicable state and federal taxes in addition to the premium required by the insurer; nor shall it be deemed to prohibit a life or accident and sickness insurer from charging and collecting amounts actually to be expended for medical examination of an applicant for life or accident and sickness insurance or for reinstatement of a life or accident and sickness insurance policy.
(C) Notwithstanding this paragraph or any other law limiting or regulating interest rates or other charges, any insurance agent or agency, as defined in Code Section 33-23-1, shall be authorized but not required to charge, receive, and collect on any unpaid premium account with a balance owing for 30 days or more a service charge which shall not exceed 15¢ per $10.00 per month computed on all amounts unpaid on the premium from month to month which need not be a calendar month or other regular period; provided, however, that, if the amount of service charge so computed shall be less than $1.00 for the month, a service charge of $1.00 for the month may be charged, received, and collected. Nothing contained in this subparagraph shall be construed to prevent an agent, agency, or broker from canceling a policy in accordance with the laws of this state;
(7)(A) Any insurer may retain, invest in, or acquire the whole or any part of the capital stock of any other insurer or insurers or have a common management with any other insurer or insurers, unless such retention, investment, acquisition, or common management is inconsistent with any other provision of this title or unless, by reason thereof, the business of such insurers with the public is conducted in a manner which substantially lessens competition generally in the insurance business or tends to create a monopoly therein.
(B) Any person otherwise qualified may be a director of two or more insurers which are competitors, unless the effect thereof is to lessen substantially competition between insurers generally or tends materially to create a monopoly;
(8) No insurance company shall cancel, modify coverage, refuse to issue, or refuse to renew any property or casualty insurance policy solely because the applicant or insured or any employee of either is mentally or physically impaired, provided that this paragraph shall not apply to accident and sickness insurance policies sold by a casualty insurer; provided, further, that this paragraph shall not be interpreted to modify any other provision of this title relating to the cancellation, modification, issuance, or renewal of any insurance policy or contract;
(8.1) No insurance company shall cancel, modify coverage, refuse to issue, or refuse to renew any life insurance policy solely because the applicant or insured, acting as a living organ donor, donated all or part of a liver, pancreas, kidney, intestine, lung, or bone marrow, provided that this paragraph shall not be interpreted to modify any other provision of this title relating to the cancellation, modification, issuance, or renewal of any insurance policy or contract;
(9) No insurance company, when selling salvage motor vehicles, major component parts, or parts, shall sell directly to a used motor vehicle parts dealer, motor vehicle dismantler, motor vehicle rebuilder, salvage pool dealer, or salvage dealer who is not licensed under Chapter 47 of Title 43; provided, however, this paragraph shall not prevent an insurance company from selling salvage motor vehicles, major component parts, or parts to any person, firm, or corporation when the sale is made through a used motor vehicle parts dealer, motor vehicle dismantler, motor vehicle rebuilder, salvage pool dealer, or salvage dealer who is licensed under Chapter 47 of Title 43;
(10) No insurer shall refuse to insure an individual, refuse to continue to insure an individual, limit the amount, extent, or kind of coverage available to an individual, or charge an individual a different rate for coverage solely because the individual is blind or partially blind;
(11) Each insurer which acquires a salvage motor vehicle, as defined in Code Section 40-3-2, shall, within 30 days of acquisition, apply for a salvage certificate of title, and no insurer shall sell, convey, or transfer any such salvage motor vehicle without first applying for and obtaining a salvage certificate of title;
(12)(A) No insurer shall cancel, nonrenew, or otherwise terminate all or substantially all of an entire line or class of business for the purpose of withdrawing from the market in this state unless:
(i) The insurer has notified the Commissioner in writing of the action, including the reasons for such action, at least one year before the completion of the withdrawal, provided that this paragraph shall not be construed to prevent such insurer from canceling, nonrenewing, or terminating policies where the insurer, by contract, statute, or otherwise, has the right to do so; or
(ii) The insurer has filed a plan of action for the orderly cessation of the insurer's business within a period of time shorter than one year and such plan of action has been approved by the Commissioner.
(B) At a minimum, in order to provide for orderly cessation and withdrawal, an insurer shall provide a general notice to each insured at least 90 days prior to the termination of any policy followed by a subsequent notice which meets the applicable statutory notice requirements for canceling, nonrenewing, or terminating insurance under this title.
(C) An insurer's rates, rules, and forms filed pursuant to Code Sections 33-9-21 and 33-24-9 shall be considered no longer on file for use with any new business in the market affected by the insurer's withdrawal plan on and after the withdrawal plan goes into effect;
(12.1) No insurer or managed care entity subject to licensing by the Commissioner shall violate any provision of Chapter 20A of this title;
(13)(A) As used in this paragraph, the term:
(i) “Aftermarket crash part” means a replacement for any of the nonmechanical sheet metal or plastic parts which generally constitute the exterior of a motor vehicle, including inner and outer panels.
(ii) “Insurer” includes an insurance company and any person authorized to represent the insurer with respect to a claim and who is acting within the scope of the person's authority.
(iii) “Nonoriginal equipment manufacturer aftermarket crash part” means an aftermarket crash part made by any manufacturer other than the original vehicle manufacturer or his or her supplier.
(iv) “Repair facility” means a motor vehicle dealer, garage, body shop, or other commercial entity which undertakes the repair or replacement of those parts that generally constitute the exterior of a motor vehicle.
(B) Any aftermarket crash part manufactured or supplied for use in this state on or after January 1, 1990, shall have affixed thereto or inscribed thereon the logo, identification number, or name of its manufacturer. Such manufacturer's logo, identification number, or name shall be visible after installation whenever practicable.
(C) In all instances where nonoriginal equipment manufacturer aftermarket crash parts are used in preparing an estimate for repairs the written estimate prepared by the insurance adjuster and repair facility shall clearly identify each such part. A disclosure document attached to the estimate shall contain the following information in no smaller than ten-point type:
“THIS ESTIMATE HAS BEEN PREPARED BASED ON THE USE OF AFTERMARKET CRASH PARTS SUPPLIED BY A SOURCE OTHER THAN THE MANUFACTURER OF YOUR MOTOR VEHICLE. THE AFTERMARKET CRASH PARTS USED IN THE PREPARATION OF THIS ESTIMATE ARE WARRANTED BY THE MANUFACTURER OR DISTRIBUTOR OF SUCH PARTS RATHER THAN THE MANUFACTURER OF YOUR VEHICLE.”; and
(14) On and after July 1, 1992, no insurer, as defined in Code Section 33-1-2, shall issue, cause to be issued, renew, or provide coverage under any major medical insurance policy or plan containing a calendar year deductible or similar plan benefit period deductible which does not provide for a carry-over of the application of such deductible as provided in this paragraph. If all or any portion of an insured's or member's cash deductible for a calendar year or similar plan benefit period is applied against covered expenses incurred by the insured or member during the last three months of the deductible accumulation period, the insured's or member's cash deductible for the next ensuing calendar year or similar benefit plan period shall be reduced by the amount so applied. The provisions of this paragraph shall apply to major medical insurance policies or plans which have a benefit plan period of less than 24 months, except policies or plans designed and issued to be compatible with a health savings account as set out in 26 U.S.C. Section 223 or a spending account as defined in Chapter 30B of this title.
(a) The Commissioner shall have the power to examine and investigate into the affairs of every person engaged in the business of insurance in this state in order to determine whether the person has been or is engaged in any unfair method of competition or in any unfair or deceptive act or practice prohibited by this chapter.
(b) In addition to any other authority granted to the Commissioner by this title and in addition to those reports required by Code Section 33-3-21, the Commissioner may require persons engaged in the business of insurance in this state to file reports by postal ZIP Code, where appropriate, or in any other format to enable the Commissioner to determine readily if such person has been or is engaged in any unfair method of competition or in any unfair or deceptive act or practice prohibited by this article.
(a) Whenever the Commissioner shall have reason to believe that any person has been engaged or is engaging in this state in any unfair method of competition or any unfair or deceptive act or practice, whether or not defined in Code Sections 33-6-4 and 33-6-5, and have reason to believe that a proceeding by the Commissioner in respect to such unfair method of competition or such unfair or deceptive act or practice would be in the public interest, he shall issue and serve upon the person a statement of the charges in that respect and a notice of a hearing on the charges to be held at a time and place fixed in the notice, which time shall not be less than 15 days after the date of the service of the notice.
(b) At the time and place fixed for the hearing, the person shall have an opportunity to be heard and to show cause why an order requiring the person to cease and to desist from the acts, methods, or practices so complained of should not be made by the Commissioner. Upon good cause shown, the Commissioner shall permit any person to intervene, appear, and be heard at the hearing by counsel or in person.
(c) Nothing contained in this article shall require the observance at the hearing of formal rules of pleading or evidence.
(d) The Commissioner at the hearing may administer oaths, examine and cross-examine witnesses, receive oral and documentary evidence, subpoena and compel the attendance of witnesses, and require the production of books, papers, records, correspondence, or other documents which he deems relevant to the inquiry. The Commissioner at the hearing may and, upon request of any party, shall cause to be made a record of all the evidence and all the proceedings had at the hearing. In case of a refusal of any person to comply with any subpoena issued under this Code section or to testify with respect to any matter concerning which he may be lawfully interrogated, the Superior Court of Fulton County or the superior court of the county where the party resides, on application of the Commissioner, may issue an order requiring the person to comply with the subpoena and to testify; and any failure to obey any order of the court may be punished by the court as a contempt thereof.
(e) Statements of charges, notices, orders, and other processes of the Commissioner under this article may be served by anyone duly authorized by the Commissioner either in the manner provided by law for service of process in civil actions or by registering or certifying and mailing a copy of the statement, notice, order, or other process to the person affected by it at the person's residence or principal office or place of business. The verified return by the person so serving the statement, notice, order, or other process, which return sets forth the manner of the service, shall be proof of the same; and the return post card receipt for the statement, notice, order, or other process, which receipt is registered or certified and mailed as provided in this Code section, shall be proof of the service of the same.
(a) If, after the hearing provided for in Code Section 33-6-7, the Commissioner shall determine that the person charged has engaged in an unfair method of competition or an unfair or deceptive act or practice, he shall reduce his findings to writing and shall issue and cause to be served upon the person charged with the violation a copy of the findings and an order requiring such person to cease and desist from engaging in the method of competition, act, or practice; and, if the act or practice is a violation of Code Sections 33-6-4 and 33-6-5, the Commissioner may at his discretion order any one or more of the following:
(1) Payment of a monetary penalty of not more than $1,000.00 for each and every act or violation, unless the person knew or reasonably should have known he was in violation of this article, in which case the penalty shall be not more than $5,000.00 for each and every act or violation;
(2) Suspension or revocation of the person's license, if he knew or reasonably should have known he was in violation of this article; or
(3) Any other relief as is reasonable and appropriate.
(b) The Commissioner may, at any time before the serving of a copy of the petition for review filed in the Superior Court of Fulton County upon him or her, as provided for in Code Section 33-6-11, or after the expiration of the time allowed by law for the serving of the petition for review, if no petition for review has been thus served, amend or set aside in whole or in part any order issued by the Commissioner under this Code section whenever in the Commissioner's opinion the facts and circumstances surrounding the case have so changed as to require the action or if the public interest shall so require. No change of an order in a manner unfavorable to the person charged or to the parties at interest shall be made except after notice and opportunity for hearing. The date of the Commissioner's last order shall be the point of time from which it may be reviewed by appeal.
After notice and hearing and upon order of the Commissioner, any person who violates a cease and desist order under Code Section 33-6-8, while the order is in effect may, at the discretion of the Commissioner, be subject to any one or more of the following:
(1) A monetary penalty of not more than $10,000.00 for each and every act or violation;
(2) Suspension or revocation of such person's license; or
(3) Any other relief as is reasonable and appropriate.
(a) Any order, decision, or the imposition of any penalty by the Commissioner shall be subject to review by petition for review as provided in Chapter 2 of this title. The Commissioner's finding upon questions of fact shall be final if sustained by substantial evidence.
(b) To the extent that the order of the Commissioner is affirmed, the court shall thereupon issue its own order commanding obedience to the terms of the order of the Commissioner.
(c) An order issued by the Commissioner under Code Section 33-6-8 shall become final:
(1) Upon the expiration of the time allowed by law for the filing of a petition for review, if no petition has been filed within that time, except that the Commissioner may thereafter modify or set aside his order to the extent provided in subsection (b) of Code Section 33-6-8; or
(2) Upon the final decision of the court, if the court directs that the order of the Commissioner be affirmed or the appeal dismissed.
If the report of the Commissioner does not charge a violation of this article, any intervenor in the proceedings may cause a review of such decision by appeal to the Superior Court of Fulton County as provided for in Chapter 2 of this title. Upon that review, the court shall have authority to issue appropriate orders and decrees in connection with such review, including, if the court finds that it is in the public interest, orders enjoining and restraining the continuance of any method of competition, act, or practice which it finds constitutes a violation of this article notwithstanding the report of the Commissioner.
The Commissioner after notice and hearing may promulgate reasonable rules and regulations as are necessary or proper to identify specific methods of competition or acts or practice which are prohibited by Code Sections 33-6-4 and 33-6-5; but the rules and regulations shall not enlarge upon or extend the provisions of Code Sections 33-6-4 and 33-6-5. The rules and regulations shall be subject to Code Section 33-2-9.
(a) No person shall either within or outside of this state enter into any contract, understanding, or combination with any other person to do jointly or severally any act or engage in any practice for the purpose of or that has a tendency to or the effect of:
(1) Controlling the rates to be charged for insuring any risk or any class of risks in this state;
(2) Unfairly discriminating against any person in this state by reason of his plan or method of transacting insurance or by reason of his affiliation or nonaffiliation with any insurance organization; or
(3) Establishing or perpetuating any condition in this state detrimental to free competition in the business of insurance or injurious to the insuring public.
(b) This Code section shall not apply to ocean marine and foreign trade insurance.
(c) This Code section shall not be deemed to prohibit the doings of things permitted to be done in accordance with Chapter 9 of this title.
(d) Whenever the Commissioner has knowledge of any violation of this Code section, he shall immediately order the offending person to discontinue such practice immediately or to show cause to the satisfaction of the Commissioner why the order should not be complied with. If the offender is an insurer or a licensee under this title and fails to comply with such order within 30 days after receipt of such order, the Commissioner may immediately revoke the offender's certificate of authority or licenses.
(a) The powers vested in the Commissioner by this article shall be in addition to any other powers to enforce any penalties, fines, or forfeitures authorized by law with respect to the methods, acts, and practices declared to be unfair or deceptive by this article.
(b) Nothing contained in this article shall be construed as repealing or amending the power of the Commissioner to revoke the license of any insurer or agent of such insurer when he is commanded or authorized to do so by existing laws or on account of a violation of this article.
This article shall be known and may be cited as the “Unfair Claims Settlement Practices Act.”
The purpose of this article is to set forth standards for the investigation and disposition of claims arising under policies or certificates of insurance issued to residents of Georgia. It is not intended to cover claims involving workers' compensation, fidelity, or surety insurance.
As used in this article, the term:
(1) “Insured” means the party named on a policy or certificate or as defined in the contract as the person with legal rights to the benefits provided by such policy or certificate.
(2) “Person” means an individual, corporation, association, partnership, reciprocal exchange, interinsurer, Lloyd's insurer, fraternal benefit society, and any other legal entity engaged in the business of insurance, including but not limited to agents, brokers, counselors, and adjusters.
(3) “Policy” or “certificate” means any contract of insurance; indemnity; medical, health, or hospital service; or annuity issued by an insurer. “Policy” or “certificate” shall not mean contracts for workers' compensation, fidelity, or surety insurance.
It is an improper claims settlement practice for any domestic, foreign, or alien insurer transacting business in Georgia to commit any act provided in Code Section 33-6-34 if such act:
(1) Is committed flagrantly and in conscious disregard of this title or any rule or regulation promulgated pursuant to this title; or
(2) Has been committed with such frequency so as to indicate a general business practice to engage in such conduct.
Any of the following acts of an insurer when committed as provided in Code Section 33-6-33 shall constitute an unfair claims settlement practice:
(1) Knowingly misrepresenting to claimants and insureds relevant facts or policy provisions relating to coverages at issue;
(2) Failing to acknowledge with reasonable promptness pertinent communications with respect to claims arising under its policies;
(3) Failing to adopt and implement procedures for the prompt investigation and settlement of claims arising under its policies;
(4) Not attempting in good faith to effectuate prompt, fair, and equitable settlement of claims submitted in which liability has become reasonably clear;
(5) Compelling insureds or beneficiaries to institute suits to recover amounts due under its policies by offering substantially less than the amounts ultimately recovered in suits brought by them;
(6) Refusing to pay claims without conducting a reasonable investigation;
(7) When requested by the insured in writing, failing to affirm or deny coverage of claims within a reasonable time after having completed its investigation related to such claim or claims;
(8) When requested by the insured in writing, making claims payments to an insured or beneficiary without indicating the coverage under which each payment is being made;
(9) Unreasonably delaying the investigation or payment of claims by requiring both a formal proof of loss and subsequent verification that would result in duplication of information and verification appearing in the formal proof of loss form; provided, however, this paragraph shall not preclude an insurer from obtaining sworn statements if permitted under the policy;
(10) When requested by the insured in writing, failing in the case of claims denial or offers of compromise settlement to provide promptly a reasonable and accurate explanation of the basis for such actions. In the case of claims denials, such denials shall be in writing;
(11) Failing to provide forms necessary to file claims within 15 calendar days of a request with reasonable explanations regarding their use;
(12) Failing to adopt and implement reasonable standards to assure that the repairs of a repairer owned by the insurer are performed in a workmanlike manner;
(13) Indicating to a first-party claimant on a payment, draft check, or accompanying letter that said payment is final or a release of any claim unless the policy limit has been paid or there has been a compromise settlement agreed to by the first-party claimant and the insurer as to coverage and amount payable under the contract;
(14) Issuing checks or drafts in partial settlement of a loss or claim under a specific coverage which contain language which releases the insurer or its insured from its total liability;
(15) Failure to comply with any insurer requirement in Chapter 20E of this title, the “Surprise Billing Consumer Protection Act,” including:
(A) The failure to designate whether the healthcare plan is subject to the exclusive jurisdiction of the Employee Retirement Income Security Act of 1974, 29 U.S.C. Sec. 1001, et seq.;
(B) The failure to directly pay the provider or facility within 15 working days for electronic claims or 30 calendar days for paper claims any moneys due under Code Section 33-20E-4 or 33-20E-5; or
(C) The failure to pay a resolution organization as required under Code Section 33-20E-16; and
(16) Failure to comply with any insurer requirement relating to emergency services or care in Article 4 of Chapter 11 of Title 31, Article 1 of Chapter 20A of this title, Chapter 20E of this title, Chapter 21A of this title, Code Section 33-24-59.27, and Chapter 30 of this title.
(a) Whenever the Commissioner has reason to believe that any person has engaged or is engaging in this state in any unfair claims settlement practice and has reason to believe that a proceeding with respect to such unfair claims settlement practice would be in the public interest, the Commissioner shall serve upon such person a statement of the charges in that respect and a notice of hearing in the same manner as provided in Code Section 33-6-7.
(b) The provisions of Code Sections 33-6-7 through 33-6-11, relating to hearings, cease and desist orders, penalties, judicial review, intervenors, and other matters in connection with violations of Article 1 of this chapter shall be applicable to violations of this article.
The Commissioner may, in accordance with the procedures set forth in Code Section 33-2-9, promulgate rules and regulations necessary to implement and enforce the provisions of this article. If the Commissioner should find that extraordinary circumstances exist and that it would be in the best interests of the citizens of this state, the Commissioner may suspend temporarily the applicability of any rule or regulation promulgated pursuant to this article.
Nothing contained in this article shall be construed to create or imply a private cause of action for a violation of this article.
It is intended that certain coverages may come within the definitions of two or more kinds of insurance as set forth in this chapter, and the fact that the coverage is included within one definition shall not exclude the coverage as to any other kind of insurance within the definition of which the coverage likewise reasonably is includable.
Accident and sickness insurance is insurance against bodily injury, disablement, or death by accident or accidental means, or the expense thereof, or against disablement or expense resulting from sickness and every insurance appertaining thereto.
(a) As used in this Code section, the term:
(1) “Direct primary care agreement” means a contract between a physician and an individual patient or his or her legal representative in which the physician or the physician's medical practice agrees to provide health care services to the individual patient for an agreed-upon fee and period of time.
(2) “Direct primary care practice” means a physician or physician's medical practice that charges a periodic fee for services, does not bill any third parties on a fee for service basis, and whose per visit charge is less than the monthly equivalent of the periodic fee.
(3) “Physician” means a person licensed to practice medicine pursuant to Article 2 of Chapter 34 of Title 43.
(b) A direct primary care agreement is not insurance, shall not be deemed an insurance arrangement nor agreement, and is not subject to state insurance laws.
(c) A physician offering, marketing, selling, or entering into a direct primary care agreement shall not be required to obtain a certificate of authority or license other than to maintain a current license to practice medicine with the State of Georgia.
(d) To be considered a direct primary care agreement for the purposes of this Code section, such agreement shall:
(1) Be in writing;
(2) Be signed by a physician or agent of the physician and the individual patient or his or her legal representative;
(3) Allow either party to terminate such agreement upon written notice; provided, however, that a physician shall be required to give a patient adequate notice of at least 30 days to allow a patient a reasonable amount of time to find another health care provider, and a patient shall be required to give a physician notice of no more than 30 days;
(4) Describe the scope of health care services that are covered by the periodic fee;
(5) Specify the periodic fee and any additional fees outside of the periodic fee for ongoing care;
(6) Specify the duration of such agreement and any automatic renewal periods and require that no more than 12 months of the periodic fee be paid in advance; and
(7) Prominently state in writing that such agreement is not health insurance.
(e) A physician providing health care services under a direct primary care agreement may decline to accept a patient if, in the physician's opinion, such patient's medical condition is such that the provider is unable to provide the appropriate level and type of health care services such patient requires. The physician may discontinue care for patients under the direct primary care agreement if:
(1) The patient fails to pay the periodic fee or any additional fees specified by the agreement;
(2) The patient has performed an act of fraud;
(3) The patient repeatedly fails to adhere to the recommended treatment plan;
(4) The patient is abusive and presents an emotional or physical danger to the staff or other patients of the direct primary care practice; or
(5) The physician or the physician's medical practice discontinues operation as a direct primary care practice.
(f) In the event that either party terminates an agreement pursuant to this Code section, any unearned portion of any fees paid pursuant to such agreement shall be refunded by the physician to the patient within 30 days of termination.
Casualty insurance includes vehicle insurance as defined in Code Section 33-7-9 and accident and sickness insurance as defined in Code Section 33-7-2 and in addition includes:
(1) Liability insurance, which is insurance against legal liability for the death, injury, or disability of any human being, or for damage to property, and which provides medical, hospital, surgical, and disability benefits to injured persons and funeral and death benefits to dependents, beneficiaries, or personal representatives of persons killed, irrespective of legal liability of the insured, when issued as an incidental coverage with or supplemental to liability insurance;
(2) Workers' compensation and employers' liability insurance, which is insurance of the obligations accepted by, imposed upon, or assumed by employers for death, disablement, or injury of employees;
(3) Burglary and theft insurance, which is insurance against loss or damage by burglary, theft, larceny, robbery, forgery, fraud, vandalism, malicious mischief, confiscation, wrongful conversion, disposal, concealment, mysterious disappearance, destruction of money or securities, or from any attempt at any of the foregoing, including supplemental coverages for medical, hospital, surgical, and funeral expenses incurred by the named insured or other person as a result of bodily injury during the commission of a burglary, robbery, or theft by another; also insurance against loss of or damage to moneys, coins, bullion, securities, notes, drafts, acceptances, or any other valuable papers and documents resulting from any cause;
(4) Personal property floater insurance, which is insurance upon personal effects against loss or damage from any cause;
(5) Glass insurance, which is insurance against loss or damage to glass, including its lettering, ornamentation, and fittings;
(6) Boiler and machinery insurance, which is insurance against any liability and loss or damage to property or interest resulting from accidents to or explosion of boilers, pipes, pressure containers, machinery, or apparatus, and inspection of, and issuing certificates of inspection upon, boilers, machinery, and apparatus of any kind, whether or not insured;
(7) Leakage and fire extinguishing equipment insurance, which is insurance against loss or damage to any property or interest caused by the breakage or leakage of sprinklers, hoses, pumps and other fire extinguishing equipment or apparatus, water pipes and containers, or by water entering through leaks or openings in buildings, and insurance against loss or damage to such sprinklers, hoses, pumps, and other fire extinguishing equipment or apparatus;
(8) Malpractice insurance, which is insurance against legal liability of the insured and against loss, damage, or expense incidental to a claim of such liability, including medical, hospital, surgical, and funeral benefits to injured persons, irrespective of legal liability of the insured, arising out of the death, injury, or disablement of any person, or arising out of damage to the economic interest of any person as the result of negligence in rendering expert, fiduciary, or professional services;
(9) Entertainments insurance, which is insurance indemnifying the producer of any motion picture, television, radio, theatrical, sport, spectacle, entertainment, or similar production, event, or exhibition against loss from interruption, postponement, or cancellation of such event or exhibition due to death, accidental injury, or sickness of performers, participants, directors, or other principals; and
(10) Miscellaneous insurance, which is insurance against any other kind of loss, damage, or liability properly a subject of insurance and not within any other kind of insurance as defined in this title, if the insurance is not disapproved by the Commissioner as being contrary to law or public policy.
(a) As used in this Code section, the term:
(1) “Credit insurance” means any insurance which is recognized by this title as being applicable or appropriate for use in connection with any loan, retail installment transaction, or any other credit transaction made pursuant to any law of this state. Such insurance includes, but is not limited to, the following:
(A) Credit life insurance;
(B) Credit accident and sickness insurance;
(C) Credit unemployment insurance;
(D) Credit casualty insurance;
(E) Credit property insurance;
(F) Nonrecording insurance or nonfiling insurance which is property insurance utilized in connection with credit transactions in lieu of the actual recording, filing, or releasing of a security instrument or financing statement. The premium charge for this insurance may not exceed the actual official fees which would be payable to file, record, or release a security instrument or financing statement. This insurance provides coverage for any loss or potential loss caused by any means whereby the creditor is prevented from obtaining possession of the covered property, enforcing its rights under a security agreement, or obtaining the proceeds to which it is entitled under the agreement. Nothing shall prohibit nonrecording insurance or nonfiling insurance from being incorporated, by endorsement or rider, into a vendor's single interest policy or a similar type of policy;
(G) Vendors' single interest insurance, which is property insurance securing the interest of a creditor as respects potential loss relative to tangible property used as collateral on credit transactions. Such insurance may include but is not limited to the following coverages: vandalism and malicious mischief, flood, collapse, alteration, skip, conversion, concealment, nonrecording insurance, misrepresentation, and embezzlement; and
(H) Any other lines or sublines of insurance which may become accepted as credit insurance by the insurance and lending industries unless otherwise disapproved by the Commissioner.
(2) “Credit loss insurance” means a form of casualty insurance against loss resulting from failure of debtors to pay their obligations to the insured creditor. Such term includes but is not limited to mortgage guaranty insurance, holder-in-due-course insurance, and repossession insurance. Credit loss insurance specifically does not include any of the coverages enumerated in subparagraphs (a)(1)(A) through (a)(1)(H) of this Code section.
(3) “Creditor” means the lender of money or vendor or lessor of goods, services, property, rights, or privileges for which payment is arranged through a credit transaction. Creditor also means any successor to the right, title, or interest of any such lender, vendor, or lessor and an affiliate, associate, or subsidiary of any of them or any director, officer, or employee of any of them or any other person in any way associated with any of them.
(4) “Debtor” means a borrower of money or a purchaser or lessee of goods, services, property, rights, or privileges for which payment is arranged through a credit transaction.
(b) Notwithstanding any law which may be construed to the contrary, neither the premium nor cost for any credit insurance which is written by or through a creditor nor any commission, dividend, or other gain payable by an insurer to a creditor for the sale or provision of credit insurance shall be deemed as interest, time price differential, finance charge, or other charge or amount in excess of permitted charges, in connection with any loan, retail installment transaction, or other credit transaction made pursuant to the laws of this state.
(c) Forms and rates for all lines or sublines of credit insurance shall be filed separately with the Commissioner. Unless disapproved by the Commissioner, pursuant to the authority to disapprove forms or rates under Chapter 9, 24, or 31 of this title, the utilization of such forms and rates shall be deemed in compliance with this title and the premiums developed from such rates shall be deemed reasonable and in compliance with this title.
Life insurance is insurance on human lives and insurance appertaining to or connected with human lives. The transacting of life insurance includes the granting of endowment benefits, additional benefits in the event of death or dismemberment by accident or accidental means, additional benefits in the event of the disability of the insured, and optional modes of settlement of proceeds of life insurance. An insurer authorized to transact life insurance may also grant annuities.
Marine and transportation insurance includes:
(1) Insurance against any and all kinds of loss or damage to vessels, craft, aircraft, cars, automobiles, and vehicles of every kind, as well as all goods, freight, cargoes, merchandise, effects, disbursements, profits, moneys, bullion, precious stones, securities, choses in action, evidence of debt, valuable papers, bottomry and respondentia interests, and all other kinds of property and interests therein in respect to, appertaining to, or in connection with any and all risks or perils of navigation, transit, or transportation, including war risks on or under any seas or other waters, on land or in the air, or while being assembled, packed, crated, baled, compressed, or similarly prepared for shipment, or while awaiting the same, or during any delays, storage, transshipment, or reshipment incident thereto, including marine builders' risks and all personal property floater risks;
(2) Insurance against any and all kinds of loss or damage to person or to property in connection with or appertaining to a marine, inland marine, transit, or transportation insurance, including liability for loss of or damage to either, arising out of or in connection with the construction, repair, operation, maintenance, or use of the subject matter of such insurance but not including life insurance or surety bonds nor insurance against loss by reason of bodily injury to the person arising out of the ownership, maintenance, or use of automobiles;
(3) Insurance against any and all kinds of loss or damage to precious stones, jewels, jewelry, gold, silver, and other precious metals, whether used in business or trade or otherwise and whether the same be in course of transportation or otherwise;
(4) Insurance against any and all kinds of loss or damage to bridges, tunnels, and other instrumentalities of transportation and communication, excluding buildings, their furniture and furnishings, fixed contents, and supplies held in storage unless fire, tornado, sprinkler leakage, hail, explosion, earthquake, riot, or civil commotion, or any or all of them are the only hazards to be covered;
(5) Insurance against any and all kinds of loss or damage to piers, wharves, docks, and slips, excluding the risks of fire, tornado, sprinkler leakage, hail, explosion, earthquake, riot, and civil commotion, and each of them;
(6) Insurance against any and all kinds of loss or damage to other aids to navigation and transportation, including dry docks and marine railways, dams, and appurtenant facilities for the control of waterways;
(7) Marine protection and indemnity insurance, which is insurance against, or against legal liability of the insured for, loss, damage, or expense arising out of, or incident to, the ownership, operation, chartering, maintenance, use, repair, or construction of any vessel, craft, or instrumentality in use in ocean or inland waterways, including liability of the insured for personal injury, illness, or death or for loss of or damage to the property of another person; and
(8) Travel insurance as such term is defined in subsection (f) of Code Section 33-23-12.
(a) Property insurance is insurance on real or personal property of every kind and interest therein against loss or damage from any or all hazards or causes and against loss consequential upon such loss or damage other than noncontractual legal liability for any such loss or damage. Property insurance shall also include miscellaneous insurance as defined in paragraph (10) of Code Section 33-7-3, except as to any noncontractual liability coverage includable therein.
(b) Property insurance also includes:
(1) Any contract, agreement, or instrument whereby a person assumes the risk of and the expense or portion thereof for:
(A) The mechanical breakdown or mechanical failure of a motor vehicle; or
(B) The repair of certain reasonable motor vehicle wear and tear sustained in ordinary use, such as:
(i) The removal of dents, dings, or creases in a motor vehicle without affecting the existing paint finish using paintless dent repair techniques;
(ii) The removal of small windshield chips and cracks without replacement of the entire windshield;
(iii) The repair of rips, burns, tears, holes, and punctures to interior fabric or carpet;
(iv) Cosmetic repair of minor scuffs, scratches, scrapes, or rash on exterior plastic surfaces, including, but not limited to, bumpers;
(v) The repair or replacement of wheels on a motor vehicle damaged as a result of coming into contact with road hazards which may include, but are not limited to, potholes, rocks, wood debris, metal parts, plastic, curbs, or composite scraps;
(vi) Exterior reconditioning of foggy or yellowed headlights to restore clarity and luster;
(vii) The repair or replacement of a motor vehicle key or key fob in the event that the key or key fob becomes inoperable or is lost or stolen;
(viii) The repair, replacement, or maintenance of a motor vehicle, or indemnification for the repair, replacement, or maintenance for excess wear to the motor vehicle, resulting in lease-end excess wear and use charges assessed by a lessor pursuant to a motor vehicle lease agreement, provided that the value of any benefits under such contract, agreement, or instrument shall not exceed the purchase price of the vehicle; provided, further, that a person offering a cancellation or waiver of excess wear and use charges in connection with a lease as described in paragraph (6) of Code Section 33-63-3 is not subject to this Code section; or
(ix) The reduction of some or all of the amounts due on a consumer's finance agreement in the event of a total physical damage loss or unrecovered theft of the motor vehicle;
and shall include those agreements commonly known as vehicle service agreements or extended warranty agreements, if made by a person other than the motor vehicle manufacturer or a subsidiary or affiliate of the motor vehicle manufacturer in exchange for a separately stated charge or the cost of the contract or contracts is included on a nonidentifiable basis in the cost of a motor vehicle sold in conjunction therewith, except that this paragraph shall not apply to an agreement underwritten by an insurer licensed to transact insurance in this state, either directly or through a reinsurance contract or, without regard to the requirement that the insurance cannot be obtained from an insurer authorized to do business in this state as required by Code Section 33-5-21, to an agreement underwritten by a surplus lines insurer which has not been rejected by the Commissioner for such purpose;
(2) Any contract, agreement, or instrument whereby a person assumes the risk of and the expense or portion of such expense for the structural or mechanical breakdown, loss of, or damage to a one-family or two-family residential building structure or any part thereof from any cause, including loss of or damage to or loss of use of the building structure or major components thereof which are attached to and become a part of said structure, if made by a person other than the constructing contractor or manufacturer of the building structure or part thereof in exchange for a separately stated charge or the cost of the contract or contracts is included on a nonidentifiable basis in the cost of such building structure sold in conjunction therewith, except that this paragraph shall not apply to an agreement underwritten by an insurer licensed to transact insurance in this state, either directly or through a reinsurance contract or underwritten by a surplus line insurer approved by the Commissioner nor shall this provision apply to an agreement: (A) the performance of which is guaranteed by a surety bond executed by an authorized corporate surety insurer in favor of and approved by the Commissioner in an amount of not less than $1.5 million; provided further that a surety bond of an additional $100,000.00 shall be required for every additional $500,000.00 in written premium above $2 million in written premium. Any company relying upon one or more bonds pursuant to this subsection shall keep such bonds or equivalent coverage in place until the expiration of the contract, agreement, or instrument contemplated in this paragraph; or (B) notwithstanding with a duration of 13 months or less covering damage to or loss of use of the major appliances located in an existing or resold home where the performance of any covered repair is guaranteed by a surety bond executed by a corporate surety insurer authorized to offer surety insurance in this state in favor of the Commissioner and in an amount which in the discretion of the Commissioner will provide adequate protection to all the residents of this state who are covered by such agreements, provided that such amount shall not be less than $100,000.00; or
(3) Any contract, agreement, or instrument, other than an agreement, contract, or instrument covered by paragraphs (1) and (2) of this subsection, whereby a person assumes the risk of and the expense or portion thereof for the cost of repair or replacement of a product if such contract, agreement, or instrument is made by a person other than the manufacturer or a subsidiary or affiliate of the motor vehicle manufacturer in exchange for a separately stated charge or the cost of the contract or contracts is included on a nonidentifiable basis in the cost of the product sold in conjunction therewith, except that this paragraph shall not apply to:
(A) An agreement underwritten by an insurer licensed to transact insurance in this state, either directly or through a reinsurance contract;
(B) Any contract, agreement, or instrument relating to similar services furnished by any air carrier that provides interstate air transportation;
(C) Any tire replacement contract, agreement, or instrument;
(D) A contract, agreement, or instrument whereby a retailer in the business of selling consumer products or a wholly owned subsidiary of such retailer assumes the risk of and the expense or portion thereof for the cost of repair or replacement of consumer products where such contract, agreement, or instrument is guaranteed by a surety bond executed by a corporate surety insurer authorized to offer surety insurance in this state in favor of and approved by the Commissioner in an amount of not less than $100,000.00; or
(E) Any contract, agreement, or instrument whereby any person assumes the risk of and the expense or portion of such expense for the breakdown, service, repair, or replacement due to normal wear and tear or structural or inherent defect to the major appliances, utility systems, and roofing system of any one-family or two-family residential building structure in exchange for a separately stated consideration and does not otherwise provide direct or consequential coverage under a property contract defined in paragraph (1) or (2) of this subsection or the introductory language of this paragraph and such contract, agreement, or instrument is guaranteed by a surety bond executed by a corporate surety insurer authorized to offer surety insurance in this state in favor of and approved by the Commissioner in an amount of not less than $100,000.00.
(c)(1) Any contract, agreement, or instrument, as regulated under paragraphs (1), (2), and (3) of subsection (b) of this Code section, shall state clearly and conspicuously in the contract the name and address of the insurer or surety which has guaranteed or underwritten the contract, agreement, or instrument, either directly or through a reinsurance contract.
(2) In the event a regulated contract, agreement, or instrument is issued by a party other than an insurer so that the holder thereof, in the first instance, must make a claim or request for refund pursuant to paragraph (3) of this subsection against a party other than the insurer, the contract, agreement, or instrument shall provide that the holder shall be entitled to make a direct claim against the insurer upon the failure of the issuer to pay any claim or to refund the consideration paid by the holder for the contract, agreement, or instrument within 60 days after proof of loss has been filed with the issuer.
(3)(A) The regulated contract, agreement, or instrument shall be cancelable by the holder for a full refund minus any claims paid if the holder cancels within 20 days of the date that the contract, agreement, or instrument was mailed to the last known address of the holder or within ten days of delivery if delivered to the holder at the time of sale, or within a longer time period permitted under the contract, agreement, or instrument. Such cancellation shall be effective upon return of the contract, agreement, or instrument to the issuer within the applicable time period. If no claim has been made prior to its return to the issuer, the contract, agreement, or instrument is void by operation of law upon its receipt by the issuer, and such issuer shall refund to the holder, or credit the account of the holder, the full purchase price. The right to void the contract, agreement, or instrument provided in this paragraph is not transferable and shall apply only to the original purchaser, and shall apply only if no claim has been made prior to its return to the issuer. A 10 percent penalty per month shall be added to a refund that is not paid or credited within 45 days after the return of the contract, agreement, or instrument to the issuer.
(B) Subsequent to the expiration of the applicable time period specified in subparagraph (A) of this paragraph, a holder may cancel and the issuer shall refund to the holder 100 percent of the unearned pro rata purchase price, less any claims paid. A reasonable administrative fee may be charged by the issuer not to exceed 10 percent of the unearned pro rata purchase price.
(4) The regulated contract, agreement, or instrument shall be noncancelable by the issuer except for fraud, material misrepresentation, or failure to pay the consideration due therefor. Notice of such cancellation stating the reason for and effective date of the cancellation shall be given to the holder in writing no less than 30 days before the effective date of such cancellation. Following an issuer cancellation, the holder shall be refunded 100 percent of the unearned pro rata purchase price, less any claims paid. A reasonable administrative fee may be charged by the issuer not to exceed 10 percent of the unearned pro rata purchase price.
(5) Any contract, agreement, or instrument exempt under subparagraph (b)(3)(D) or (b)(3)(E) of this Code section shall state clearly and conspicuously substantially the following: “This is not a contract of insurance.”
(d) The Commissioner shall promulgate rules and regulations regarding vehicle service agreements or extended warranty agreements as described in paragraph (1) of subsection (b) of this Code section. Such rules and regulations shall include filing requirements, disclosures for the benefit of the agreement holder, record keeping, and procedures for public complaints. Such rules and regulations shall also include the conditions under which surplus lines insurers may be rejected for the purpose of underwriting vehicle service agreements and extended warranty agreements.
(e)(1) As used in this subsection, the term “heavy equipment dealer” means a person, firm, or corporation which is primarily engaged in the business of selling, renting, leasing, and servicing heavy equipment, engines, power generation equipment, and parts and attachments to such heavy equipment which is primarily used for construction, industrial, maritime, mining, agriculture, or similar purposes and who is not required to be licensed.
(2) The provisions of this Code section shall not apply to heavy equipment dealers.
(f) Property insurance does not include service contracts sold or offered for sale to persons other than consumers, or those agreements commonly known as vehicle service agreements or extended warranty agreements which are issued, sold, or offered for sale by a retail installment seller, as defined in Code Section 10-1-31 in connection with the sale of a motor vehicle by such retail installment seller, provided that such retail installment seller:
(1) Maintains, or has a parent company maintain, a net worth or stockholders' equity of at least $50 million, provided the parent company guarantees the obligations of the retail installment seller arising from vehicle service agreements or extended warranty agreements underwritten pursuant to this paragraph;
(2) Complies with the registration requirement prescribed by the Commissioner through regulation;
(3) Files with the Commissioner a true and correct copy of the vehicle service agreement or extended warranty agreement that has a term of and is no longer than nine months in a form that is consistent with the terms prescribed by the Commissioner through regulation;
(4) Files a copy of its Form 10-K or Form 20-F disclosure statements, or if it does not file such statements with the United States Securities and Exchange Commission, a copy of its audited financial statements reported on a GAAP basis. If the retail installment seller's financial statements are consolidated with those of its parent company, then the retail installment seller may comply with this provision by filing the statements of its parent company. The statement shall be filed with the Commissioner 30 days prior to the retail installment seller's initial offering or delivering of a service agreement or extended warranty agreement, and thereafter, the statement shall be filed with the Commissioner annually; and
(5) Upon the request of the Commissioner, posts a security deposit or surety bond in an amount not to exceed $250,000.00 and in the manner prescribed by the Commissioner through regulation.
Surety insurance includes:
(1) Fidelity insurance, which is insurance guaranteeing the fidelity of persons holding positions of public or private trust;
(2) Insurance guaranteeing the performance of contracts other than insurance policies and guaranteeing and executing bonds, undertakings, and contracts of suretyship; and
(3) Insurance indemnifying banks, bankers, brokers, or financial or moneyed corporations or associations against loss resulting from any cause of bills of exchange, notes, bonds, securities, evidences of debt, deeds, mortgages, warehouse receipts or other valuable papers, documents, money, precious metals and articles made from such metals, jewelry, watches, necklaces, bracelets, gems, precious and semiprecious stones, including any loss while the same are being transported in armored motor vehicles or by messenger but not including any other risks of transportation or navigation; also insurance against loss or damage to such an insured's premises or to his furnishings, fixtures, equipment, safes, and vaults in such an insured's premises caused by burglary, robbery, theft, vandalism, or malicious mischief or any attempt at burglary, robbery, theft, vandalism, or malicious mischief.
Title insurance is insurance of owners of real or personal property or others having an interest in such real or personal property, or liens or encumbrances on such real or personal property, against loss by encumbrance, defective titles, invalidity, adverse claim to title, or unmarketability of title by reason of encumbrance or defects not excepted in the insurance contract, which contract shall be written only upon evidence or opinion of title obtained and preserved by the insurer.
(a) As used in this Code section, the term:
(1) “Closing protection letter” means insurance that indemnifies a buyer, lender, or seller in transactions where title to real estate is being conveyed solely against losses not to exceed the amount of the settlement funds only because of the following acts of the person responsible for the disbursement of settlement funds:
(A) Acts of fraud, theft, dishonesty, or negligence in handling settlement funds or documents in connection with a closing, but only to the extent that the acts affect status or priority of title in the real estate insured by the title insurance; and
(B) Failure to comply with written closing instructions by a proposed insured when agreed to by the title agency or title agent relating to title insurance coverage, but only to the extent that the acts affect status or priority of title in real estate insured by the title insurance.
(2) “Settlement funds” means the total funds paid by the buyer, lender, or seller as consideration for the conveyance of real estate.
(b) A title insurer may issue closing protection letters only for real estate transactions where its title insurance policies are issued and where its issuing agent or agency is also responsible for the disbursement of settlement funds.
(c) The premium charged by the title insurer for closing protection letters shall be filed with and approved by the Commissioner in accordance with Chapter 9 of this title and shall not be subject to any agreement requiring a division of the premium collected on behalf of the title insurer.
(d) Companies issuing closing protection letters shall maintain adequate reserves for those closing protection letters pursuant to Chapter 10 of this title.
(e) The Commissioner shall promulgate rules and regulations necessary to implement this Code section, which shall include, but shall not be limited to, prescribing standard closing protection letter policy forms.
Vehicle insurance is insurance against loss of or damage to any land vehicle or aircraft, any draft or riding animal, or to property while contained therein or thereon or being loaded or unloaded therein or therefrom from any hazard or cause, and against any loss, liability, or expense resulting from or incident to ownership, maintenance, or use of any such vehicle, aircraft, or animal, together with insurance against accidental death or accidental injury to individuals, including the named insured, while in, entering, alighting from, adjusting, repairing, cranking, or caused by being struck by a vehicle, aircraft, or draft or riding animal, if such insurance is issued as a part of insurance on the vehicle, aircraft, or draft or riding animal; and provisions of medical, hospital, surgical, and disability benefits to injured persons, funeral and death benefits to dependents, beneficiaries or personal representatives of persons killed, irrespective of legal liability of the insured, when issued as an incidental coverage with or supplemental to liability insurance.
Every person writing or issuing contracts of life insurance as described in Code Section 33-7-4 or as defined in Code Section 33-25-1 shall be deemed to be engaged in the business of life insurance and shall be subject to all of the provisions of the laws of Georgia regulating life insurance companies.
(a)(1) No automobile liability policy or motor vehicle liability policy shall be issued or delivered in this state to the owner of such vehicle or shall be issued or delivered by any insurer licensed in this state upon any motor vehicle then principally garaged or principally used in this state unless it contains an endorsement or provisions undertaking to pay the insured damages for bodily injury, loss of consortium or death of an insured, or for injury to or destruction of property of an insured under the named insured's policy sustained from the owner or operator of an uninsured motor vehicle, within limits exclusive of interests and costs which at the option of the insured shall be:
(A) Not less than $25,000.00 because of bodily injury to or death of one person in any one accident, and, subject to such limit for one person, $50,000.00 because of bodily injury to or death of two or more persons in any one accident, and $25,000.00 because of injury to or destruction of property; or
(B) Equal to the limits of liability because of bodily injury to or death of one person in any one accident and of two or more persons in any one accident, and because of injury to or destruction of property of the insured which is contained in the insured's personal coverage in the automobile liability policy or motor vehicle liability policy issued by the insurer to the insured if those limits of liability exceed the limits of liability set forth in subparagraph (A) of this paragraph. In any event, the insured may affirmatively choose uninsured motorist limits in an amount less than the limits of liability.
(2) The coverages for bodily injury or death or for injury to or destruction of property of an insured person, as provided in paragraph (1) of this subsection, may be subject to deductible amounts as follows:
(A) For bodily injury or death, deductibles of $250.00, $500.00, or $1,000.00, at the option of any named insured in the policy. Deductibles above $1,000.00 may be offered, subject to approval of the Commissioner;
(B) For injury to or destruction of property of the insured, deductibles of $250.00, $500.00, or $1,000.00, at the option of any named insured in the policy. Deductibles above $1,000.00 may be offered, subject to the approval of the Commissioner;
(C) Deductible amounts shown in subparagraphs (A) and (B) of this paragraph may not be reduced below $250.00;
(D) Deductible amounts shown in subparagraphs (A) and (B) of this paragraph shall be made available at a reduced premium; and
(E) Where an insurer has combined into one single limit the coverages required under paragraph (1) of this subsection, any deductible selected under subparagraphs (A) and (B) of this paragraph shall be combined, and the resultant total shall be construed to be a single aggregate deductible.
(3) The coverage required under paragraph (1) of this subsection shall not be applicable where any insured named in the policy shall reject the coverage in writing. The coverage required under paragraph (1) of this subsection excludes umbrella or excess liability policies unless affirmatively provided for in such policies or in a policy endorsement. The coverage need not be provided in or supplemental to a renewal policy where the named insured had rejected the coverage in connection with a policy previously issued to said insured by the same insurer. The amount of coverage need not be increased from the amounts shown on the declarations page on renewal once coverage is issued.
(4) The filing of a petition for relief in bankruptcy under a chapter of Title 11 of the United States Code by an uninsured motorist as described in this Code section, or the appointment of a trustee in bankruptcy for an uninsured motorist as described in this Code section, or the discharge in bankruptcy of an uninsured motorist as described in this Code section shall not affect the legal liability of an uninsured motorist as the term “legal liability” is used in this Code section, and such filing of a petition for relief in voluntary or involuntary bankruptcy, the appointment of a trustee in bankruptcy, or the discharge in bankruptcy of such an uninsured motorist shall not be pleaded by the insurance carrier providing uninsured motorist protection in bar of any claim of an insured as defined in this Code section so as to defeat payment for damages sustained by any insured by the insurance company providing uninsured motorist protection and coverage under the terms of this chapter; but the insurance company or companies shall have the right to defend any such action in its own name or in the name of the uninsured motorist and shall make payment of any judgment up to the limits of the applicable uninsured motorist insurance protection afforded by its policy. In those cases, the uninsured motorist upon being discharged in bankruptcy may plead the discharge in bankruptcy against any subrogation claim of any uninsured motorist carrier making payment of a claim or judgment in favor of an uninsured person, and the uninsured motorist may plead said motorist's discharge in bankruptcy in bar of all amounts of an insured person's claim in excess of uninsured motorist protection available to the insured person.
(b)(1) As used in this Code section, the term:
(A) “Bodily injury” shall include death resulting from bodily injury.
(B) “Insured” means the named insured and, while resident of the same household, the spouse of any such named insured and relatives of either, while in a motor vehicle or otherwise; any person who uses, with the expressed or implied consent of the named insured, the motor vehicle to which the policy applies; a guest in such motor vehicle to which the policy applies; or the personal representatives of any such persons. The term “insured” shall also mean a foster child or ward residing in the household of the named insured pursuant to a court order, guardianship, or placement by the department of family and children services or other department or agency of the state, while in a motor vehicle or otherwise.
(C) “Property of the insured” as used in subsection (a) of this Code section means the insured motor vehicle and includes the personal property owned by the insured and contained in the insured motor vehicle.
(D) “Uninsured motor vehicle” means a motor vehicle, other than a motor vehicle owned by or furnished for the regular use of the named insured, the spouse of the named insured, and, while residents of the same household, the relative of either, as to which there is:
(i) No bodily injury liability insurance and property damage liability insurance;
(ii) Bodily injury liability insurance and property damage liability insurance and the insured has uninsured motorist coverage provided under the insured's motor vehicle insurance policy; the motor vehicle shall be considered uninsured, and the amount of available coverages shall be as follows:
(I) Such motor vehicle shall be considered uninsured to the full extent of the limits of the uninsured motorist coverage provided under the insured's motor vehicle insurance policies, and such coverages shall apply to the insured's losses in addition to the amounts payable under any available bodily injury liability and property damage liability insurance coverages. The insured's uninsured motorist coverage shall not be used to duplicate payments made under any available bodily injury liability insurance and property damage liability insurance coverages but instead shall be available as additional insurance coverage in excess of any available bodily injury liability insurance and property damage liability insurance coverages; provided, however, that the insured's combined recovery from the insured's uninsured motorist coverages and the available coverages under the bodily injury liability insurance and property damage liability insurance on such uninsured motor vehicle shall not exceed the sum of all economic and noneconomic losses sustained by the insured. For purposes of this subdivision, available coverages under the bodily injury liability insurance and property damage liability insurance coverages on such motor vehicle shall be the limits of coverage less any amounts by which the maximum amounts payable under such limits of coverage have, by reason of payment of other claims or otherwise, been reduced below the limits of coverage;
(II) Provided, however, that an insured may reject the coverage referenced in subdivision (I) of this division and select in writing coverage for the occurrence of sustaining losses from the owner or operator of an uninsured motor vehicle that considers such motor vehicle to be uninsured only for the amount of the difference between the available coverages under the bodily injury liability insurance and property damage liability insurance coverages on such motor vehicle and the limits of the uninsured motorist coverages provided under the insured's motor vehicle insurance policies; and, for purposes of this subdivision, available coverages under the bodily injury liability insurance and property damage liability insurance coverages on such motor vehicle shall be the limits of coverage less any amounts by which the maximum amounts payable under such limits of coverage have, by reason of payment of other claims or otherwise, been reduced below the limits of coverage; and
(III) Neither coverage under subdivision (I) nor (II) of this division shall be applicable if the insured rejects such coverages as provided in paragraph (3) of subsection (a) of this Code section. The coverage set forth in subdivision (I) of this division need not be provided in or supplemental to a renewal policy where the named insured has rejected the coverage set forth in subdivision (I) of this division and selected the coverage set forth in subdivision (II) of this division in connection with a policy previously issued to said insured by the same insurer;
(iii) Bodily injury liability insurance and property damage liability insurance in existence but the insurance company writing the insurance has legally denied coverage under its policy;
(iv) Bodily injury liability and property damage liability insurance in existence but the insurance company writing the insurance is unable, because of being insolvent, to make either full or partial payment with respect to the legal liability of its insured, provided that in the event that a partial payment is made by or on behalf of the insolvent insurer with respect to the legal liability of its insured, then the motor vehicle shall only be considered to be uninsured for the amount of the difference between the partial payment and the limits of the uninsured motorist coverage provided under the insured's motor vehicle insurance policy; or
(v) No bond or deposit of cash or securities in lieu of bodily injury and property damage liability insurance.
(2) A motor vehicle shall be deemed to be uninsured if the owner or operator of the motor vehicle is unknown. In those cases, recovery under the endorsement or provisions shall be subject to the conditions set forth in subsections (c) through (j) of this Code section, and, in order for the insured to recover under the endorsement where the owner or operator of any motor vehicle which causes bodily injury or property damage to the insured is unknown, actual physical contact shall have occurred between the motor vehicle owned or operated by the unknown person and the person or property of the insured. Such physical contact shall not be required if the description by the claimant of how the occurrence occurred is corroborated by an eyewitness to the occurrence other than the claimant.
(c) If the owner or operator of any motor vehicle which causes bodily injury or property damage to the insured is unknown, the insured, or someone on his behalf, or in the event of a death claim someone on behalf of the party having the claim, in order for the insured to recover under the endorsement, shall report the accident as required by Code Section 40-6-273.
(d) In cases where the owner or operator of any vehicle causing injury or damages is known, and either or both are named as defendants in any action for such injury or damages, and a reasonable belief exists that the vehicle is an uninsured motor vehicle under subparagraph (b)(1)(D) of this Code section, a copy of the action and all pleadings thereto shall be served as prescribed by law upon the insurance company issuing the policy as though the insurance company were actually named as a party defendant. If facts arise after an action has been commenced which create a reasonable belief that a vehicle is an uninsured motor vehicle under subparagraph (b)(1)(D) of this Code section and no such reasonable belief existed prior to the commencement of the action against the defendant, and the complaint was timely served on the defendant, the insurance company issuing the policy shall be served within either the remainder of the time allowed for valid service on the defendant or 90 days after the date on which the party seeking relief discovered, or in the exercise of due diligence should have discovered, that the vehicle was uninsured or underinsured, whichever period is greater. The uninsured motorist carrier may conduct discovery as a matter of right for a period of not less than 120 days after service prior to any hearing on the merits of the action. If either the owner or operator of any vehicle causing injury or damages is unknown, an action may be instituted against the unknown defendant as “John Doe,” and a copy of the action and all pleadings thereto shall be served as prescribed by law upon the insurance company issuing the policy as though the insurance company were actually named as a party defendant; and the insurance company shall have the right to file pleadings and take other action allowable by law in the name of “John Doe” or itself. In any case arising under this Code section where service upon an insurance company is prescribed, the clerk of the court in which the action is brought shall have such service accomplished by issuing a duplicate original copy for the sheriff or marshal to place his or her return of service in the same form and manner as prescribed by law for a party defendant. The return of service upon the insurance company shall in no case appear upon the original pleadings in such case. In the case of a known owner or operator of such vehicle, either or both of whom are named as a defendant in such action, the insurance company issuing the policy shall have the right to file pleadings and take other action allowable by law in the name of either the known owner or operator or both or itself.
(1) In cases where the owner or operator of a vehicle causing injury or damages is unknown and an action is instituted against the unknown defendant as “John Doe,” the residence of such “John Doe” defendant shall be presumed to be in the county in which the accident causing injury or damages occurred, or in the county of residence of the plaintiff, at the election of the plaintiff in the action.
(2) A motor vehicle shall not be deemed to be an uninsured motor vehicle within the meaning of this Code section when the owner or operator of such motor vehicle has deposited security, pursuant to Code Section 40-9-32, in the amounts specified in subparagraph (a)(1)(A) of this Code section.
(e) In cases where the owner or operator of any vehicle causing injury or damage is known and either or both are named as defendants in any action for such injury or damages but the person resides out of the state, has departed from the state, cannot after due diligence be found within the state, or conceals himself to avoid the service of summons, and this fact shall appear by affidavit to the satisfaction of the judge of the court, and it shall appear either by affidavit or by a verified complaint on file that a claim exists against the owner or driver in respect to whom service is to be made and that he is a necessary or proper party to the action, the judge may grant an order that the service be made on the owner or driver by the publication of summons. A copy of any action filed and all pleadings thereto shall be served as prescribed by law upon the insurance company issuing the policy as though the insurance company issuing the policy were actually named as a party defendant. Subsection (d) of this Code section shall govern the rights of the insurance company, the duties of the clerk of court concerning duplicate original copies of the pleadings, and the return of service. Following service on the owner or driver by the publication of the summons as provided in this subsection and service as prescribed by law upon the insurance company issuing the policy, the plaintiff shall have a continuing duty to exercise diligence in attempting to locate the owner or driver against whom the claim exists, but such obligation of diligence shall not extend beyond a period of 12 months following service upon the owner or driver by publication of the summons. However, regardless of such time limitations, should the plaintiff learn of the location of the owner or driver against whom the claim exists, the plaintiff shall exercise due diligence to effect service of process upon that owner or driver within a reasonable time period after receiving such information.
(f) An insurer paying a claim under the endorsement or provisions required by subsection (a) of this Code section shall be subrogated to the rights of the insured to whom the claim was paid against the person causing such injury, death, or damage to the extent that payment was made, including the proceeds recoverable from the assets of the insolvent insurer, provided that the bringing of an action against the unknown owner or operator as “John Doe” or the conclusion of such an action shall not constitute a bar to the insured, if the identity of the owner or operator who caused the injury or damages complained of becomes known, bringing an action against the owner or operator theretofore proceeded against as “John Doe”; provided, further, that any recovery against such owner or operator shall be paid to the insurance company to the extent that the insurance company paid the named insured in the action brought against the owner or operator as “John Doe,” except that the insurance company shall pay its proportionate part of any reasonable costs and expense incurred in connection therewith, including reasonable attorney's fees. Nothing in an endorsement or provisions made under this Code section nor any other provision of law shall operate to prevent the joining in an action against “John Doe” or the owner or operator of the motor vehicle causing such injury as a party defendant, and joinder is specifically authorized.
(g) No endorsement or provisions shall contain a provision requiring arbitration of any claim arising under any endorsement or provisions, nor may anything be required of the insured, subject to the other provisions of the policy or contract, except the establishment of legal liability; nor shall the insured be restricted or prevented, in any manner, from employing legal counsel or instituting legal proceedings.
(h) Before a motor vehicle shall be deemed to be uninsured because of the insolvency of an insurance company under division (b)(1)(D)(iv) of this Code section, an insurer under the uninsured motorists endorsement provisions of subsection (a) of this Code section must be given notice within a reasonable time by its insured of the pendency of any legal proceeding against such insurance company of which he may have knowledge, and before the insured enters into any negotiation or arrangement with the insurance company, and before the insurer is prejudiced by any action or nonaction of the insured with respect to the determinations of the insolvency of the insurance company.
(i) In addition to any offsets or reductions contained in the provisions of division (b)(1)(D)(ii) of this Code section, an endorsement or the provisions of the policy providing the coverage required by this Code section may contain provisions which exclude any liability of the insurer for injury to or destruction of property of the insured for which such insured has been compensated by other property or physical damage insurance and may contain provisions which exclude any liability of the insurer for personal or bodily injury or death for which the insured has been compensated pursuant to “medical payments coverage,” as such term is defined in paragraph (1) of Code Section 33-34-2, or compensated pursuant to workers' compensation laws.
(j) If the insurer shall refuse to pay any insured any loss covered by this Code section within 60 days after a demand has been made by the insured and a finding has been made that such refusal was made in bad faith, the insurer shall be liable to the insured in addition to any recovery under this Code section for not more than 25 percent of the recovery or $25,000.00, whichever is greater, and all reasonable attorney's fees for the prosecution of the case under this Code section. The question of bad faith, the amount of the penalty, if any, and the reasonable attorney's fees, if any, shall be determined in a separate action filed by the insured against the insurer after a judgment has been rendered against the uninsured motorist in the original tort action. The attorney's fees shall be fixed on the basis of competent expert evidence as to the reasonable value of the services, based on the time spent and legal and factual issues involved, in accordance with prevailing fees in the locality where the action is pending. The trial court shall have the discretion, if it finds such jury verdict fixing attorney's fees to be greatly excessive or inadequate, to review and amend such portion of the verdict fixing attorney's fees without the necessity of disapproving the entire verdict. The limitations contained in this subsection in reference to the amount of attorney's fees are not controlling as to the fees which may be agreed upon by the plaintiff and his or her attorney for the services of the attorney in the action against the insurer.
(a) As used in this Code section, the term “liability insurance policy” means an automobile liability or motor vehicle liability insurance policy issued or delivered in this state to the owner of such vehicle or issued or delivered by any insurer licensed in this state upon any such motor vehicle then principally garaged or principally used in this state.
(b) Any insurer, upon acceptance of liability, pursuant to any automobile liability or motor vehicle liability insurance policy, shall pay reasonable benefits for losses, including total losses, to a third party on behalf of an insured for loss of use and towing and storage costs of such a motor vehicle, and the liability of the insurer for payment of benefits for losses, including total losses, to the third party shall commence as of the time of the incident or occurrence which results in such losses; provided, however, in no event shall this Code section be construed so as to relieve the claimant of his or her obligation to mitigate his or her losses or to require the payment of loss of use and towing and storage costs benefits in an amount which is greater than the actual losses suffered.
(c) When making any payment to a third party for damage to an automobile for any loss, the insurer shall have printed on the loss estimate, if prepared directly by the insurer, the following:
“Failure to use the insurance proceeds in accordance with a security agreement between you and a lienholder, if any, may be a violation of Code Section 16-8-4 of the O.C.G.A. If you have any questions, contact your lending institution.”
This subsection does not apply if the insurer does not prepare the loss estimate or if the estimate is not prepared in the State of Georgia.
(d) The provisions of this Code section shall be applicable to all automobile liability or motor vehicle liability insurance policies that pay benefits to a third party on behalf of an insured for the loss of use and towing and storage costs of such motor vehicle issued, delivered, or renewed in this state on or after January 1, 2009.
(a) Any provision in a liability policy of insurance which provides that the insurer shall have the right to compromise or settle claims of third persons against the insured without the consent of the insured shall be deemed to create, as between the insurer and the insured, the relationship of an independent contractor so that the insured shall not be precluded from asserting a claim or cause of action against third persons, notwithstanding the settlement by the insurer of such claims of third persons, unless the insured shall previously have consented in writing to relinquish his claim or cause of action against third persons, provided in all cases where the insurer shall settle the claims of third persons against the insured without written consent that it shall be the duty of the insurer to inform the third persons in writing of the lack of consent of the insured and that the insured is not thereby precluded from the further assertion of claims against the third persons before taking from the third persons any release, covenant not to sue, or other settlement; and upon the failure of the insurer to give the notice to the third persons of the lack of consent of the insured, the release, covenant not to sue, or other settlement shall be of no effect, null, and void.
(b) If such third persons execute a release, covenant not to sue, or other instrument in settlement of their claims after such notice of the lack of consent of the insured, the same shall be deemed and construed as a bar to the further assertion by such third persons of such claims against all persons whomsoever; and such third persons shall not plead such release, covenant not to sue, or settlement in bar of any action or claim asserted by such insured.
(a) A “subject of insurance,” for the purposes of this Code section, as to insurance against fire and hazards other than catastrophic hazards includes all properties insured by the same insurer which are customarily considered by underwriters to be subject to loss or damage from the same fire or other such hazard insured against.
(b) “Surplus to policyholders,” for the purpose of this Code section shall be deemed to include any voluntary reserves which are not required pursuant to law and shall be determined from the last sworn statement of the insurer on file with the Commissioner or by the last report of examination by the Commissioner, whichever is the more recent at the time of assumption of such risk.
(c) No insurer shall retain any risk on any one subject of insurance, whether located or to be performed in Georgia or elsewhere, in an amount exceeding 10 percent of its surplus to policyholders.
(d) Reinsurance authorized by Code Section 33-7-14 shall be deducted in determining risk retained. As to surety risks, deduction shall also be made of the amount assumed by any established incorporated cosurety and the value of any security deposited, pledged, or held subject to the surety's consent and for the surety's protection.
(e) As to alien insurers, this Code section shall relate only to risks and surplus to policyholders of the insurer's United States branch.
(f) This Code section shall not apply to life insurance, accident and sickness insurance, annuities, title insurance, insurance of ocean marine risks or marine protection and indemnity risks, workers' compensation insurance, employers' liability coverages, nor to any policy or type of coverage as to which the maximum possible loss to the insurer is not readily ascertainable on issuance of the policy.
(a) Credit for reinsurance shall be allowed a domestic ceding insurer as either an asset or a deduction from liability on account of reinsurance ceded only when the reinsurer meets the requirements of paragraph (1), (2), (3), (4), (5), (6), or (7) of this subsection, and the Commissioner may adopt by regulation pursuant to subsection (d) of this Code section specific additional requirements relating to or setting forth the valuation of assets or reserve credits, the amount and forms of security supporting reinsurance arrangements described in subsection (d) of this Code section, and the circumstances in which credit will be reduced or eliminated. Credit shall be allowed under paragraph (1), (2), or (3) of this subsection only with respect to cessions of those kinds of classes of business for which the assuming insurer is licensed or otherwise permitted to write or assume in its state of domicile, or in the case of a United States branch of an alien assuming insurer, in the state through which it is entered and licensed to transact insurance or reinsurance. If meeting the requirements of paragraph (3) or (4) of this subsection, the requirements of paragraph (8) of this subsection shall also be met:
(1) Credit shall be allowed when the reinsurance is ceded to an assuming insurer which is licensed to transact insurance or reinsurance in this state;
(2) Credit shall be allowed when the reinsurance is ceded to an assuming insurer which is accredited as a reinsurer by the Commissioner in this state. In order to be eligible for accreditation, a reinsurer shall:
(A) File with the Commissioner evidence of its submission to this state's jurisdiction;
(B) Submit to this state's authority to examine its books and records;
(C) Be licensed to transact insurance or reinsurance in at least one state, or in the case of a United States branch of an alien assuming insurer, be entered through and licensed to transact insurance or reinsurance in at least one state;
(D) File annually with the Commissioner a copy of its annual statement filed with the insurance department of its state of domicile and a copy of its most recent audited financial statement; and
(E) Demonstrate to the satisfaction of the Commissioner that it has adequate financial capacity to meet its reinsurance obligations and is otherwise qualified to assume reinsurance from domestic insurers. An assuming insurer is deemed to meet this requirement as of the time of its application if it maintains a surplus as regards policyholders in an amount of not less than $20 million and its accreditation has not been denied by the Commissioner within 90 days after the submission of its application;
(3) Credit shall be allowed when the reinsurance is ceded to an assuming insurer which is domiciled and licensed in, or, in the case of a United States branch of an alien assuming insurer, is entered through a state which employs standards regarding credit for reinsurance substantially similar to those applicable under this Code section and the assuming insurer or United States branch of an alien assuming insurer:
(A) Maintains a surplus with regard to policyholders in an amount not less than $20 million; and
(B) Submits to the authority of this state to examine its books and records.
Subparagraph (A) of this paragraph shall not apply to reinsurance ceded and assumed pursuant to pooling arrangements among insurers in the same holding company system;
(4)(A) Credit shall be allowed when the reinsurance is ceded to an assuming insurer which maintains a trust fund in a qualified United States financial institution, as defined in subsection (c) of this Code section, for the payment of the valid claims of its United States ceding insurers, their assigns, and successors in interest. The assuming insurer shall report annually to the Commissioner information substantially the same as that required to be reported on the National Association of Insurance Commissioners Annual Statement form by licensed insurers to enable the Commissioner to determine the sufficiency of the trust fund. In the case of a single assuming insurer, the trust shall consist of a trusteed account representing the assuming insurer's liabilities attributable to business written in the United States and, in addition, the assuming insurer shall maintain a trusteed surplus of not less than $20 million; provided, however, that, at any time after the assuming insurer has permanently discontinued underwriting new business secured by trust for at least three full years, the commissioner with principal regulatory oversight of the trust may authorize a reduction of the required trusteed surplus, but only after a finding, based upon an assessment of the risk, that the new required surplus level is adequate for the protection of United States ceding insurers, policyholders, and claimants in light of reasonably foreseeable adverse loss development. The risk assessment may involve an actuarial review, including an independent analysis of reserves and cash flows, and shall consider all material risk factors, including, when applicable, the lines of business involved, the stability of the incurred loss estimates and the effect of the surplus requirements on the assuming insurer's liquidity or solvency. The minimum required trusteed surplus may not be reduced to an amount less than 30 percent of the assuming insurer's liabilities attributable to reinsurance ceded by United States ceding insurers covered by the trust. In the case of a group including incorporated and individual unincorporated underwriters, the trust shall consist of a trusteed account in an amount not less than the respective underwriters' liabilities attributable to business written in the United States and, in addition, the group shall maintain a trusteed surplus of which $100 million shall be held jointly for the benefit of United States ceding insurers of any member of the group for all years of account; the incorporated members of the group shall not be engaged in any business other than underwriting as a member of the group and shall be subject to the same level of solvency regulation and control by the group's domiciliary regulator as are the unincorporated members; and, within 90 days after its financial statements are due to be filed with the group's domiciliary regulator, the group shall provide to the Commissioner an annual certification of the solvency of each underwriter by the group's domiciliary regulator or, if a certification is unavailable, financial statements prepared by independent public accountants of each member of the group.
(B) In the case of a group of incorporated insurers under common administration which complies with the filing requirements contained in subparagraph (A) of this paragraph and which has continuously transacted an insurance business outside the United States for at least three years immediately prior to making application for accreditation, and submits to this state's authority to examine its books and records and bears the expense of the examination, and which has aggregate policyholders' surplus of $10 billion; the trust shall be in an amount equal to the group's several liabilities attributable to business ceded by the United States ceding insurers to any member of the group pursuant to reinsurance contracts issued in the name of such group; plus the group shall maintain a joint trusteed surplus of which $100 million shall be held jointly for the benefit of United States ceding insurers of any member of the group as additional security for any such liabilities, and within 90 days after its financial statements are due to be filed with the group's domiciliary regulator, each member of the group shall make available to the Commissioner an annual certification of the member's solvency by the member's domiciliary regulator and financial statements prepared by its independent public accountant.
(C) Credit for reinsurance shall not be granted under this paragraph unless the form of the trust and any amendments to the trust have been approved by the commissioner of the state where the trust is domiciled or the commissioner of another state, who, pursuant to the terms of the trust agreement, has accepted principal regulatory oversight of the trust. The form of the trust and any trust amendments also shall be filed with the commissioner of every state in which the ceding insurer beneficiaries of the trust are domiciled. The trust instrument shall provide that contested claims shall be valid and enforceable upon the final order of any court of competent jurisdiction in the United States. The trust shall vest legal title to its assets in the trustees of the trust for its United States ceding insurers, their assigns, and successors in interest. The trust and the assuming insurer shall be subject to examination as determined by the Commissioner. The trust must remain in effect for as long as the assuming insurer shall have outstanding obligations due under the reinsurance agreements subject to the trust.
(D) No later than February 28 of each year the trustees of the trust shall report to the Commissioner in writing setting forth the balance of the trust and listing the trust's investments as of the end of the preceding year and shall certify the date of termination of the trust, if so planned, or certify that the trust shall not expire prior to the next following December 31;
(5) Credit shall be allowed when the reinsurance is ceded to an assuming insurer not meeting the requirements of paragraph (1), (2), (3), or (4) of this subsection if such assuming insurer has been certified by the Commissioner as a reinsurer in this state and secures its obligations in accordance with the requirements of this subsection.
(A) In order to be eligible for certification, the assuming insurer shall meet the following requirements:
(i) The assuming insurer shall be domiciled and licensed to transact insurance or reinsurance in a qualified jurisdiction, as determined by the Commissioner pursuant to subparagraph (C) of this paragraph;
(ii) The assuming insurer shall maintain minimum capital and surplus, or its equivalent, in an amount to be determined by the Commissioner pursuant to regulation;
(iii) The assuming insurer shall maintain financial strength ratings from two or more rating agencies deemed acceptable by the Commissioner pursuant to regulation;
(iv) The assuming insurer shall agree to submit to the jurisdiction of this state, appoint the Commissioner as its agent for service of process in this state, and agree to provide security for 100 percent of the assuming insurer's liabilities attributable to reinsurance ceded by United States ceding insurers if it resists enforcement of a final United States judgment;
(v) The assuming insurer shall agree to meet applicable information filing requirements as determined by the Commissioner, both with respect to an initial application for certification and on an ongoing basis; and
(vi) The assuming insurer shall satisfy any other requirements for certification deemed relevant by the Commissioner.
(B) An association including incorporated and individual unincorporated underwriters may be a certified reinsurer. In order to be eligible for certification, in addition to satisfying requirements of subparagraph (A) of this paragraph:
(i) The association shall satisfy its minimum capital and surplus requirements through the capital and surplus equivalents, net of liabilities, of the association and its members, which shall include a joint central fund that may be applied to any unsatisfied obligation of the association of any of its members, in an amount determined by the Commissioner to provide adequate protection;
(ii) The incorporated members of the association shall not be engaged in any business other than underwriting as a member of the association and shall be subject to the same level of regulation and solvency control by the association's domiciliary regulator as are the unincorporated members; and
(iii) Within 90 days after its financial statements are due to be filed with the association's domiciliary regulator, the association shall provide to the Commissioner an annual certification by the association's domiciliary regulator of the solvency of each underwriter member; or if a certification is unavailable, financial statements, prepared by independent public accountants, of each underwriter member of the association.
(C) The Commissioner shall create and publish a list of qualified jurisdictions under which an assuming insurer licensed and domiciled in such jurisdiction is eligible to be considered for certification by the Commissioner as a certified reinsurer.
(i) In order to determine whether the domiciliary jurisdiction of a non-United States assuming insurer is eligible to be recognized as a qualified jurisdiction, the Commissioner shall evaluate the appropriateness and effectiveness of the reinsurance supervisory system of the jurisdiction, both initially and on an ongoing basis, and consider the rights, benefits, and the extent of reciprocal recognition afforded by the non-United States jurisdiction to reinsurers licensed and domiciled in the United States. A qualified jurisdiction shall agree to share information and cooperate with the Commissioner with respect to all certified reinsurers domiciled within that jurisdiction. A jurisdiction may not be recognized as a qualified jurisdiction if the Commissioner has determined that the jurisdiction does not adequately and promptly enforce final United States judgments and arbitration awards. Additional factors may be considered in the discretion of the Commissioner.
(ii) A list of qualified jurisdictions shall be published through the National Association of Insurance Commissioners (NAIC) Committee Process. The Commissioner shall consider this list in determining qualified jurisdictions. If the Commissioner approves a jurisdiction as qualified that does not appear on the list of qualified jurisdictions, the Commissioner shall provide thoroughly documented justification in accordance with criteria to be developed under regulations.
(iii) United States jurisdictions that meet the requirement for accreditation under the NAIC financial standards and accreditation program shall be recognized as qualified jurisdictions.
(iv) If a certified reinsurer's domiciliary jurisdiction ceases to be a qualified jurisdiction, the Commissioner has the discretion to suspend the reinsurer's certification indefinitely, in lieu of revocation.
(D) The Commissioner shall assign a rating to each certified reinsurer, giving due consideration to the financial strength ratings that have been assigned by rating agencies deemed acceptable to the Commissioner pursuant to regulation. The Commissioner shall publish a list of all certified reinsurers and their ratings.
(E) A certified reinsurer shall secure obligations assumed from United States ceding insurers under this subparagraph at a level consistent with its rating, as specified in regulations promulgated by the Commissioner.
(i) In order for a domestic ceding insurer to qualify for full financial statement credit for reinsurance ceded to a certified reinsurer, the certified reinsurer shall maintain security in a form acceptable to the Commissioner and consistent with the provisions of subsection (b) of this Code section, or in a multibeneficiary trust in accordance with paragraph (4) of this subsection, except as otherwise provided in this paragraph.
(ii) If a certified reinsurer maintains a trust to fully secure its obligations subject to paragraph (4) of this subsection, and chooses to secure its obligations incurred as a certified reinsurer in the form of a multibeneficiary trust, the certified reinsurer shall maintain separate trust accounts for its obligations incurred under reinsurance agreements issued or renewed as a certified reinsurer with reduced security as permitted by this subsection or comparable laws of other United States jurisdictions and for its obligations subject to paragraph (4) of this subsection. It shall be a condition to the grant of certification under this paragraph that the certified reinsurer shall have bound itself, by the language of the trust and agreement with the commissioner with principal regulatory oversight of each such trust account, to fund, upon termination of any such trust account, out of the remaining surplus of such trust any deficiency of any other such trust account.
(iii) The minimum trusteed surplus requirements provided in paragraph (4) of this subsection are not applicable with respect to a multibeneficiary trust maintained by a certified reinsurer for the purpose of securing obligations incurred under this subsection, except that such trust shall maintain a minimum trusteed surplus of $10 million.
(iv) With respect to obligations incurred by a certified reinsurer under this subparagraph, if the security is insufficient, the Commissioner shall reduce the allowable credit by an amount proportionate to the deficiency, and shall have the discretion to impose further reductions in allowable credit upon finding that there is a material risk that the certified reinsurer's obligations will not be paid in full when due.
(v) For purposes of this subparagraph, a certified reinsurer whose certification has been terminated for any reason shall be treated as a certified reinsurer required to secure 100 percent of its obligations:
(I) As used in this subparagraph, the term “terminated” refers to revocation, suspension, voluntary surrender, and inactive status.
(II) If the Commissioner continues to assign a higher rating as permitted by other provisions of this paragraph, this requirement shall not apply to a certified reinsurer in inactive status or to a reinsurer whose certification has been suspended.
(F) If an applicant for certification has been certified as a reinsurer in an NAIC accredited jurisdiction, the Commissioner shall have the discretion to defer to that jurisdiction's certification, and shall have the discretion to defer to the rating assigned by that jurisdiction, and such assuming insurer shall be considered to be a certified reinsurer in this state.
(G) A certified reinsurer that ceases to assume new business in this state may request to maintain its certification in inactive status in order to continue to qualify for a reduction in security for its in-force business. An inactive certified reinsurer shall continue to comply with all applicable requirements of this paragraph, and the Commissioner shall assign a rating that takes into account, if relevant, the reasons why the reinsurer is not assuming new business;
(6)(A) Credit shall be allowed when the reinsurance is ceded to an assuming insurer meeting each of the conditions set forth below:
(i) The assuming insurer must have its head office or be domiciled in, as applicable, and be licensed in a reciprocal jurisdiction. For purposes of this paragraph, the term “reciprocal jurisdiction” means a jurisdiction that is one of the following:
(I) A non-United States jurisdiction that is subject to an in-force covered agreement with the United States, each within its legal authority, or, in the case of a covered agreement between the United States and European Union, is a member state of the European Union. For purposes of this paragraph, the term “covered agreement” means an agreement entered into pursuant to the federal Dodd-Frank Wall Street Reform and Consumer Protection Act, 31 U.S.C. Sections 313 and 314, that is currently in effect or in a period of provisional application and that addresses the elimination, under specified conditions, of collateral requirements as a condition for entering into any reinsurance agreement with a ceding insurer domiciled in this state or for allowing the ceding insurer to recognize credit for reinsurance;
(II) A United States jurisdiction that meets the requirements for accreditation under the NAIC financial standards and accreditation program; or
(III) A qualified jurisdiction, as determined by the Commissioner pursuant to subparagraph (C) of paragraph (5) of this subsection, which is not otherwise described in subdivision (I) or (II) of this division and which meets certain additional requirements, consistent with the terms and conditions of in-force covered agreements, as specified by the Commissioner in regulation;
(ii) The assuming insurer must have and maintain, on an ongoing basis, minimum capital and surplus, or its equivalent, calculated according to the methodology of its domiciliary jurisdiction, in an amount to be set forth in regulation. If the assuming insurer is an association, including incorporated and individual unincorporated underwriters, it must have and maintain, on an ongoing basis, minimum capital and surplus equivalents, net of liabilities, calculated according to the methodology applicable in its domiciliary jurisdiction and a central fund containing a balance in amounts to be set forth in regulation;
(iii) The assuming insurer must have and maintain, on an ongoing basis, a minimum solvency or capital ratio, as applicable, which shall be set forth in regulation. If the assuming insurer is an association, including incorporated and individual unincorporated underwriters, it must have and maintain, on an ongoing basis, a minimum solvency or capital ratio in the reciprocal jurisdiction where the assuming insurer has its head office or is domiciled, as applicable, and is also licensed;
(iv) The assuming insurer must agree and provide adequate assurance to the Commissioner, in a form specified by the Commissioner pursuant to regulation, as follows:
(I) The assuming insurer must provide prompt written notice and explanation to the Commissioner if it falls below the minimum requirements set forth in division (ii) or (iii) of this subparagraph, or if any regulatory action is taken against it for serious noncompliance with applicable law;
(II) The assuming insurer must consent in writing to the jurisdiction of the courts of this state and to the appointment of the Commissioner as agent for service of process. The Commissioner may require that consent for service of process be provided to the Commissioner and included in each reinsurance agreement. Nothing in this subdivision shall limit, or in any way alter, the capacity of parties to a reinsurance agreement to agree to alternative dispute resolution mechanisms, except to the extent such agreements are unenforceable under applicable insolvency or delinquency laws;
(III) The assuming insurer must consent in writing to pay all final judgments, wherever enforcement is sought, obtained by a ceding insurer or its legal successor, that have been declared enforceable in the jurisdiction where the judgment was obtained;
(IV) Each reinsurance agreement must include a provision requiring the assuming insurer to provide security in an amount equal to 100 percent of the assuming insurer's liabilities attributable to reinsurance ceded pursuant to such agreement if the assuming insurer resists enforcement of a final judgment that is enforceable under the law of the jurisdiction in which it was obtained or a properly enforceable arbitration award, whether obtained by the ceding insurer or by its legal successor on behalf of its resolution estate; and
(V) The assuming insurer must confirm that it is not presently participating in any solvent scheme of arrangement which involves this state's ceding insurers and agree to notify the ceding insurer and the Commissioner and to provide security in an amount equal to 100 percent of the assuming insurer's liabilities to the ceding insurer, should the assuming insurer enter into such a solvent scheme of arrangement. Such security shall be in a form consistent with the provisions of paragraph (5) of this subsection and subsection (b) of this Code section and as specified by the Commissioner in regulation;
(v) The assuming insurer or its legal successor must provide, if requested by the Commissioner, on behalf of itself and any legal predecessors, certain documentation to the Commissioner, as specified by the Commissioner in regulation;
(vi) The assuming insurer must maintain a practice of prompt payment of claims under reinsurance agreements, pursuant to criteria set forth in regulation; and
(vii) The assuming insurer's supervisory authority must confirm to the Commissioner on an annual basis, as of the preceding December 31 or at the annual date otherwise statutorily reported to the reciprocal jurisdiction, that the assuming insurer complies with the requirements set forth in divisions (ii) and (iii) of this subparagraph.
Nothing in this paragraph precludes an assuming insurer from providing the Commissioner with information on a voluntary basis.
(B)(i) The Commissioner shall timely create and publish a list of reciprocal jurisdictions.
(ii) A list of reciprocal jurisdictions is published through the NAIC Committee Process. The Commissioner's list shall include any reciprocal jurisdiction as defined in subdivision (A)(i)(I) or (A)(i)(II) of this paragraph and shall consider any other reciprocal jurisdiction included on the NAIC list. The Commissioner may approve a jurisdiction that does not appear on the NAIC list of reciprocal jurisdictions in accordance with criteria to be developed under regulations issued by the Commissioner.
(iii) The Commissioner may remove a jurisdiction from the list of reciprocal jurisdictions upon a determination that the jurisdiction no longer meets the requirements of a reciprocal jurisdiction, in accordance with a process set forth in regulation issued by the Commissioner, except that the Commissioner shall not remove from the list a reciprocal jurisdiction as defined in subdivision (A)(i)(I) or (A)(i)(II) of this paragraph. Upon removal of a reciprocal jurisdiction from the list, credit for reinsurance ceded to an assuming insurer which has its home office or is domiciled in such jurisdiction shall be allowed, if otherwise allowed pursuant to this Code section.
(C) The Commissioner shall timely create and publish a list of assuming insurers that have satisfied the conditions set forth in this paragraph and to which cessions shall be granted credit in accordance with this paragraph. The Commissioner may add an assuming insurer to such list if an NAIC accredited jurisdiction has added such assuming insurer to a list of such assuming insurers or if, upon initial eligibility, the assuming insurer submits information to the Commissioner as required under division (iv) of subparagraph (A) of this paragraph and complies with any additional requirements that the Commissioner may impose by regulation, except to the extent that they conflict with an applicable covered agreement.
(D)(i) If the Commissioner determines that an assuming insurer no longer meets one or more of the requirements under this paragraph, the Commissioner may revoke or suspend the eligibility of the assuming insurer for recognition under this paragraph in accordance with procedures set forth in regulation.
(ii) While an assuming insurer's eligibility is suspended, no reinsurance agreement issued, amended, or renewed after the effective date of the suspension qualifies for credit except to the extent that the assuming insurer's obligations under the contract are secured in accordance with subsection (b) of this Code section.
(iii) If an assuming insurer's eligibility is revoked, no credit for reinsurance may be granted after the effective date of the revocation with respect to any reinsurance agreements entered into by the assuming insurer, including reinsurance agreements entered into prior to the date of revocation, except to the extent that the assuming insurer's obligations under the contract are secured in a form acceptable to the Commissioner and consistent with the provisions of subsection (b) of this Code section.
(E) If subject to a legal process of rehabilitation, liquidation, or conservation, as applicable, the ceding insurer, or its representative, may seek and, if determined appropriate by the court in which the proceedings are pending, may obtain an order requiring that the assuming insurer post security for all outstanding ceded liabilities.
(F) Nothing in this paragraph shall limit or in any way alter the capacity of parties to a reinsurance agreement to agree on requirements for security or other terms in such reinsurance agreement, except as expressly prohibited by this Code section or other applicable law or regulation.
(G) Credit may be taken under this paragraph only for reinsurance agreements entered into, amended, or renewed on or after July 1, 2020, and only with respect to losses incurred and reserves reported on or after the later of the date on which the assuming insurer has met all eligibility requirements pursuant to subparagraph (A) of this paragraph or the effective date of the new reinsurance agreement, amendment, or renewal; provided, however, that:
(i) This subparagraph shall not alter or impair a ceding insurer's right to take credit for reinsurance, to the extent that credit is not available under this paragraph, so long as the reinsurance qualifies for credit under any other applicable provision of this Code section;
(ii) Nothing in this paragraph shall authorize an assuming insurer to withdraw or reduce the security provided under any reinsurance agreement except as permitted by the terms of the agreement; and
(iii) Nothing in this paragraph shall limit, or in any way alter, the capacity of parties to any reinsurance agreement to renegotiate the agreement.
(H) This paragraph does not alter or impair a ceding insurer's right to take credit for reinsurance, to the extent that credit is not available under this paragraph, as long as the reinsurance qualifies for credit under any other applicable provision of this Code section.
(I) Nothing in this paragraph shall authorize an assuming insurer to withdraw or reduce the security provided under any reinsurance agreement except as permitted by the terms of the agreement.
(J) Nothing in this paragraph shall limit, or in any way alter, the capacity of parties to any reinsurance agreement to renegotiate the agreement.
(7) Credit shall be allowed when the reinsurance is ceded to an assuming insurer not meeting the requirements of paragraph (1), (2), (3), (4), (5), or (6) of this subsection, but only as to the insurance of risks located in jurisdictions where the reinsurance is required by applicable law or regulation of that jurisdiction;
(8) If the assuming insurer is not licensed, accredited, or certified to transact insurance or reinsurance in this state, the credit permitted by paragraphs (3) and (4) of this subsection shall not be allowed unless the assuming insurer agrees in the reinsurance agreements:
(A) That, in the event of the failure of the assuming insurer to perform its obligations under the terms of the reinsurance agreement, the assuming insurer, at the request of the ceding insurer, shall submit to the jurisdiction of any court of competent jurisdiction in any state of the United States, shall comply with all requirements necessary to give the court jurisdiction, and shall abide by the final decision of the court or of any appellate court in the event of an appeal; and
(B) To designate the Commissioner or a designated attorney as its true and lawful attorney upon whom may be served any lawful process in any action, suit, or proceeding instituted by or on behalf of the ceding insurer.
This paragraph is not intended to conflict with or override the obligation of the parties to a reinsurance agreement to arbitrate their disputes, if this obligation is created in the agreement;
(9) If the assuming insurer does not meet the requirements of paragraph (1), (2), (3), or (6) of this subsection, the credit permitted by paragraph (4) or (5) of this subsection shall not be allowed unless the assuming insurer agrees in the trust agreements to the following conditions:
(A) Notwithstanding any other provisions in the trust instrument, if the trust fund is inadequate because it contains an amount less than the amount required by subparagraphs (A) and (B) of paragraph (4) of this subsection, as applicable, or if the grantor of the trust has been declared insolvent or placed into receivership, rehabilitation, liquidation, or similar proceedings under the laws of its state or country of domicile, the trustee shall comply with an order of the commissioner with regulatory oversight over the trust or with an order of a court of competent jurisdiction directing the trustee to transfer to the commissioner with regulatory oversight all of the assets of the trust fund;
(B) The assets shall be distributed by and claims shall be filed with and valued by the commissioner with regulatory oversight in accordance with the laws of the state in which the trust is domiciled that are applicable to the liquidation of domestic insurance companies;
(C) If the commissioner with regulatory oversight determines that the assets of the trust fund or any part thereof are not necessary to satisfy the claims of the United States ceding insurers of the grantor of the trust, the assets or part thereof shall be returned by the commissioner with regulatory oversight to the trustee for distribution in accordance with the trust agreement; and
(D) The grantor shall waive any right otherwise available to it under United States law that is inconsistent with this paragraph.
(10) If an accredited or certified reinsurer ceases to meet the requirements for accreditation or certification, the Commissioner may suspend or revoke the reinsurer's accreditation or certification.
(A) The Commissioner shall give the reinsurer notice and opportunity for hearing. The suspension or revocation shall not take effect until after the Commissioner's order on hearing, unless:
(i) The reinsurer waives its right to hearing;
(ii) The Commissioner's order is based on regulatory action by the reinsurer's domiciliary jurisdiction or the voluntary surrender or termination of the reinsurer's eligibility to transact insurance or reinsurance business in its domiciliary jurisdiction or in the primary certifying state of the reinsurer under subparagraph (F) of paragraph (5) of this subsection; or
(iii) The Commissioner finds that an emergency requires immediate action and a court of competent jurisdiction has not stayed the Commissioner's action.
(B) While a reinsurer's accreditation or certification is suspended, no reinsurance contract issued or renewed after the effective date of the suspension qualifies for credit except to the extent that the reinsurer's obligations under the contract are secured in accordance with subsection (b) of this Code section. If a reinsurer's accreditation or certification is revoked, no credit for reinsurance may be granted after the effective date of the revocation except to the extent that the reinsurer's obligations under the contract are secured in accordance with subparagraph (E) of paragraph (5) of this subsection or subsection (b) of this Code section.
(11) Concentration Risk:
(A) A ceding insurer shall take steps to manage its reinsurance recoverable proportionate to its own book of business. A domestic ceding insurer shall notify the Commissioner within 30 days after reinsurance recoverables from any single assuming insurers, or group of affiliated assuming insurers, exceeds 50 percent of the domestic ceding insurer's last reported surplus to policyholders, or after it is determined that reinsurance recoverables from any single assuming insurer, or group of affiliated assuming insurers, is likely to exceed this limit. The notification shall demonstrate that the exposure is safely managed by the domestic ceding insurer.
(B) A ceding insurer shall take steps to diversify its reinsurance program. A domestic ceding insurer shall notify the Commissioner within 30 days after ceding to any single assuming insurer, or group of affiliated assuming insurers, more than 20 percent of the ceding insurer's gross written premium in the prior calendar year, or after it has determined that the reinsurance ceded to any single assuming insurer, or group of affiliated assuming insurers, is likely to exceed this limit. The notification shall demonstrate that the exposure is safely managed by the domestic ceding insurer.
(b) An asset or a reduction from liability for the reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of subsection (a) of this Code section shall be allowed in an amount not exceeding the liabilities carried by the ceding insurer, and the Commissioner may adopt by regulation pursuant to subsection (d) of this Code section specific additional requirements relating to or setting forth the valuation of assets or reserve credits, the amount and forms of security supporting reinsurance arrangements described in subsection (d) of this Code section, and the circumstances in which credit will be reduced or eliminated. Such reduction shall be in the amount of funds held by or on behalf of the ceding insurer, including funds held in trust for the ceding insurer, under a reinsurance contract with such assuming insurer as security for the payment of obligations thereunder, if such security is held in the United States subject to withdrawal solely by, and under the exclusive control of, the ceding insurer; or, in the case of a trust, held in a qualified United States financial institution, as defined in paragraph (2) of subsection (c) of this Code section. This security may be in the form of:
(1) Cash;
(2) Securities listed by the Securities Valuation Office of the National Association of Insurance Commissioners, including those deemed exempt from filing as defined by the Purposes and Procedures Manual of the Securities Validation Office, and qualifying as admitted assets;
(3) Clean, irrevocable, unconditional letters of credit, issued or confirmed by a qualified United States financial institution, as defined in paragraph (1) of subsection (c) of this Code section, no later than December 31 of the year for which filing is being made, and in the possession of, or in the trust for, the ceding insurer on or before the filing date of its annual statement. Letters of credit meeting applicable standards of issuer acceptability as of the dates of their issuance or confirmation shall, notwithstanding the issuing or confirming institution's subsequent failure to meet applicable standards of issuer acceptability, continue to be acceptable as security until their expiration, extension, renewal, modification, or amendment, whichever first occurs; or
(4) Any other form of security acceptable to the Commissioner.
(c)(1) For purposes of paragraph (3) of subsection (b) of this Code section, the term “qualified United States financial institution” means an institution that:
(A) Is organized or, in the case of a United States office of a foreign banking organization, licensed under the laws of the United States or any state thereof;
(B) Is regulated, supervised, and examined by the United States federal or state authorities having regulatory authority over banks and trust companies; and
(C) Has been determined by either the Commissioner or the Securities Valuation Office of the National Association of Insurance Commissioners to meet such standards of financial condition and standing as are considered necessary and appropriate to regulate the quality of financial institutions whose letters of credit will be acceptable to the Commissioner.
(2) The term “qualified United States financial institution” means, for the purposes of those provisions of this Code section specifying those institutions that are eligible to act as a fiduciary of a trust, an institution that:
(A) Is organized or, in the case of a United States branch or agency office of a foreign banking organization, licensed under the laws of the United States or any state thereof and has been granted authority to operate with fiduciary powers; and
(B) Is regulated, supervised, and examined by federal or state authorities having regulatory authority over banks and trust companies.
(d)(1) The Commissioner may adopt rules and regulations implementing the provisions of this Code section.
(2)(A) The Commissioner is further authorized to adopt rules and regulations applicable to reinsurance arrangements described in subparagraph (B) of this paragraph.
(B) Any regulation adopted pursuant to this paragraph may apply only to reinsurance relating to:
(i) Life insurance policies with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits;
(ii) Universal life insurance policies with provisions resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period;
(iii) Variable annuities with guaranteed death or living benefits;
(iv) Long-term care insurance policies; or
(v) Such other life and health insurance and annuity products for which the NAIC adopts model regulatory requirements with respect to credit for reinsurance.
(C) A regulation adopted pursuant to division (i) or (ii) of subparagraph (B) of this paragraph may apply to any treaty containing policies issued on or after January 1, 2015, or policies issued prior to January 1, 2015, if risk pertaining to policies issued prior to January 1, 2015, is ceded in connection with the treaty, in whole or in part, on or after January 1, 2015.
(3) A regulation adopted pursuant to this subsection may require the ceding insurer, in calculating the amounts or forms of security required to be held under regulations promulgated under this subsection, to use the valuation manual adopted by the NAIC under Section 11B(1) of the NAIC Standard Valuation Law, including all amendments adopted by the NAIC and in effect on the date on which the calculation is made, to the extent applicable.
(4) A regulation adopted pursuant to this subsection shall not apply to cessions to an assuming insurer that:
(A) Meets the conditions set forth in paragraph (6) of subsection (a) of this Code section;
(B) Is certified in this state or, if this state has not adopted provisions substantially equivalent to Section 2E of the National Association of Insurance Commissioners Credit for Reinsurance Model Law (#785), certified in a minimum of five other states; or
(C) Maintains at least $250 million in capital and surplus when determined in accordance with the NAIC Accounting Practices and Procedures Manual, including all amendments thereto adopted by the NAIC, excluding the impact of any permitted or prescribed practices, and is:
(i) Licensed in at least 26 states; or
(ii) Licensed in at least ten states and licensed or accredited in at least 35 states.
(5) The authority to adopt regulations pursuant to this subsection shall not limit the Commissioner's general authority to adopt regulations pursuant to paragraph (1) of this subsection.
(a) No motor vehicle liability insurance policy covering a motor vehicle principally garaged or principally used in this state shall be issued, delivered or issued for delivery, or renewed in this state unless such policy contains provisions or has an endorsement thereto which specifically requires the insured to send his insurer, as soon as practicable after the receipt thereof, a copy of every summons or other process relating to the coverage under the policy and to cooperate otherwise with the insurer in connection with the defense of any action or threatened action covered under the policy.
(b) Noncompliance by the insured with this required provision or endorsement shall constitute a breach of the insurance contract which, if prejudicial to the insurer, shall relieve the insurer of its obligation to defend its insureds under the policy and of any liability to pay any judgment or other sum on behalf of its insureds.
(b.1) In the event the insurer denies coverage and it is determined by declaratory judgment or other civil process that there is in fact coverage, the insurer shall be liable to the insured for legal cost and attorney's fees as may be awarded by the court.
(c) Subsections (a) and (b) of this Code section shall not operate to deny coverage for failure to send a copy of a summons or other process relating to policy coverage if such documents are sent by a third party to the insurer or to the insurer's agent by certified mail or statutory overnight delivery within ten days of the filing of such documents with the clerk of the court. If the name of the insurer or the insurer's agent is unknown, the third party shall have a period of 30 days from the date the insurer or agent becomes known in which to send these required documents. Such documents must be sent to the insurer or agent at least 30 days prior to the entry of any judgment against the insured.
The Commissioner is authorized to assess and collect in advance, and persons so assessed shall pay in advance to the Commissioner, fees and charges under this title as follows:
| | (1) Unless specifically provided otherwise, for each certificate of authority, original license, renewal of a certificate of authority, or renewal of a license: | | | | | --- | --- | --- | --- | --- | | | | (A) Agent, subagent, counselor, adjuster, or principal office of an insurance agency (new license) | $ 100.00 | | | | | (B) Agent, subagent, counselor, adjuster, or principal office of an insurance agency (biennial license renewal) | 100.00 | | | | | (B.1) Each branch office of an insurance agency other than the principal office (new license) | 20.00 | | | | | (B.2) Each branch office of an insurance agency other than the principal office (biennial license renewal) | 20.00 | | | | | (C) Agent certificate of authority for subagent․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 5.00 | | | | | (D) Automobile self-insurance․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 100.00 | | | | | (E) Captive insurance company: | | | | | | | (i) Original license or certificate․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 600.00 | | | | | (ii) Renewal license or certificate․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 500.00 | | | | (F) Continuing care provider․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 75.00 | | | | | (G) Duplicate certificate of authority, license, or permit․․․․․․․․․․․․․․․․․․․․ | 25.00 | | | | | (H) Farmers mutual fire insurance company: | | | | | | | (i) Original license or certificate․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 500.00 | | | | | (ii) Renewal license or certificate․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 25.00 | | | | (I) Fraternal benefit society: | | | | | | | (i) Original license or certificate․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 600.00 | | | | | (ii) Renewal license or certificate․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 500.00 | | | | (I.1) Health care corporations: | | | | | | | (i) Original license or certificate․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 600.00 | | | | | (ii) Renewal license or certificate․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 500.00 | | | | (J) Health maintenance organization: | | | | | | | (i) Original license or certificate․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 600.00 | | | | | (ii) Renewal license or certificate․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 500.00 | | | | (K) Insurer certificate of authority for agent․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 10.00 | | | | | (L) Life, accident, and sickness insurance company: | | | | | | | (i) Original license or certificate․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 600.00 | | | | | (ii) Renewal license or certificate․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 500.00 | | | | (M) Managing general agent: | | | | | | | (i) Original license or certificate․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 600.00 | | | | | (ii) Renewal license or certificate․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 500.00 | | | | (N) Multiple employer self-insurance plan․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 400.00 | | | | | (O) Premium finance company (full power)․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 500.00 | | | | | (P) Premium finance company (limited power)․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 300.00 | | | | | (Q) Reserved. | | | | | | (R) Prepaid legal services plans․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 500.00 | | | | | (S) Private review agents: | | | | | | | (i) Original license or certificate․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 1,000.00 | | | | | (ii) Renewal license or certificate․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 500.00 | | | | (T) Property and casualty insurance company: | | | | | | | (i) Original license or certificate․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 600.00 | | | | | (ii) Renewal license or certificate․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 500.00 | | | | (U) Reserved. | | | | | | (V) Rating or advisory organization․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 100.00 | | | | | (W) Reinsurance intermediary․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 50.00 | | | | | (X) Surplus lines broker․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 600.00 | | | | | (Y) Third-party administrators: | | | | | | | (i) Original license or certificate․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 500.00 | | | | | (ii) Renewal license or certificate․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 400.00 | | | | (Z) Title insurance company: | | | | | | | (i) Original license or certificate․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 600.00 | | | | | (ii) Renewal license or certificate․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 500.00 | | | | (AA) Utilization review agent․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 200.00 | | | | | (BB) Each vending machine licensed under Chapter 23 of this title․․․․․․․․․․․․․ | 25.00 | | | | | (CC) Workers' compensation group self-insurance fund: | | | | | | | (i) Original license or certificate․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 600.00 | | | | | (ii) Renewal license or certificate․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 500.00 | | | (2) Bond or security deposits: | | | | | | | (A) Not over $5,000.00․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 4.00 | | | | | (B) Not over $10,000.00․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 8.00 | | | | | (C) Not over $25,000.00․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 15.00 | | | | | (D) Not over $50,000.00․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 25.00 | | | | | (E) Over $50,000.00 but less than $100,000.00․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 40.00 | | | | | (F) $100,000.00 or more․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 50.00 | | | | (3) Examination fee for agent's, subagent's, counselor's, or adjuster's license․․ | 25.00 | | | | | (4) Application fee for agent's, subagent's, adjuster's, or counselor's license․․ | 15.00 | | | | | (5) Status letter for agent, subagent, counselor, or adjuster․․․․․․․․․․․․․․․․․․․․ | 10.00 | | | | | (6) For the following filings: | | | | | | | (A) Bylaws amendments․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 25.00 | | | | | (B) Certification of annual statement․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 10.00 | | | | | (C) Certification of examination report․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 10.00 | | | | | (D) Certification of other documents․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 5.00 | | | | | (E) Charter amendments․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 25.00 | | | | | (F) Education course provider (original filing)․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 100.00 | | | | | (G) Education course provider (renewal filing)․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 50.00 | | | | | (H) Education course or program․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 10.00 | | | | | (I) Education course instructor․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 10.00 | | | | | (J) Financial statement․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 50.00 | | | | | (K) Form A․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 5,000.00 | | | | | (L) Form A exemption․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 1,000.00 | | | | | (M) Form B․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 500.00 | | | | | (N) Form B exemption․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 100.00 | | | | | (O) Individual risk rate or form․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 10.00 | | | | | (P) Insurance policy form․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 25.00 | | | | | (Q) Insurance rate filing․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 75.00 | | | | | (R) Listing of licensed agents, subagents, counselors, or adjusters․․․․․․․․․․․ | 1,000.00 | | | | | (S) Listing of insurer's certificates of authority filed for agents․․․․․․․․․․․ | 5.00 | | | | | (T) Listing of agent's certificates of authority filed for subagents․․․․․․․․․․ | 5.00 | | | | | (U) List of licensees or permit or certificate holders other than agents, subagents, counselors, or adjusters | 40.00 | | | | | (V) License, permit, or certificate of authority amendment․․․․․․․․․․․․․․․․․․․․ | 25.00 | | | | | (W) Late fee for filings․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 15.00 | | | | | (X) Registration of risk retention groups․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 100.00 | | | | | (Y) Registration of purchasing groups․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 100.00 | | | | | (Z) Filing of other documents․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 50.00 | | | | | (AA) Amendment of filings․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 25.00 | | | | | | Provided, however, that the Commissioner, in his or her discretion, may exempt from such fee change of address filings done offline by agents, subagents, counselors, and adjusters. | | | | | (AA.1) Change of address filings done online by agents, subagents, counselors, and adjusters | No charge | | | | | (BB) Service of process․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 15.00 | | | | (7) For refiling of corrected documents under this Code section, provided that fees were paid with original filing | No charge | | |
The same fees or taxes imposed upon Georgia agents, brokers, adjusters, or any other representatives of insurers, as listed in this chapter, for the privilege of doing business in another state shall be imposed upon agents, brokers, adjusters, or any other representatives of insurers of such other state doing business in this state, in accordance with Code Section 33-3-26.
(a) Each and every insurance company, domestic, foreign, or alien, carrying on an insurance business in Georgia shall pay to the Commissioner, annually in advance, on or before July 1, a license fee in an amount as provided in Code Section 33-8-1, which payment shall be in lieu of all other license fees of said companies. Foreign companies entering the state and domestic companies beginning business at any time during the license year as fixed by this Code section shall pay said license fee in full for the remaining portion of that license year.
(b) The license fees provided for in Code Section 33-8-1 are expressly imposed on and shall be the obligation of the licensees.
(a) All foreign, alien, and domestic insurance companies doing business in this state shall pay a tax of 2 1/4 percent upon the gross direct premiums received by them. The tax shall be levied upon persons, property, or risks in Georgia, from January 1 to December 31, both inclusive, of each year without regard to business ceded to or assumed from other companies. The tax shall be imposed upon gross premiums received from direct writings without any deductions allowed for premium abatements of any kind or character or for reinsurance or for cash surrender values paid, or for losses or expenses of any kind; provided, however, that deductions shall be allowed for premiums returned on change of rate or canceled policies; provided, further, that deductions may be permitted for return premiums or assessments, including all policy dividends, refunds, or other similar returns paid or credited to policyholders and not reapplied as premium for additional or extended life insurance. The term “gross direct premiums” shall not include annuity considerations.
(b) For purposes of this chapter, annuity considerations received by nonprofit corporations licensed to do business in this state issuing annuities to fund retirement benefits for teachers and staff personnel of private secondary schools and colleges and universities shall not be considered gross direct premium.
(c) Insurers shall be exempt from otherwise applicable state premium taxes as provided for in subsection (a) of this Code section on premiums paid by Georgia residents for high deductible health plans as defined by Section 223 of the Internal Revenue Code.
(a) As used in this Code section, the term:
(1) “Business enterprise” means any insurance company or the headquarters of any insurance company required to pay the tax under Code Section 33-8-4.
(2) “Existing business enterprise” means any insurance company or the headquarters of any insurance company required to pay the tax under Code Section 33-8-4 which has operated for the immediately preceding three years a facility in this state.
(b)(1) Not later than December 31 of each year, using the most current data available from the Department of Labor and the United States Department of Commerce, the commissioner of community affairs shall rank and designate as less developed areas all 159 counties in this state using a combination of the following equally weighted factors:
(A) Highest unemployment rate for the most recent 36 month period;
(B) Lowest per capita income for the most recent 36 month period; and
(C) Highest percentage of residents whose incomes are below the poverty level according to the most recent data available.
(2) Counties ranked and designated as the first through seventy-first least developed counties shall be classified as tier 1, counties ranked and designated as the seventy-second through one hundred sixth least developed counties shall be classified as tier 2, counties ranked and designated as the one hundred seventh through one hundred forty-first least developed counties shall be classified as tier 3, and counties ranked and designated as the one hundred forty-second through one hundred fifty-ninth least developed counties shall be classified as tier 4.
(c) The commissioner of community affairs shall be authorized to include in the tier 2 designation provided for in subsection (b) of this Code section any tier 3 county which, in the opinion of the commissioner of community affairs, undergoes a sudden and severe period of economic distress caused by the closing of one or more business enterprises located in such county. No designation made pursuant to this subsection shall operate to displace or remove any other county previously designated as a tier 2 county.
(d) The commissioner of community affairs shall be authorized to include in the tier 1 designation provided for in subsection (b) of this Code section any tier 2 county which, in the opinion of the commissioner of community affairs, undergoes a sudden and severe period of economic distress caused by the closing of one or more business enterprises located in such county. No designation made pursuant to this subsection shall operate to displace or remove any other county previously designated as a tier 1 county.
(e) For business enterprises which plan a significant expansion in their labor forces, the commissioner of community affairs shall prescribe redesignation procedures to ensure that the business enterprises can claim credits in future years without regard to whether or not a particular county is reclassified in a different tier.
(f)(1) Business enterprises in counties designated by the commissioner of community affairs as tier 1 counties shall be allowed a job tax credit for taxes imposed under Code Section 33-8-4 equal to $3,500.00 annually per eligible new full-time employee job for five years beginning with years two through six after the creation of such job. Business enterprises in counties designated by the commissioner of community affairs as tier 2 counties shall be allowed a job tax credit for taxes imposed under Code Section 33-8-4 equal to $2,500.00 annually, business enterprises in counties designated by the commissioner of community affairs as tier 3 counties shall be allowed a job tax credit for taxes imposed under Code Section 33-8-4 equal to $1,250.00 annually, and business enterprises in counties designated by the commissioner of community affairs as tier 4 counties shall be allowed a job tax credit for taxes imposed under Code Section 33-8-4 equal to $750.00 annually for each new full-time employee job for five years beginning with years two through six after the creation of the job. The number of new full-time jobs shall be determined by comparing the monthly average number of full-time employees subject to Georgia income tax withholding for the calendar year with the corresponding period of the prior calendar year. In tier 1 counties, those business enterprises that increase employment by five or more shall be eligible for the credit. In tier 2 counties, only those business enterprises that increase employment by ten or more shall be eligible for the credit. In tier 3 counties, only those business enterprises that increase employment by 15 or more shall be eligible for the credit. In tier 4 counties, only those business enterprises that increase employment by 25 or more shall be eligible for the credit. The average wage of the new jobs created must be above the average wage of the county that has the lowest average wage of any county in the state to qualify as reported in the most recently available annual issue of the Georgia Employment and Wages Averages Report of the Department of Labor. To qualify for a credit under this paragraph, the employer must make health insurance coverage available to the employee filling the new full-time job; provided, however, that nothing in this paragraph shall be construed to require the employer to pay for all or any part of health insurance coverage for such an employee in order to claim the credit provided for in this paragraph if such employer does not pay for all or any part of health insurance coverage for other employees. Credit shall not be allowed during a year if the net employment increase falls below the number required in such tier. Any credit received for years prior to the year in which the net employment increase falls below the number required in such tier shall not be affected. The Commissioner of Insurance shall adjust the credit allowed each year for net new employment fluctuations above the minimum level of the number required in such tier.
(2) Existing business enterprises as defined under paragraph (2) of subsection (a) of this Code section shall be allowed an additional tax credit for taxes imposed under Code Section 33-8-4 equal to $500.00 per eligible new full-time employee job for one year after the creation of such job. The additional credit shall be claimed in year two after the creation of such job. The number of new full-time jobs shall be determined by comparing the monthly average number of full-time employees subject to Georgia income tax withholding for the calendar year with the corresponding period of the prior calendar year. In tier 1 counties, those existing business enterprises that increase employment by five or more shall be eligible for the credit. In tier 2 counties, only those existing business enterprises that increase employment by ten or more shall be eligible for the credit. In tier 3 counties, only those existing business enterprises that increase employment by 15 or more shall be eligible for the credit. In tier 4 counties, only those existing business enterprises that increase employment by 25 or more shall be eligible for the credit. The average wage of the new jobs created must be above the average wage of the county that has the lowest average wage of any county in the state to qualify as reported in the most recently available annual issue of the Georgia Employment and Wages Averages Report of the Department of Labor. To qualify for a credit under this paragraph, the employer must make health insurance coverage available to the employee filling the new full-time job; provided, however, that nothing in this paragraph shall be construed to require the employer to pay for all or any part of health insurance coverage for such an employee in order to claim the credit provided for in this paragraph if such employer does not pay for all or any part of health insurance coverage for other employees. Credit shall not be allowed during a year if the net employment increase falls below the number required in such tier. Any credit received for years prior to the year in which the net employment increase falls below the number required in such tier shall not be affected. The Commissioner of Insurance shall adjust the credit allowed each year for net new employment fluctuations above the minimum level of the number required in such tier.
(g) Tax credits for five years for the taxes imposed under Code Section 33-8-4 shall be awarded for additional new full-time jobs created by business enterprises qualified under subsection (b), (c), or (d) of this Code section. Additional new full-time jobs shall be determined by subtracting the highest total employment of the business enterprise during years two through six, or whatever portion of years two through six which has been completed, from the total increased employment. The Commissioner of Insurance shall adjust the credit allowed in the event of employment fluctuations during the additional five years of credit.
(h) The sale, merger, acquisition, or bankruptcy of any business enterprise shall not create new eligibility in any succeeding business entity, but any unused job tax credit may be transferred and continued by any transferee of the business enterprise. The commissioner of community affairs shall determine whether or not qualifying net increases or decreases have occurred and may require reports, promulgate regulations, and hold hearings as needed for substantiation and qualification.
(i)(1) Except as provided in paragraph (2) of this subsection, any credit claimed under this Code section but not used in that calendar year may be carried forward for ten years from the close of the calendar year in which the qualified jobs were established, but in tiers 3 and 4 the credit established by this Code section taken in any one calendar year shall be limited to an amount not greater than 50 percent of the taxpayer's tax liability under Code Section 33-8-4 which is attributable to operations in this state for that calendar year. In tier 1 and 2 counties, the credit allowed under this Code section against taxes imposed under Code Section 33-8-4 in any calendar year shall be limited to an amount not greater than 100 percent of the taxpayer's tax liability under Code Section 33-8-4 attributable to operations in this state for such calendar year.
(2) The additional credit claimed by an existing business enterprise pursuant to the provisions of paragraph (2) of subsection (f) of this Code section must be applied against taxes imposed for the calendar year in which such credit is available and may not be carried forward to any subsequent calendar year.
(j) The Commissioner of Insurance may require such reports, promulgate such regulations, and gather such relevant data necessary and advisable for the evaluation of the job tax credits established by this Code section.
(a) As used in this Code section, the term “affiliated entity” means:
(1) A corporation that is a member of the taxpayer's “affiliated group” within the meaning of Section 1504(a) of the Internal Revenue Code and which corporation has a tax liability under Code Section 33-8-4; or
(2) An entity affiliated with a corporation, business, partnership, or limited liability company taxpayer, which entity has a tax liability under Code Section 33-8-4 and which entity:
(A) Owns or leases the land on which a project is constructed;
(B) Provides capital for construction of the project; and
(C) Is the grantor or owner under a management agreement with a managing company of the project.
(b) In lieu of claiming any tax credit under Code Section 33-8-4.1 for which a taxpayer otherwise is eligible for the calendar year (such eligibility being determined for this purpose without regard to any limitation imposed by reason of the taxpayer's precredit tax liability under Code Section 33-8-4), the taxpayer may elect to assign such credit in whole or in part to one or more affiliated entities for such calendar year by attaching a statement to the taxpayer's return for the calendar year; provided, however, that no carryover attributable to the unused portion of any previously claimed or assigned credit may be assigned or reassigned, except as provided in subsection (d) of this Code section. Such election must be made on or before the due date for filing the applicable tax return under Code Section 33-8-4, including any extensions which have been granted. In the case of any credit that must be claimed in installments in more than one calendar year, the election under this subsection may be made on an annual basis with respect to each such installment, provided that the taxpayer shall notify the Commissioner with respect to the assignment of each such installment by filing a separate copy of the election statement for such installment no later than the due date for filing the applicable tax return under Code Section 33-8-4, including any extensions which have been granted. Once made, an election under this subsection shall be irrevocable.
(c) The recipient of a tax credit assigned under subsection (b) of this Code section shall attach a statement to its tax return under Code Section 33-8-4 identifying the assignor of the tax credit, in addition to providing any other information required to be provided by a claimant of the assigned tax credit.
(d) If the assignor and the recipient of a tax credit assigned under subsection (b) of this Code section cease to be affiliated entities, any carryover attributable to the unused portion of such credit shall be transferred back to the assignor of the credit. Such assignor shall be permitted to use any such carryover itself and also shall be permitted to assign such carryover to one or more affiliated entities, as if such carryover were a tax credit under Code Section 33-8-4.1 for which the assignor became eligible in the calendar year in which the carryover was transferred back to the assignor.
(e) The assignor and recipient of a tax credit assigned under subsection (b) of this Code section shall be jointly and severally liable for any tax under Code Section 33-8-4 (plus interest and penalties, if any) attributable to the disallowance or recapture of the assigned credit.
Whenever any insurance company doing business in this state shall make it appear to the Commissioner, by evidence satisfactory to him, that one-fourth of its total assets, as of December 31 of any taxable year, exclusive of direct obligations of the United States, consists of or is invested in any or all of the following classes of property:
(1) General obligation bonds of this state or of any political subdivision of the State of Georgia;
(2) Revenue bonds or revenue anticipation certificates of any county, municipality, or political subdivision of this state;
(3) Revenue bonds or revenue anticipation certificates of any authority or public corporation created by or pursuant to the laws of this state;
(4) Real estate situated in and subject to taxation by this state or its political subdivisions;
(5) Tangible personal property located in this state and subject to taxation by this state or its political subdivisions;
(6) Loans secured by liens on real estate situated in this state;
(7) Policy loans on insurance policies issued by the company on lives of persons resident in this state;
(8) Intangible property having a taxable situs in this state; or
(9) Shares in Georgia corporations in which the insurance companies are authorized to invest under the laws of this state,
then the gross premium tax levied by Code Section 33-8-4 shall be abated or reduced to 1 1/4 percent upon the gross premium of any company subject to taxation by said Code section and, if the amount so invested by any company shall be as much as three-fourths of its total assets, exclusive of direct obligations of the United States, then the said premium tax shall be abated or reduced to one-half of 1 percent upon the gross premiums of the company subject to taxation by said Code section.
(a) The annual premium taxes required in this chapter shall be paid to the Commissioner annually on or before March 1 following the close of the preceding calendar year upon all the premiums received during that calendar year. At the same time each such insurance company shall file with the Commissioner an annual return on a form prescribed by the Commissioner showing, by quarters, the gross direct premiums received during the preceding calendar year and the installment payments made during that year.
(b) Installments of the annual premium taxes shall be due and payable for each calendar quarter on the twentieth day of March, June, September, and December in each year based upon the estimated amount of gross direct premiums received during that calendar quarter. A final payment of tax due for the year shall be made at the time each such insurance company files its annual return for such year.
(c) Any insurance company which fails to report and pay any installment of tax or which estimates any installment of tax to be less than 80 percent of the amount finally shown to be due in any quarter shall be subject to penalty and interest as provided in subsection (d) of this Code section for any underpayment of taxes due and payable for that quarter. Any insurance company paying, for each installment required in this chapter, 25 percent of the amount of the annual premium taxes reported on its annual return for the preceding year shall not be subject to any penalty or interest for such underpayment.
(d) A penalty of 10 percent of the amount owed, together with interest on the principal amount at the rate of 1 percent per month, or any part of a month, from the date due until the date paid shall be imposed for late payment, underpayment, or nonpayment of any taxes or amounts imposed under this chapter.
(e) When the date prescribed by or imposed pursuant to law for the making of any return, the filing of any paper or document, or the payment of any tax or license fee pursuant to this chapter falls on a Saturday, Sunday, or legal holiday, the making of the return, the filing of the paper or document, or the payment of the tax or license fee shall be postponed until the first day following which is not a Saturday, Sunday, or legal holiday.
(f) Subsections (b) and (c) of this Code section shall not apply to any such insurance company whose annual premium taxes for the immediately preceding calendar year was less than $500.00.
Any insurance company, corporation, or association domiciled in this state and issuing insurance policies on fire, lightning, extended coverage, and windstorm, which policy covers property within this state, may deduct any retaliatory tax actually paid to another state from their Georgia taxes due for the tax year for which such retaliatory tax was paid only at the time when such Georgia taxes for that year are paid and upon furnishing proof of payment of the retaliatory tax to the Commissioner.
(a) Except as otherwise provided in this chapter, the State of Georgia preempts the field of imposing taxes, except taxes on real property and tangible personal property taxed ad valorem, upon insurance companies and their agents and other representatives, including, but not limited to, excise, privilege, franchise, income, license, permit, registration, and similar taxes and fees measured by premiums, income, or volume of transactions; and no county or unincorporated area of such county, city, municipality, district, school district, or other political subdivision or agency of this state shall impose, levy, charge, or require the same, except as provided in this chapter.
(b) Municipal corporations are authorized, in conformity with the requirements of their charters, to impose and collect the following license fees upon insurance companies for the privilege of engaging in the business of insurance within said municipal corporation:
(1) An annual license fee on each insurance company doing business within the municipal corporate limits not to exceed the following schedule:
| | Population of Municipal Corporation | | Amount | | | | --- | --- | --- | --- | --- | --- | | | Under | | 1,000․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | | $ 15.00 | | | 1,000 | - | 1,999․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | | 25.00 | | | 2,000 | - | 4,999․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | | 40.00 | | | 5,000 | - | 9,999․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | | 50.00 | | | 10,000 | - | 24,999․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | | 75.00 | | | 25,000 | - | 49,999․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | | 100.00 | | | 50,000 and over․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | | 150.00 | | |
and an additional annual license fee in the same amount for each separate business location in excess of one operated and maintained by such company within the same municipality; and
(2) An additional annual license fee of $10.00 or 35 percent of the schedule set forth in paragraph (1) of this subsection, whichever amount is greater, on each insurance company for each separate business location not otherwise subject to a license fee under this Code section, which company is operated and maintained by a business organization which is engaged in the business of lending money or transacting sales involving term financing and which, in connection with the loans or sales involving term financing, offers, solicits, or takes applications for insurance through a licensed agent of the insurance company for insurance.
(c) Within 45 days after the date of their enactment, each municipal corporation shall file with the Commissioner a certified copy of the pertinent parts of all ordinances and amendments thereto which impose any such license fee, and such filing shall be a condition to the validity and enforceability of such an ordinance.
(d) Insurance agencies which are maintained and operated by a company may not be separately licensed by municipal corporations except under the provisions of this Code section; but nothing contained in this Code section shall prevent municipal corporations from separately imposing and collecting business licenses from independent insurance agencies or brokers doing an insurance business not otherwise taxed under this Code section. No such license may be imposed on such independent agents or brokers, which license is measured by the premiums of insurance companies.
(e) Life insurance companies may deduct from premium taxes otherwise payable to this state under Code Section 33-8-4, in addition to all credits and abatements allowed by law, the license fees imposed pursuant to this Code section and paid to any municipal corporation during the preceding calendar year.
(f) As used in this Code section, the term “life insurance company” means a company which is authorized to transact only the class of insurance designated in Code Section 33-3-5 as class (1).
(a) As used in this Code section, the term “life insurance company” means a company which is authorized to transact only the class of insurance designated in Code Section 33-3-5 as class (1).
(b) Life insurance companies are subject to county and municipal corporation taxes levied as follows:
(1) There is imposed a county tax for county purposes on each life insurance company doing business within the state, which tax shall be based solely upon gross direct premiums, as defined in Code Section 33-8-4, which are received during the preceding calendar year from policies insuring persons residing within the unincorporated area of the counties pursuant to the provisions of this Code section. The rate of such tax shall be 1 percent of such premiums, except that such tax shall not apply to the gross direct premiums of an insurance company which qualifies, pursuant to Code Section 33-8-5, for the reduction to one-half of 1 percent of the state tax imposed by Code Section 33-8-4. The tax imposed by this Code section shall not apply to annuity considerations; and
(2) Municipal corporations whose ordinances have been filed with the Commissioner are authorized to impose a tax on each life insurance company doing business within the state, which tax shall be based solely upon the gross direct premiums, as defined in Code Section 33-8-4, which are received during the preceding calendar year from policies insuring persons residing within the corporate limits of the municipal corporation pursuant to the provisions of this Code section; provided, however, that the rate of the tax may not exceed 1 percent of the premiums. The tax imposed shall not apply to annuity considerations.
(c)(1) On March 1 of each year, each life insurance company shall file a certified return on a form prescribed by the Commissioner showing gross direct premiums received during the preceding calendar year that will appear in the company's certified annual statement.
(2) Reserved.
(3) On or before August 1 of each year, the Commissioner shall collect taxes imposed pursuant to subsection (b) of this Code section on behalf of counties and municipal corporations whose ordinances have been filed with the Commissioner. The tax collected for each year shall be based upon gross direct premiums written during the preceding calendar year. Penalty and interest as prescribed in subsection (d) of Code Section 33-8-6 shall be imposed for late payment, underpayment, or nonpayment of such taxes.
(d) Taxes imposed by subsection (b) of this Code section shall be allocated and distributed to counties and municipal corporations as follows:
(1) A portion of the total amount of life insurance premiums taxable by the state, exclusive of premiums collected by companies which qualify for the reduction to one-half of 1 percent of the state tax, shall be allocated to counties based upon the ratio that the total population of all unincorporated areas in the state bears to the total population in the state. The amount of the tax base so allocated to counties shall be taxed at the rate levied for county purposes. The tax shall be distributed to each county governing authority by the Commissioner based upon a fraction, the numerator of which is the population of the unincorporated area of that county and the denominator of which is the population of all unincorporated areas of the state; and
(2) A portion of the total amount of life insurance premiums taxable by the state shall be allocated to all municipal corporations based upon the ratio that the total population of all municipal corporations bears to the total state population. The amount of the tax base so allocated to municipalities shall be distributed to each municipal corporation based upon the fraction, the numerator of which is the population of that municipal corporation and the denominator of which is the population of all municipal corporations in the state. The amount of the tax base so distributed to each municipality shall be taxed at the rate levied by that municipality; and taxes levied by each municipal corporation shall be distributed based upon the tax rate levied by each such municipal corporation.
(e) On or before January 1 of the first year that the tax is levied, each municipal corporation levying the tax shall file with the Commissioner a certified copy of the pertinent parts of all ordinances and amendments thereto which impose the tax, and such filing shall be a condition to the validity and enforceability of such an ordinance. On or before February 1 of each year the Commissioner shall furnish a list of all municipal corporations levying the tax for that year to each life insurance company in the state.
(f) Life insurance companies may deduct from premium taxes otherwise payable to this state under Code Section 33-8-4, in addition to all credits and abatements allowed by law, the taxes imposed pursuant to subsection (b) of this Code section and paid to the Commissioner on behalf of any county and municipal corporation during the preceding calendar year.
(g) On or before October 15 of each year, the Commissioner shall distribute the taxes imposed by counties and municipal corporations which are actually remitted to and collected by the Commissioner. On or before October 15 of each year, the Commissioner shall distribute any delinquent taxes actually collected by the Commissioner for a previous year, exclusive of any interest or penalty on such delinquent taxes, which delinquent taxes have not previously been distributed.
(h) For purposes of this Code section, population shall be measured by the United States decennial census of 1990 or any future such census plus any corrections or revisions contained in official statements by the United States Bureau of the Census made prior to the first day of September immediately preceding the distribution of the proceeds of such taxes by the Commissioner and any additional official census data received by the Commissioner from the United States Bureau of the Census or its successor agency pertaining to any newly incorporated municipality. Such corrections, revisions, or additional data shall be certified to the Commissioner by the Office of Planning and Budget on or before August 31 of each year.
(a) Counties and municipal corporations are authorized to levy tax at a rate not to exceed 2.5 percent upon the gross direct premiums of all foreign, alien, and domestic insurance companies doing business in this state other than life insurance companies. The tax shall be in addition to the taxes levied by Code Section 33-8-4, and it may be levied upon the gross direct premiums received by such companies during the preceding calendar year. The tax shall be levied upon premiums derived from policies insuring persons, property, or risks in Georgia from January 1 to December 31, both inclusive, of each year without regard to business ceded to or assumed from other companies. The tax shall be imposed upon gross premiums received during the preceding calendar year from direct writing without any deductions allowed from premium abatement of any kind or character or for reinsurance or for losses or expenses of any kind; provided, however, deductions shall be allowed for premiums returned or change of rate or canceled policies; provided, further, that deductions shall be permitted for returned premiums or assessments, including all policy dividends, refunds, or other similar returns paid or credited to policyholders.
(b) The taxes provided in this Code section are county and municipal taxes and shall be levied for county and municipal purposes and shall be collected and distributed as follows:
(1) On or before January 1 of the first year that the tax is levied, each county and municipal corporation levying the tax shall file with the Commissioner a certified copy of the pertinent parts of all ordinances and resolutions and amendments thereto which impose the tax, and such filing shall be a condition to the validity and enforceability of such an ordinance or resolution;
(2) On or before February 1 of each year, the Commissioner shall furnish to each insurance company a list of all counties and municipal corporations where the tax as authorized by this Code section has been imposed for the then current year together with the applicable tax rate levied by each such county and municipal corporation and the population percentages by which the taxes are to be allocated to each such county and municipal corporation as provided in this Code section;
(3)(A) On March 1 of each year, each insurance company upon which a tax is imposed by subsection (b) of this Code section shall file a certified return on a form prescribed by the Commissioner showing gross direct premiums received during the preceding calendar year that will appear in the company's certified annual statement.
(B) Reserved.
(C) On or before August 1 of each year, the Commissioner shall collect taxes imposed pursuant to this Code section on behalf of counties and municipal corporations whose ordinances have been filed with the Commissioner. The premiums tax collected for each year shall be based upon gross direct premiums written during the preceding calendar year. Penalty and interest as prescribed in subsection (d) of Code Section 33-8-6 shall be imposed for late payment, underpayment, or nonpayment of such taxes;
(4) The total amount of premiums taxable by the state on insurance companies as defined in this Code section shall be allocated to each county unincorporated area and each municipal corporation based upon a fraction, the numerator of which is the population of the unincorporated area or municipal corporation and the denominator of which is the total population of the state. Tax rates levied by each county shall be applied to the premiums allocated to its unincorporated area, and tax rates levied by each municipal corporation shall be applied to the premiums allocated to it; and
(5) On or before October 15 of each year, the Commissioner shall distribute the taxes imposed by counties and municipal corporations which are actually remitted to and collected by the Commissioner. On or before October 15 of each year, the Commissioner shall distribute any delinquent taxes actually collected by the Commissioner for a previous year, exclusive of any interest or penalty on such delinquent taxes, which delinquent taxes have not previously been distributed.
(c) For purposes of this Code section, population shall be measured by the United States decennial census of 1990 or any future such census plus any corrections or revisions contained in official statements by the United States Bureau of the Census made prior to the first day of September immediately preceding the distribution of the proceeds of such taxes by the Commissioner and any additional official census data received by the Commissioner from the United States Bureau of the Census or its successor agency pertaining to any newly incorporated municipality. Such corrections, revisions, or additional data shall be certified to the Commissioner by the Office of Planning and Budget on or before August 31 of each year.
(d) Any county or municipal corporation which, on January 1, 1983, levied a tax on all premiums of insurance companies, other than life insurance companies, at a rate in excess of 2.5 percent may continue to levy the tax at a rate in excess of 2.5 percent, provided that the rate of such tax shall not exceed the rate which was in effect in such county or municipal corporation on January 1, 1983, reduced annually beginning January 1, 1984, by one-third of the difference between such January 1, 1983, rate and 2.5 percent, so that the rate levied on January 1, 1986, shall not exceed 2.5 percent.
(e) It shall be in contravention of public policy for a county or a municipal corporation that levies taxes for county or municipal purposes on foreign, alien, and domestic insurance companies doing business in this state, as provided in subsection (a) of this Code section, to impose additional taxes or any other fees of any kind for services provided by such county or municipal corporation to such insurance companies for accidents involving motor vehicles except for the following:
(1) Where the coverage for such services is expressly provided by an insurance company to the insured and the services are lawfully billed to the insured;
(2) Where emergency medical services are provided to the insured by the county or municipal corporation, whenever the insured's medical insurance covers the services provided and the insured assigns the right to collect to the service provider; or
(3) Where other services are provided to the insured by the county or municipal corporation which are expressly authorized by state or federal law to be billed directly to an insurance company.
(a) The proceeds from the county taxes levied for county purposes, as provided by this chapter, shall be separated from other county funds and shall be used by the county governing authorities solely for the purpose of either:
(1) Funding the provision of the following services to inhabitants of the unincorporated areas of such counties directly or by intergovernmental contract as authorized by Article IX, Section III, Paragraph I of the Constitution of the State of Georgia:
(A) Police protection, except such protection provided by the county sheriff;
(B) Fire protection;
(C) Curbside or on-site residential or commercial garbage and solid waste collection;
(D) Curbs, sidewalks, and street lights;
(E) Flood risk reduction, which, for purposes of this paragraph, such term shall mean policies adopted or projects implemented by a county to reduce the risks from flood events to residents of or property located in unincorporated areas of such county that are prone to experiencing floods. Such policies or projects may include but are not limited to the creation of flood risk management strategies and plans, installation of storm-water management infrastructure, and acquisition of high-risk properties; and
(F) Such other services as may be provided by the county governing authority for the primary benefit of the inhabitants of the unincorporated area of the county; or
(2) Reducing ad valorem taxes of the inhabitants of the unincorporated areas of those counties in which the governing authority of a county does not provide any of the services enumerated in paragraph (1) of this subsection to inhabitants of the unincorporated areas. In fixing the ad valorem tax millage rate for the year, the governing authorities of such counties shall be authorized and directed to reduce such ad valorem tax millage rate on taxable property within the unincorporated areas of such counties to offset any of the proceeds derived from any tax provided for in this chapter which cannot be expended pursuant to paragraph (1) of this subsection.
(b) In the adoption of the budget utilizing any of the funds derived from the tax imposed by Code Sections 33-8-8.1 and 33-8-8.2 the governing authority of a county shall specify in such budget the amount of such funds expended as authorized by paragraph (1) of subsection (a) of this Code section or used to reduce ad valorem taxes as provided in paragraph (2) of subsection (a) of this Code section. Said budget shall also specify the amount of any other funds expended for such purpose or purposes as are authorized to be expended for services referred to in paragraph (1) of subsection (a) of this Code section. Such provisions shall be spread on the minutes of the meeting at which such budget is adopted.
For purposes of levying, collecting, distributing, and applying the proceeds of local insurance taxes and for all other purposes of Code Sections 33-8-8.1, 33-8-8.2, and 33-8-8.3, the population of an inactive municipality shall be considered to be population of the unincorporated area of the county or counties within which the municipality is located. Any municipality whose governing authority has neither met nor taken any official action during a calendar year shall be considered to be an inactive municipality during the next calendar year.
Any insurance company, other than a life insurance company, which receives reimbursement for the payment of an insurance premium tax levied by a county or municipality which was illegally assessed and collected shall distribute on a pro rata basis the proceeds of such reimbursement to its policyholders of record for the year the tax was levied. The distribution of the reimbursement shall be made as soon as practicable and in no event later than 90 days after such reimbursement is received by the insurance company.
Notwithstanding any other provision of law, any payment by an insurance company, other than a life insurance company, of premium taxes levied by a county or municipality heretofore made which when made was not accompanied by a written protest of the legality or amount of such tax shall be deemed to have been a voluntary payment and shall not be recoverable from such county or municipality.
Refunds and credits of license fees and taxes levied by this chapter shall be made by the Commissioner in accordance with the provisions of Code Sections 33-2-29 through 33-2-31.
(a) The information secured by the Commissioner incident to the administration of any tax provided for in this title shall be confidential and privileged. Neither the Commissioner nor any members of his staff nor any of his authorized representatives shall without prior written consent of the taxpayer divulge or disclose any confidential information obtained from the department's records or from an examination of the business of the taxpayer to any person, except that upon request the information shall be divulged and disclosed to any officer or representative of any political subdivision of the state which has an ordinance on file with the Commissioner, as contemplated by subsection (c) of Code Section 33-8-8, and which has designated the officer or representative to the Commissioner in writing over the signature of an officer of the political subdivision. Information so divulged and disclosed shall be used by the political subdivisions, their agents, employees, officers, or representatives only for the purpose of assisting in the enforcement of local ordinances and shall not be divulged by the agents, employees, officers, or representatives of the political subdivisions except as may be reasonably required in connection with the enforcement and collection of any taxes due under the ordinances. The Commissioner shall not be responsible for the use or disclosure of any information by the political subdivisions or by their agents, employees, officers, or representatives. The information may also be disclosed to any other officer or representative of a state or local government entitled to such information in his official capacity or to the taxpayer or his authorized representative, provided that the Commissioner may furnish the confidential information to the appropriate insurance regulatory, tax, or legal official of another state, territory, country, or of the United States government if the office or officer of such state, territory, country, or of the United States government makes its own records available to the Commissioner.
(b) Any person who is designated by a local government or any other political subdivision of this state to assist in the collection of any tax relating to the transaction of insurance shall disclose to the Commissioner in writing annually any and all commissions, fees, or any other payments which such person receives for the assistance in the collection of any such tax. All disclosures which are filed with the Commissioner shall be available for public inspection and shall in no manner be treated as confidential information.
(c) Any person who violates this Code section shall be guilty of a misdemeanor and, upon conviction thereof, shall be fined not less than $500.00 nor more than $1,000.00 or imprisoned for not less than one month nor more than 12 months, or both; and, if the offender is an officer or employee of the state, he shall be dismissed from office and shall be incapable of holding any public office in this state for a period of five years thereafter.
In addition to other remedies provided for in this title for the collection of fees and taxes, the Commissioner is authorized to issue executions against delinquents who have failed to pay the fees and taxes when due.
The Commissioner is authorized to waive the collection of any amount due the state as a penalty under provisions of this title providing for fees, premium taxes, or other miscellaneous charges collected by the Commissioner, whenever or to the extent that he may determine that the default giving rise to the penalty was due to reasonable cause and not due to gross or willful neglect or disregard of the law, regulations, or instructions pertaining thereto. The Commissioner may waive the collection of any interest, in whole or in part, due the state on any unpaid taxes whenever or to the extent that he reasonably determines that the delay in payment of the taxes was attributable to the action or inaction of the department.
Any other provision of this chapter to the contrary notwithstanding, an insurance company exempt from federal income tax pursuant to the provisions of 26 U.S.C. Section 501(c)(3) or (4) and which only insures the risks of places of worship shall be exempt from the taxes levied upon insurance companies pursuant to Code Sections 33-8-4, 33-8-8, 33-8-8.1, and 33-8-8.2. Any insurance company desiring the exemption provided by this Code section shall present to the Commissioner the certificate issued by the federal Internal Revenue Service demonstrating the company's tax exempt status and such evidence of the scope of the company's business as the Commissioner shall deem necessary.
(a) The purpose of this chapter is to promote the public welfare by regulating insurance rates as provided in this chapter to the end that they shall not be excessive, inadequate, or unfairly discriminatory; to authorize the existence and operation of qualified rating organizations and advisory organizations and require that specified rating services of such rating organizations be generally available to all admitted insurers; and to authorize cooperation between insurers in rate making and other related matters.
(b) It is the express intent of this chapter to permit and encourage competition between insurers on a sound financial basis to the fullest extent possible. However, nothing in this chapter is intended or should be construed to restrict the Commissioner in any way, on his own motion or otherwise, to take any affirmative action by rule, regulation, or administrative determination in a particular case, cases, or class of cases which he may deem necessary to protect the public's interest in maintaining the standards prescribed in Code Section 33-9-4; and Code Sections 33-9-26 through 33-9-29 in particular shall in no way be viewed as exhaustive or restrictive of the powers or procedures available to the Commissioner for this purpose.
As used in this chapter, the term:
(1) “Advisory organization” means every person other than an admitted insurer, whether located within or outside this state, who prepares policy forms or makes underwriting rules incident to but not including the making of rates, rating plans, or rating systems, or who collects and furnishes to admitted insurers or rating organizations loss or expense statistics or other statistical information and data and acts in an advisory, as distinguished from a rate-making, capacity. No duly authorized attorney at law acting in the usual course of his profession shall be deemed to be an advisory organization.
(2) “Member” means an insurer who participates in or is entitled to participate in the management of a rating, advisory, or other organization.
(3) “Rating organization” means every person other than an admitted insurer, whether located within or outside this state, who has as his object or purpose the making of rates, rating plans, or rating systems. Two or more admitted insurers who act in concert for the purpose of making rates, rating plans, or rating systems and who do not operate within the specific authorizations contained in Code Sections 33-9-6, 33-9-7, 33-9-11, 33-9-20, and 33-9-22 shall be deemed to be a rating organization. No single insurer shall be deemed to be a rating organization.
(4) “Subscriber” means an insurer which is furnished at its request with rates and rating manuals by a rating organization of which it is not a member, or with advisory services by an advisory organization of which it is not a member.
(a) This chapter shall apply to all insurance on risks or on operations in this state, except:
(1) Reinsurance other than joint reinsurance to the extent stated in Code Section 33-9-19;
(2) Life insurance;
(3) Disability income, specified disease, or hospital indemnity policies;
(4) Insurance of vessels or craft, their cargoes, marine builders' risks, marine protection and indemnity, or other risks commonly insured under marine, as distinguished from transportation, insurance policies. Inland marine insurance shall be deemed to include insurance defined by statute, or by interpretation thereof or, if not so defined or interpreted, by ruling of the Commissioner or as established by general custom of the business, as inland marine insurance;
(5) Insurance against loss of or damage to aircraft, insurance of hulls of aircraft, including their accessories and equipment, or insurance against liability arising out of the ownership, maintenance, or use of aircraft;
(6) Title insurance; or
(7) Annuities.
(a.1) The Commissioner may by rule or regulation establish criteria by which defined commercial risks may be exempted from the filing requirements of this chapter.
(b) This chapter shall apply to all insurers, including stock and mutual companies, Lloyd's associations, and reciprocal and interinsurance exchanges, which under any laws of this state write any of the kinds of insurance to which this chapter applies.
The following standards shall apply to the making and use of rates pertaining to all classes of insurance to which this chapter is applicable:
(1) Rates shall not be excessive or inadequate, as defined in this Code section, nor shall they be unfairly discriminatory;
(2) No rate shall be held to be excessive unless such rate is unreasonably high for the insurance provided and a reasonable degree of competition does not exist in the area with respect to the classification to which such rate is applicable; provided, however, with respect to rate filings involving an increase in rates, no rate for personal private passenger motor vehicle insurance shall be held to be excessive unless such rate is unreasonably high for the insurance provided and a reasonable degree of competition does not exist;
(3) No rate shall be held inadequate unless it is unreasonably low for the insurance provided and continued use of it would endanger solvency of the insurer, or unless the use of such rate by the insurer using such rate has, or will, if continued, tend to destroy competition or create a monopoly;
(4) Consideration shall be given to the extent applicable to past and prospective loss experience within and outside this state, to conflagration and catastrophe hazards, to a reasonable margin for underwriting profit and contingencies, to past and prospective expenses both country wide and those specially applicable to this state, to the insurer's average yield from investment income, and to all other factors, including judgment factors, deemed relevant within and outside this state; and, in the case of fire insurance rates, consideration may be given to the experience of the fire insurance business during the most recent five-year period;
(5) Consideration may also be given, in the making and use of rates, to dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers;
(6) The systems of expense provisions included in the rates for use by any insurer or group of insurers may differ from those of other insurers or groups of insurers to reflect the operating methods of any such insurer or group with respect to any kind of insurance or with respect to any subdivision or combination thereof;
(7) Risks may be grouped by classifications for the establishment of rates and minimum premiums. Classification rates may be modified to produce rates for individual risks in accordance with rating plans which establish standards for measuring variations in hazards or expense provisions, or both. Such standards may measure any difference among risks that have a probable effect upon losses or expenses. Classifications or modifications of classifications of risks may be established based upon size, expense, management, individual experience, location or dispersion of hazard, or any other reasonable considerations. Such classifications and modifications shall apply to all risks under the same or substantially the same circumstances or conditions; provided, however, the Commissioner shall establish the maximum amount of any such modification;
(8) Nothing contained in this Code section or elsewhere in this chapter shall be construed to repeal or modify Chapter 6 of this title, relating to unfair trade practices, and any rate, rating classification, rating plan or schedule, or variation thereof established in violation of Chapter 6 of this title shall, in addition to the consequences stated in Chapter 6 of this title or elsewhere, be deemed violative of this Code section;
(9) No insurer shall base any standard or rating plan on vehicle insurance, in whole or in part, directly or indirectly, upon race, creed, or ethnic extraction; and
(10) No insurer shall base any standard or rating plan on vehicle insurance, in whole or in part, directly or indirectly, upon any physical disability of an insured unless the disability directly impairs the ability of the insured to drive a motor vehicle.
Subject to and in compliance with this chapter authorizing insurers to be members or subscribers of rating or advisory organizations or to engage in joint underwriting or joint reinsurance, two or more insurers may act in concert with each other and with others with respect to any matters pertaining to the making of rates or rating systems, the preparation or making of insurance policy or bond forms, underwriting rules, surveys, inspections and investigations, the furnishing of loss or expense statistics or other information and data, or carrying on of research.
With respect to any matters pertaining to the making of rates or rating systems, the preparation or making of insurance policy or bond forms, underwriting rules, surveys, inspections and investigations, the furnishing of loss or expense statistics or other information and data, or carrying on of research, two or more admitted insurers having a common ownership or operating in this state under common management or control are authorized to act in concert between or among themselves the same as if they constituted a single insurer; and to the extent that the matters relate to cosurety bonds, two or more admitted insurers executing the bonds are authorized to act in concert between or among themselves the same as if they constituted a single insurer.
(a) Agreements may be made among admitted insurers with respect to the equitable apportionment among them of property and casualty insurance which may be afforded applicants who are in good faith entitled to but who are unable to procure such insurance through ordinary methods, and with respect to the use of reasonable rate modifications for such insurance, such agreements to be subject to the approval of the Commissioner.
(b) All such agreements shall be submitted in writing to the Commissioner for his consideration and approval together with such information as he may reasonably require. The Commissioner shall approve only such agreements as are found by him to contemplate the use of rates which meet the standards prescribed by this chapter and activities and practices that are not unfair, unreasonable, or otherwise inconsistent with this chapter.
(c) At any time after such agreements are in effect, the Commissioner may review the practices and activities of the adherents to such agreements and, if after a hearing upon not less than ten days' notice to such adherents he finds that any such practice or activity is unfair or unreasonable or is otherwise inconsistent with this chapter, he may issue a written order to the parties to any such agreement specifying in what respect such act or practice is unfair or unreasonable or otherwise inconsistent with this chapter and requiring the discontinuance of such activity or practice. For good cause, and after hearing upon not less than ten days' notice to the adherents to such agreement, the Commissioner may revoke approval of any such agreement.
(a) Agreements shall be made among admitted property and casualty insurers with respect to the equitable apportionment among them of property and casualty insurance which may be afforded applicants who are in good faith entitled to but who are unable to procure such insurance through ordinary methods upon the determination by the Commissioner in writing that an agreement relative to a given kind or kinds of property and casualty insurance is necessary to protect the health, property, and welfare of the citizens of Georgia. All of the agreements shall be subject to the approval of the Commissioner and upon his or her approval shall have the effect of rules and regulations promulgated by the Commissioner.
(b) All of the agreements shall be submitted in writing to the Commissioner for his or her consideration and approval within the period of time specified by the Commissioner in his or her determination, as provided for in this Code section, together with such information as he or she may reasonably require. The approval of the agreements shall comply with the requirements of the rule-making process as set forth in Code Section 33-2-9. The Commissioner shall approve only such agreements as are found by him or her to contemplate the use of rates which meet the standards prescribed by this chapter and activities and practices that are not unfair, unreasonable, or otherwise inconsistent with this chapter.
(c) If, as provided in this Code section, the Commissioner determines that it is necessary to protect the health, property, and welfare of the citizens of this state, in addition to all other authority granted in this title, the Commissioner shall also have and may exercise the following authority:
(1) The Commissioner may require that any rates contemplated to be used under this Code section shall be approved by him or her prior to their use;
(2) The Commissioner may declare that any policies, contracts, or rates used pursuant to any agreement or plan established under this Code section shall be the exclusive policies, contracts, or rates authorized to be used in Georgia for the kind or kinds of insurance; and he or she may prohibit the use by any person of policies, contracts, or rates in this state which are different from those established in accordance with this Code section; and
(3) The Commissioner may amend or modify in whole or in part and may adopt any agreement submitted to him or her in accordance with this Code section. If no agreement is submitted within the time prescribed by the Commissioner or if after a hearing the agreement submitted is unacceptable to the Commissioner, the Commissioner may on his or her own motion promulgate and adopt a reasonable plan to implement this Code section which plan shall become effective on a date not sooner than ten days as specified by the Commissioner in his or her order.
(d) At any time after the agreements are in effect the Commissioner may review the practices and activities of the adherents to such agreements and, if after a hearing upon not less than ten days' notice to such adherents, he or she finds that any such practice or activity is unfair or unreasonable, or is otherwise inconsistent with this chapter, he or she may issue a written order to the parties of the agreement specifying in what respect the act or practice is unfair or unreasonable or otherwise inconsistent with this chapter and requiring the discontinuance of the activity or practice. For good cause, and after hearing upon not less than ten days' notice to the adherents thereto, the Commissioner may revoke approval of the agreement.
(e) Whenever the Commissioner determines that a lack of competition or a lack of availability exists in this state in either property or casualty insurance, the Commissioner is authorized to protect the health, property, and welfare of the citizens of this state by exercising the following authority:
(1) The Commissioner shall approve all rates contemplated to be used under this Code section prior to their use;
(2) The Commissioner shall approve any policies or contracts used pursuant to any agreement or plan established under this Code section and such policies or contracts shall be used exclusively in this state for those kinds of insurance. The use by any person of any policies or contracts which are different from those established in accordance with this Code section shall be prohibited; and
(3) The Commissioner may by order implement a plan or program to provide the necessary insurance coverages to the citizens of this state by equitable apportionment among all property and casualty insurers licensed to transact those kinds of insurance in this state.
(f) The powers contained in this Code section are cumulative and shall be in addition to all other powers of the Commissioner contained elsewhere in this title or under the laws of this state.
Members and subscribers of rating or advisory organizations may use the rating systems, underwriting rules, or policy or bond form of the organizations and the rates filed by such organizations for all lines of insurance covered by the provisions of this chapter, either consistently or intermittently, but, except as provided in Code Sections 33-9-3, 33-9-7, 33-9-19, and 33-9-20, shall not agree with each other or rating organizations or others to adhere to such rates, rating systems, underwriting rules, or policy or bond form. The fact that two or more admitted insurers, whether or not members or subscribers of a rating or advisory organization, use, either consistently or intermittently, the rates or rating systems made or adopted by a rating organization, or the underwriting rules or policy or bond forms prepared by a rating or advisory organization shall not be sufficient in itself to support a finding that an agreement so to adhere exists and may be used only for the purpose of supplementing or explaining any competent evidence of the existence of the agreement.
Upon compliance with this chapter as applicable thereto, any rating organization, advisory organization, and any group, association, or other organization of admitted insurers which engages in joint underwriting or joint reinsurance through such organization or by standing agreement among the members thereof may conduct operations in this state. With respect to insurance risks or operations in this state, no insurer shall be a member or subscriber of any such organization, group, or association that has not complied with this chapter.
Cooperation among rating organizations or among rating organizations and insurers in rate making or in other matters within the scope of this chapter is authorized. The Commissioner may review the cooperative activities and practices and, if after a hearing he finds that the activity or practice is unfair or unreasonable or otherwise inconsistent with this chapter, he may issue a written order specifying in what respects the activity or practice is unfair or unreasonable or otherwise inconsistent with this chapter and requiring the discontinuance of the activity or practice.
(a) No rating organization shall conduct its operations in this state without first filing with the Commissioner a written application for and securing a license to act as a rating organization. Any rating organization may make application for and obtain a license as a rating organization if it shall meet the requirements for a license set forth in this chapter. Every rating organization shall file with its application:
(1) A copy of its constitution; its articles of incorporation, agreement or association; and of its bylaws, rules, and regulations governing the conduct of its business, all duly certified by the custodian of the originals of the constitution, articles of incorporation, agreement or association, bylaws, rules, and regulations;
(2) A list of its members and subscribers;
(3) The name and address of a resident of this state upon whom notices or orders of the Commissioner or process affecting the rating organization may be served; and
(4) A statement of its qualifications as a rating organization.
(b) The fee for filing an application for license as a rating organization shall be an amount as provided in Code Section 33-8-1, payable in advance to the Commissioner.
To obtain and retain a license, a rating organization shall provide satisfactory evidence to the Commissioner that it will:
(1) Permit any admitted insurer to become a member of or a subscriber to such rating organization at a reasonable cost and without discrimination, or withdraw therefrom;
(2) Neither have nor adopt any rule or exact any agreement the effect of which would be to require any member or subscriber, as a condition to membership or subscribership, to adhere to its rates, rating plans, rating systems, underwriting rules, or policy or bond forms;
(3) Neither adopt any rule nor exact any agreement the effect of which would be to prohibit or regulate the payment of dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers;
(4) Neither practice nor sanction any plan or act of boycott, coercion, or intimidation;
(5) Neither enter into nor sanction any contract or act by which any person is restrained from lawfully engaging in the insurance business;
(6) Notify the Commissioner promptly of every change in its constitution, its articles of incorporation, agreement or association, and of its bylaws, rules, and regulations governing the conduct of its business; its list of members and subscribers; and the name and address of the resident of this state designated by it upon whom notices or orders of the Commissioner or process affecting such organization may be served; and
(7) Comply with Code Section 33-9-20.
(a) The Commissioner shall examine each application for license to act as a rating organization and the documents filed therewith and may make such further investigation of the applicant, its affairs, and its proposed plan of business as he deems desirable.
(b) The Commissioner shall issue the license applied for within 60 days of its filing with him, if from such examination and investigation he is satisfied that:
(1) The business reputation of the applicant and its officers is good;
(2) The facilities of the applicant are adequate to enable it to furnish the services it proposes to furnish; and
(3) The applicant and its proposed plan of operation conform to the requirements of this chapter.
(c) Otherwise, but only after hearing upon notice, the Commissioner shall in writing deny the application and notify the applicant of his decision and his reasons therefor.
(d) The Commissioner may grant an application in part only and issue a license to act as a rating organization for one or more of the classes of insurance or subdivisions thereof or class of risk or a part or combination thereof as are specified in the application if the applicant qualifies for only a portion of the classes applied for.
(e) Licenses issued pursuant to this Code section shall remain in effect until revoked as provided in this chapter.
Notwithstanding Code Section 33-9-14, each rating organization possessing a license of indefinite term pursuant to such Code section shall owe and pay to the Commissioner an annual fee as provided in Code Section 33-8-1 in advance on account of such license until its final termination. Such fee shall be for periods commencing on July 1 of each year and ending on June 30 and shall be due and payable on March 1 of each year and shall be delinquent on April 1 of each year.
Subject to the approval of the Commissioner, licensed rating organizations may make reasonable rules governing eligibility for membership.
If two or more insurers having a common ownership or operating in this state under common management are admitted for the classes or types of insurance for which a rating organization is licensed to make rates, the rating organization may require as a condition to membership or subscribership of one or more that all the insurers shall become members or subscribers.
(a) No advisory organization shall conduct its operations in this state unless and until it has filed with the Commissioner a copy of its constitution, articles of incorporation, agreement, or association, and of its bylaws or rules and regulations governing its activities, all duly certified by the custodian of the originals of the constitution, articles of incorporation, agreement or association, and bylaws or rules and regulations; a list of its members and subscribers; and the name and address of a resident of this state upon whom notices or orders of the Commissioner or process may be served.
(b) Each advisory organization shall notify the Commissioner promptly of every change in its constitution, its articles of incorporation, agreement, or association, and of its bylaws or rules and regulations governing the conduct of its business; its list of members and subscribers; and the name and address of the resident of this state designated by it upon whom notices or orders of the Commissioner or process affecting the organization may be served.
(c) No advisory organization shall engage in any unfair or unreasonable practice with respect to its activities.
(d) Each advisory organization shall pay an annual fee as provided in Code Section 33-8-1.
(a) Every group, association, or other organization of insurers which engages in joint underwriting or joint reinsurance through the group, association, or organization or by standing agreement among the members of the group, association, or organization shall file with the Commissioner a copy of its constitution, its articles of incorporation, agreement, or association, and of its bylaws or rules and regulations governing its activities, all duly certified by the custodian of the originals of such constitution, articles of incorporation, agreement or association, bylaws or rules and regulations; a list of its members; and the name and address of a resident of this state upon whom notices or orders of the Commissioner or process may be served.
(b) Each group, association, or other organization shall notify the Commissioner promptly of every change in its constitution, its articles of incorporation, agreement, or association, and its bylaws, rules, and regulations governing the conduct of its business; its list of members; and the name and address of the resident of this state designated by it upon whom notices or orders of the Commissioner or process affecting the group, association, or organization may be served.
(c) No group, association, or organization shall engage in any unfair or unreasonable practice with respect to its activities.
(d) Each joint underwriting and joint reinsurance organization shall pay an annual fee as provided in Code Section 33-8-1.
(a) Every insurer, rating organization, or advisory organization and every group, association, or other organization of insurers which engages in joint underwriting or joint reinsurance shall maintain reasonable records of the type and kind reasonably adapted to its method of operation, of its experience or the experience of its members, and of the data, statistics, or information collected or used by it in connection with the rates, rating plans, rating systems, underwriting rules, policy or bond forms, surveys, or inspections made or used by it so that the records will be available at all reasonable times to enable the Commissioner to determine whether the organization, insurer, group, or association and, in the case of an insurer or rating organization, every rate, rating plan, and rating system made or used by it complies with this chapter as applicable to it. The maintenance of the records in the office of a licensed rating organization of which an insurer is a member or subscriber will be sufficient compliance with this Code section for any insurer maintaining membership or subscribership in the organization to the extent that the insurer uses the rates, rating plans, rating systems, or underwriting rules of the organization. Such records shall be maintained in an office within this state and shall be made available for examination or inspection by the Commissioner at any time.
(b) Each insurer shall maintain statistics under statistical plans compatible with the rating plans used. An insurer shall report its statistics through a recognized statistical agency or advisory organization. No insurer shall be required to report its statistics through such agencies or organizations with respect to any unique or unusual risks or with respect to any risks rated in accordance with Code Section 33-9-32 or any lines or sublines of insurance for which such agencies or organizations do not promulgate rates or rating systems. Moreover, the Commissioner shall withhold from public inspection any proprietary information of any insurer, agency, or organization.
(a) Every insurer shall maintain with the Commissioner copies of the rates, rating plans, rating systems, underwriting rules, and policy or bond forms used by it. The maintenance of rates, rating plans, rating systems, underwriting rules, and policy or bond forms with the Commissioner by a licensed rating organization of which an insurer is a member or subscriber will be sufficient compliance with this Code section for any insurer maintaining membership or subscriberships in such organization, to the extent that the insurer uses the rates, rating plans, rating systems, underwriting rules, and policy or bond forms of such organization; provided, however, that the Commissioner, when he or she deems it necessary, without compliance with the rule-making procedures of this title or Chapter 13 of Title 50, the “Georgia Administrative Procedure Act”:
(1) May require any domestic, foreign, and alien insurer to file the required rates, rating plans, rating systems, underwriting rules, and policy or bond forms used independent of any filing made on its behalf or as a member of a licensed rating organization, as the Commissioner shall deem to be necessary to ensure compliance with the standards of this chapter and Code Section 34-9-130 and for the best interests of the citizens of this state;
(2) Shall require each domestic, foreign, and alien insurer, writing or authorized to write workers' compensation insurance in this state, to file such insurer's own individual rate filing for rates to be charged for workers' compensation insurance coverage written in this state. Such rates shall be developed and established based upon each individual insurer's experience in the State of Georgia to the extent actuarially credible. The experience filed shall include the loss ratios, reserves, reserve development information, expenses, including commissions paid and dividends paid, investment income, pure premium data adjusted for loss development and loss trending, profits, and all other data and information used by that insurer in formulating its workers' compensation rates which are used in this state and any other information or data required by the Commissioner. In establishing and maintaining loss reserves, no workers' compensation insurer shall be allowed to maintain any excess loss reserve for any claim or potential claim for more than 90 days after the amount of liability for such claim or potential claim has been established, whether by final judgment, by settlement agreement, or otherwise. This limitation on the maintenance of loss reserves shall be enforced through this Code section, as well as through Code Section 33-9-23, relating to examination of admitted insurers, and any other appropriate enforcement procedures. The Commissioner is authorized to accept such rate classifications as are reasonable and necessary for compliance with this chapter. A rate filing required by this paragraph shall be updated by the insurer at least once every two years; and
(3) As used in paragraph (2) of this subsection, the term “excess loss reserve” means any reserve amount in excess of the reserve required by law.
(b) Any domestic, foreign, or alien insurer that is authorized to write insurance in this state must file with the Commissioner any rate, rating plan, rating system, or underwriting rule for all personal private passenger motor vehicle insurance:
(1) For private passenger motor vehicle insurance providing only the mandatory minimum limits required by Code Section 33-34-4 and subsection (a) of Code Section 40-9-37, no such rate, rating plan, rating system, or underwriting rule shall become effective, nor may any premium be collected by any insurer thereunder, unless the filing has been received by the Commissioner in his or her office and such filing has been approved by the Commissioner or a period of 45 days has elapsed from the date such filing was received by the Commissioner during which time such filing has not been disapproved by the Commissioner. The Commissioner shall be authorized to extend such 45 day period by no more than 55 days at his or her discretion. If a filing is disapproved, notice of such disapproval order shall be given within 100 days of receipt of filing by the Commissioner, specifying in what respects such filing fails to meet the requirements of this chapter. The filer shall be given a hearing upon written request made within 30 days after the issuance of the disapproval order, and such hearing shall commence within 30 days after such request unless postponed by mutual consent. Such hearing, once commenced, may be postponed or recessed by the Commissioner only for weekends, holidays, or after normal working hours or at any time by mutual consent of all parties to the hearing. The Commissioner may also, at his or her discretion, recess any hearing for not more than two recess periods of up to 15 consecutive days each. In connection with any hearing or judicial review with respect to the approval or disapproval of such rates, the burden of persuasion shall fall upon the affected insurer or insurers to establish that the challenged rates are adequate, not excessive, and not unfairly discriminatory. After such a hearing, the Commissioner must affirm, modify, or reverse his or her previous action within the time period provided in subsection (a) of Code Section 33-2-23 relative to orders of the Commissioner. The requirement of approval or disapproval of a rate filing by the Commissioner under this subsection shall not prohibit actions by the Commissioner regarding compliance of such rate filing with the requirements of Code Section 33-9-4 brought after such approval or disapproval.
(2) For personal private passenger motor vehicle insurance other than that described in paragraph (1) of this subsection, such rate, rating plan, rating system, or underwriting rule for all such personal private passenger motor vehicle insurance shall be effective 60 days after such filing and shall be implemented without approval of the Commissioner, unless an earlier effective date is authorized by the Commissioner or a later effective date is specified by the insurer. This paragraph shall apply to the entire personal private passenger motor vehicle insurance policy with limits above the mandatory minimum required by Code Section 33-34-4 and subsection (a) of Code Section 40-9-37 and shall apply to the entire personal private passenger motor vehicle policy with minimum limits if such policy has any additional nonmandatory coverage or coverages.
(3) Notwithstanding the provisions of paragraphs (1) and (2) of this subsection, an insurer may, but shall not be required to, file its rate, rating plan, rating system, or underwriting rule for all such personal private passenger motor vehicle insurance provided for in paragraphs (1) and (2) of this subsection under the filing process of paragraph (1) of this subsection.
(c) When a rate filing of an insurer required under paragraph (1) of subsection (b) of this Code section is not accompanied by the information upon which the insurer supports the filing and the Commissioner does not have sufficient information to determine whether the filing meets the requirements of this chapter, then the Commissioner shall request in writing, within 20 days of the date he or she receives the filing, the specifics of such additional information as he or she requires, and the insurer shall be required to furnish such information, and in such event the 45 day period provided for in paragraph (1) of subsection (b) of this Code section shall commence as of the date such information is furnished.
(d) Any domestic, foreign, or alien insurer that is authorized to write insurance in this state must file with the Commissioner any rate, rating plan, rating system, or underwriting rule at least 45 days prior to any indicated effective date for all insurance other than personal private passenger motor vehicle insurance. No rate, rating plan, rating system, or underwriting rule required to be filed under this subsection will become effective, nor may any premium be collected by any insurer thereunder, unless the filing has been received by the Commissioner in his office not less than 45 days prior to its effective date.
(e) When a rate filing of an insurer required under subsection (d) of this Code section results in any overall rate increase of 10 percent or more within any 12 month period, the Commissioner shall order an examination of that insurer to determine the accuracy of the claim reserves, the applicability of the claim reserve practices for the loss data used in support of such filing, and any other component of the rate filing; provided, however, that in the event the overall increase is less than 25 percent within any 12 month period and the Commissioner affirmatively determines that he or she has sufficient information to evaluate such rate increase and that the cost thereof would not be justified, he or she may waive all or part of such examination. In all other rate filings required under subsection (d) of this Code section, the Commissioner may order an examination of that insurer as provided in this subsection. Such examination shall be conducted in accordance with the provisions of Chapter 2 of this title. Upon notification by the Commissioner of his or her intent to conduct such examination, the insurer shall be prohibited from placing the rates so filed in effect until such examination has been reviewed and certified by the Commissioner as being complete. Such examination, if conducted by the Commissioner, shall be reviewed and certified within 90 days of the date such rate, rating plan, rating system, or underwriting rule is filed; provided, however, that if the Commissioner makes an affirmative finding that the examination may not be completed within the 90 day period, he or she may extend such time for one additional 60 day period. Any examination required under this Code section shall be conducted in accordance with Chapter 2 of this title.
(f) Notwithstanding the provisions of subsection (d) of this Code section, in the event the filing of any rate, rating plan, rating system, or underwriting rule under subsection (d) of this Code section is not necessary, in the judgment of the Commissioner, to accomplish the purposes of this chapter as set forth in Code Section 33-9-1, then the Commissioner may exempt all domestic, foreign, and alien insurers from being required to file such rate, rating plan, rating system, or underwriting rule.
(g) Filings required pursuant to this Code section shall be accompanied by a fee or fees as provided in Code Section 33-8-1.
The following types of casualty insurance shall be filed separately and data relative to such types of insurance shall be maintained separately:
(1) Nonrecording insurance or nonfiling insurance; and
(2) Vendors' single interest insurance.
Any insurer aggrieved by the Commissioner's disapproval of any rate filing may petition the Commissioner for a hearing within ten days of the notification of such disapproval, unless otherwise specifically provided by law. A hearing conducted pursuant to this Code section shall be conducted in accordance with the provisions of Chapter 2 of this title.
(a) The Commissioner shall, at least once every five years, and may, as often as may be reasonable and necessary, make or cause to be made an examination of each licensed rating organization; and he may, as often as may be reasonable and necessary, make or cause to be made an examination of any advisory organization or group, association, or other organization of insurers which engages in joint underwriting or joint reinsurance.
(b) In lieu of the examination required in subsection (a) of this Code section, the Commissioner may accept the report of an examination made by the insurance supervisory official of another state.
(c) In examining any organization, group, or association pursuant to this Code section, the Commissioner shall ascertain whether the organization, group, or association and, in the case of a rating organization, any rate or rating system made or used by it complies with the applicable requirements and standards of this chapter.
(a) The Commissioner may, at any reasonable time, make or cause to be made an examination of every admitted insurer transacting any class of insurance to which this chapter is applicable to ascertain whether the insurer and every rate and rating system used by it for each class of insurance complies with the requirements and standards of this chapter applicable thereto. The examination shall not be a part of a periodic general examination participated in by representatives of more than one state.
(b) In addition to and apart from the examination required by subsection (a) of this Code section, the Commissioner may, at any reasonable time, examine or cause to be examined by some examiner duly authorized by him or her all insurers transacting workers' compensation insurance in this state. This examination will include a review of the loss ratios, reserves, reserve development information, expenses including commissions paid and dividends paid, investment income, pure premium data adjusted for loss development and loss trending, profits, and all other data and information used by that insurer in formulating its workers' compensation rates which are used in this state and any other information or data required by the Commissioner. Upon completion of this examination, a report in such form as the Commissioner shall prescribe shall be filed in his or her office.
The officers, managers, agents, and employees of any such organization, group, association, or insurer may be examined at any time under oath and shall exhibit all books, records, accounts, documents, or agreements governing its method of operation, together with all data, statistics, and information of every kind and character collected or considered by such organization, group, association, or insurer in the conduct of the operations to which the examination relates.
The reasonable cost of any examination authorized by this chapter shall be paid by the organization, group, association, or insurer to be examined.
Any person aggrieved by any rate charged, rating plan, rating system, or underwriting rule followed or adopted by an insurer or rating organization may request the insurer or rating organization to review the manner in which the rate, plan, system, or rule has been applied with respect to insurance afforded him. The request may be made by his authorized representative and shall be written. If the request is not granted within 30 days after it is made, the requestor may treat it as rejected. Any person aggrieved by the action of an insurer or rating organization in refusing the review requested or in failing or refusing to grant all or part of the relief requested may file a written complaint and request for hearing with the Commissioner, specifying the grounds relied upon. If the Commissioner has information concerning a similar complaint, he may deny the hearing. If he believes that probable cause for the complaint does not exist or that the complaint is not made in good faith, he shall deny the hearing. Otherwise, and if he finds that the complaint charges a violation of this chapter and that the complainant would be aggrieved if the violation is proven, he shall proceed as provided in Code Section 33-9-27.
If after examination of an insurer, rating organization, advisory organization, or group, association, or other organization of insurers which engages in joint underwriting or joint reinsurance, or upon the basis of other information, or upon sufficient complaint as provided in Code Section 33-9-26 the Commissioner has good cause to believe that the insurer, organization, group, or association, or any rate, rating plan, or rating system made or used by any insurer or rating organization does not comply with the requirements and standards of this chapter applicable to it, he shall, unless he has good cause to believe such noncompliance is willful, give notice in writing to such insurer, organization, group, or association stating in the notice to the extent practicable in what manner such noncompliance is alleged to exist and specifying in the notice a reasonable time, not less than ten days after notice, in which the noncompliance may be corrected.
If the Commissioner has good cause to believe the noncompliance to be willful, or if within the period prescribed by the Commissioner in the notice required by Code Section 33-9-27 the insurer, organization, group, or association does not make the changes necessary to correct the noncompliance specified by the Commissioner or establish to the satisfaction of the Commissioner that the specified noncompliance does not exist, then the Commissioner may hold a public hearing in connection with the noncompliance, provided that within a reasonable period of time, which shall be not less than ten days before the date of the hearing, he shall mail written notice specifying the matters to be considered at the hearing to the insurer, organization, group, or association. If no notice has been given as provided in Code Section 33-9-27, the notice provided for in this Code section shall state to the extent practicable in what manner such noncompliance is alleged to exist. The hearing shall not include any additional subjects not specified in the notices required by Code Section 33-9-27 or this Code section.
The costs incurred by the Commissioner in conducting any hearing under this chapter may be assessed against the parties to the hearing in such proportion as the Commissioner may determine upon consideration of all relevant circumstances including, but not limited to, the nature of the hearing; whether the hearing was instigated by or for the benefit of a particular party or parties; whether there is a successful party on the merits of the proceeding; and the relative levels of participation by the parties. For purposes of this Code section, costs incurred shall include payments made by the Commissioner to obtain the services of independent contractors or outside experts and travel expenses of such contractors or experts. The Commissioner shall make the assessment of costs incurred as part of the final order or decision arising out of the proceeding; provided, however, that any order or decision shall include findings and conclusions of the Commissioner or his designee to support the assessment of costs.
If after a hearing pursuant to Code Section 33-9-28 the Commissioner finds:
(1) That any rate, rating plan, or rating system violates the applicable provisions of this chapter, he may issue an order to the insurer or rating organization which has been the subject of the hearing specifying in what respects the violation exists and stating when, within a reasonable period of time, the further use of the rate or rating system by the insurer or rating organization in contracts of insurance made thereafter shall be prohibited and may further order that the portion of premiums received from current policyholders as a result of the most recent rate increase at the time the notice of such hearing is issued shall be refunded to the policyholders;
(2) That an insurer, rating organization, advisory organization, or a group, association, or other organization of insurers which engages in joint underwriting or joint reinsurance is in violation of the provisions of this chapter applicable to it other than the provisions dealing with rates, rating plans, or rating system, he may issue an order to the insurer, organization, group, or association which has been the subject of the hearing specifying in what respects the violation exists and requiring compliance within a reasonable time thereafter;
(3) That the violation of this chapter applicable to it by any insurer or rating organization which has been the subject of the hearing was willful, he may suspend or revoke, in whole or in part, the certificate of authority of each insurer or the license of each rating organization with respect to the class of insurance which has been the subject matter of the hearing;
(4) That any rating organization has willfully engaged in any fraudulent or dishonest act or practices, he may suspend or revoke, in whole or in part, the license of the organization in addition to any other penalty provided in this chapter.
In addition to other penalties provided in this title, the Commissioner, by order pursuant to Code Section 33-9-29, may suspend or revoke, in whole or in part, the license of any rating organization or the certificate of authority of any insurer with respect to the class or classes of insurance specified in such order if such entity fails to comply within the time limited by such order or any extension thereof that the Commissioner may grant.
Except as otherwise provided in this chapter, all proceedings in connection with the denial, suspension, or revocation of a license or certificate of authority under this chapter shall be conducted in accordance with Chapter 2 of this title; and the Commissioner shall have all the powers granted to him in Chapter 2 of this title.
Nothing contained in this chapter shall be deemed to prohibit an insurer and its insured from contracting to use a rate on a specific risk or risks which is in excess of or lower than that otherwise applicable, provided that the contract and rate deviation by consenting parties have been filed with the Commissioner prior to the use of the rate in accordance with the procedures, conditions, and limitations as may be established by the Commissioner; and provided, further, that, if the resulting premium exceeds $1,000.00, a binder of coverage may be issued and the contract and rate deviation shall be filed within 20 days after the issuance of the binder. Such contract and rate deviation shall be subject to challenge by the Commissioner for a period of ten days after filing. If such challenge is upheld, the insurer shall be required to use its regular filed rates for the first 30 days of coverage in accordance with the requirements of applicable law. If there is no challenge or if a challenge is not upheld, the contract and rate deviation agreed upon may be used from and after the effective date of the binder.
Nothing in this chapter shall be construed to prohibit or regulate the payment of dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers. A plan for the payment of dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers shall not be deemed a rating plan or system.
No act done, action taken, or agreement made pursuant to the authority conferred by this chapter shall constitute a violation of or grounds for prosecution or civil proceedings under any other law of this state which does not specifically refer to insurance.
No person, insurer, or organization shall willfully withhold information from, or knowingly give false or misleading information to, the Commissioner or to any rating organization, advisory organization, insurer, or group, association, or other organization of insurers which will affect the rates, rating systems, or premiums for the classes of insurance to which this chapter is applicable.
(a) As used in this Code section, the term:
(1) “Gift certificate” shall have the same meaning as provided in Code Section 10-1-393.
(2) “Insurance” includes suretyship.
(3) “Policy” includes bond.
(4) “Store gift card” shall have the same meaning as provided in Code Section 10-1-393.
(b) No broker or agent shall knowingly charge, demand, or receive a premium for any policy of insurance except in accordance with this chapter.
(c) No insurer or employee of such insurer and no broker or agent shall pay, allow, or give, or offer to pay, allow, or give, directly or indirectly as an inducement to insurance or after insurance has been effected, any rebate, discount, abatement, credit, or reduction of the premium named in a policy of insurance, or any special favor or advantage in the dividends or other benefits to accrue on such policy of insurance, or any valuable consideration or inducement whatever, not specified in the policy of insurance, except to the extent provided for in an applicable filing. No insured named in a policy of insurance nor any employee of the insured shall knowingly receive or accept, directly or indirectly, any such rebate, discount, abatement, credit, or reduction of premium, or any special favor or advantage or valuable consideration or inducement.
(d) Nothing in this Code section shall be construed as prohibiting the payment of commissions or other compensation to duly licensed agents and brokers, nor as prohibiting any insurer from allowing or returning to its participating policyholders, members, or subscribers dividends, savings, or unabsorbed premium deposits.
(e) Nothing in this Code section shall be construed as prohibiting the payment for food or refreshments by an insurer or employee of such insurer or a broker or an agent for current or prospective clients during sales presentations and seminars, provided that no insurance or annuity applications or contracts are offered or accepted at such presentations or seminars.
(f) Nothing in this Code section shall be construed as prohibiting an insurer or employee of such insurer or a broker or an agent from advertising or conducting promotional programs by insurers or insurance producers whereby prizes, goods, wares, store gift cards, gift certificates, sporting event tickets, or merchandise, not exceeding $100.00 in value per customer in the aggregate in any one calendar year, are given to current or prospective customers; provided, however, that the giving of any item or items of value under this subsection shall not be contingent on the sale or renewal of a policy.
In the event any insurer shall in collusion with any other insurer conspire to fix, set, or adhere to insurance rates, except as expressly sanctioned by this chapter, the insurer shall be liable to any person damaged thereby for an amount equal to three times the amount of the damage together with the damaged party's attorney's fees.
(a) Any person, insurer, organization, group, or association who fails to comply with a final order of the Commissioner under this chapter shall be liable to the state in an amount not exceeding $50.00; but, if such failure is willful, the person, insurer, organization, group, or association shall be liable to the state in an amount not exceeding $5,000.00. The Commissioner shall collect the amount so payable and may bring an action in the name of the people of the State of Georgia to enforce collection. Such penalties may be in addition to any other penalties provided by law.
(b) Any person who willfully violates this chapter shall be guilty of a misdemeanor.
No insurer shall surcharge the premium or rate charged on a policy of motor vehicle insurance that provides coverage for the personal motor vehicles of any law enforcement officer, firefighter, or emergency medical technician in this state for any accident:
(1) That occurred while the law enforcement officer, firefighter, or emergency medical technician was lawfully engaged in the performance of official duties; and
(2) For which the law enforcement officer, firefighter, or emergency medical technician furnishes proof, in the form of copies of the accident report, 9-1-1 emergency dispatch log, or the employing agency's documents, to the insurer of the condition provided in paragraph (1) of this Code section.
No insurer shall surcharge the premium or rate charged on a policy of motor vehicle insurance or cancel such policy as a result of the insured person's involvement in a multivehicle accident when such person was not at fault in such accident.
(a) An insurer shall not assign an adverse experience modification factor which is applicable to the rate of a workers' compensation insurance policy issued to a particular business entity to the rate of a workers' compensation policy issued to another business entity maintaining a separate payroll for federal and state tax purposes and engaging in a distinctly different business enterprise for the sole reason that the majority interest in both business entities is held by the same person.
(b) For experience rating purposes, no workers' compensation insurer shall maintain any case reserve for any claim in excess of the amount established by final judgment, by settlement, or otherwise. All reductions in case reserves shall be made and reported to the appropriate rating organization within 90 days. Any further adjustments upward in the case reserve shall only be made due to additional paid claims or a case reserve established on a claim which was previously closed but reopened due to a claimant's request for additional benefits. This limitation on the maintenance of reserves shall be enforced through this Code section, as well as through Code Section 33-9-21, relating to rate filings, Code Section 33-9-23, relating to examination of insurers, and any other appropriate enforcement procedures.
(c)(1) The Commissioner shall cause an investigation to be made of each complaint filed by a licensee under this title or under Article 5 of Chapter 9 of Title 34 or a person acting for or on behalf of such licensee against an insurer or workers' compensation group self-insurance fund alleging that such insurer or fund is:
(A) Using an improper rate;
(B) Using an improper classification; or
(C) Using an improper experience modification in issuing a contract of workers' compensation insurance.
(2) If the Commissioner finds the complaint to be justified, in addition to all other appropriate action under this title, the Commissioner may assess the cost of such investigation against the insurer or workers' compensation group self-insurance fund and retain the proceeds therefrom for reimbursement of the cost of conducting such investigation.
(3) If the person making the complaint is a licensee under this title or under Article 5 of Chapter 9 of Title 34 or a person acting for or on behalf of such licensee and the Commissioner finds the complaint not to be justified, the Commissioner may, in addition to all other appropriate action under this title:
(A) Assess the reasonable verified cost of such investigation against such person and retain the proceeds therefrom for reimbursement of the cost of conducting such investigation; and
(B) If such person files six or more complaints the Commissioner finds not to be justified in any 12 month period, assess an administrative penalty not to exceed $2,000.00 for the sixth and each subsequent complaint found to be not justified.
(a) For each policy of workers' compensation insurance issued or renewed in the state on and after July 1, 1993, there shall be granted by the insurer not less than a 7 1/2 percent reduction in the premium for such policy if the insured has been certified by the State Board of Workers' Compensation as having a drug-free workplace program which complies with the requirements of Article 11 of Chapter 9 of Title 34 and has notified its insurer in writing of such certification.
(b) The premium discount provided by this Code section shall be applied to an insured's policy of workers' compensation insurance pro rata as of the date the insured receives certification by the State Board of Workers' Compensation and shall continue for as long as the insured maintains the certification as having a drug-free workplace; provided, however, that an insurer shall not be required to credit the actual amount of the premium discount to the account of the insured until the final premium audit under such policy. Certification by an insured shall be required for each year in which such premium discount is granted.
(c) The workers' compensation insurance policy of an insured shall be subject to an additional premium for the purposes of reimbursement of a previously granted premium discount and to cancellation in accordance with the provisions of the policy if it is determined by the State Board of Workers' Compensation that such insured misrepresented the compliance of its drug-free workplace program with the provisions of Article 11 of Chapter 9 of Title 34.
(d) Each insurer shall make an annual report to the rating and statistical organization designated by the Commissioner pursuant to this chapter illustrating the total dollar amount of drug-free workplace premium credit. Standard earned premium figures reported pursuant to this subsection on the aggregate calls for experience must reflect the effects of such credits. The net standard premium will then be the basis of any premium adjustment. The drug-free workplace credits must be reported under a unique classification code or unit statistical reports submitted to the rating and statistical organization designated by the Commissioner pursuant to this chapter.
(e) The Commissioner shall conduct a study to determine the impact of this chapter on reducing workers' compensation losses and on the impact of the premium credit provided pursuant to this Code section in encouraging employers to implement and maintain the program for which the credit is provided.
(f) The Commissioner shall be authorized to promulgate rules and regulations necessary for the implementation and enforcement of this Code section.
(a) For each policy of workers' compensation insurance issued or renewed in the state on and after July 1, 2016, there may be granted by the insurer up to a 5 percent reduction in the premium for such policy if the insured has been certified by the State Board of Education to the State Board of Workers' Compensation as a work based learning employer pursuant to Article 12 of Chapter 9 of Title 34 and has notified its insurer in writing of such certification.
(b) If granted, the premium discount provided by this Code section shall be applied to an insured's policy of workers' compensation insurance pro rata as of the date the insured receives such certification and shall continue for as long as the insured maintains the certification; provided, however, that an insurer shall not be required to credit the actual amount of the premium discount to the account of the insured until the final premium audit under such policy. Certification of an insured shall be required for each year in which a premium discount is granted.
(c) If it is determined that an insured misrepresented its qualifications for certification pursuant to Article 12 of Chapter 9 of Title 34, the workers' compensation insurance policy of such insured may be subject to an additional premium for the purposes of reimbursement of a previously granted premium discount and to cancellation in accordance with the provisions of the policy.
(d) Each insurer shall make an annual report, in accordance with guidelines established by the Commissioner, to the rating and statistical organization designated by the Commissioner illustrating the total dollar amount of the premium discounts applied pursuant to this Code section.
(e) The Commissioner shall conduct a study to determine the impact of the premium discounts provided pursuant to this Code section in encouraging employers to provide work based learning opportunities for students age 16 or older.
(f) The Commissioner shall be authorized to promulgate rules and regulations necessary for the implementation and enforcement of this Code section.
(a) For each personal or family-type policy of private passenger motor vehicle insurance issued or issued for delivery in this state, there shall be offered by the insurer a reduction of not less than 10 percent in premiums for motor vehicle liability, first-party medical, and collision coverages to the policyholder if all named drivers, as listed or who should be listed on the policy application or provided in information subsequent to such application, of each motor vehicle covered by such policy satisfy the requirements of subsection (b) or subsection (c), as applicable, of this Code section.
(b) Reductions in premiums shall be available if all named drivers who are 25 years of age or older:
(1) Have committed no traffic offenses for the prior three years or since the date of licensure, whichever is shorter;
(2) Have had no claims based on fault against an insurer for the prior three years; and
(3) Complete one of the following types of driving courses:
(A) A defensive driving course of not less than six hours from a driver improvement clinic or commercial or noncommercial driving school approved by and under the jurisdiction of the Department of Driver Services;
(B) An emergency vehicles operations course at the Georgia Public Safety Training Center;
(C) A defensive driving course of not less than six hours from a driver improvement program which is administered by a nonprofit organization such as the AARP, the American Automobile Association, the National Safety Council, or a comparable organization and which meets the rules and regulations of the Department of Driver Services pursuant to subsection (g) of this Code section; or
(D) A defensive driving course of not less than six hours which is offered by an employer to its employees and their immediate families and which meets the rules and regulations of the Department of Driver Services.
(c) Reductions in premiums shall be available if all named drivers who are under 25 years of age:
(1) Have committed no traffic offenses for the prior three years or since the date of licensure, whichever is shorter;
(2) Have had no claims based on fault against an insurer for the prior three years; and
(3) Complete a preparatory course offered to new drivers of not less than 30 hours of classroom training and not less than six hours of practical training by a driver's training school approved by and under the jurisdiction of the Department of Driver Services or by an accredited secondary school, junior college, or college.
(d) Upon completion of one of the defensive driving courses specified in paragraph (3) of subsection (b) or preparatory courses offered to new drivers specified in paragraph (3) of subsection (c), as applicable, of this Code section by each named driver, eligibility for reductions in premiums for such policy shall continue for a period of three years, provided any named driver under such policy does not commit a traffic offense or have a claim against the policy based on any such driver's fault.
(e) The Department of Driver Services shall assure through the supervision of driver improvement clinics, emergency vehicles operations courses, driver improvement programs administered by nonprofit organizations, and commercial or noncommercial driving schools approved by the Department of Driver Services that defensive driving courses shall be available and accessible wherever practicable as determined by the department to licensed drivers throughout the state.
(f) Each insurer providing premium discounts under this Code section shall provide, upon the request of the Commissioner, information regarding the amount of such discounts in a form acceptable to the Commissioner.
(g) The power of supervision granted to the Department of Driver Services over driver improvement programs administered by nonprofit organizations under this Code section shall be limited to the establishment of minimum standards and requirements relative to the content of specific courses offered by such programs and relative to investigation and resolution of any complaints directed towards the content or operation of any course by a person enrolled in such course. The Department of Driver Services may adopt rules and regulations necessary to carry out the provisions of this subsection. The Department of Driver Services shall not require a nonprofit organization to obtain a license or permit or to pay a fee in order to administer a driver improvement program in the state. The Department of Driver Services shall not require a commercial driving school licensed by such department to obtain an additional license to teach a defensive driving course, as described in subparagraph (b)(3)(A) or preparatory course offered to new drivers as described in paragraph (3) of subsection (c) of this Code section, at any location in this state.
(h) Nothing in this Code section shall prevent an insurer from offering the reduction in premium specified in subsection (a) of this Code section to a driver who does not meet all of the requirements of subsection (b) or subsection (c), as applicable, of this Code section.
(a) For each personal or family-type policy of private passenger motor vehicle insurance issued, delivered, issued for delivery, or renewed, there shall be offered by the insurer a reduction in the premium for motor vehicle liability, first-party medical, and collision coverage for each named driver under 25 years of age, as listed on the policy application or provided in information subsequent to such application, of each motor vehicle covered by such policy, if that driver:
(1) Is unmarried;
(2) Is enrolled as a full-time student in:
(A) High school;
(B) Academic courses in a college or university; or
(C) Vocational-technical school;
(3) Is an honor student because the scholastic records for the immediately preceding quarter, semester, or comparable segment show that such person:
(A) Ranks scholastically in the upper 20 percent of the class;
(B) Has a “B” average or better;
(C) Has a 3.0 average or better; or
(D) Is on the “Dean's List” or “Honor Roll”; and
(4) Is a driver whose use of the automobile is considered by the insurer in determining the applicable classification.
(b) Proof of meeting the requirements for the discount provided by this Code section shall be provided annually to the insurer by the insured student or policyholder upon such forms as the Commissioner shall prescribe. The premium reduction required by this Code section shall be approved by the Commissioner and reflected in the insurer's automobile rating plan.
(c) An insurer shall not be required to offer the premium reduction provided in subsection (a) of this Code section to a driver who, at any time within a period of three years prior to the beginning of the policy year during which that reduction is otherwise required, has:
(1) Been involved in any motor vehicle accident in which that person has been determined to have been at fault;
(2) Been finally convicted of, pleaded nolo contendere to, or been found to have committed a delinquent act constituting any of the following offenses:
(A) Any serious traffic offense described in Article 15 of Chapter 6 of Title 40;
(B) Any traffic offense for which three or more points may be assessed pursuant to Code Section 40-5-57; or
(C) Any felony or any offense prohibited pursuant to Chapter 13 of Title 16, relating to dangerous drugs, marijuana, and controlled substances; or
(3) Had that person's driver's license suspended for refusal to submit to chemical tests pursuant to Code Section 40-5-67.1 and that suspension has not been reversed, if appealed from.
It is specifically intended that the discounts provided in Code Sections 33-9-42 and 33-9-43 shall be provided by the insurer to any person who qualifies for such discounts.
In any determination of the financial condition of an insurer, there shall be allowed as assets only such assets as are owned by the insurer and which consist of:
(1) Cash in the possession of the insurer or in transit under its control, including the true balance of any deposit in a solvent bank, a trust company, a savings and loan association, or a building and loan association;
(2) Investments, securities, properties, and loans acquired or held in accordance with this title and in connection therewith the following items:
(A) Interest due or accrued on any bond or evidence of indebtedness which is not in default and which is not valued on a basis including accrued interest;
(B) Declared and unpaid dividends on stock and shares, unless such amount has otherwise been allowed as an asset;
(C) Interest due or accrued upon a collateral loan in an amount not to exceed one year's interest thereon;
(D) Interest due or accrued on deposits in solvent banks, trust companies, savings and loan associations, or building and loan associations and interest due or accrued on other assets, if such interest is in the judgment of the Commissioner a collectable asset;
(E) Interest due or accrued on a mortgage loan, in an amount not exceeding in any event the amount, if any, of the excess of the value of the property less delinquent taxes on the property over the unpaid principal; but in no event shall interest accrued for a period in excess of 18 months be allowed as an asset;
(F) Rent due or accrued on real property if such rent is not in arrears for more than three months and rent more than three months in arrears if the payment of such rent be adequately secured by property held in the name of the tenant and conveyed to the insurer as collateral; or
(G) The unaccrued portion of taxes paid prior to the due date on real property;
(3) Electronic and mechanical machines and software constituting a data processing, record-keeping, or accounting system if the cost of such system does not exceed 10 percent of admitted assets or $7.5 million, whichever is less;
(4) Good will up to 10 percent of the acquiring insurer's capital and surplus shown on its statutory balance sheet for its most recently filed statement with the Commissioner adjusted to exclude any net positive good will, electronic data processing equipment, operating system software, and net deferred tax asset;
(5) Premium notes, policy loans, and other policy assets and liens on policies and certificates of life insurance and annuity contracts and accrued interest thereon, in an amount not exceeding the legal reserve and other policy liabilities carried on each individual policy;
(6) The net amount of uncollected and deferred premiums and annuity considerations in the case of a life insurer;
(7) Premiums in the course of collection, other than for life insurance and annuity considerations, not more than three months past due, less commissions payable thereon. The foregoing limitation shall not apply to premiums payable directly or indirectly by the United States government or by any state or by any of their instrumentalities;
(8) Installment premiums other than life insurance premiums to the extent of the unearned premium reserves carried thereon;
(9) Notes and similar written obligations not past due taken for premiums other than life insurance premiums on policies permitted to be issued on such basis to the extent of the unearned premium reserves carried thereon;
(10) The full amount of reinsurance recoverable by a ceding insurer from a solvent reinsurer and which reinsurance is authorized under Code Section 33-7-14;
(11) Amounts receivable by an assuming insurer representing funds withheld by a solvent ceding insurer under a reinsurance treaty;
(12) Deposit or equities recoverable from underwriting associations, syndicates, and reinsurance funds or from any suspended banking institution to the extent deemed by the Commissioner available for the payment of losses and claims and at values to be determined by the Commissioner;
(13) All assets, whether or not consistent with this Code section, as may be allowed pursuant to the annual statement form approved by the Commissioner for the kinds of insurance to be reported upon therein; and
(14) Other assets, not inconsistent with this Code section, deemed by the Commissioner to be available for the payment of losses and claims at values to be determined by the Commissioner.
In addition to assets impliedly excluded by Code Section 33-10-1, the following expressly shall not be allowed as assets in any determination of the financial condition of an insurer:
(1) Trade names and other similar intangible assets;
(2) Advances to officers other than policy loans whether secured or not and advances other than policy loans to employees, agents, and other persons on personal security only;
(3) Stock of such insurer, owned by such insurer, or any equity in such stock or loans secured by such stock or any proportionate interest in such stock acquired or held through the ownership by such insurer of a controlling interest in another firm, corporation, or business unit;
(4) Furniture, fixtures, furnishings, safes, vehicles, libraries, stationery, literature, and supplies other than data processing and accounting system authorized under paragraph (3) of Code Section 33-10-1, except, in the case of title insurers, such materials and plants as the insurer is expressly authorized to invest in under Code Section 33-11-27 and except, in the case of any insurer, such personal property as the insurer is permitted to hold pursuant to Chapter 11 of this title or which is reasonably necessary for the maintenance and operation of real estate lawfully acquired and held by the insurer other than real estate used by such insurer for home office, branch office, or similar purposes; and
(5) The amount, if any, by which the aggregate book value of investments as carried in the ledger assets of the insurer exceeds the aggregate value of the investments as determined under this chapter.
Assets may be allowable as deductions from corresponding liabilities, and liabilities may be charged as deductions from assets, in accordance with the form of annual statement applicable to such insurer as directed by the Commissioner or otherwise in his or her discretion.
All assets not allowed and all other assets of doubtful value or character included as assets in any statement by an insurer to the Commissioner or in any examiner's report to said Commissioner shall also be reported, to the extent of the value disallowed, as deductions from the gross assets of such insurer.
In any determination of the financial condition of an insurer, capital stock and liabilities to be charged against its assets shall include:
(1) The amount of its capital stock outstanding, if any;
(2) The amount, estimated consistent with this title, necessary to pay all of its unpaid losses and claims incurred on or prior to the date of statement, whether reported or unreported, together with the expenses of adjustment or settlement thereof;
(3) With reference to life and disability insurance and annuity contracts:
(A) The amount of reserves on life insurance policies and annuity contracts in force, valued according to the tables of mortality, rates of interest, and methods adopted pursuant to this title which are applicable thereto;
(B) Reserves for disability benefits for both active and disabled lives;
(C) Reserves for accidental death benefits; and
(D) Any additional reserves which may be required by the Commissioner consistent with practice formulated or approved by him on account of such insurance;
(4) With reference to insurance other than that specified in paragraph (3) of this Code section and other than title insurance, the amount of reserves equal to the unearned portions of the gross premiums charged on policies in force, computed in accordance with this chapter; and
(5) Taxes, expenses, and other obligations due or accrued at the date of the statement.
(a) With reference to insurance against loss or damage to property, except as provided in Code Section 33-10-7, and with reference to all general casualty insurance and surety insurance, every insurer shall maintain an unearned premium reserve on all policies in force.
(b) The Commissioner may require that such reserves shall be equal to the unearned portions of the gross premiums in force after deducting reinsurance in solvent insurers as computed on each respective risk from the policy's date of issue. If the Commissioner does not so require, the portions of the gross premium in force, less reinsurance in solvent insurers to be held as a premium reserve, shall be computed according to the following table:
| | Term for Which Policy Was Written | | Reserve for Unearned Premium | | --- | --- | --- | --- | | | 1 year or less․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․1/2 | | | | 2 years․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․First year 3/4 | | | | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․Second year 1/4 | | | | 3 years․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․First year 5/6 | | | | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․Second year 1/2 | | | | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․Third year 1/6 | | | | 4 years․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․First year 7/8 | | | | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․Second year 5/8 | | | | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․Third year 3/8 | | | | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․Fourth year 1/8 | | | | 5 years․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․First year 9/10 | | | | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․Second year 7/10 | | | | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․Third year 1/2 | | | | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․Fourth year 3/10 | | | | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․Fifth year 1/10 | | | | Over 5 years․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․Pro rata | |
(c) Unearned premium reserves on policies written for an intermediate period shall be calculated on a monthly pro rata basis.
(d) In lieu of computation according to the foregoing table, all of such reserves may be computed, at the option of the insurer, on a monthly or more frequent pro rata basis.
(e) After adopting a method for computing such reserve, a domestic insurer shall not change methods without approval of the Commissioner, and a foreign or alien insurer shall not change methods without approval of the insurance supervisory official of the state of its domicile.
(f) This Code section does not apply to title insurance.
With reference to marine insurance, premiums on trip risks not terminated shall be deemed unearned, and the Commissioner may require the insurer to carry a reserve thereon equal to 100 percent on trip risks written during the month ended as of the date of statement.
For all accident and sickness insurance policies the insurer shall maintain an active life reserve which shall place a sound value on its liabilities under such policies and which shall not be less in the aggregate than the reserve according to such method of calculation as the Commissioner may approve.
In addition to an adequate reserve as to outstanding losses as required under Code Section 33-10-5, a title insurer shall maintain a guaranty fund or unearned premium reserve of not less than an amount computed as follows:
(1) Ten percent of the total amount of the risk premiums written in the calendar year for title insurance contracts shall be assigned originally to the reserve; and
(2) During each of the 20 years next following the year in which the title insurance contract was issued, the reserve applicable to the contract may be reduced by 5 percent of the original amount of the reserve.
In lieu of the unearned premium reserve required on surety insurance under subsection (a) of Code Section 33-10-6, the Commissioner may require any surety insurer or limited surety insurer to set up and maintain a reserve on all bail bonds or other single premium bonds without definite expiration data, furnished in judicial proceedings, equal to 25 percent of the total consideration charged for any bonds as are outstanding as of the date of any then current financial statement of the insurer.
If the loss experience shows that an insurer's loss reserves, however estimated, are inadequate, the Commissioner shall require the insurer to maintain loss reserves of increased amounts as are needed to make them adequate. This Code section does not apply to life insurance.
(a) This Code section shall be known and may be cited as the “Standard Valuation Law.”
(b) The following definitions shall apply on or after the operative date of the valuation manual. For the purposes of this Code section, the term:
(1) “Accident and health insurance” means contracts that incorporate morbidity risk and provide protection against economic loss resulting from accident, sickness, or medical conditions and as may be specified in the valuation manual.
(2) “Appointed actuary” means a qualified actuary who is appointed in accordance with the valuation manual to prepare the actuarial opinion required in paragraph (2) of subsection (d) of this Code section.
(3) “Company” means an entity, which:
(A) Has written, issued, or reinsured life insurance contracts, accident and health insurance contracts, or deposit-type contracts in this state and has at least one such policy in force or on claim; or
(B) Has written, issued, or reinsured life insurance contracts, accident and health insurance contracts, or deposit-type contracts in any state and is required to hold a certificate of authority to write life insurance, accident and health insurance, or deposit-type contracts in this state.
(4) “Deposit-type contract” means contracts that do not incorporate mortality or morbidity risks and as may be specified in the valuation manual.
(5) “Life insurance” means contracts that incorporate mortality risk, including annuity and pure endowment contracts, and as may be specified in the valuation manual.
(6) “NAIC” means the National Association of Insurance Commissioners.
(7) “Policyholder behavior” means any action a policyholder, contract holder, or any other person with the right to elect options, such as a certificate holder, may take under a policy or contract subject to this Code section, including, but not limited to, lapse, withdrawal, transfer, deposit, premium payment, loan, annuitization, or benefit elections prescribed by the policy or contract but excluding events of mortality or morbidity that result in benefits prescribed in their essential aspects by the terms of the policy or contract.
(8) “Principle-based valuation” means a reserve valuation that uses one or more methods or one or more assumptions determined by the insurer and is required to comply with subsection (p) of this Code section as specified in the valuation manual.
(9) “Qualified actuary” means an individual who is qualified to sign the applicable statement of actuarial opinion in accordance with the American Academy of Actuaries qualification standards for actuaries signing such statements and who meets the requirements specified in the valuation manual.
(10) “Tail risk” means a risk that occurs either where the frequency of low probability events is higher than expected under a normal probability distribution or where there are observed events of very significant size or magnitude.
(11) “Valuation manual” means the manual of valuation instructions adopted by the NAIC as specified in this Code section or as subsequently amended.
(c)(1)(A) The Commissioner shall annually value, or cause to be valued, the reserve liabilities (hereinafter called reserves) for all outstanding life insurance policies and annuity and pure endowment contracts of every life insurance company doing business in this state issued on or after January 1, 1966, and prior to the operative date of the valuation manual. In calculating reserves, the Commissioner may use group methods and approximate averages for fractions of a year or otherwise. In lieu of the valuation of the reserves required of a foreign or alien company, the Commissioner may accept a valuation made, or caused to be made, by the insurance supervisory official of any state or other jurisdiction when the valuation complies with the minimum standard provided in this Code section.
(B) The provisions set forth in subsections (e) through (n) of this Code section shall apply to all policies and contracts, as appropriate, subject to this Code section issued on or after January 1, 1966, and prior to the operative date of the valuation manual, and the provisions set forth in subsections (o) and (p) of this Code section shall not apply to any such policies and contracts.
(C) The minimum standard for the valuation of such policies and contracts issued prior to January 1, 1966, shall be as required under the laws in effect immediately prior to January 1, 1966, or the minimum provided in subsection (e) of this Code section if less.
(2)(A) The Commissioner shall annually value, or cause to be valued, the reserve liabilities (hereinafter called reserves) for all outstanding life insurance contracts, annuity and pure endowment contracts, accident and health contracts, and deposit-type contracts of every company issued on or after the operative date of the valuation manual. In lieu of the valuation of the reserves required of a foreign or alien company, the Commissioner may accept a valuation made, or caused to be made, by the insurance supervisory official of any state or other jurisdiction when the valuation complies with the minimum standard provided in this Code section.
(B) The provisions set forth in subsections (o) and (p) of this Code section shall apply to all policies and contracts issued on or after the operative date of the valuation manual.
(d)(1)(A) Prior to the operative date of the valuation manual, every life insurance company doing business in this state shall annually submit the opinion of a qualified actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified by the Commissioner by regulation are computed appropriately, are based on assumptions that satisfy contractual provisions, are consistent with prior reported amounts, and comply with applicable laws of this state. The Commissioner shall define by regulation the specifics of this opinion and add any other items deemed to be necessary to its scope.
(B)(i) Every life insurance company, except as exempted by regulation, shall also annually include in the opinion required by subparagraph (A) of this paragraph an opinion of the same qualified actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified by the Commissioner by regulation, when considered in light of the assets held by the company with respect to the reserves and related actuarial items, including but not limited to the investment earnings on the assets and the considerations anticipated to be received and retained under the policies and contracts, make adequate provision for the company's obligations under the policies and contracts, including but not limited to the benefits under and expenses associated with the policies and contracts.
(ii) The Commissioner may provide by regulation for a transition period for establishing any higher reserves that the qualified actuary may deem necessary in order to render the opinion required by this subsection.
(C) Each opinion required by subparagraph (B) of this paragraph shall be governed by the following provisions:
(i) A memorandum, in form and substance acceptable to the Commissioner as specified by regulation, shall be prepared to support each actuarial opinion; and
(ii) If the insurance company fails to provide a supporting memorandum at the request of the Commissioner within a period specified by regulation or the Commissioner determines that the supporting memorandum provided by the insurance company fails to meet the standards prescribed by the regulations or is otherwise unacceptable to the Commissioner, the Commissioner may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare the supporting memorandum required by the Commissioner.
(D) Every opinion required by this subsection shall be governed by the following provisions:
(i) The opinion shall be submitted with the annual statement reflecting the valuation of such reserve liabilities for each year ending on or after December 31, 1994;
(ii) The opinion shall apply to all business in force, including individual and group health insurance plans, in form and substance acceptable to the Commissioner as specified by regulation;
(iii) The opinion shall be based on standards adopted from time to time by the Actuarial Standards Board and on such additional standards as the Commissioner may by regulation prescribe;
(iv) In the case of an opinion required to be submitted by a foreign or alien company, the Commissioner may accept the opinion filed by that company with the insurance supervisory official of another state if the Commissioner determines that the opinion reasonably meets the requirements applicable to a company domiciled in this state;
(v) For the purposes of this subsection, the term “qualified actuary” means a member in good standing of the American Academy of Actuaries who meets the requirements set forth in the regulation;
(vi) Except in cases of fraud or willful misconduct, the qualified actuary shall not be liable for damages to any person, other than the insurance company and the Commissioner, for any act, error, omission, decision, or conduct with respect to the actuary's opinion;
(vii) Disciplinary action by the Commissioner against the company or the qualified actuary shall be defined in regulations by the Commissioner;
(viii) Except as provided in divisions (xii), (xiii), and (xiv) of this subparagraph, documents, materials, or other information in the possession or control of the department that are a memorandum in support of the opinion, and any other material provided by the company to the Commissioner in connection with the memorandum, shall be confidential by law and privileged, shall not be subject to Article 4 of Chapter 18 of Title 50, relating to open records, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. However, the Commissioner is authorized to use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the Commissioner's official duties;
(ix) Neither the Commissioner nor any person who received documents, materials, or other information while acting under the authority of the Commissioner shall be permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject to division (viii) of this subparagraph;
(x) In order to assist in the performance of the Commissioner's duties, the Commissioner:
(I) May share documents, materials, or other information, including the confidential and privileged documents, materials, or information subject to division (viii) of this subparagraph, with other state, federal, and international regulatory agencies, with the National Association of Insurance Commissioners and its affiliates and subsidiaries, and with state, federal, and international law enforcement authorities, provided that the recipient agrees to maintain the confidentiality and privileged status of the document, materials, or other information;
(II) May receive documents, materials, or information, including otherwise confidential and privileged documents, materials, or information, from the National Association of Insurance Commissioners and its affiliates and subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information; and
(III) May enter into agreements governing sharing and use of information consistent with divisions (viii) through (x) of this subparagraph;
(xi) No waiver of any applicable privilege or claim of confidentiality in the documents, materials, or information shall occur as a result of disclosure to the Commissioner under this subsection or as a result of sharing as authorized in division (x) of this subparagraph;
(xii) A memorandum in support of the opinion, and any other material provided by the company to the Commissioner in connection with the memorandum, may be subject to subpoena for the purpose of defending an action seeking damages from the actuary submitting the memorandum by reason of an action required by this subsection or by regulations promulgated hereunder;
(xiii) The memorandum or other material may otherwise be released by the Commissioner with the written consent of the company or to the American Academy of Actuaries upon request stating that the memorandum or other material is required for the purpose of professional disciplinary proceedings and setting forth procedures satisfactory to the Commissioner for preserving the confidentiality of the memorandum or other material; and
(xiv) Once any portion of the confidential memorandum is cited by the company in its marketing or is cited before a governmental agency other than a state insurance department or is released by the company to the news media, all portions of the confidential memorandum shall be no longer confidential.
(2)(A) On and after the operative date of the valuation manual, every company with outstanding life insurance contracts, accident and health insurance contracts, or deposit-type contracts in this state and subject to regulation by the Commissioner shall annually submit the opinion of the appointed actuary as to whether the reserves and related actuarial items held in support of the policies and contracts are computed appropriately, are based on assumptions that satisfy contractual provisions, are consistent with prior reported amounts, and comply with applicable laws of this state. The valuation manual will prescribe the specifics of this opinion, including any items deemed to be necessary to its scope.
(B) Every company with outstanding life insurance contracts, accident and health insurance contracts, or deposit-type contracts in this state and subject to regulation by the Commissioner, except as exempted in the valuation manual, shall also annually include in the opinion required by subparagraph (A) of this paragraph an opinion of the same appointed actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified in the valuation manual, when considered in light of the assets held by the company with respect to the reserves and related actuarial items, including but not limited to the investment earnings on the assets and the considerations anticipated to be received and retained under the policies and contracts, make adequate provision for the company's obligations under the policies and contracts, including but not limited to the benefits under and expenses associated with the policies and contracts.
(C) Each opinion required by subparagraph (B) of this paragraph shall be governed by the following provisions:
(i) A memorandum, in form and substance as specified in the valuation manual, and acceptable to the Commissioner, shall be prepared to support each actuarial opinion; and
(ii) If the insurance company fails to provide a supporting memorandum at the request of the Commissioner within a period specified in the valuation manual or the Commissioner determines that the supporting memorandum provided by the insurance company fails to meet the standards prescribed by the valuation manual or is otherwise unacceptable to the Commissioner, the Commissioner may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare the supporting memorandum required by the Commissioner.
(D) Every opinion required by this paragraph shall be governed by the following provisions:
(i) The opinion shall be in form and substance as specified in the valuation manual and acceptable to the Commissioner;
(ii) The opinion shall be submitted with the annual statement reflecting the valuation of such reserve liabilities for each year ending on or after the operative date of the valuation manual;
(iii) The opinion shall apply to all policies and contracts subject to subparagraph (B) of this paragraph, plus other actuarial liabilities as may be specified in the valuation manual;
(iv) The opinion shall be based on standards adopted from time to time by the Actuarial Standards Board or its successor, and on such additional standards as may be prescribed in the valuation manual;
(v) In the case of an opinion required to be submitted by a foreign or alien company, the Commissioner may accept the opinion filed by that company with the insurance supervisory official of another state if the Commissioner determines that the opinion reasonably meets the requirements applicable to a company domiciled in this state;
(vi) Except in cases of fraud or willful misconduct, the appointed actuary shall not be liable for damages to any person, other than the insurance company and the Commissioner, for any act, error, omission, decision, or conduct with respect to the appointed actuary's opinion; and
(vii) Disciplinary action by the Commissioner against the company or the appointed actuary shall be defined in regulations by the Commissioner.
(e)(1) Except as otherwise provided in paragraph (2) of this subsection and subsection (f) of this Code section, the minimum standards for the valuation of all life insurance policies and annuity or pure endowment contracts issued on or after January 1, 1966, shall be the Commissioner's reserve valuation methods defined in subsections (g), (h), and (i) of this Code section and the following interest rates and tables:
(A) Three and one-half percent interest or, in the case of policies and contracts other than annuity and pure endowment contracts issued on or after July 1, 1973, 4 percent interest for such policies issued prior to July 1, 1979, 5 1/2 percent interest for single premium life insurance policies, and 4 1/2 percent interest for all other such policies issued on or after July 1, 1979;
(B) For all ordinary policies of life insurance issued on the standard basis, excluding any disability and accidental death benefits in such policies, the Commissioners 1958 Standard Ordinary Mortality Tables for such policies issued prior to the operative date of subsection (e) of Code Section 33-25-4 as amended, except that for any category of such policies issued on female risk modified net premiums and present values, referred to in subsection (g) of this Code section, may be calculated at the insurer's option and with the Commissioner's approval according to an age not more than six years younger than the actual age of the insured; and for such policies issued on or after the operative date of subsection (e) of Code Section 33-25-4, (i) the Commissioners 1980 Standard Ordinary Mortality Table, or (ii) at the election of the insurer for any one or more specified plans of life insurance, the Commissioners 1980 Standard Ordinary Mortality Table with Ten-Year Select Mortality Factors, or (iii) any ordinary mortality table, adopted after 1980 by the National Association of Insurance Commissioners, that is approved by regulation promulgated by the Commissioner for use in determining the minimum standard of valuation for such policies;
(C) For all industrial life insurance policies issued on the standard basis, excluding any disability and accidental death benefits in such policies, the 1941 Standard Industrial Mortality Table; for such policies issued prior to the date on which the Commissioners 1961 Standard Industrial Mortality Table becomes applicable in accordance with subsection (d) of Code Section 33-25-4 and for such policies issued on or after such date the Commissioners 1961 Standard Industrial Mortality Table or any industrial mortality table, adopted after 1980 by the National Association of Insurance Commissioners, that is approved by regulation promulgated by the Commissioner for use in determining the minimum standard of valuation for such policies;
(D) For individual annuity and pure endowment contracts, excluding any disability and accidental death benefits in such policies, the 1937 Standard Annuity Mortality Table or, at the option of the insurer, the Annuity Mortality Table for 1949, ultimate, or any modification of either of these tables approved by the Commissioner;
(E) For group annuity and pure endowment contracts, excluding any disability and accidental death benefits in such policies, the Group Annuity Mortality Table for 1951, any modification of such table approved by the Commissioner or, at the option of the insurer, any of the tables or modifications of tables specified for individual annuity and pure endowment contracts;
(F) For total and permanent disability benefits in or supplementary to ordinary policies or contracts, for policies or contracts issued on or after January 1, 1966, the tables of Period 2 disablement rates and the 1930 to 1950 termination rates of the 1952 Disability Study of the Society of Actuaries, with due regard to the type of benefit or any tables of disablement rates and termination rates, adopted after 1980 by the National Association of Insurance Commissioners, that are approved by regulation promulgated by the Commissioner for use in determining the minimum standard of valuation for such policies; for policies or contracts issued prior to January 1, 1966, either such tables or, at the option of the insurer, the Class (3) Disability Table (1926). Any such table shall, for active lives, be combined with a mortality table permitted for calculating the reserves for life insurance policies;
(G) For accidental death benefits in or supplementary to policies, for policies issued on or after January 1, 1966, the 1959 Accidental Death Benefits Table or any accidental death benefits table, adopted after 1980 by the National Association of Insurance Commissioners, that is approved by regulation promulgated by the Commissioner for use in determining the minimum standard of valuation for such policies; for policies issued prior to January 1, 1966, either such table or, at the option of the insurer, the Inter-Company Double Indemnity Mortality Table. Either table shall be combined with a mortality table permitted for calculating the reserves for life insurance policies; and
(H) For group life insurance, life insurance issued on the substandard basis, and other special benefits such tables or appropriate modifications of such tables as may be approved by the Commissioner as being sufficient with relation to the benefits provided by those policies.
(2) Except as provided in paragraphs (3) through (7) of this subsection, the minimum standard for the valuation of all individual annuity and pure endowment contracts issued on or after the operative date of this paragraph, as defined in this paragraph, and for all annuities and pure endowments purchased on or after the operative date under group annuity and pure endowment contracts, shall be the Commissioner's reserve valuation methods defined in subsections (g) and (h) of this Code section and the following tables and interest rates:
(A) For individual annuity and pure endowment contracts issued prior to July 1, 1979, excluding any disability and accidental death benefits in such contracts, the 1971 Individual Annuity Mortality Table or any modification of this table approved by the Commissioner and 6 percent interest for single premium immediate annuity contracts and 4 percent interest for all other individual annuity and pure endowment contracts;
(B) For individual single premium immediate annuity contracts issued on or after July 1, 1979, excluding any disability and accidental death benefits in such contracts, the 1971 Individual Annuity Mortality Table or any individual annuity mortality table, adopted after 1980 by the National Association of Insurance Commissioners that is approved by regulation promulgated by the Commissioner for use in determining the minimum standard of valuation for such contracts or any modification of these tables approved by the Commissioner and 7 1/2 percent interest;
(C) For individual annuity and pure endowment contracts issued on or after July 1, 1979, other than single premium immediate annuity contracts, excluding any disability and accidental death benefits in such contracts, the 1971 Individual Annuity Mortality Table or any individual annuity mortality table, adopted after 1980 by the National Association of Insurance Commissioners, that is approved by regulation promulgated by the Commissioner for use in determining the minimum standard of valuation for such contracts or any modification of these tables approved by the Commissioner and 5 1/2 percent interest for single premium deferred annuity and pure endowment contracts and 4 1/2 percent interest for all other such individual annuity and pure endowment contracts;
(D) For all annuities and pure endowments purchased prior to July 1, 1979, under group annuity and pure endowment contracts, excluding any disability and accidental death benefits purchased under such contracts, the 1971 Group Annuity Mortality Table or any modification of this table approved by the Commissioner and 6 percent interest; and
(E) For all annuities and pure endowments purchased on or after July 1, 1979, under group annuity and pure endowment contracts, excluding any disability and accidental death benefits purchased under such contracts, the 1971 Group Annuity Mortality Table or any group annuity mortality table, adopted after 1980 by the National Association of Insurance Commissioners, that is approved by regulation promulgated by the Commissioner for use in determining the minimum standard of valuation for such annuities and pure endowments or any modification of these tables approved by the Commissioner and 7 1/2 percent interest.
After July 1, 1973, any insurer may file with the Commissioner a written notice of its election to comply with this paragraph after a specified date before January 1, 1979, which shall be the operative date of this paragraph for such insurer, provided that if an insurer makes no such election, the operative date of this paragraph for such insurer shall be January 1, 1979.
(f)(1) The interest rates used in determining the minimum standard for the valuation of:
(A) All life insurance policies issued in a particular calendar year, on or after the operative date of subsection (e) of Code Section 33-25-4;
(B) All individual annuity and pure endowment contracts issued in a particular calendar year on or after January 1, 1994;
(C) All annuities and pure endowments purchased in a particular calendar year on or after January 1, 1994, under group annuity and pure endowment contracts; and
(D) The net increase, if any, in a particular calendar year after January 1, 1994, in amounts held under guaranteed interest contracts shall be the calendar year statutory valuation interest rates as defined in paragraphs (2) through (5) of this subsection.
(2) The calendar year statutory valuation interest rates, I, shall be determined as follows and the results rounded to the nearer one-quarter of 1 percent:
(A) For life insurance:
I = .03 + W(R1 - .03) + 1/2 W(R2 - .09);
(B) For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and from guaranteed interest contracts with cash settlement options:
I = .03 + W(R - .03)
where R1 is the lesser of R and .09, R2 is the greater of R and .09, R is the reference interest rate defined in paragraph (4) of this subsection, and W is the weighting factor defined in paragraph (3) of this subsection;
(C) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on an issue year basis, except as stated in subparagraph (B) of this paragraph, the formula for life insurance stated in subparagraph (A) of this paragraph shall apply to annuities and guaranteed interest contracts with guarantee durations in excess of ten years and the formula for single premium immediate annuities stated in subparagraph (B) of this paragraph shall apply to annuities and guaranteed interest contracts with guarantee duration of ten years or less;
(D) For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the formula for single premium immediate annuities stated in subparagraph (B) of this paragraph shall apply; and
(E) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, the formula for single premium immediate annuities stated in subparagraph (B) of this paragraph shall apply;
However, if the calendar year statutory valuation interest rate for any life insurance policies issued in any calendar year determined without reference to this sentence differs from the corresponding actual rate for similar policies issued in the immediately preceding calendar year by less than one-half of 1 percent, the calendar year statutory valuation interest rate for such life insurance policies shall be equal to the corresponding actual rate for the immediately preceding calendar year. For purposes of applying the immediately preceding sentence, the calendar year statutory valuation interest rate for life insurance policies issued in a calendar year shall be determined for 1980 (using the reference interest rate defined for 1979) and shall be determined for each subsequent calendar year regardless of when subsection (e) of Code Section 33-25-4 becomes operative.
(3) The weighting factors referred to in the formulas stated above are given in the following tables:
(A) Weighting Factors for Life Insurance:
| | Guarantee | | | --- | --- | --- | | | Duration | Weighting | | | Years | Factors | | | 10 or less | .50 | | | More than 10, but not more than 20 | .45 | | | More than 20 | .35 |
For life insurance, the guarantee duration is the maximum number of years the life insurance can remain in force on a basis guaranteed in the policy or under options to convert to plans of life insurance with premium rates or nonforfeiture values or both which are guaranteed in the original policy;
(B) Weighting factor for single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options: .80; and
(C) Weighting factors for other annuities and for guaranteed interest contracts, except as stated in subparagraph (B) of this paragraph, shall be as specified in Tables I, II, and III of this subparagraph, according to the rules and definitions in IV, V, and VI of this subparagraph:
I. For annuities and guaranteed interest contracts valued on an issue year basis:
| | Guarantee | Weighting Factor | | | | --- | --- | --- | --- | --- | | | Duration | for Plan Type | | | | | (Years) | A | B | C | | | 5 or less: | .80 | .60 | .50 | | | More than 5, but not more than 10: | .75 | .60 | .50 | | | More than 10, but not more than 20: | .65 | .50 | .45 | | | More than 20: | .45 | .35 | .35 |
II. For annuities and guaranteed interest contracts valued on a change in fund basis, the factors shown in Table I increased by:
| | Plan Type | | | | --- | --- | --- | --- | | | A | B | C | | | .15 | .25 | .05 |
III. For annuities and guaranteed interest contracts valued on an issue year basis (other than those with no cash settlement options) which do not guarantee interest on considerations received more than one year after issue or purchase and for annuities and guaranteed interest contracts valued on a change in fund basis which do not guarantee interest rates on considerations received more than 12 months beyond the valuation date, the factors shown in Table I or derived in Table II increased by:
| | Plan Type | | | | --- | --- | --- | --- | | | A | B | C | | | .05 | .05 | .05 |
IV. For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the guarantee duration is the number of years for which the contract guarantees interest rates in excess of the calendar year statutory valuation interest rate for life insurance policies with guarantee duration in excess of 20 years. For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the guarantee duration is the number of years from the date of issue or date of purchase to the date annuity benefits are scheduled to commence;
V. Plan type as used in the above tables is defined as follows:
Plan Type A: At any time policyholder may withdraw funds only (1) with an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer, or (2) without such adjustment but in installments over five years or more, or (3) as an immediate life annuity, or (4) no withdrawal permitted;
Plan Type B: Before expiration of the interest rate guarantee, policyholder may withdraw funds only (1) with adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer, or (2) without such adjustment but in installments over five years or more, or (3) no withdrawal permitted. At the end of interest rate guarantee, funds may be withdrawn without such adjustment in a single sum or installments over less than five years;
Plan Type C: Policyholder may withdraw funds before expiration of interest rate guarantee in a single sum or installments over less than five years either (1) without adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurer, or (2) subject only to a fixed surrender charge stipulated in the contract as a percentage of the fund;
VI. An insurer may elect to value guaranteed interest contracts with cash settlement options and annuities with cash settlement options on either an issue year basis or on a change in fund basis. Guaranteed interest contracts with no cash settlement options and other annuities with no cash settlement options must be valued on an issue year basis. As used in this subsection, an issue year basis of valuation refers to a valuation basis under which the interest rate used to determine the minimum valuation standard for the entire duration of the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of issue or year of purchase of the annuity or guaranteed interest contract, and the change in fund basis of valuation refers to a valuation basis under which the interest rate used to determine the minimum valuation standard applicable to each change in the fund held under the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of the change in the fund.
(4) The reference interest rate referred to in paragraph (2) of this subsection shall be defined as follows:
(A) For all life insurance, the lesser of the average over a period of 36 months and the average over a period of 12 months, ending on June 30 of the calendar year next preceding the year of issue, of Moody's Corporate Bond Yield Average--Monthly Average Corporates, as published in Moody's Investors Service, Inc.;
(B) For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the average over a period of 12 months, ending on June 30 of the calendar year of issue or year of purchase, of Moody's Corporate Bond Yield Average--Monthly Average Corporates, as published by Moody's Investors Service, Inc.;
(C) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year of issue basis, except as stated in subparagraph (B) of this paragraph, with guarantee duration in excess of ten years, the lesser of the average over a period of 36 months and the average over a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of Moody's Corporate Bond Yield Average--Monthly Average Corporates, as published by Moody's Investors Service, Inc.;
(D) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year of issue basis, except as stated in subparagraph (B) of this paragraph, with guarantee duration of ten years or less, the average over a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of Moody's Corporate Bond Yield Average--Monthly Average Corporates, as published by Moody's Investors Service, Inc.;
(E) For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the average over a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of Moody's Corporate Bond Yield Average--Monthly Average Corporates, as published by Moody's Investors Service, Inc.; and
(F) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, except as stated in subparagraph (B) of this paragraph, the average over a period of 12 months, ending on June 30 of the calendar year of the change in the fund, of Moody's Corporate Bond Yield Average--Monthly Average Corporates, as published by Moody's Investors Service, Inc.
(5) In the event that Moody's Corporate Bond Yield Average--Monthly Average Corporates is no longer published by Moody's Investors Service, Inc., or, in the event that the National Association of Insurance Commissioners determines that Moody's Corporate Bond Yield Average--Monthly Average Corporates as published by Moody's Investors Service, Inc., is no longer appropriate for the determination of the reference interest rate, then the alternative method for determination of the reference interest rate, which is adopted by the National Association of Insurance Commissioners and approved by regulation promulgated by the Commissioner, may be substituted.
(g)(1) Except as otherwise provided in subsections (l) and (n) of this Code section, reserves according to the Commissioner's reserve valuation method, for the life insurance and endowment benefits of policies providing for a uniform amount of insurance and requiring the payment of uniform premiums, shall be the excess, if any, of the present value at the date of valuation of the future guaranteed benefits provided for by the policies over the then present value of any future modified net premiums therefor. The modified net premiums for the policy shall be the uniform percentage of the respective contract premiums for the benefits, excluding extra premiums on a substandard policy, that the present value at the date of issue of the policy of all the modified net premiums shall be equal to the sum of the then present value of the benefits provided for by the policy and the excess of subparagraph (A) of this paragraph over subparagraph (B) of this paragraph as follows:
(A) A net level annual premium equal to the present value at the date of issue of such benefits provided for after the first policy year, divided by the present value at the date of issue of an annuity of one per annum payable on the first and each subsequent anniversary of such policy on which a premium falls due; provided, however, that the net level annual premium shall not exceed the net level annual premium on the 19 year premium whole life plan for insurance of the same amount at an age one year higher than the age at issue of the policy; and
(B) A net one-year term premium for the benefits provided for in the first policy year.
Provided that for any life insurance policy issued on or after the effective date of subsection (h) of Code Section 33-25-4 for which the contract premium in the first policy year exceeds that of the second year and for which no comparable additional benefit is provided in the first year for such excess and which provides an endowment benefit or a cash surrender value or a combination thereof in an amount greater than such excess premium, the reserve according to the Commissioner's reserve valuation method as of any policy anniversary occurring on or before the assumed ending date defined in this subsection as the first policy anniversary on which the sum of any endowment benefit and any cash surrender value then available is greater than such excess premium shall, except as otherwise provided in subsection (l) of this Code section, be the greater of the reserve as of such policy anniversary calculated as described in the preceding paragraph and the reserve as of such policy anniversary calculated as described in that paragraph, but with (i) the value defined in subparagraph (A) of that paragraph being reduced by 15 percent of the amount of such excess first year premium, (ii) all present values of benefits and premiums being determined without reference to premiums or benefits provided for by the policy after the assumed ending date, (iii) the policy being assumed to mature on such date as an endowment, and (iv) the cash surrender value provided on such date being considered as an endowment benefit. In making the above comparison, the mortality and interest bases stated in subsections (e) and (f) of this Code section shall be used.
(2) Reserves according to the Commissioner's reserve valuation method for:
(A) Life insurance policies providing for a varying amount of insurance or requiring the payment of varying premiums;
(B) Group annuity and pure endowment contracts purchased under a retirement plan or plan of deferred compensation, established or maintained by an employer, including a partnership or sole proprietorship, or by an employee organization or by both, other than a plan providing individual retirement accounts or individual retirement annuities under Section 408 of the Internal Revenue Code as now or hereafter amended;
(C) Disability and accidental death benefits in all policies and contracts; and
(D) All other benefits, except life insurance and endowment benefits in life insurance policies and benefits provided by all other annuity and pure endowment contracts, shall be calculated by a method consistent with the principles of this subsection.
(h) This subsection shall apply to all annuity and pure endowment contracts other than group annuity and pure endowment contracts purchased under a retirement plan or plan of deferred compensation established or maintained by an employer, including a partnership or sole proprietorship, or by an employee organization or by both, other than a plan providing individual retirement accounts or individual retirement annuities under Section 408 of the Internal Revenue Code. Reserves according to the Commissioner's annuity reserve method for benefits under annuity or pure endowment contracts, excluding any disability and accidental death benefits in the contracts, shall be the greatest of the respective excesses of the present values at the date of valuation of the future guaranteed benefits, including guaranteed nonforfeiture benefits provided for by the contracts at the end of each respective contract year, over the present value at the date of valuation of any future valuation considerations derived from future gross considerations required by the terms of the contract that become payable prior to the end of the respective contract year. The future guaranteed benefits shall be determined by using the mortality table, if any, and the interest rate or rates, specified in such contracts for determining guaranteed benefits. The valuation considerations are the portions of the respective gross considerations applied under the terms of the contracts to determine nonforfeiture values.
(i) In no event shall an insurer's aggregate reserve for all life insurance policies, excluding disability and accidental death benefits issued on or after January 1, 1966, be less than the aggregate reserves calculated in accordance with the methods set forth in subsections (g), (h), (l), and (m) of this Code section and the mortality table or tables and rate or rates of interest used in calculating nonforfeiture benefits for the policies. In no event shall the aggregate reserves for all policies, contracts, and benefits be less than the aggregate reserves determined by the appointed actuary to be necessary to render the opinion required by subsection (d) of this Code section.
(j)(1) Reserves for all policies and contracts issued prior to January 1, 1966, may be calculated, at the option of the insurer, according to any standards which produce greater aggregate reserves for all the policies and contracts than the minimum reserves required by the laws in effect immediately prior to that date.
(2) For any category of policies, contracts, or benefits specified in subsection (e) of this Code section issued on or after January 1, 1966, reserves may be calculated, at the option of the insurer, according to any standard or standards which produce greater aggregate reserves for such category than those calculated according to the minimum standard provided in this Code section; but the rate or rates of interest used for policies and contracts, other than annuity and pure endowment contracts, shall not be higher than the corresponding rate or rates of interest used in calculating any nonforfeiture benefits provided for in the policies and contracts.
(k) An insurer that at any time had adopted any standard of valuation producing greater aggregate reserves than those calculated according to the minimum standard provided for in subsection (i) of this Code section may, with the approval of the Commissioner, adopt any lower standard of valuation but not lower than the minimum provided in this subsection; provided, however, that for the purposes of this subsection, the holding of additional reserves previously determined by a qualified actuary to be necessary to render the opinion required by subsection (d) of this Code section shall not be deemed to be the adoption of a higher standard of valuation.
(l) If in any contract year the gross premium charged by any life insurer on any policy or contract issued on or after January 1, 1966, is less than the valuation net premium for the policy or contract calculated by the method used in calculating the reserve thereon but using the minimum valuation standards of mortality and rate of interest, the minimum reserve required for such policy or contract shall be the greater of either the reserve calculated according to the mortality table, rate of interest, and method actually used for such policy or contract or the reserve calculated by the method actually used for the policy or contract but using the minimum valuation standards of mortality and rate of interest and replacing the valuation net premium by the actual gross premium in each contract year for which the valuation net premium exceeds the actual gross premium. The minimum valuation standards of mortality and rate of interest referred to in this Code section are those standards stated in subsections (e) and (f) of this Code section. Provided that for any life insurance policy issued on or after the effective date of subsection (h) of Code Section 33-25-4 for which the gross premium in the first policy year exceeds that of the second year and for which no comparable additional benefit is provided in the first year for such excess and which provides as an endowment benefit or a cash surrender value or a combination thereof in an amount greater than such excess premium, the foregoing provisions of this subsection shall be applied as if the method actually used in calculating the reserve for such policy were the method described in subsection (g) of this Code section, ignoring the second paragraph of paragraph (1) of subsection (g) of this Code section. The minimum reserve at each policy anniversary of such a policy shall be the greater of the minimum reserve calculated in accordance with subsection (g) of this Code section, including the second paragraph of paragraph (1) of subsection (g) of this Code section, and the minimum reserve calculated in accordance with this subsection.
(m) In the case of any plan of life insurance which provides for future premium determination, the amounts of which are to be determined by the insurer based on then estimates of future experience, or in the case of any plan of life insurance or annuity which is of such a nature that the minimum reserves cannot be determined by the methods described in subsections (e), (g), (h), and (l) of this Code section, the reserves which are held under any such plan must:
(1) Be appropriate in relation to the benefits and the pattern of premiums for that plan; and
(2) Be computed by a method which is consistent with the principles of this Code section, the “Standard Valuation Law,”
as determined by regulations promulgated by the Commissioner.
(n) For accident and health insurance contracts issued on or after the operative date of the valuation manual, the standard prescribed in the valuation manual is the minimum standard of valuation required under paragraph (2) of subsection (c) of this Code section. For disability, accident and sickness, accident, and health insurance contracts issued prior to the operative date of the valuation manual, the minimum standard of valuation is the standard adopted by the Commissioner by regulation.
(o)(1) For policies issued on or after the operative date of the valuation manual, the standard prescribed in the valuation manual is the minimum standard of valuation required under paragraph (2) of subsection (c) of this Code section, except as provided under paragraphs (5) and (7) of this subsection.
(2) The operative date of the valuation manual is January 1 of the first calendar year following the first July 1 as of which all of the following have occurred:
(A) The valuation manual has been adopted by the NAIC by an affirmative vote of at least 42 members, or three-fourths of the members voting, whichever is greater;
(B) The Standard Valuation Law, as amended by the NAIC in 2009, or legislation including substantially similar terms and provisions, has been enacted by states representing greater than 75 percent of the direct premiums written as reported in the following annual statements submitted for 2008: life, accident, and health annual statements; health annual statements; or fraternal annual statements; and
(C) The Standard Valuation Law, as amended by the NAIC in 2009, or legislation including substantially similar terms and provisions, has been enacted by at least 42 of the following 55 jurisdictions: the 50 states of the United States, American Samoa, the American Virgin Islands, the District of Columbia, Guam, and Puerto Rico.
(3) Unless a change in the valuation manual specifies a later effective date, changes to the valuation manual shall be effective on January 1 following the date when the change to the valuation manual has been adopted by the NAIC by an affirmative vote representing:
(A) At least three-fourths of the members of the NAIC voting, but not less than a majority of the total membership; and
(B) Members of the NAIC representing jurisdictions totaling greater than 75 percent of the direct premiums written as reported in the following annual statements most recently available prior to the vote in subparagraph (A) of this paragraph: life, accident, and health annual statements, health annual statements, or fraternal annual statements.
(4) The valuation manual must specify all of the following:
(A) Minimum valuation standards for and definitions of the policies or contracts subject to paragraph (2) of subsection (c) of this Code section. Such minimum valuation standards shall be:
(i) The Commissioner's reserve valuation method for life insurance contracts, other than annuity contracts, subject to paragraph (2) of subsection (c) of this Code section;
(ii) The Commissioner's annuity reserve valuation method for annuity contracts subject to paragraph (2) of subsection (c) of this Code section; and
(iii) Minimum reserves for all other policies or contracts subject to paragraph (2) of subsection (c) of this Code section;
(B) Which policies or contracts or types of policies or contracts that are subject to the requirements of a principle-based valuation in paragraph (1) of subsection (p) of this Code section and the minimum valuation standards consistent with those requirements;
(C) For policies and contracts subject to a principle-based valuation under subsection (p) of this Code section:
(i) Requirements for the format of reports to the Commissioner under subparagraph (p)(2)(C) of this Code section and which shall include information necessary to determine if the valuation is appropriate and in compliance with this Code section;
(ii) Assumptions shall be prescribed for risks over which the company does not have significant control or influence; and
(iii) Procedures for corporate governance and oversight of the actuarial function, and a process for appropriate waiver or modification of such procedures;
(D) For policies not subject to a principle-based valuation under subsection (p) of this Code section, the minimum valuation standard shall either:
(i) Be consistent with the minimum standard of valuation prior to the operative date of the valuation manual; or
(ii) Develop reserves that quantify the benefits and guarantees, and the funding, associated with the contracts and their risks at a level of conservatism that reflects conditions that include unfavorable events that have a reasonable probability of occurring;
(E) Other requirements, including, but not limited to, those relating to reserve methods, models for measuring risk, generation of economic scenarios, assumptions, margins, use of company experience, risk measurement, disclosure, certifications, reports, actuarial opinions and memorandums, transition rules, and internal controls; and
(F) The data and form of the data required under subsection (q) of this Code section, with whom the data must be submitted, and may specify other requirements including data analyses and reporting of analyses.
(5) In the absence of a specific valuation requirement or if a specific valuation requirement in the valuation manual is not, in the opinion of the Commissioner, in compliance with this Code section, then the company shall, with respect to such requirements, comply with minimum valuation standards prescribed by the Commissioner by regulation.
(6) The Commissioner may engage a qualified actuary, at the expense of the company, to perform an actuarial examination of the company and opine on the appropriateness of any reserve assumption or method used by the company, or to review and opine on a company's compliance with any requirement set forth in this Code section. The Commissioner may rely upon the opinion, regarding provisions contained within this Code section, of a qualified actuary engaged by the commissioner of another state, district, or territory of the United States. As used in this paragraph, the term “engage” includes employment and contracting.
(7) The Commissioner may require a company to change any assumption or method that in the opinion of the Commissioner is necessary in order to comply with the requirements of the valuation manual or this Code section; and the company shall adjust the reserves as required by the Commissioner. The Commissioner may take other disciplinary action as permitted pursuant to this title.
(p)(1) A company must establish reserves using a principle-based valuation that meets the following conditions for policies or contracts as specified in the valuation manual:
(A) Quantify the benefits and guarantees, and the funding, associated with the contracts and their risks at a level of conservatism that reflects conditions that include unfavorable events that have a reasonable probability of occurring during the lifetime of the contracts, and for policies or contracts with significant tail risk, reflects conditions appropriately adverse to quantify the tail risk;
(B) Incorporate assumptions, risk analysis methods and financial models, and management techniques that are consistent with, but not necessarily identical to, those utilized within the company's overall risk assessment process, while recognizing potential differences in financial reporting structures and any prescribed assumptions or methods;
(C) Incorporate assumptions that are derived in one of the following manners:
(i) The assumption is prescribed in the valuation manual; or
(ii) For assumptions that are not prescribed, the assumptions shall:
(I) Be established utilizing the company's available experience, to the extent it is relevant and statistically credible; or
(II) To the extent that company data is not available, relevant, or statistically credible, be established utilizing other relevant, statistically credible experience; and
(D) Provide margins for uncertainty, including adverse deviation and estimation error, such that the greater the uncertainty the larger the margin and resulting reserve.
(2) A company using a principle-based valuation for one or more policies or contracts subject to this subsection as specified in the valuation manual shall:
(A) Establish procedures for corporate governance and oversight of the actuarial valuation function consistent with those described in the valuation manual;
(B) Provide to the Commissioner and the board of directors an annual certification of the effectiveness of the internal controls with respect to the principle-based valuation. Such controls shall be designed to assure that all material risks inherent in the liabilities and associated assets subject to such valuation are included in the valuation, and that valuations are made in accordance with the valuation manual. The certification shall be based on the controls in place as of the end of the preceding calendar year; and
(C) Develop, and file with the Commissioner upon request, a principle-based valuation report that complies with standards prescribed in the valuation manual.
(3) A principle-based valuation may include a prescribed formulaic reserve component.
(q) A company shall submit mortality, morbidity, policyholder behavior, or expense experience and other data as prescribed in the valuation manual.
(r)(1) For purposes of this subsection, the term “confidential information” shall mean:
(A) A memorandum in support of an opinion submitted under subsection (d) of this Code section and any other documents, materials, and other information, including, but not limited to, all working papers, and copies thereof, created, produced, or obtained by or disclosed to the Commissioner or any other person in connection with such memorandum;
(B) All documents, materials, and other information, including, but not limited to, all working papers, and copies thereof, created, produced, or obtained by or disclosed to the Commissioner or any other person in the course of an examination made under paragraph (6) of subsection (o) of this Code section; provided, however, that if an examination report or other material prepared in connection with an examination made under Chapter 2 of this title is not held as private and confidential information under Chapter 2 of this title, an examination report or other material prepared in connection with an examination made under paragraph (6) of subsection (o) of this Code section shall not be confidential information to the same extent as if such examination report or other material had been prepared under Chapter 2 of this title;
(C) Any reports, documents, materials, and other information developed by a company in support of, or in connection with, an annual certification by the company under subparagraph (p)(2)(B) of this Code section evaluating the effectiveness of the company's internal controls with respect to a principle-based valuation and any other documents, materials, and other information, including, but not limited to, all working papers, and copies thereof, created, produced, or obtained by or disclosed to the Commissioner or any other person in connection with such reports, documents, materials, and other information;
(D) Any principle-based valuation report developed under subparagraph (p)(2)(C) of this Code section and any other documents, materials, and other information, including, but not limited to, all working papers, and copies thereof, created, produced, or obtained by or disclosed to the Commissioner or any other person in connection with such report; and
(E) Any documents, materials, data, and other information submitted by a company under subsection (q) of this Code section (collectively, “experience data”) and any other documents, materials, data, and other information, including, but not limited to, all working papers, and copies thereof, created or produced in connection with such experience data, in each case that include any potentially company-identifying or personally identifiable information, that is provided to or obtained by the Commissioner (together with any “experience data,” the “experience materials”) and any other documents, materials, data, and other information, including, but not limited to, all working papers, and copies thereof, created, produced, or obtained by or disclosed to the Commissioner or any other person in connection with such experience materials.
(2)(A) Except as provided in this subsection, a company's confidential information is confidential by law and privileged, and shall not be subject to Article 4 of Chapter 18 of Title 50, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action; provided, however, that the Commissioner is authorized to use the confidential information in the furtherance of any regulatory or legal action brought against the company as a part of the Commissioner's official duties.
(B) Neither the Commissioner nor any person who received confidential information while acting under the authority of the Commissioner shall be permitted or required to testify in any private civil action concerning any confidential information.
(C) In order to assist in the performance of the Commissioner's duties, the Commissioner may share confidential information (i) with other state, federal, and international regulatory agencies and with the NAIC and its affiliates and subsidiaries, and (ii) in the case of confidential information specified in subparagraphs (A) and (D) of paragraph (1) of this subsection only, with the Actuarial Board for Counseling and Discipline or its successor upon request stating that the confidential information is required for the purpose of professional disciplinary proceedings and with state, federal, and international law enforcement officials; in the case of (i) and (ii), provided that such recipient agrees, and has the legal authority to agree, to maintain the confidentiality and privileged status of such documents, materials, data, and other information in the same manner and to the same extent as required for the Commissioner.
(D) The Commissioner may receive documents, materials, data, and other information, including otherwise confidential and privileged documents, materials, data, or information, from the NAIC and its affiliates and subsidiaries, from regulatory or law enforcement officials of other foreign or domestic jurisdictions, and from the Actuarial Board for Counseling and Discipline or its successor and shall maintain as confidential or privileged any document, material, data, or other information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or other information.
(E) The Commissioner may enter into agreements governing sharing and use of information consistent with this paragraph.
(F) No waiver of any applicable privilege or claim of confidentiality in the confidential information shall occur as a result of disclosure to the Commissioner under this subsection or as a result of sharing as authorized in subparagraph (C) of this paragraph.
(G) A privilege established under the law of any state or jurisdiction that is substantially similar to the privilege established under this paragraph shall be available and enforced in any proceeding in, and in any court of, this state.
(H) In this subsection, the terms “regulatory agency,” “law enforcement agency,” and the “NAIC” include, but are not limited to, their employees, agents, consultants, and contractors.
(3) Notwithstanding this paragraph, any confidential information specified in subparagraphs (A) and (D) of paragraph (1) of this subsection:
(A) May be subject to subpoena for the purpose of defending an action seeking damages from the appointed actuary submitting the related memorandum in support of an opinion submitted under subsection (d) of this Code section or principle-based valuation report developed under subparagraph (p)(2)(C) of this Code section by reason of an action required by this Code section or by regulations promulgated hereunder;
(B) May otherwise be released by the Commissioner with the written consent of the company; and
(C) Once any portion of a memorandum in support of an opinion submitted under subsection (d) of this Code section or a principle-based valuation report developed under subparagraph (p)(2)(C) of this Code section is cited by the company in its marketing or is publicly volunteered to or before a governmental agency other than a state insurance department or is released by the company to the news media, all portions of such memorandum or report shall no longer be confidential.
(s)(1) The Commissioner may exempt specific product forms or product lines of a domestic company that is licensed and doing business only in this state from the requirements of subsection (o) of this Code section, provided that:
(A) The Commissioner has issued an exemption in writing to the company and has not subsequently revoked the exemption in writing; and
(B) The company computes reserves using assumptions and methods used prior to the operative date of the valuation manual in addition to any requirements established by the Commissioner and promulgated by regulation.
(2) For any company granted an exemption under this subsection, subsections (d) through (n) of this Code section shall be applicable. With respect to any company applying this exemption, any reference to subsection (o) of this Code section in subsections (d) through (n) of this Code section shall not be applicable.
(t)(1) An insurer that has less than $300 million of ordinary life premiums and that is licensed and doing business in this state and that is subject to the requirements of subsections (o) through (r) of this Code section may hold reserves based on the mortality tables and interest rates defined by the valuation manual for net premium reserves and using the methodologies described in subsections (g) through (m) of this Code section as they apply to ordinary life insurance in lieu of the reserves required by subsections (o) and (p) of this Code section, provided that:
(A) If the insurer is a member of a group of life insurers, the group has combined ordinary life premiums of less than $600 million;
(B) The insurer reported total adjusted capital of at least 450 percent of authorized control level risk based capital in the risk based capital report for the prior calendar year;
(C) The appointed actuary has provided an unqualified opinion on the reserves for the prior calendar year; and
(D) The insurer has provided a certification by a qualified actuary that any universal life policy with a secondary guarantee issued by the insurer after the operative date of the valuation manual meets the definition of a nonmaterial secondary guarantee universal life product as defined in the valuation manual.
(2) For purposes of paragraph (1) of this subsection, ordinary life premiums are measured as direct premium plus reinsurance assumed from an unaffiliated company, as reported in the annual statement for the prior calendar year.
(3) A domestic company meeting all of the conditions provided in this subsection may file, prior to July 1 of the current calendar year, a statement with the Commissioner certifying that such conditions are met for the current calendar year based on premiums and other values from the financial statements for the prior calendar year. The Commissioner may reject such statement prior to September 1 and require a company to comply with the valuation manual requirements for life insurance reserves.
The value or amount of investments, unless otherwise specified in this chapter, and excluding assets of separate accounts which are subject to Code Sections 33-11-65 through 33-11-67, shall be the value at which assets of an insurer are required to be reported for statutory accounting purposes as determined in accordance with procedures prescribed in published accounting and valuation standards of the National Association of Insurance Commissioners and adopted by regulation promulgated by the Commissioner or as otherwise prescribed by regulation promulgated by the Commissioner.
(a) Real property acquired under a mortgage loan or under a deed to secure debt or pursuant to a contract of sale, in the absence of a recent appraisal deemed by the Commissioner to be reliable, shall not be valued at an amount greater than the unpaid principal of the defaulted loan or contract at the date of such acquisition, together with any taxes and expenses paid or incurred in connection with such acquisition and the cost of improvements thereafter made by the insurer and any amounts thereafter paid by the insurer on assessments levied for improvements in connection with the property.
(b) Other real property held by an insurer shall not be valued at an amount in excess of fair value as determined by recent appraisal. If valuation is based on an appraisal more than three years old, the Commissioner may at his discretion call for and require a new appraisal in order to determine fair value.
(c) Personal property acquired under a chattel mortgage made in accordance with Code Section 33-11-26 shall not be valued at an amount greater than the unpaid balance of principal on the defaulted loan at the date of acquisition, together with taxes and expenses incurred in connection with the acquisition or the fair value of the property, whichever amount is the lesser.
Mortgages on real property referred to in subsection (a) of Code Section 33-10-16 shall be valued in an amount not exceeding the acquisition cost of the real property covered thereby or 90 percent of the fair value of the real property, whichever is less.
(a) With the exception of Code Section 33-11-42, this article shall apply to domestic insurers only.
(b) The provisions of this article shall apply only to those insurers that are not subject to Article 2 of this chapter.
(a) Insurers shall invest in or lend their funds on the security of, and shall hold as invested assets, only eligible investments as prescribed in this article.
(b) Eligibility of an investment shall be determined as of the date of its making or acquisition.
(c) Any investment limitation based upon the amount of the insurer's assets or particular fund shall relate to such assets or funds as shown by the insurer's annual statement as of December 31 of the year preceding the date of acquisition of the investment by the insurer or as shown by a current financial statement resulting from merger of another insurer, bulk reinsurance, or change in capitalization.
(a) No security or investment, other than real and personal property acquired under Code Sections 33-11-28, 33-11-29, and 33-11-32 and cash and deposits under Code Section 33-11-6, shall be eligible for acquisition unless it is interest bearing or interest accruing or dividend or income paying, or it is not then in default in any respect, and the insurer is entitled to receive for its account and benefit the interest or income accruing thereon.
(b) No security or investment shall be eligible for purchase at a price above its market value.
(c) No provision of this article shall prohibit the acquisition by an insurer of other or additional securities or property if received as a dividend or as a lawful distribution of assets or under a lawful and bona fide agreement of bulk reinsurance, merger, or consolidation. Any investment so acquired which is not otherwise eligible under this article shall be disposed of pursuant to Code Section 33-11-39 if real property, or pursuant to Code Section 33-11-40 if personal property or securities.
(d) Nothing in this Code section shall prohibit an insurer from acquiring control of another insurer subject to the approval of the Commissioner.
An insurer shall not make any investment or loan other than policy loans or annuity contract loans of a life insurer unless the same is authorized or approved by the insurer's board of directors or by a committee authorized by the board and charged with the supervision or making of the investment or loan. The minutes of the committee shall be recorded and regular reports of the committee shall be submitted to the board of directors.
An insurer shall invest in or hold as admitted assets categories of investments that fall within the applicable limits listed in paragraphs (1) through (3) of this Code section:
(1) ONE PERSON.Any insurer shall not, except with the Commissioner's consent, have at any one time any combinations of investments in or loans upon the security of the obligations, property, or securities of any one person, institution, corporation, or municipal corporation, aggregating an amount in excess of 10 percent of the insurer's admitted assets. This restriction shall not apply as to general obligations of the United States of America or of the government of Canada or of any state, nor include policy loans under this article;
(2) VOTING STOCK.An insurer shall not invest in or hold at any one time more than 10 percent of the outstanding voting stock of any corporation, except with the Commissioner's consent. This provision does not apply as to stock of a substantially wholly owned insurance subsidiary of the insurer, but the prior written consent of the Commissioner shall be required for investment in a subsidiary;
(3) MINIMUM CAPITAL.An insurer shall invest and maintain invested funds not less in amount than the minimum paid-in capital stock required under this title of a domestic stock insurer transacting like kinds of insurance, only in the following:
(A) Cash;
(B) Certificates of deposit or similar certificates or evidences of deposit in banks and trust companies to the extent that the certificates or deposits are insured by the Federal Deposit Insurance Corporation;
(C) Savings accounts, certificates of deposit, or similar certificates or evidences of deposit in savings and loan associations and building and loan associations to the extent that the same are insured by the Federal Savings and Loan Insurance Corporation;
(D) The securities provided for under Code Section 33-11-9;
(E) The securities provided for under Code Section 33-11-11;
(F) The securities provided for under Code Section 33-11-12;
(G) The securities provided for under Code Section 33-11-13; and
(H) The securities provided for under Code Section 33-11-25;
(4) INVESTMENT OF RESERVES.In addition to the investments in paragraph (3) of this Code section, an insurer shall invest and keep invested its funds in amounts not less than 100 percent of the reserves provided for by this title, in cash or the securities or investments authorized under this article; provided, however, that an amount equal to not less than 75 percent of the reserves shall be invested in securities other than common stocks;
(5) OTHER SPECIFIC LIMITS.Limits as to investments in the category of real estate shall be as provided in Code Sections 33-11-29 through 33-11-32; provided, however, that, except as authorized by subsection (b) of Code Section 33-11-29, all such investments shall not exceed the lesser of 10 percent of admitted assets or 50 percent of the policyholder's surplus; and other specific limits shall apply as stated in Code sections dealing with other respective kinds of investments.
An insurer may have as assets cash or deposits in checking or savings accounts under certificates of deposit or in any other form in banks and trust companies and in savings accounts, certificates of deposit, or similar certificates or evidences of deposits in savings and loan associations and building and loan associations which have qualified for the insurance protection afforded by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation; provided, however, that an insurer may, upon approval of the Commissioner, have as assets cash or deposits in checking or savings accounts, or in any other form in banks, trust companies, or savings and loan associations which are not members of the Federal Deposit Insurance Corporation or Federal Savings and Loan Insurance Corporation.
An insurer may invest in the securities of any open-end management type investment company or investment trust registered with the Federal Securities and Exchange Commission under the Investment Company Act of 1940, 1 as from time to time amended, if such investment company or trust has been organized for not less than ten years or has assets of not less than $25 million at the date of investment by the insurer.
1 15 U.S.C.A. § 80a-1 et seq.
An insurer authorized to transact insurance in a foreign country may make investments, in a manner consistent with the laws of such country, in securities or other investments within such foreign country which are similar in characteristics and quality to like investments required pursuant to this article for investments in the United States of America. The aggregate amount of the investments must not exceed the amount which is customary and necessary for the servicing of the insurance which the insurer has in force in the foreign country. Canadian securities eligible for investment under this article are not subject to this Code section.
An insurer may invest in bonds, notes, warrants, and other evidences of indebtedness which are direct obligations of the government of the United States of America or for which the full faith and credit of the government of the United States of America is pledged for the payment of principal and interest.
Notwithstanding any other provisions of this title which might be construed to the contrary, nothing contained in this title shall be deemed to prohibit an insurer from investing its funds in or holding or owning as admitted assets securities which are not evidenced by certificates or instruments and related records issued to the insurer if held in accordance with the rules and regulations prescribed by the Commissioner and such securities are otherwise eligible for investment under this title.
An insurer may invest in loans guaranteed as to principal and interest by the government of the United States of America, or by any agency or instrumentality of the government of the United States of America, to the extent of such guaranty.
An insurer may invest in bonds, notes, warrants, and other securities not in default which are the direct obligations of any state of the United States or of the District of Columbia, or of the government of Canada or any province of Canada, or for which the full faith and credit of such state, district, government, or province has been pledged for the payment of principal and interest.
Subject to the restrictions and limitations provided in this title, an insurer may invest in bonds, notes, warrants, and other securities not in default which are the direct obligations of the government of any foreign country which the International Monetary Fund lists as an industrialized country and for which the full faith and credit of such government has been pledged for the payment of principal and interest, provided such securities are listed as investment grade by the Securities Valuation Office of the National Association of Insurance Commissioners (NAIC) or as investment grade by a securities rating organization accepted by the NAIC.
An insurer may invest in the obligations of any county, any incorporated city, town, or village, any school district, water district, sewer district, road district, or any special district, or any other political subdivision or public authority of any state, territory, or insular possession of the United States, or of the District of Columbia, or of the Canadian cities that have a population of over 25,000 according to the most recent official Census of Canada, which has not defaulted for a period of 120 days in the payment of interest upon, or for a period of more than one year in the payment of principal of, any of its bonds, notes, warrants, certificates of indebtedness, securities, or any other interest-bearing obligation during the five years immediately preceding the acquisition of the investment.
An insurer may invest in the bonds, notes, certificates of indebtedness, warrants, or other evidence of indebtedness which are valid obligations issued, assumed, or guaranteed by the United States of America or any state of the United States of America, or by any county, municipal corporation, district, or political subdivision, or civil division or public instrumentality of any such government or unit of such government, if by statute or other legal requirements such obligations are payable as to both principal and interest from revenues or earnings from the whole or any part of any utility supplying water, gas, sewage disposal facility, or electricity or any other public service, including but not limited to toll roads and toll bridges, and in revenue bonds issued by any political subdivision, authority, unit, or other corporate body created by the United States government or the government of any state, for the purpose of aiding in or promoting the industrial development of such state or political subdivisions.
An insurer may invest in bonds, debentures, or other securities issued or insured or guaranteed by any agency, authority, unit, or corporate body created by the government of the United States of America whether or not such obligations are guaranteed by the United States.
An insurer may invest in the bonds, debentures, or other securities of public housing authorities, issued under the act of Congress entitled the Housing Act of 1949 1 and approved July, 1949, the Municipal Housing Commission Act, or the Rural Housing Commission Act, and any additional amendments issued by any other public housing authority or agency in the United States, if the bonds, debentures, or other securities are secured by a pledge of annual contributions to be paid by the United States or any agency of the United States.
1 42 U.S.C.A. § 1441 et seq.
An insurer may invest in obligations issued, assumed, or guaranteed by the International Bank for Reconstruction and Development or the International Finance Corporation. The investments authorized by this Code section shall not be counted as an investment of reserves under paragraph (4) of Code Section 33-11-5 at any one time in an amount greater than 5 percent of the insurer's admitted assets. Such investments shall be subject to all limitations and requirements of this article. In addition to authority contained in Code Section 33-11-8 and elsewhere in this title, an insurer may invest up to 10 percent of its admitted assets in securities or other investments within a foreign country which are similar in characteristics and quality to like investments authorized pursuant to this article for investments in the United States of America, including obligations of the government of such foreign country and its political subdivisions and instrumentalities, provided that the values of such securities or other investments shall be determined in accordance with the valuation methods then currently formulated or approved by the National Association of Insurance Commissioners or its successor organization.
An insurer may invest in obligations issued, assumed, or guaranteed by the Asian Development Bank, in which bank the United States is a subscribing participant by virtue of an act of Congress approved March 16, 1966, entitled Asian Development Bank Act. 1 The investments authorized by this Code section shall not be counted as an investment of reserves of paragraph (4) of Code Section 33-11-5 at any time in an amount greater than 5 percent of the insurer's admitted assets.
1 22 U.S.C.A. § 285 et seq.
An insurer may invest in obligations issued, assumed, or guaranteed by the Inter-American Development Bank. The investments authorized by this Code section shall not be counted as an investment of reserves of paragraph (4) of Code Section 33-11-5 at any one time in an amount greater than 5 percent of the insurer's admitted assets.
An insurer may make and invest in loans guaranteed as to principal and interest by the Georgia Higher Education Assistance Corporation, to the extent of such guaranty.
An insurer may invest in obligations issued, assumed, or guaranteed by the African Development Bank. The investments authorized by this Code section shall not be counted as an investment of reserves of paragraph (4) of Code Section 33-11-5 at any one time in an amount greater than 5 percent of the insurer's admitted assets.
An insurer may make and invest in loans guaranteed as to principal and interest by the United Student Aid Funds, Inc., to the extent of such guaranty.
(a) An insurer may invest in bonds, debentures, notes, and other evidences of indebtedness issued, assumed, or guaranteed by any solvent institution existing under the laws of the United States of America or of Canada, or any state or province thereof, which are not in default as to principal or interest and which are secured by collateral worth at least 50 percent more than the par value of the entire issue of such obligations, but only if not more than one-third of the total value of the required collateral consists of common stocks.
(b) An insurer may invest in secured and unsecured obligations of such institutions other than obligations described in subsection (a) of this Code section bearing interest at a fixed rate, with mandatory principal and interest due at specified times, if the net earnings of the issuing, assuming, or guaranteeing institution available for its fixed charges for a period of five fiscal years next preceding date of acquisition by such insurer have averaged per year not less than one and one-half times its average annual fixed charges applicable to such period and if during either of the last two years of the period of such net earnings have been not less than one and one-half times its fixed charges for the year.
(c) An insurer may invest in bonds, debentures, notes, or other evidences of indebtedness of corporations existing under the laws of the United States of America or of Canada or any state or province thereof, which are secured by assignment of a lease or leases or the rentals payable under the leases of real or personal property or both to:
(1) The United States of America or any state thereof, or any county, city, town, village, municipality, or district therein or any political subdivision thereof or any civil division or public instrumentality of one or more of the foregoing; or
(2) One or more institutions created or existing under the laws of the United States of America or of Canada or of any state or province, provided that:
(A) The fixed rentals assigned shall be sufficient to repay the indebtedness within the unexpired term of the lease, exclusive of the term which may be provided by an enforceable option of renewal;
(B) No such lessee has defaulted in payment of interest or principal on any of its bonds, notes, debentures, or other evidences of indebtedness during the five fiscal years immediately preceding the date of the investment;
(C) The net earnings of each lessee under paragraph (2) of subsection (c) of this Code section available for its fixed charges for a period of five fiscal years next preceding the date of acquisition by the insurance company shall have averaged per year not less than one and one-half times its average annual fixed charges applicable to the period and during either of the last two years of the period the net earnings shall have been not less than one and one-half times its fixed charges for the year; and
(D) A first lien on the interest of the lessor in the unencumbered property so leased shall be obtained as additional security for the indebtedness.
(d) An insurer may invest in secured and unsecured obligations of such institutions or in portions thereof, other than the obligations described in subsections (a), (b), and (c) of this Code section, which do not bear interest at a fixed rate and which may or may not have a maturity date or be evidenced by a formal certificate. Such investments must:
(1) Consist of less than 100 percent of the total obligation issued;
(2) Be available for liquidation by the insurer within five days from the date of a request by the insurer for the liquidation of the investment; and
(3) Notwithstanding Code Section 33-11-37, as a total at any one time not exceed 5 percent of the insurer's admitted assets without the written approval of the Commissioner.
An insurer may invest in nonassessable dividend-paying stocks, common or preferred, of any solvent corporation other than a corporation engaged solely in the business of operating real estate or a corporation having substantially all of its assets invested in the shares of such corporation, created or existing under the laws of the United States of America or of any state or of the District of Columbia, provided cash dividends on the common stocks shall have been paid out of current earnings in at least three of the last five years preceding the purchase.
An insurer may invest in equipment trust obligations or certificates adequately secured and evidencing an interest in transportation equipment, wholly or in part within the United States of America, and the right to receive determined portions of rental, purchase, or other fixed obligatory payments for the use or purchase of the transportation equipment.
An insurer may invest in loans which are secured by pledge of securities eligible for investment under this article or by the pledge or assignment of life insurance policies issued by other insurers authorized to transact insurance in this state. On the date made, no loan shall exceed in amount 75 percent of the market value of the collateral pledged. The amount so loaned shall be included in the maximum percentage of funds permitted under this article to be invested in the kinds of securities or evidences of debt pledged.
(a) An insurer may invest in:
(1) Bonds, notes, or other evidences of indebtedness, in addition to those eligible under Code Section 33-11-20 (corporate bonds and debentures) which are secured by first mortgage or deed of trust or deed to secure debt upon fee simple, unencumbered improved or income-producing real property located in the United States or Canada, including leasehold estates in such real estate:
(A) The loan or loans when made on a single-family residential dwelling shall not exceed 80 percent of the value of the real property or leasehold securing the real property; nor shall the loan or loans exceed 75 percent of the value of other real property, as determined by competent appraisers, unless guaranteed or insured by the secretary of veterans affairs or insured by the secretary of housing and urban development as provided in paragraphs (3) and (4) of this Code section;
(B) Unless the loan is guaranteed or insured by a governmental agency, as provided in subparagraph (A) of this paragraph, the appraisal must be certified by two or more company officers, or qualified employees, or by two independent appraisers;
(C) No loan made or acquired by an insurer which is a participation or a part of a series or issue secured by the same mortgage or deed to secure debt or deed of trust shall be a lawful investment under this Code section unless the entire series or issue which is secured by the same mortgage or deed to secure a debt or deed of trust is held by the insurer or unless the participation held by the insurer in the mortgage or deed to secure a debt or deed of trust gives the insurer substantially the rights of a first mortgagee and no other participant in such mortgage or deed to secure a debt or deed of trust holds a senior participation therein;
(D) All loans secured by leasehold must provide for amortization payments on principal at least once in each year in amounts sufficient to amortize completely the loan within a period of four-fifths of the term of the leasehold, inclusive of the term which may be provided by an enforceable option of renewal, but in no event exceeding 35 years;
(E) For the purposes of this Code section, real estate shall not be deemed to be encumbered by reason of the existence of taxes or assessments that are not delinquent, instruments creating or reserving mineral, oil, or timber rights, rights of way, joint driveways, sewer rights, public utility easements, rights in walls, nor by reason of building restrictions or other restrictive covenants, nor when the real estate is subject to lease in whole or in part whereby rents or profits are reserved to the owner, provided that the security created by the mortgage or trust or security deed on the real estate is a first lien upon the real estate and that there is no condition or right of reentry or forfeiture under which the lien can be cut off, subordinated, or otherwise disturbed;
(2) Purchase money mortgages or like securities received upon the sale or exchange of real property acquired;
(3) Bonds, notes, or other evidences of indebtedness which are secured by mortgage or deed of trust or deed to secure debt on real estate or an interest in real estate in the United States, if payment of such indebtedness or part of such indebtedness is guaranteed or insured by the secretary of veterans affairs in accordance with the Servicemen's Readjustment Act of 1944, 1 as amended;
(4)(A) Bonds, notes, or other evidences of indebtedness which are secured by mortgage or deed of trust or deed to secure debt insured in whole or in part by the secretary of housing and urban development under the terms of the National Housing Act, 2 as amended, or any other loan guaranteed by the federal government or its instrumentalities.
(B) Any portion of a loan referred to in paragraph (3) or subparagraph (A) of this paragraph, which is neither insured by the secretary of housing and urban development nor guaranteed under the Servicemen's Readjustment Act, as amended, is subject to the same provisions as apply under this article to uninsured mortgage loans.
(b) Nothing in this Code section shall be deemed to prohibit an insurer from renewing or extending a loan for the original or a lesser amount where a shrinkage in value of the real estate securing the loan would cause its value to be less than the amount otherwise required in relation to the amount of the loan.
1 See 38 U.S.C.A. § 3701 et seq.
2 12 U.S.C.A. § 1701 et seq.
(a) In addition to the investment authority granted to insurers under Code Sections 33-11-20, 33-11-21, and other applicable provisions of this title, an insurer authorized to transact insurance in this state, other than an insurer authorized to transact mortgage guaranty insurance, may invest in, purchase, or hold a mortgage or a mortgage participation, pass-through, conventional pass-through, trust certificate, or other similar security which represents an undivided, beneficial interest in a pool of loans secured by first mortgages, deeds of trust, or deeds to secure debt upon fee simple, unencumbered, improved, or income-producing real property located in the United States or Canada, which is improved with a residential building or a condominium unit or buildings designed for occupancy by not more than four families, including leasehold estates in such real estate if such first mortgages, deeds of trust, or deeds to secure debt are fully guaranteed or insured by the Federal Housing Administration, the United States Department of Veterans Affairs, the Farmers Home Administration, the Federal Home Loan Mortgage Corporation, the Government National Mortgage Association, the Federal National Mortgage Association, or any other similar governmental entity or instrumentality or by an insurer authorized to transact mortgage guaranty insurance in this state in accordance with such rules and regulations as may be promulgated by the Commissioner after due notice and hearing.
(b) Notwithstanding any provisions of this title which might be construed to the contrary, the Commissioner may, in his discretion, grant, deny, or revoke the authority of any authorized insurer to invest in or to continue to hold its investment in such securities if, after due notice and hearing, he shall determine that such continued investments would be hazardous to such insurer's policyholders or to the public. In such event, the Commissioner shall give such company a reasonable period of time, not to exceed three years, to dispose of such investments as otherwise provided for in this title, subject to such extensions of time or exceptions as the Commissioner, in his discretion, may grant.
(a) In connection with a loan on the security of real estate designed and used primarily for residential purposes only, which loan was acquired pursuant to Code Section 33-11-25, an insurer may lend or invest an amount not exceeding 20 percent of the amount loaned on or invested in the real estate mortgage or loan deed on the security of a chattel mortgage to be amortized by regular periodic payments within a term of not more than five years, and representing a first and prior lien, except for taxes not then delinquent, on personal property constituting durable equipment owned by the mortgagor or security grantor and kept and used in the mortgaged premises.
(b) For the purpose of this Code section, the term “durable equipment” shall include only mechanical refrigerators, air-conditioning equipment, mechanical laundering machines, heating and cooking stoves and ranges, and, in addition, in the case of apartment houses and hotels, room furniture and furnishings.
(c) Prior to the acquisition of a chattel mortgage as prescribed by this Code section, items of property to be included in such mortgage shall be separately appraised by a qualified appraiser and the fair market value of such items of property determined. No chattel mortgage loan shall exceed in amount the same ratio of loan to the value of the property as is applicable to the companion loan on the real property.
(d) This Code section shall not prohibit an insurer from taking liens on personal property as additional security for any investment otherwise eligible under this article.
(a) In addition to other investments eligible under this article, a title insurer may invest and have invested an amount not exceeding 50 percent of its paid-in capital stock in its abstract plant and equipment and, with the Commissioner's consent, in stocks of abstract companies.
(b) Investments authorized by this Code section shall not be credited against the insurer's required unearned premium or guaranty fund reserve provided for under Code Section 33-10-10.
(a) If real property securing any evidence of indebtedness held by an insurer is used for agricultural purposes and a proceeding to foreclose the security instrument or an insolvency proceeding relating to the mortgagor has been commenced or, if the mortgagor has made an assignment for the benefit of creditors, the insurer may, for the purpose of preserving or enhancing the earnings of the property:
(1) Purchase agricultural livestock or equipment and utilize the same or cause the same to be utilized in the operation of the property by the mortgagor, or a receiver or trustee, or by the insurer-creditor; or
(2) Lend up to the value of any agricultural equipment or livestock which may be used in the operation of the property, on the security of a first lien on the equipment and livestock.
(b) Nothing in this Code section shall be deemed to limit any right which the insurer may otherwise have under or with respect to any loan, mortgage, or investment.
(a) An insurer shall not directly or indirectly acquire or hold real estate except as authorized in this Code section and in Code Sections 33-11-30 through 33-11-32. An insurer may acquire and hold:
(1) Land and buildings on such land used or acquired for use as its principal home office and branch offices for the convenient transaction of its own business; portions of such buildings not used for its own business may be rented by the insurer to others;
(2) Real property acquired in satisfaction in whole or in part of loans, mortgages, liens, judgments, decrees, or debts previously owing to the insurer in the course of its business;
(3) Real property acquired in part payment of the consideration on the sale of other real property owned by it if such transaction effects a net reduction in the insurer's investment in real estate;
(4) Real property acquired by gift or devise, or through merger, consolidation, or bulk reinsurance of another insurer under this title; or
(5) Additional real property and equipment incident to real property if necessary or convenient for the enhancement of the marketability or sale value of real property previously acquired or held by it under paragraphs (2) through (4) of this subsection, but subject to the prior written approval of the Commissioner.
(b) The amount invested by an insurer in home office and branch office property under paragraph (1) of subsection (a) of this Code section shall not exceed 10 percent of the insurer's admitted assets, but the Commissioner may grant permission to the insurer to invest in real property for that purpose in an increased amount not to exceed 25 percent of admitted assets.
(a) Authority to make; terms and conditions. Every insurance company organized and doing business by virtue of the laws of this state shall have authority, in addition to all other investments authorized by law, to invest assets in real estate acquired for the purpose of leasing the same to any person, firm, or corporation, or in real estate already leased to any person, firm, or corporation, under the following terms and conditions:
(1) That the lessee shall at his own cost erect, or that there has already been erected on such real estate, free of liens, a building or other improvements costing an amount at least equal to the value of the said real estate exclusive of improvements; but, if the lease is entered into simultaneously with the purchase of the real estate, the lessor may agree to erect such improvements on the real estate;
(2) That the said improvements shall remain on the said property during the period of the lease with provisions when such improvements are put upon the said property at the cost of the lessee that at the termination of the lease the ownership of the improvements free of liens shall vest in the owner of the real estate;
(3) That the lessee shall during the term of the lease, or the unexpired period of the lease if the property is bought subject to the lease, pay to the owner of the real estate rent in such amount as will enable the owner to amortize completely the improvements put upon the real estate according to a standard amortization table then in use at or before the end of the normal termination of the lease or at the end of 30 years should the lease, or the unexpired period of the lease, be for a longer period than 30 years; and
(4) That during the term of the lease the tenant shall pay all taxes and assessments levied on or against the said real estate, including improvements, shall keep and maintain the said improvements in good repair, and shall provide and maintain for the benefit of the lessor fire and extended coverage insurance on such improvements at least equal to the then current insurable value of the improvements.
(b) Lease and improvements as prerequisites to treatment as investment. Real estate acquired pursuant to this article shall not be treated as an investment unless and until the improvements required under subsection (a) of this Code section have been constructed and the lease agreement entered into in accordance with the terms of this Code section, but if the lessee is a corporation, the bonds, debentures, notes, or preferred stock of which are eligible as investments under the laws of this state, the requirements of this Code section as to the erection of improvements by the lessee, the cost of the improvements, and the vesting of ownership of the improvements in the owner of the real estate shall not be applicable.
(c) Treatment as admitted asset. Real estate acquired under authority of this Code section shall not be treated as an admitted asset in an amount in excess of the actual investment reduced each year by decrements out of the income from said property sufficient to write off completely, based on standard amortization tables in general use, the improvements at the normal termination of the lease or at the end of 30 years should the term of the lease, or the unexpired period of the lease, be for a longer period than 30 years.
(d) Limitation of amount. The total investment of any company under this Code section shall not exceed 5 percent of its admitted assets. No investment shall be made by any company pursuant to this Code section which will cause the company's investment in all real property owned by it to exceed 25 percent of its admitted assets or when all real property owned by the company equals or exceeds 25 percent of its admitted assets.
Subject to prior approval of the Commissioner, an insurer may acquire and hold real property for recreation, hospitalization, convalescence, and retirement purposes of its employees. All investments under this Code section shall not exceed 5 percent of the insurer's surplus; or, if a mutual or reciprocal insurer, all of those investments shall not exceed 5 percent of the insurer's surplus in excess of the surplus required to be maintained under this title for its authority to transact insurance.
No investment in real property shall be made by any insurer pursuant to Code Section 33-11-30 or 33-11-31 which will cause the insurer's investment in all real property owned or held by it directly or indirectly to exceed 25 percent of its admitted assets.
(a) In addition to investments excluded pursuant to other provisions of this title, an insurer shall not directly or indirectly invest in or lend its funds upon the security of:
(1) Any investment or security which is found by the Commissioner to be designed to evade any prohibition of this title;
(2) Issued shares of its own capital stock, except for the purpose of mutualization under Chapter 14 of this title or in connection with a plan approved by the Commissioner for purchase of the shares by the insurer's employees or agents;
(3) Except with the advance consent of the Commissioner, securities issued by any corporation or enterprise the controlling interest of which is, or will after acquisition by the insurer be, held directly or indirectly by the insurer or any combination of the insurer and the insurer's directors, officers, parent corporation, subsidiaries, or controlling stockholders. Investments in subsidiaries, to the extent otherwise authorized by this article, shall not be subject to this provision; or
(4) Any note or other evidence of indebtedness of any director, officer, or controlling stockholder of the insurer.
(b) No insurer shall underwrite or participate in the underwriting of an offering of securities or property by any other person.
After satisfying requirements of this article, any funds of any domestic insurer in excess of its reserve and capital, if a stock insurer, or surplus, if a mutual or reciprocal insurer, required to be maintained may be invested without limitation in any investments otherwise authorized by this title, and, in addition, in the other investments, notwithstanding any prohibition contained in Code Section 33-11-29, as may be approved by the Commissioner; provided, however, that approval of the Commissioner is not required except to the extent the investments constitute more than 5 percent of the total assets of an insurer.
Insurance companies organized and doing business by virtue of the laws of this state may sell, assign, transfer, and convey, either with or without warranty, or either with or without recourse upon it, as it may prefer, any real estate, personal property, bond, note, mortgage, deed of trust, deed to secure debt, or other form of property or securities in which it may have invested its money or its assets or on which it may have made loans as allowed by law and may also buy and sell any realty that may be necessary for the protection of any loan such insurance company may lawfully make.
(a) Except as provided in subsection (d) of this Code section, an insurer shall dispose of real property within time limits as follows:
(1) If acquired under paragraph (1) of subsection (a) of Code Section 33-11-29 or Code Section 33-11-31, the insurer shall sell the property within five years after it ceased to be used or to be necessary for the purposes stated in paragraph (1) of subsection (a) of Code Section 33-11-29 or Code Section 33-11-31;
(2) If acquired under paragraph (2), (3), or (4) of subsection (a) of Code Section 33-11-29, the insurer shall sell the property within five years after the insurer acquired title to the property;
(3) If acquired under paragraph (5) of subsection (a) of Code Section 33-11-29, the insurer shall sell the property within five years after the date of acquisition by the insurer of the real property the marketability or sales price of which was so enhanced; and
(4) If acquired under Code Section 33-11-30, the insurer shall within five years after the termination or expiration of the lease sell the property or re-lease the property for an additional term under the same conditions provided for in Code Section 33-11-30 as for an original leasing.
(b) Any real property otherwise subject to disposal under paragraphs (2) through (4) of subsection (a) of this Code section may be retained by the insurer for home office or branch office purposes for so long as so used, provided that retention of the real property is in compliance with any other provisions of this article applicable to the home office and branch office property (real property leasing).
(c) Any real property otherwise subject to disposal under paragraph (1), (2), or (3) of subsection (a) of this Code section may be retained by the insurer for leasing under Code Section 33-11-30 for so long as so used and subject to provisions otherwise applicable to such real property for leasing.
(d) Upon proof satisfactory to him that the interests of the insurer will suffer materially by the forced sale of such real property, the Commissioner may by certificate grant a reasonable additional period, as specified in the certificate, within which the insurer shall dispose of any particular parcel of real property.
(e) Nothing contained in this Code section shall prevent any insurer from improving or conveying its real property, notwithstanding the lapse of five years without having procured a certificate from the Commissioner.
Any personal property or securities lawfully acquired by an insurer which it could not otherwise have invested in or loaned its funds upon at the time of the acquisition shall be disposed of within three years from date of acquisition unless within that period the security has attained to the standard of eligibility. However, any security or personal property acquired under any agreement of bulk reinsurance, merger, or consolidation may be retained for a longer period if so provided in the plan for the reinsurance, merger, or consolidation as approved by the Commissioner under Chapter 14 of this title. Upon application by the insurer and proof that forced sale of any of the property or security would materially injure the interests of the insurer, the Commissioner may extend the disposal period for an additional reasonable time.
(a) Any real estate, personal property, or securities lawfully acquired and held by an insurer after expiration of the period for disposal of such real estate, personal property, or securities or any extension of the period granted by the Commissioner, as provided in Code Section 33-11-39 or 33-11-40, shall not be allowed as an asset of the insurer.
(b) The insurer shall immediately dispose of any ineligible investment unlawfully acquired by it, and the Commissioner may suspend or revoke the insurer's certificate of authority if the insurer fails to dispose of the investment within a reasonable time as the Commissioner may, by his order, specify.
(a) The investments of foreign and alien insurers shall be as permitted by the laws of their domicile but shall be of a quality substantially as high as those required under this article for similar funds of like domestic insurers.
(b) For the purposes of this Code section the domicile of an alien insurer, other than insurers formed under the laws of Canada, shall be that state designated by the insurer in writing filed with the Commissioner at time of admission to this state and may be any one of the following states:
(1) This state if the insurer is entering through this state to transact insurance in the United States through a United States branch;
(2) That in which the insurer was first authorized to transact insurance;
(3) That in which is located the insurer's principal place of business in the United States; or
(4) That in which is held the larger deposits of trusteed assets of the insurer for the protection of its policyholders and creditors in the United States.
(c) If the insurer makes no such designation, its domicile shall be deemed to be that state in which is located its principal place of business in the United States.
(d) In the case of the insurer formed under the laws of Canada or a province of Canada, its domicile shall be deemed to be that province in which its head office is situated.
Notwithstanding any provision of the federal Secondary Mortgage Market Enhancement Act of 1984, 15 U.S.C. Section 77r-1, to the contrary, any insurer subject to the provisions of this title shall comply with all provisions, restrictions, and limitations concerning investments provided in this article.
(a) The purpose of this article is to protect and to further the interests of insureds, creditors, and the general public. This objective will be met by the establishment of:
(1) Prudent standards by which an insurer shall develop its investment policy and investment portfolio;
(2) A minimum financial security benchmark and a minimum asset requirement, each of which shall be supported by classes of investments and, as applicable, noninvested assets, described in this article;
(3) A level of investment discretion whereby the regulation of an insurer's investment practices has minimum interference with management initiative and judgment; and
(4) A prescribed process for actions by the Commissioner to address situations where an insurer's investment policy or investment portfolio is not prudent under prevailing circumstances.
(b) This article and the regulations adopted to interpret and implement it shall apply only to domestic life, accident and sickness, property, and casualty insurers licensed pursuant to Code Section 33-3-2 to transact the classes of business described in paragraphs (1) through (5) of Code Section 33-3-5 and United States branches of similar alien insurers entered through this state if such entry is otherwise permitted by law.
(c) Separate accounts established in accordance with Code Sections 33-11-65 through 33-11-67 shall be governed pursuant to those Code sections.
For purposes of this article, the term:
(1) “Admitted assets” means assets permitted to be reported as admitted assets on the statutory financial statement of the insurer most recently required to be filed with the Commissioner.
(2) “Asset-backed/mortgage-backed securities” shall include single-class mortgage-backed/asset-backed securities, multiclass residential mortgage-backed securities, and multiclass commercial mortgage-backed/asset-backed securities.
(3) “Asset-valuation reserve” means the reserve required to be computed and reported in the annual and quarterly financial statements, adopted for use by the Commissioner, which is designed to address the credit related and equity risks of a domestic life or accident and sickness insurer's assets.
(4) “Cap” means an option contract in which the cap writer (seller), in return for a premium, agrees to limit, or cap, the cap holder's (purchaser's) risk associated with an increase in a reference rate or index.
(5) “Collar” means a combination of a cap and a floor (one purchased and one written). A collar fixes the rate between two levels (the strike prices of the cap and the floor).
(6) “Counterparty exposure amount” means:
(A) The net amount of credit risk attributable to an over-the-counter derivative instrument. The amount of credit risk equals:
(i) The market value of the over-the-counter derivative instrument if the liquidation of the derivative instrument would result in a final cash payment to the insurer; or
(ii) Zero if the liquidation of the derivative instrument would not result in a final cash payment to the insurer;
(B) If over-the-counter derivative instruments are entered into under a written master agreement which provides for netting of payments owed by the respective parties and the domiciliary jurisdiction of the counterparty is either within the United States or, if not within the United States, within a foreign jurisdiction listed in the Purposes and Procedures Manual of the NAIC Securities Valuation Office as eligible for netting in accordance with procedures adopted by the National Association of Insurance Commissioners and adopted by regulation promulgated by the Commissioner or as otherwise prescribed by regulation promulgated by the Commissioner, the net amount of credit risk shall be the greater of zero or the net sum of:
(i) The market value of the over-the-counter derivative instruments entered into under the agreement, the liquidation of which would result in a final cash payment to the insurer; and
(ii) The market value of the over-the-counter derivative instruments entered into under the agreement, the liquidation of which would result in a final cash payment by the insurer to the business entity; and
(C) For open transactions, market value shall be determined at the end of the most recent quarter of the insurer's fiscal year and shall be reduced by the market value of acceptable collateral held by the insurer or placed in escrow by one or both parties.
(7) “Debt-like preferred stock” means an investment with the structure of a preferred stock that has the cash flow characteristics of a debt instrument.
(8) “Derivative instrument” means a cap, collar, floor, forward, future, option, swap, or warrant.
(9) “Derivative transaction” means a transaction involving the use of one or more derivative instruments.
(10) “Domestic jurisdiction” means the United States, Canada, any state, any province of Canada, or any political subdivision of any of the foregoing.
(11) “Equity-like preferred stock” means an investment with the structure of a preferred stock that has the characteristics of an equity instrument.
(12) “Floor” means an option contract in which the floor writer (seller), in return for a premium, agrees to limit the risk associated with a decline in a reference rate or index.
(13) “Forward” means a contract in which there is an agreement (other than a futures) between two parties that commits one party to purchase and the other to sell the instrument or commodity underlying the contract at a specified future date.
(14) “Future” means a standardized forward contract traded on organized exchanges. Each exchange specifies the standard terms of futures contracts it sponsors. Futures contracts are available for a wide variety of underlying instruments, including insurance, agricultural commodities, minerals, debt instruments (such as United States Treasury bonds and bills), composite stock indices, and foreign currencies.
(15) “Government sponsored enterprise” means a:
(A) Governmental agency; or
(B) Corporation, limited liability company, association, partnership, joint-stock company, joint venture, trust, or other entity or instrumentality organized under the laws of any domestic jurisdiction to accomplish a public policy or other governmental purpose.
(16) “Hedging transaction” means a derivative transaction which is entered into and maintained to reduce or manage:
(A) The risk of a change in the value, yield, price, cash flow, or quantity of assets or liabilities which the insurer has acquired or incurred or anticipates acquiring or incurring; or
(B) The currency exchange rate risk or the degree of exposure as to assets or liabilities which an insurer has acquired or incurred or anticipates acquiring or incurring.
(17) “High-grade investment” means an investment rated 1 or 2 by the Securities Valuation Office or any successor office in accordance with valuation standards adopted by the National Association of Insurance Commissioners and adopted by regulation promulgated by the Commissioner or as otherwise prescribed by regulation promulgated by the Commissioner.
(18) “Lower grade investment” means an investment rated 4, 5, or 6 by the Securities Valuation Office or any successor office in accordance with valuation standards adopted by the National Association of Insurance Commissioners and adopted by regulation promulgated by the Commissioner or as otherwise prescribed by regulation promulgated by the Commissioner.
(19) “Medium grade investment” means an investment rated 3 by the Securities Valuation Office or any successor office in accordance with valuation standards adopted by the National Association of Insurance Commissioners and adopted by regulation promulgated by the Commissioner or as otherwise prescribed by regulation promulgated by the Commissioner.
(20) “Minimum asset requirement” means the sum of an insurer's liabilities and its minimum financial security benchmark.
(21) “Minimum financial security benchmark” means the amount an insurer is required to maintain under Code Section 33-11-52.
(22) “Multiclass commercial mortgage-backed/asset-backed securities” means securities which have been divided into two or more classes, which do not receive proportionate payments of principal and interest, each of which represents an ownership interest in instruments or cash flows, but not including those secured by liens on one-family to four-family residential properties, including:
(A) Defined multiclass commercial mortgage-backed securities which have been divided into two or more classes, which do not receive proportionate payments of principal and interest, each of which represents an ownership interest in instruments, directly or indirectly secured by a first lien on one or more parcels of real estate upon which is located one or more commercial structures, and rated in one of the two highest generic rating categories established by a nationally recognized statistical rating organization that is recognized by the Securities Valuation Office in accordance with valuation standards adopted by the National Association of Insurance Commissioners and adopted by regulation promulgated by the Commissioner or as otherwise prescribed by regulation promulgated by the Commissioner; and
(B) Other multiclass commercial mortgage-backed/asset-backed securities which have been divided into two or more classes, which do not receive proportionate payments of principal and interest, each of which represents an ownership interest in instruments or cash flows, including, but not limited to, instruments secured by liens on one or more parcels of real estate upon which is located one or more commercial structures that are not first liens or, if secured by first liens, the securities are rated below the two highest generic rating categories established by a nationally recognized statistical rating organization that is recognized by the Securities Valuation Office in accordance with valuation standards adopted by the National Association of Insurance Commissioners and adopted by regulation promulgated by the Commissioner or as otherwise prescribed by regulation promulgated by the Commissioner.
(23) “Multiclass residential mortgage-backed securities” means mortgage-backed securities which have been divided into two or more classes, which do not receive proportionate payments of principal and interest, each of which represents an ownership interest in instruments which are directly or indirectly secured by liens on one-family to four-family residential properties, including:
(A) Defined multiclass residential mortgage-backed securities which are first liens and are rated in one of the two highest generic rating categories established by a nationally recognized statistical rating organization that is recognized by the Securities Valuation Office in accordance with valuation standards adopted by the National Association of Insurance Commissioners and adopted by regulation promulgated by the Commissioner or as otherwise prescribed by regulation promulgated by the Commissioner; and
(B) Other multiclass residential mortgage-backed securities which are not first liens or, if secured by first liens, are rated below the two highest generic rating categories established by a nationally recognized statistical rating organization that is recognized by the Securities Valuation Office in accordance with valuation standards adopted by the National Association of Insurance Commissioners and adopted by regulation promulgated by the Commissioner or as otherwise prescribed by regulation promulgated by the Commissioner.
(24) “Option” means a contract that gives the option holder (purchaser of the option rights) the right, but not the obligation, to enter into a transaction with the option writer (seller of the option rights) on terms specified in the contract. A call option allows the holder to buy the underlying instrument, while a put option allows the holder to sell the underlying instrument.
(25) “Over-the-counter derivative instrument” means a derivative instrument entered into with a business entity other than through a qualified exchange, qualified foreign exchange, or cleared through a qualified clearing-house.
(26) “Potential exposure” means the amount determined in accordance with the Annual Statement Instructions adopted by the National Association of Insurance Commissioners and adopted by regulation promulgated by the Commissioner or as otherwise prescribed by regulation promulgated by the Commissioner.
(27) “Replication” means a derivative transaction involving one or more derivative instruments being used to modify the cash flow characteristics of one or more investments held by an insurer in a manner so that the aggregate cash flows of the derivative instruments and investments reproduce the cash flows of another investment having a higher risk-based capital charge than the risk-based capital charge of the original investments or investments.
(28) “Single-class mortgage-backed/asset-backed securities” means pass-through certificates and other securitized loans issued using only one class where the payment of interest or principal or both of the security is directly proportional to interest or principal or both received by the business entity from the loans supporting the security.
(29) “Special rated credit instrument” means an asset-backed/mortgage-backed security authorized by paragraph (2) of subsection (a) of Code Section 33-11-55 where the investment is structured such that:
(A) The payments are the interest only portion of the underlying collateral;
(B) Such payments are reduced as the balance of the underlying collateral is reduced; and
(C) Such reduction may cause a significant loss of the original investment. For purposes of this subparagraph, “significant” shall mean a loss of 15 percent or more.
(30) “SVO listed mutual fund” means a money market mutual fund or short-term bond fund that is registered with the United States Securities and Exchange Commission under the Investment Company Act of 1940 1 and that has been determined by the Securities Valuation Office or any successor office in accordance with valuation standards adopted by the National Association of Insurance Commissioners and adopted by regulation promulgated by the Commissioner or as otherwise prescribed by regulation promulgated by the Commissioner to be eligible for special reserve and reporting treatment other than as common stock.
(31) “Swap” means a contract to exchange, for a period of time, the investment performance of one underlying instrument for the investment performance of another underlying instrument, typically without exchanging the instruments themselves. An interest rate swap is a contractual agreement between two parties to exchange interest rate payments (usually fixed for variable) based on a specified amount of underlying assets or liabilities (known as the notional amount) for a specified period. The swap does not involve an exchange of principal. The result of these transactions is to transform payments from a variable rate to a fixed rate, from a fixed rate to a variable rate, or from one variable rate index to another variable rate index.
(32) “Warrant” means an instrument that gives the holder the right to purchase an underlying financial instrument at a given price and time or at a series of prices and times outlined in the warrant agreement.
1 15 U.S.C.A. § 80a-1 et seq.
(a)(1) Unless otherwise established in accordance with paragraphs (2) and (3) of this subsection, the amount of the minimum financial security benchmark for an insurer shall be the greater of:
(A) The authorized control level risk-based capital applicable to the insurer as set forth by Code Section 33-56-3 less the asset valuation reserve and voluntary investment reserves as defined by the valuation procedures in Code Section 33-10-14; or
(B) The minimum capital and surplus required by this title for maintenance of an insurer's certificate of authority.
(2) The Commissioner may, in accordance with the factors in paragraph (2) of subsection (b) of this Code section, establish by order a minimum financial security benchmark to apply to a specific insurer provided it is not less than the amount determined by paragraph (1) of this subsection.
(3) The Commissioner may establish by regulation a minimum financial security benchmark that is a multiple of authorized control level risk-based capital to apply to any class of insurers provided the amount established by the regulation is not less than the amount determined in paragraph (1) of this subsection.
(b) The Commissioner shall determine the amount of surplus that shall constitute an insurer's minimum financial security benchmark, as an amount that will provide reasonable security against contingencies affecting the insurer's financial position that are not fully covered by reserves or by reinsurance.
(1) The Commissioner shall consider the risks of the following types of contingencies:
(A) Increases in the frequency or severity of losses beyond the levels contemplated by the rates charged;
(B) Increases in expenses beyond those contemplated by the rates charged;
(C) Decreases in the value of or the return on invested assets below those planned on;
(D) Changes in economic conditions that would make liquidity more important than contemplated and would force untimely sale of assets or prevent timely investments;
(E) Currency devaluation to which the insurer may be subject; and
(F) Any other contingencies the Commissioner can identify that may affect the insurer's operations.
(2) In determining an insurer's minimum financial security benchmark under this subsection, the Commissioner shall take into account the following factors:
(A) The most reliable information available as to the magnitude of the various risks under paragraph (1) of this subsection;
(B) The extent to which the risks in paragraph (1) of this subsection are independent of each other or are related, and whether any dependency is direct or inverse;
(C) The insurer's recent history of profits or losses;
(D) The extent to which the insurer has provided protection against the contingencies in other ways than the establishment of surplus, including redundancy of premiums, adjustability of contracts under their terms, investment valuation reserves whether voluntary or mandatory, appropriate reinsurance, the use of conservative actuarial assumptions to provide a margin of security, reserve adjustments in recognition of previous rate inadequacies, contingency or catastrophe reserves, diversification of assets and underwriting risks;
(E) Independent judgments of the soundness of the insurer's operations, as evidenced by the ratings of reliable professional financial reporting services; and
(F) Any other relevant factors.
(3) An insurer subject to the provisions of this article shall invest and maintain invested funds not less in amount than the minimum financial security benchmark only in the following:
(A) Cash;
(B) Certificates of deposit or similar certificates or evidences of deposit in banks and trust companies to the extent that the certificates or deposits are insured by the Federal Deposit Insurance Corporation;
(C) Savings accounts, certificates of deposit, or similar certificates or evidences of deposit in savings and loan associations and building and loan associations to the extent that the same are insured by the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation;
(D) Bonds, notes, warrants, and other evidences of indebtedness which are direct obligations of the government of the United States of America or for which the full faith and credit of the government of the United States of America is pledged for the payment of principal and interest;
(E) Loans guaranteed as to principal and interest by the government of the United States of America, or by any agency or instrumentality of the government of the United States of America, to the extent of such guaranty;
(F) Bonds, notes, warrants, and other securities not in default which are the direct obligations of any domestic jurisdiction, or for which the full faith and credit of such domestic jurisdiction has been pledged for the payment of principal and interest;
(G) The obligations of any county, any incorporated city, town, or village, any school district, water district, sewer district, road district, or any special district, or any other political subdivision or public authority of any state, territory, or insular possession of the United States, or of the District of Columbia, or of the Canadian cities having a population of over 25,000 according to the most recent official census, which has not defaulted for a period of 120 days in the payment of interest upon, or for a period of more than one year in the payment of principal of, any of its bonds, notes, warrants, certificates of indebtedness, securities, or any other interest-bearing obligation during the five years immediately preceding the acquisition of the investment;
(H) Bonds, notes, or other evidences of indebtedness, in addition to those eligible corporate bonds and debentures, which are secured by first mortgages on real estate situated within a domestic jurisdiction, or purchase money mortgages or like securities received upon the sale or exchange of real property acquired; provided, however, that not more than 45 percent in the case of life insurers, and not more than 25 percent in the case of nonlife insurers, of the minimum financial security benchmark may be made up of such investments;
(I) High-grade investments in corporate bonds and debentures having a remaining maturity of five years or less; and
(J) Any other investment not otherwise prohibited by this article that is considered exempt from risk-based capital requirements pursuant to Code Section 33-56-2 in accordance with risk-based capital instructions adopted by the National Association of Insurance Commissioners and adopted by regulation promulgated by the Commissioner or as otherwise prescribed by regulation promulgated by the Commissioner.
The following factors shall be evaluated by the insurer and considered along with its business in determining whether an investment portfolio or investment policy is prudent, and the Commissioner shall consider the following factors prior to making a determination that an insurer's investment portfolio or investment policy is not prudent:
(1) General economic conditions;
(2) The possible effect of inflation or deflation;
(3) The expected tax consequences of investment decisions or strategies;
(4) The fairness and reasonableness of the terms of an investment considering its probable risk and reward characteristics and relationship to the investment portfolio as a whole;
(5) The extent of the diversification of the insurer's investments among:
(A) Individual investments;
(B) Classes of investments;
(C) Industry concentrations;
(D) Dates of maturity; and
(E) Geographic areas;
(6) The quality and liquidity of investments in affiliates;
(7) The investment exposure to the following risks, quantified in a manner consistent with the insurer's acceptable risk level appropriate for the insurer given the level of capitalization and expertise available to the insurer:
(A) Liquidity;
(B) Credit and default;
(C) Systemic (market);
(D) Interest rate;
(E) Call, prepayment, and extension;
(F) Currency; and
(G) Foreign sovereign, political subdivision, and corporate;
(8) The amount of the insurer's assets, capital and surplus, premium writings, insurance in force, and other appropriate characteristics;
(9) The amount and adequacy of the insurer's reported liabilities;
(10) The relationship of the expected cash flows of the insurer's assets and liabilities and the risk of adverse changes in the insurer's assets and liabilities;
(11) The adequacy of the insurer's capital and surplus to secure the risks and liabilities of the insurer; and
(12) Any other factors appropriate for consideration and relevant to whether an investment is prudent.
(a) An insurer's board of directors shall adopt a written plan for acquiring and holding investments and for engaging in investment practices that specifies guidelines as to the quality, maturity, and diversification of investments and other specifications, including investment strategies intended to assure that the investments and investment practices are appropriate for the business conducted by the insurer, its liquidity needs, and its capital and surplus. The board shall review and assess the insurer's technical investment and administrative capabilities and expertise before adopting a written plan concerning an investment strategy or investment practice.
(b) Investments acquired and held under this article shall be acquired and held under the supervision and direction of the board of directors of the insurer. The board of directors shall evidence by formal resolution, at least annually, that it has determined whether all investments have been made in accordance with delegations, standards, limitations, and investment objectives prescribed by the board or a committee of the board charged with the responsibility to direct its investments.
(c) On no less than a quarterly basis, and more often if deemed appropriate, an insurer's board of directors or committee of the board of directors shall:
(1) Receive and review a summary report on the insurer's investment portfolio, its investment activities, and investment practices engaged in under delegated authority, in order to determine whether the investment activity of the insurer is consistent with its written plan; and
(2) Review and revise, as appropriate, the written plan.
(d) In discharging its duties under this Code section, the board of directors shall require that records of any authorizations or approvals, other documentation as the board may require, and reports of any action taken under authority delegated under the plan referred to in subsection (a) of this Code section shall be made available on a regular basis to the board of directors.
(e) If an insurer does not have a board of directors, all references to the board of directors in this article shall be deemed to be references to the governing body of the insurer having authority equivalent to that of a board of directors.
(f) In discharging their duties under this Code section, the directors of an insurer shall perform their duties to the same degree required by Code Section 14-2-830.
(a) The following classes of investments are eligible for support of an insurer's outstanding liabilities, whether they are made directly or through limited partnership interests, joint ventures, stock of an investment subsidiary or membership interests in a limited liability company, trust certificates, participation certificates, or other similar instruments and, with the prior written approval of the Commissioner, general partnership interests:
(1) Cash;
(2) Bonds, investment pools, trust certificates, asset-backed/mortgage-backed securities, SVO listed mutual funds, debt-like preferred stock, or evidences of indebtedness of governmental units or government sponsored enterprises of a domestic jurisdiction, or private business entities domiciled in a domestic jurisdiction;
(3)(A) Obligations secured by mortgages on real estate situated within a domestic jurisdiction, in an aggregate amount which, together with those investments made pursuant to paragraph (6) of this subsection, does not exceed 45 percent of admitted assets in the case of life insurers and 25 percent in the case of nonlife insurers; but a mortgage loan which is secured by other than a first lien may only be acquired when:
(i) The insurer is the holder of the first lien; or
(ii) No senior loan is cross-collateralized or cross-defaulted with another mortgage loan secured by real estate, and the insurer has the right to cure a default on any senior loans.
(B) The obligations held by the insurer and any obligations with an equal lien priority shall not, at the time of acquisition of the obligation, exceed:
(i) Ninety percent of the fair market value of the real estate, if the mortgage loan is secured by a purchase money mortgage or like security received by the insurer upon disposition of the real estate;
(ii) Eighty percent of the fair market value of the real estate, if the mortgage loan requires immediate scheduled payment in periodic installments of principal and interest, has an amortization period of 30 years or less, and has periodic payments made no less frequently than annually. Each periodic payment shall be sufficient to assure that at all times the outstanding principal balance of the mortgage loan shall be not greater than the outstanding principal balance that would be outstanding under a mortgage loan with the same original principal balance, with the same interest rate and requiring equal payments of principal and interest with the same frequency over the same amortization period. Mortgage loans permitted under this subsection are permitted notwithstanding the fact that they provide for a payment of the principal balance prior to the end of the period of amortization of the loan. For residential mortgage loans, the 80 percent limitation may be increased to 97 percent if acceptable private mortgage insurance has been obtained; or
(iii) Seventy-five percent of the fair market value of the real estate for mortgage loans that do not meet the requirements of division (i) or (ii) of this subparagraph.
(C) For purposes of subparagraph (A) of this paragraph, the amount of an obligation required to be included in the calculation of the loan-to-value ratio may be reduced to the extent the obligation is insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs, or their successors.
(D) Subject to the limitations of Code Section 33-11-58, credit tenant loans with the following characteristics shall be exempt from the provisions of subparagraph (B) of this paragraph:
(i) The loan amortizes over the initial fixed lease term at least in an amount sufficient so that the loan balance at the end of the lease term does not exceed the original appraised value of the real estate;
(ii) The lease payments cover or exceed the total debt service over the life of the loan;
(iii) A tenant or its affiliated entity whose outstanding obligations have a high-grade designation or a comparable rating from a nationally recognized statistical rating organization recognized by the Securities Valuation Office or any successor office in accordance with valuation standards adopted by the National Association of Insurance Commissioners and adopted by regulation promulgated by the Commissioner or as otherwise prescribed by regulation promulgated by the Commissioner and where the tenant or its affiliated entity has a full faith and credit obligation to make the lease payments;
(iv) The insurer holds or is the beneficial holder of a first lien mortgage on the real estate;
(v) The expenses of the real estate are passed through to the tenant, excluding exterior, structural, parking, and heating, ventilation, and air conditioning replacement expenses, unless annual escrow contributions from cash flows derived from the lease payments cover the expense shortfall; and
(vi) There is a perfected assignment of the rents due pursuant to the lease to, or for the benefit of, the insurer.
(E) An insurer shall not acquire an investment under this paragraph if, as a result of and after giving effect to the investment, the aggregate amount of all investments then held by the insurer under this paragraph would exceed:
(i) Four percent of its admitted assets in mortgage loans covering any one secured location;
(ii) One percent of its admitted assets in construction loans covering any one secured location; or
(iii) Eight percent of its admitted assets in construction loans in the aggregate;
(4) Common stock or equity-like preferred stock or equity interests in any business entity in a domestic jurisdiction, or shares of mutual funds registered with the Securities and Exchange Commission of the United States under the Investment Company Act of 1940, 1 other than Securities Valuation Office listed mutual funds, in an amount not exceeding 20 percent of admitted assets in the case of life insurers, and 25 percent in the case of nonlife insurers;
(5) Real property for the convenient accommodation of the insurer's (which may include its affiliates) business operations, including home office, branch office, and field office operations, in an amount not exceeding 10 percent of admitted assets;
(A) Real estate acquired under this paragraph may include excess space for rent to others, if the excess space, valued at its fair market value, would otherwise be a permitted investment under paragraph (6) of this subsection and is so qualified by the insurer;
(B) The real estate acquired under this paragraph may be subject to one or more mortgages, liens, or other encumbrances, the amount of which shall, to the extent that the obligations secured by the mortgages, liens, or encumbrances are without recourse to the insurer, be deducted from the amount of the investment of the insurer in the real estate for purposes of determining compliance with this Code section; and
(C) For purposes of this paragraph, business operations shall not include that portion of real estate used for the direct provision of health care services by an accident and sickness insurer for its insureds. An insurer may acquire real estate used for these purposes under paragraph (6) of this subsection;
(6) Real property, together with the fixtures, furniture, furnishings, and equipment pertaining thereto situated in a domestic jurisdiction, in an amount not exceeding 20 percent of admitted assets in the case of life insurers, and 10 percent in the case of nonlife insurers. Real estate acquired under this paragraph:
(A) Shall be income producing or intended for improvement or development for investment purposes under an existing program (in which case the real estate shall be deemed to be income producing);
(B) May be subject to mortgages, liens, or other encumbrances, the amount of which shall, to the extent that the obligations secured by the mortgages, liens, or encumbrances are without recourse to the insurer, be deducted from the amount of the investment of the insurer in the real estate for purposes of determining compliance with subparagraph (C) of this paragraph; and
(C) An insurer shall not acquire an investment under this paragraph if, as a result of and after giving effect to the investment and any outstanding guarantees made by the insurer in connection with the investment, the aggregate amount of investments then held by the insurer under this paragraph plus the guarantees then outstanding would exceed:
(i) Four percent of its admitted assets in one parcel or group of contiguous parcels of real estate, except that this limitation shall not apply to that portion of real estate used for the direct provision of health care services by an accident and sickness insurer for its insureds, such as hospitals, medical clinics, medical professional buildings, or other health facilities used for the purpose of providing health services; or
(ii) Fifteen percent of its admitted assets in the aggregate;
(7) Loans, securities, or other investments of the types described in paragraphs (1) through (6) of this subsection in countries other than the United States and Canada, provided that the aggregate amount of investments shall not exceed 20 percent of admitted assets;
(8) Bonds or other evidences of indebtedness of international development organizations of which the United States is a member, in an amount not exceeding 5 percent of admitted assets in each organization;
(9) Loans upon the security of the insurer's own policies in amounts that are adequately secured by the policies and that in no case exceed the surrender values of the policies;
(10) Tangible personal property under contract of sale or lease under which contractual payments may reasonably be expected to return the principal of and provide earnings on the investment within its anticipated useful life, in an amount not exceeding 2 percent of admitted assets;
(11) Loans guaranteed as to principal and interest by the Georgia Higher Education Assistance Corporation, to the extent of such guaranty;
(12) Chattel mortgage loans as follows:
(A) In connection with a loan on the security of real estate designed and used primarily for residential purposes only, which loan was acquired in accordance with paragraph (3) of subsection (a) of this Code section, an insurer may lend or invest an amount not exceeding 20 percent of the amount loaned on a chattel mortgage to be amortized by regular periodic payments within a term of not more than five years, and representing a first and prior lien, except for taxes not then delinquent, on personal property constituting durable equipment owned by the mortgagor or security grantor and kept and used in the mortgaged premises;
(B) For the purpose of this paragraph, the term “durable equipment” shall include only mechanical refrigerators, air-conditioning equipment, mechanical laundering machines, heating and cooking stoves and ranges, and in addition, in the case of apartment houses and hotels, room furniture and furnishings;
(C) Prior to the acquisition of a chattel mortgage as prescribed by this Code section, items of property to be included in such mortgage shall be separately appraised by a qualified appraiser and the fair market value of such items of property determined. No chattel mortgage loan shall exceed in amount the same ratio of loan to the value of the property as is applicable to the companion loan on the real property; and
(D) This paragraph shall not prohibit an insurer from taking liens on personal property as additional security for any investment otherwise eligible under this article;
(13)(A) If real property securing any evidence of indebtedness held by an insurer is used for agricultural purposes and a proceeding to foreclose the security instrument or an insolvency proceeding relating to the mortgagor has been commenced or, if the mortgagor has made an assignment for the benefit of creditors, the insurer may, for the purpose of preserving or enhancing the earnings of the property:
(i) Purchase agricultural livestock or equipment and utilize the same or cause the same to be utilized in the operation of the property by the mortgagor, or a receiver or trustee, or by the insurer-creditor; or
(ii) Lend up to the value of any agricultural equipment or livestock which may be used in the operation of the property, on the security of a first lien on the equipment and livestock.
(B) Nothing in this Code section shall be deemed to limit any right which the insurer may otherwise have under or with respect to any loan, mortgage, or investment;
(14) Subject to prior approval of the Commissioner, an insurer may acquire and hold real property for recreation, hospitalization, convalescence, and retirement purposes of its employees. All investments under this paragraph shall not exceed 5 percent of the insurer's surplus; or, if a mutual or reciprocal insurer, all of those investments shall not exceed 5 percent of the insurer's surplus in excess of the surplus required to be maintained under this title for its authority to transact insurance;
(15) Other investments the Commissioner authorizes by regulation; and
(16) Investments not otherwise expressly permitted by this Code section but not specifically prohibited by statute, to the extent of not more than 10 percent of the insurer's admitted assets.
(b) An insurer may exceed the aggregate limitation contained in paragraph (3) of subsection (a) of this Code section by no more than 30 percent of its admitted assets if:
(1) This increased amount is invested only in residential mortgage loans;
(2) The insurer has no more than 10 percent of its admitted assets invested in mortgage loans other than residential mortgage loans;
(3) The loan-to-value ratio of each residential mortgage loan does not exceed 60 percent at the time the mortgage loan is qualified under this increased authority, and the fair market value is supported by an appraisal no more than two years old, prepared by an independent appraiser; and
(4) A single mortgage loan qualified under this increased authority shall not exceed 0.5 percent of its admitted assets.
(c) With the permission of the Commissioner, additional amounts of real estate may be acquired under paragraph (5) of subsection (a) of this Code section.
1 15 U.S.C.A. § 80a-1 et seq.
(a) An insurer may, directly or indirectly through an investment subsidiary, engage in derivative transactions under this article under the following conditions:
(1) An insurer may use derivative instruments under this Code section to engage in hedging transactions which manage risk and certain income generation transactions, as these terms may be further defined in regulation promulgated by the Commissioner;
(2) An insurer shall be able to demonstrate to the Commissioner the intended hedging characteristics and the ongoing effectiveness of the derivative transaction or combination of the transactions through cash flow testing or other appropriate analyses;
(3) An insurer may enter into hedging transactions under this Code section if, as a result of and after giving effect to the transaction:
(A) The aggregate statement value of options, caps, floors, and warrants not attached to another financial instrument purchased and used in hedging transactions does not exceed 7.5 percent of its admitted assets;
(B) The aggregate statement value of options, caps, and floors written in hedging transactions does not exceed 3 percent of its admitted assets; and
(C) The aggregate potential exposure of collars, swaps, forwards, and futures used in hedging transactions does not exceed 6.5 percent of its admitted assets;
(4) An insurer may only enter into the types of income generation transactions described in subparagraphs (A) through (D) of this paragraph if, as a result of and after giving effect to the transactions, the aggregate statement value of the fixed income assets that are subject to call or that generate the cash flows for payments under the caps or floors, plus the face value of fixed income securities underlying a derivative instrument subject to call, plus the amount of the purchase obligations under the puts, does not exceed 10 percent of its admitted assets:
(A) Sales of covered call options on noncallable fixed income securities, callable fixed income securities if the option expires by its terms prior to the end of the noncallable period, or derivative instruments based on fixed income securities;
(B) Sales of covered call options on equity securities, if the insurer holds in its portfolio, or can immediately acquire through the exercise of options, warrants, or conversion rights already owned, the equity securities subject to call during the complete term of the call option sold;
(C) Sales of covered puts on investments that the insurer is permitted to acquire under this article, if the insurer has escrowed, or entered into a custodian agreement segregating, cash or cash equivalents with a market value equal to the amount of its purchase obligations under the put during the complete term of the put option sold; or
(D) Sales of covered caps or floors, if the insurer holds in its portfolio the investments generating the cash flow to make the required payments under the caps or floors during the complete term that the cap or floor is outstanding; and
(5) An insurer shall include all counterparty exposure amounts in determining compliance with the limitations of this article.
(b) The Commissioner may approve additional transactions involving the use of derivative instruments in excess of the limits of this Code section or for other risk management purposes under regulations promulgated by the Commissioner.
(a) Investments not conforming to this article shall not be admitted assets.
(b) Subject to subsection (c) of this Code section, an insurer shall not acquire or hold an investment as an admitted asset unless at the time of acquisition it is:
(1) Eligible for the payment or accrual of interest or discount (whether in cash or other forms of income or securities), eligible to receive dividends or other distributions, or is otherwise income producing;
(2) Acquired under Code Section 33-11-55, 33-11-56, or 33-11-63 as a result of securities lending, repurchase, reverse repurchase, dollar roll transactions or, if a life insurer, the administration of policy loans; or
(3) Under the authority of provisions of this chapter other than this article.
(c) An insurer may acquire or hold as admitted assets investments that do not otherwise qualify as provided in this article if the insurer has not acquired them for the purpose of circumventing any limitations contained in this article, the insurer complies with the provisions of Code Section 33-11-60 and values such investments in accordance with Code Section 33-10-14, and if the insurer acquires the investments in the following circumstances:
(1) As payment on account of existing indebtedness or in connection with the refinancing, restructuring, or workout of existing indebtedness, if taken to protect the insurer's interest in that investment;
(2) As realization on collateral for an obligation;
(3) In connection with an otherwise qualified investment or investment practice, as interest on or a dividend or other distribution related to the investment or investment practice or in connection with the refinancing of the investment, in each case for no additional or only nominal consideration;
(4) Under a lawful and bona fide agreement of recapitalization or voluntary or involuntary reorganization in connection with an investment held by the insurer; or
(5) Under a bulk reinsurance, merger, or consolidation transaction approved by the Commissioner if the assets constitute admissible investments for the ceding, merged, or consolidated companies.
(d) An investment or portion of an investment acquired by an insurer under subsection (c) of this Code section shall become a nonadmitted asset three years (or five years in the case of mortgage loans and real estate) from the date of its acquisition, unless within that period the investment has become a qualified investment under a provision of this article other than subsection (c) of this Code section, but an investment acquired under an agreement of bulk reinsurance, merger, or consolidation may be qualified for a longer period if so provided in the plan for reinsurance, merger, or consolidation as approved by the Commissioner. Upon application by the insurer and a showing that the nonadmission of an asset held under subsection (c) of this Code section would materially injure the interests of the insurer, the Commissioner may extend the period for admissibility for an additional reasonable period of time.
(e) Except as provided in subsections (f) and (h) of this Code section, an investment acquired or committed to be acquired prior to January 1, 2000, shall qualify under this article if, on the date the insurer committed to acquire the investment or on the date of its acquisition, it would have qualified under provisions of this chapter then in effect. For the purposes of determining limitations contained in this article, an insurer shall give appropriate recognition to any commitments to acquire investments.
(f)(1) Each specific transaction constituting an investment practice of the type described in this article that was lawfully entered into by an insurer and was in effect on January 1, 2000, shall continue to be permitted under this article until its expiration or termination under its terms.
(2) A mortgage made pursuant to Code Section 33-11-55 or held as an admitted asset pursuant to paragraph (1) of this subsection shall remain qualified as an admitted asset regardless of any refinancing, modification, or extension of such mortgage loan.
(g) Unless otherwise specified, an investment limitation computed on the basis of an insurer's admitted assets or capital and surplus shall relate to the amount required to be shown on the statutory balance sheet of the insurer most recently required to be filed with the Commissioner.
(h) An investment qualified, in whole or in part, for acquisition or holding as an admitted asset may be qualified or requalified at the time of acquisition or a later date, in whole or in part, under any other provision of this article, if the relevant conditions contained in such other provision are satisfied at the time of qualification or requalification.
(i) An insurer shall maintain documentation demonstrating that investments were acquired in accordance with this article and specifying the Code section under which they were acquired.
(j) An insurer shall not enter into an agreement to purchase securities in advance of their issuance for resale to the public as part of a distribution of the securities by the issuer or otherwise guarantee the distribution, except that an insurer may acquire privately placed securities with registration rights.
(k) Notwithstanding the provisions of this article, the Commissioner, for good cause, may order an insurer to nonadmit, limit, dispose of, withdraw from, or discontinue an investment or investment practice. The authority of the Commissioner under this subsection is in addition to any other authority of the Commissioner.
(l) Insurance futures and insurance futures options are not considered investments or investment practices for purposes of this article.
(a)(1) For purposes of determining compliance with Code Section 33-11-61, securities of a single issuer and its affiliates, other than:
(A) The government of the United States; or
(B) Government sponsored enterprises,
shall not exceed 10 percent of admitted assets.
(2) This limitation shall not apply to the aggregate amounts insured by a single financial guaranty insurer with the highest generic rating issued by a nationally recognized statistical rating organization.
(b) For the purpose of determining compliance with the limitations of this Code section, the admitted portion of assets of subsidiaries authorized under Code Section 33-13-2 shall be deemed to be owned directly by the insurer and any other investors in proportion to the market value or, if there is no market, the reasonable value of their interest in the subsidiaries.
(c) To the extent that investments exceed the limitations specified in subsections (a) and (b) of this Code section, the excess may be assigned to the investment class authorized in paragraph (15) of Code Section 33-11-55, until that limit is exhausted.
(d) Unless otherwise specified, an investment limitation computed on the basis of an insurer's admitted assets or capital and surplus shall relate to the amount required to be shown on the statutory balance sheet of the insurer most recently required to be filed with the Commissioner.
(e) Notwithstanding any provision of the federal Secondary Mortgage Enhancement Act, 15 U.S.C. Section 77r-1, to the contrary, any insurer subject to the provisions of this article shall comply with all restrictions and limitations concerning investments provided in this article.
(f) Notwithstanding any other provision of this article, an insurer authorized to transact insurance in a foreign country may make investments, in a manner consistent with the laws of such country, in securities or other investments which are similar in characteristics and quality to like investments required pursuant to this chapter for investments in the United States of America. The aggregate amount of the investments must not exceed the amount which is customary and necessary for the servicing of the insurance which the insurer has in force in the foreign country.
(g) Subject to the restrictions and limitations provided in this article, an insurer may invest in bonds, notes, warrants, and other securities not in default which are the direct obligations of the government of any foreign country for which the full faith and credit of such government has been pledged for the payment of principal and interest, provided such securities are listed as high by a securities rating organization accepted by the National Association of Insurance Commissioners in accordance with valuation standards adopted by the National Association of Insurance Commissioners and adopted by regulation promulgated by the Commissioner or as otherwise prescribed by regulation promulgated by the Commissioner.
An insurer doing business that requires it to make payment in different currencies shall have investments in securities in each of these currencies in an amount that independently of all other investments meets the requirements of this article as applied separately to the insurer's obligations in each currency. The Commissioner may by order exempt an insurer, or by regulation a class of insurers, from this requirement if the obligations in other currencies are small enough that no significant problem for financial solidity would be created by substantial fluctuations in relative currency values.
In addition to investments excluded or prohibited pursuant to other provisions of this article, an insurer shall not, directly or indirectly:
(1) Engage on its own behalf or through one or more affiliates in a transaction or series of transactions designed to evade the prohibitions of this article; or
(2) Invest in or lend its funds upon the security of shares of its own stock, except that an insurer may acquire shares of its own stock for the following purposes, but the shares shall not be admitted assets of the insurer:
(A) Conversion of a stock insurer into a mutual or reciprocal insurer or a mutual or reciprocal insurer into a stock insurer;
(B) Issuance to the insurer's officers, employees, or agents in connection with a plan approved by the Commissioner for converting a publicly held insurer into a privately held insurer or in connection with other stock option and employee benefit plans; or
(C) In accordance with any other plan approved by the Commissioner.
(a) Invested assets may be counted toward satisfaction of the minimum asset requirement only so far as they are invested in compliance with this article and applicable regulations promulgated and orders issued by the Commissioner pursuant to this article. Assets other than invested assets may be counted toward satisfaction of the minimum asset requirement at admitted annual statement value.
(b) An investment held as an admitted asset by an insurer on January 1, 2000, which qualified under Article 1 of this chapter shall remain qualified as an admitted asset under this article.
(c) If an insurer does not own, or is unable to apply toward compliance with this article, an amount of assets equal to its minimum asset requirement, the Commissioner may deem it to be financially hazardous under Chapter 37 of this title.
(a) The Commissioner may retain at the insurer's expense attorneys, actuaries, accountants, and other experts not otherwise a part of the Commissioner's staff as may be reasonably necessary to assist in reviewing the insurer's investments. Persons so retained shall be under the direction and control of the Commissioner and shall act in a purely advisory capacity.
(b) The investment policy or information related to the investment policy provided to the Commissioner for review under this article shall be considered confidential and shall not be a public record for purposes of Article 4 of Chapter 18 of Title 50 or subject to subpoena, and shall be subject to disclosure only as required for purposes of and in accordance with this title.
(a) If the Commissioner determines that an insurer's investment practices do not meet the provisions of this article, the Commissioner may, after notification to the insurer of the Commissioner's findings, order the insurer to make changes necessary to comply with the provisions of this article.
(b) If the Commissioner determines that by reason of the financial condition, current investment practice, or current investment plan of an insurer, the interests of insureds, creditors, or the general public are or may be endangered, the Commissioner may impose reasonable additional restrictions upon the admissibility or valuation of investments or may impose restrictions on the investment practices of an insurer, including prohibition or divestment.
(c) If the Commissioner is satisfied by evidence of an insurer's financial strength and the competence of management and its investment advisers, the Commissioner may count toward satisfaction of the minimum asset requirement any other investment not specifically prohibited by this article to the extent that the Commissioner is satisfied that the interests of insureds, creditors, and the general public of this state are protected.
(a) An insurer shall not acquire an investment under this article if, as a result of and after giving effect to the investment, the aggregate amount of all investments then held by the insurer under this article would exceed:
(1) For medium and lower grade investments, 20 percent of admitted assets;
(2) For lower grade investments, 10 percent of admitted assets;
(3) For investments rated 5 or 6 by the Securities Valuation Office or any successor office pursuant to the valuation procedures of Code Section 33-10-14, 5 percent of admitted assets; or
(4) For investments rated 6 by the Securities Valuation Office or any successor office pursuant to the valuation procedures of Code Section 33-10-14, 1 percent of admitted assets.
(b) The aggregate amount of special rated credit instruments held by an insurer pursuant to the valuation procedures of Code Section 33-10-14 shall not exceed 10 percent of admitted assets.
(a) Any domestic life insurance company may establish one or more separate accounts and may allocate to such separate account or accounts, in accordance with the terms of a written agreement, any amounts paid to the company in connection with a pension, retirement, or profit-sharing plan, which is established by or in behalf of any group listed in Code Section 33-27-1, which are to be applied to provide benefits payable in fixed or variable dollar amounts.
(b) The amounts allocated to each account and accumulations thereon may be invested and reinvested in any class of investments which may be authorized in the written agreement without regard to any requirements or limitations prescribed by the laws of this state governing the investments of domestic life insurance companies, provided that, to the extent that the company's reserve liability with regard to benefits guaranteed as to amount and duration and funds guaranteed as to principal amount or stated rate of interest is maintained in any separate account, a portion of the assets of such separate account at least equal to such reserve liability shall be invested in accordance with the laws of this state governing the investment of reserves of domestic life insurance companies, as set forth in this article. The investments in such separate account or accounts shall not be taken into account in applying the investment limitations applicable to other investments of the company.
(c) The income, if any, and gains and losses realized or unrealized on each account shall be credited to or charged against the amounts allocated to the account in accordance with the written agreement, without regard to other income, gains, or losses of the company.
(d) Assets allocated to a separate account shall be valued at their market value on the date of valuation or, if there is no readily available market, in accordance with the terms of the applicable written agreement, provided that the portion of the assets of such separate account at least equal to the company's reserve liability with regard to the guaranteed benefits and funds referred to in subsection (b) of this Code section, if any, shall be valued in accordance with the rules otherwise applicable to the company's assets.
(e) Amounts allocated to a separate account in the exercise of the power granted by this Code section shall be owned by the company, and the company shall not be, nor hold itself out to be, a trustee with respect to those amounts.
(f) If the agreement provides for payment of benefits in variable amounts, any contract entered into pursuant to this chapter and delivered in this state providing for such variable benefits shall be a group annuity contract. Such contract shall:
(1) Cover at least ten persons at the time it is entered into;
(2) Be for the purpose of funding a pension, retirement, or profit-sharing plan or agreement which meets the requirements for qualification under Section 401, 403, or 414 of the United States Internal Revenue Code, as now or hereafter amended, or any corresponding provisions of prior or subsequent United States revenue laws; and
(3) Prohibit the allocation to the separate account of any payment or contribution made by any employee.
The contract shall contain a statement of the essential features of the procedure to be followed by the company in determining the dollar amounts of such variable benefits. The contract and any group certificate issued under the contract shall state that such dollar amounts may decrease or increase and shall contain on its first page, in a prominent position, a statement that the benefits under the contract are on a variable basis.
(g) No domestic life insurance company and no foreign or Canadian life insurance company admitted to transact business in this state shall be authorized to deliver within this state any contract entered into pursuant to this article and providing benefits in variable amounts until said company has satisfied the Commissioner that its condition or methods of operation in connection with the issuance of such contracts will not be such as would render its operation hazardous to the public or its policyholders in this state. In determining the qualification of a company requesting authority to deliver the contracts in this state, the Commissioner shall consider, among other things:
(1) The history and financial condition of the company;
(2) The character, responsibility, and general fitness of the officers and directors of the company; and
(3) In the case of a foreign or Canadian company, whether the regulations provided by the state of its domicile or that province in which its head office is located provides a degree of protection to policyholders and the public which is substantially equal to that provided by this Code section and the rules and regulations issued thereunder.
(h) Notwithstanding any other provisions of law, the Commissioner shall have sole authority to issue such reasonable rules and regulations as may be necessary to carry out the purposes of this Code section.
(i) Nothing in this Code section shall be deemed to repeal any provision of Code Section 33-25-9 and no contract or agreement made pursuant to this Code section, or policy or certificate issued under this Code section, shall be construed to violate Code Section 33-25-9.
(a) This Code section is cumulative of and in addition to the authority granted by any other law of this state relating to separate accounts for insurance companies or to annuity contracts on a variable basis and shall not be deemed to repeal or affect the provisions of Code Section 33-11-65 dealing with the group variable annuity contracts referred to in subsection (f) of Code Section 33-11-65.
(b) When used in this Code section, the term “variable annuity contract” shall mean any individual or group contract issued by an insurance company or annuity company providing for annuity benefits and incidental contractual payments or values which vary in whole or in part so as to reflect investment results of any segregated portfolio of investments or of a designated separate account or accounts in which amounts received or retained in connection with any of the contracts have been placed.
(c) Any domestic life insurance company may establish one or more separate accounts and may allocate to those accounts amounts to provide for annuities (and benefits incidental thereto) payable in fixed or variable amounts or both.
(d) Except as provided in subsection (f) of this Code section, amounts allocated to any separate account and accumulations thereon may be invested and reinvested without regard to any requirements or limitations prescribed by the laws of this state governing the investments of domestic life insurance companies, provided that, to the extent that the company's reserve liability with regard to benefits guaranteed as to amount and duration and funds guaranteed as to principal amount or stated rate of interest is maintained in any separate account, a portion of the assets of such separate account at least equal to the reserve liability shall be invested in accordance with the laws of this state governing the investment of reserves of life insurance companies. The investments in the separate account or accounts shall not be taken into account in applying the investment limitations applicable to other investments of the company.
(e) To the extent any such domestic company deems it necessary to comply with any applicable federal or state laws, the company, with respect to any separate account, including without limitation any separate account which is a management investment company or a unit investment trust, may provide for persons having an interest in such separate account appropriate voting and other rights and special procedures for the conduct of the business of such account, including without limitation, special rights and procedures relating to investment policy, investment advisory services, selection of independent public accountants, and the selection of a committee, the members of which need not be otherwise affiliated with the company, to manage the business of the account. This subsection shall not affect existing laws pertaining to the voting rights of the life insurance company's stockholders or policyholders except as provided in this Code section.
(f) No domestic company shall, for any separate account, purchase the voting securities of a single issuer if such purchase would result in such company, and all domestic insurance companies, directly or indirectly controlling, controlled by, or under common control with the company and holding in the company's or companies' separate account or accounts an amount in excess of 10 percent of the total issued and outstanding voting securities of the issuer, provided that this limitation shall not apply with respect to securities held in separate accounts, the voting rights in which are exercisable in accordance with instructions from persons having interests in such accounts. This limitation shall not apply to the investment for a separate account in the securities of an investment company registered under the Investment Company Act of 1940. 1
(g) No sale, exchange, or other transfer of assets may be made by any domestic company between any of its separate accounts or between any other investment account and one or more of its separate accounts unless, in case of a transfer into a separate account, the transfer is made solely to establish the account or to support the operation of the contracts with respect to the separate account to which the transfer is made and unless the transfer, whether into or from a separate account, is made by transfer of cash or by a transfer of securities having a readily determinable market value, provided that transfer of securities is approved by the Commissioner. The Commissioner may approve other transfers among such accounts if, in his or her opinion, the transfers would not be inequitable.
(h) The income, if any, and gains and losses, realized or unrealized, from assets allocated to each account shall be credited to or charged against the account without regard to income, gains, or losses of the company.
(i) Unless otherwise approved by the Commissioner, assets allocated to a separate account shall be valued at their market value on the date of valuation or, if there is no readily available market, as provided under the terms of the contract or the rules or other written agreement applicable to such separate account, provided that the portion of the assets of the separate account equal to the company's reserve liability with regard to the guaranteed benefits and funds referred to in subsection (d) of this Code section, if any, shall be valued in accordance with the rules otherwise applicable to the company's assets. The reserve liability for variable annuity contracts shall be determined in accordance with actuarial procedures that recognize the variable nature of the benefits provided and any mortality guarantees.
(j) The amounts held in any separate account shall not be chargeable with liabilities arising out of any other business the company may conduct but shall be held and applied exclusively for the benefit of the owners or beneficiaries of the variable annuity contracts applicable thereto.
(k) Each domestic life insurance company shall have the power within the limits of its corporate charter to do all things necessary under any applicable state or federal law in order that variable annuity contracts may be lawfully sold or offered for sale including, without limitation, the power to provide for management of a separate account by persons who may otherwise be unaffiliated with the life insurance company and the power to grant in connection with such contracts such voting rights as are set forth in subsection (e) of this Code section. Each domestic life insurance company may allocate from its general accounts to each separate account established under this Code section an initial cash amount necessary to meet minimum capitalization requirements for such account as prescribed by the Securities and Exchange Commission, provided that the total of all such allocations shall not exceed 10 percent of the company's assets or $1 million, whichever is less. Any allocation may be withdrawn when sufficient amounts have been received by the company in connection with variable annuity contracts and allocated to a separate account to meet the minimum capitalization requirement.
(l) Amounts allocated to a separate account in the exercise of the power granted by this Code section shall be owned by the company, and the company shall not be, or hold itself out to be, a trustee with respect to such amounts.
(m) Any variable annuity contract providing benefits payable in variable amounts issued under this Code section shall contain a statement of the essential features of the procedure to be followed by the company in determining the dollar amount of such variable benefits. Any contract, including a group contract and certificate in evidence or variable benefits issued under such contract, shall state that such dollar amount will vary to reflect investment experience and shall contain on its first page a statement to the effect that benefits under the contract are on a variable basis.
(n) No company shall deliver or issue for delivery variable annuity contracts within this state unless it is licensed or organized to do a life insurance or annuity business in this state or is organized as a nonprofit educational corporation in its state of domicile and issues variable annuity contracts solely for the purpose of aiding and strengthening nonproprietary and nonprofit-making colleges, universities, and other institutions engaged primarily in education or research and the Commissioner is satisfied that its condition or method of operation in connection with the issuance of such contracts will not render its operation hazardous to the public or its policyholders in this state. In this connection, the Commissioner shall consider among other things:
(1) The history and financial condition of the company;
(2) The character, responsibility, and fitness of the officers and directors of the company; and
(3) The law and regulation under which the company is authorized in the state of domicile to issue variable contracts.
(o) The Commissioner shall have sole and exclusive authority to regulate the issuance or sale of the contracts and to issue such reasonable rules and regulations as may be necessary to carry out the purposes and provisions of this Code section; and the contracts, the companies which issue them, and the agents or other persons who sell them shall not be subject to Chapter 5 of Title 10, the “Georgia Uniform Securities Act of 2008,” in the sale of the contracts.
(p) Notwithstanding any other laws of this state, no individual shall, within this state, sell or offer for sale variable annuity contracts as defined in this Code section unless the individual shall have both a valid and current life insurance license and variable contract license issued by the Commissioner. No license shall be issued unless and until the Commissioner is satisfied, after examination, except as provided for in Code Section 33-23-16, that the person is by training, knowledge, ability, and character qualified to act as such a variable annuity agent. The Commissioner may reject any application or suspend or revoke or refuse to renew any variable contract agent's license upon any ground that would bar the applicant or the agent from being licensed to sell life insurance contracts in this state or for the violation of any federal or state securities laws or regulations. The rules governing any proceedings relating to the suspension or revocation of a life insurance agent's license shall also govern any proceedings for the suspension or revocation of a variable contract agent's license. Renewal of a variable contract agent's license shall follow the same procedure established for renewal of an agent's license to sell life insurance contracts in this state.
(q) No contract or agreement made pursuant to this Code section or policy or certificate issued under this Code section shall be construed to violate Code Section 33-25-9, and the sale or offer of any policy or certificate shall not be deemed an unfair method of competition or an unfair or deceptive act or practice in the business of insurance in violation of paragraph (7) of subsection (b) and subparagraphs (b)(8)(B) and (b)(8)(C) of Code Section 33-6-4.
(r) Except for paragraphs (1), (5), and (6) of subsection (b) of Code Section 33-28-2 and except as otherwise provided in this Code section, all pertinent provisions of this title shall apply to separate accounts and variable annuity contracts relating thereto. The Commissioner, by regulation, may require that any individual variable annuity contract delivered or issued for delivery in this state contain provisions as to grace period and reinstatement appropriate for a variable annuity contract.
1 15 U.S.C.A. § 80a-1 et seq.
(a) As used in this Code section, “variable life insurance policy” means any individual or group policy issued by an insurance company providing for life insurance and benefits incidental thereto, under which payments or values may vary in whole or in part so as to reflect investment results of any segregated portfolio of investments or of a designated separate account or accounts in which amounts received or retained in connection with any of such policies have been placed.
(b) A domestic life insurance company may establish one or more separate accounts and may allocate to the accounts amounts including without limitation proceeds applied under optional modes of settlement or under dividend options to provide for life insurance and benefits incidental thereto, payable in variable amounts, subject to the following:
(1) The income, gains, and losses, realized or unrealized, from assets allocated to a separate account shall be credited to or charged against the account, without regard to other income, gains, or losses of the company;
(2) Except as provided in paragraph (4) of this subsection, amounts allocated to any separate account and accumulations thereon may be invested and reinvested without regard to any requirements or limitations prescribed by the laws of this state governing the investments of domestic life insurance companies, provided that, to the extent that the company's reserve liability with regard to benefits guaranteed as to amount and duration and funds guaranteed as to principal amount or stated rate of interest is maintained in any separate account, a portion of the assets of the separate account at least equal to the reserve liability shall be invested in accordance with the laws of this state governing the investment of reserves of life insurance companies. The investments in the separate account or accounts shall not be taken into account in applying the investment limitations applicable to other investments of the company;
(3) To the extent any domestic company deems it necessary to comply with any applicable federal or state laws, the company, with respect to any separate account, including without limitation any separate account which is a management investment company or a unit investment trust, may provide for persons having an interest therein appropriate voting and other rights and special procedures for the conduct of the business of the account, including without limitation special rights and procedures relating to investment policy, investment advisory services, selection of independent public accountants, and the selection of a committee, the members of which need not be otherwise affiliated with the company, to manage the business of such account. This paragraph shall not affect existing laws pertaining to the voting rights of the life insurance company's stockholders or policyholders except as provided in paragraph (4) of this subsection;
(4) No domestic company shall, for any separate account, purchase the voting securities of a single issuer if the purchase would result in the company and all domestic insurance companies directly or indirectly controlling, controlled by, or under common control with the company and holding in the company's or companies' separate account or accounts an amount in excess of 10 percent of the total issued and outstanding voting securities of the issuer, provided that this limitation shall not apply with respect to securities held in separate accounts, the voting rights in which are exercisable in accordance with instructions from persons having interest in the accounts. This limitation shall not apply to the investment for a separate account in the securities of an investment company registered under the Investment Company Act of 1940; 1
(5) Unless otherwise approved by the Commissioner, assets allocated to a separate account shall be valued at their market value on the date of valuation or, if there is no readily available market, as provided under the terms of the policy or the rules or other written agreement applicable to the separate account, provided that, unless otherwise approved by the Commissioner, the portion, if any, of the assets of such separate account equal to the company's reserve liability with regard to the guaranteed benefits and funds referred to in paragraph (2) of this subsection shall be valued in accordance with the rules otherwise applicable to the company's assets;
(6) Amounts allocated to a separate account in the exercise of the power granted by this Code section shall be owned by the company, and the company shall not be, nor hold itself out to be, a trustee with respect to such amounts. If and to the extent so provided under the applicable contracts, that portion of the assets of any such separate account equal to the reserves and other contract liabilities with respect to the account shall not be chargeable with liabilities arising out of any other business the company may conduct; and
(7) No sale, exchange, or other transfer of assets may be made by a company between any of its separate accounts or between any other investment account and one or more of its separate accounts unless, in case of a transfer into a separate account, the transfer is made solely to establish the account or to support the operation of the policies with respect to the separate account to which the transfer is made and unless the transfer, whether into or from a separate account, is made by a transfer of cash or by a transfer of securities having a readily determinable market value, provided that the transfer of securities is approved by the Commissioner. The Commissioner may approve other transfers among the accounts if, in his or her opinion, the transfers would not be inequitable.
(c) Each domestic life insurance company shall have the power within the limits of its corporate charter to do all things necessary under any applicable state or federal law in order that variable life insurance policies may be lawfully sold or offered for sale including, without limitation, the power to provide for management of a separate account by persons who may otherwise be unaffiliated with the life insurance company and the power to grant in connection with the policies such voting rights as are set forth in paragraph (3) of subsection (b) of this Code section. Each domestic life insurance company may allocate from its general accounts to each separate account established under this Code section an initial cash amount necessary to meet minimum capitalization requirements for such account as prescribed by the Securities and Exchange Commission, provided that the total of all of the allocations shall not exceed 10 percent of the company's assets or $1 million, whichever is less. Any allocation may be withdrawn when sufficient amounts have been received by the company in connection with variable life insurance policies and allocated to a separate account to meet the minimum capitalization requirement.
(d) Any variable life insurance policy issued under this Code section shall contain a statement of the essential features of the procedure to be followed by the company in determining the dollar amount of variable benefits provided under such policy. Any policy, including a group contract and certificates in evidence of variable benefits issued thereunder, shall state that the dollar amount will vary to reflect investment experience and shall contain on its first page a statement to the effect that benefits under such policy are on a variable basis.
(e) No company shall deliver or issue for delivery variable life insurance policies within this state unless it has a current certificate of authority to transact life insurance in this state and the Commissioner is satisfied that its condition or method of operations in connection with the issuance of such policies will not render its operation hazardous to the public or its policyholders in this state. In this connection, the Commissioner shall consider among other things:
(1) The history and financial condition of the company;
(2) The experience, character, responsibility, and fitness of the officers and directors of the company; and
(3) The law and regulation under which the company is authorized in the state of domicile to issue variable life insurance policies.
(f) The Commissioner shall have sole and exclusive authority to regulate the solicitation, sale, and issuance of variable life insurance policies and to issue any reasonable rules and regulations as may be necessary to carry out the purposes and provisions of this Code section; and the policies, the companies which issue them, and the agents or other persons who sell them shall not be subject to Chapter 5 of Title 10, the “Georgia Uniform Securities Act of 2008,” in the sale of the policies.
(g) Notwithstanding any other laws of this state, no individual shall, within this state, sell or offer for sale variable life insurance contracts as defined in this Code section unless such individual shall have both a valid and current life insurance license and variable contract insurance license issued by the Commissioner. No license shall be issued unless and until the Commissioner is satisfied, after examination, except as provided for in Code Section 33-23-16, that the individual is by training, knowledge, ability, and character qualified to act as such a variable contract insurance agent. The Commissioner may reject any application or suspend or revoke or refuse to renew any variable contract insurance agent's license upon any ground that would bar the applicant or the agent from being licensed to sell life insurance contracts in this state or for the violation of any federal or state securities laws or regulations. The rules governing any proceedings relating to the suspension or revocation of a life insurance agent's license shall also govern any proceedings for the suspension or revocation of a variable contract insurance agent's license. Renewal of a variable contract insurance agent's license shall follow the same procedure established for renewal of an agent's license to sell life insurance contracts in this state.
(h) No variable life insurance policy or certificate issued pursuant to this Code section shall be construed to violate Code Section 33-25-9, and the sale or offer of any such policy or certificate shall not be deemed an unfair method of competition or an unfair or deceptive act or practice in the business of insurance in violation of paragraph (7) and subparagraphs (B) and (C) of paragraph (8) of subsection (b) of Code Section 33-6-4.
(i)(1) Except for paragraphs (1), (5), (6), (7), and (8) of subsection (a) of Code Section 33-25-3, Code Section 33-25-4, and paragraph (1) of Code Section 33-27-3 and except as otherwise provided in this Code section, all pertinent provisions of this title shall apply to separate accounts and variable life insurance policies relating to such accounts. The Commissioner, by regulation, may require that any individual variable life insurance policy delivered or issued for delivery in this state contain provisions as to grace, reinstatement, and nonforfeiture appropriate for that policy; and any such group variable life insurance policy shall contain a provision for grace and nonforfeiture appropriate to that policy.
(2) The reserve liability for variable life insurance policies shall be determined in accordance with actuarial procedures approved by the Commissioner that recognize the variable nature of the benefits provided and any mortality guarantees.
1 15 U.S.C.A. § 80a-1 et seq.
This article shall be known and may be cited as the “Investment Pool Act of 1997.”
This article shall apply to domestic insurers only.
As used in this article, the term:
(1) “Business entity” means a corporation, limited liability company, association, partnership, joint-stock company, joint venture, mutual fund trust, or other similar form of business organization, whether organized for profit or not for profit.
(2) “Class one money market mutual fund” means a mutual fund that at all times qualifies for investment using the bond class one reserve factor under the Purposes and Procedures of the SVO or any successor publication.
(3) “Government money market mutual fund” means a money market mutual fund that at all times:
(A) Invests only in obligations issued, guaranteed, or insured by the government of the United States or collateralized repurchase agreements composed of such obligations; and
(B) Qualifies for investment without a reserve under the Purposes and Procedures of the SVO or any successor publication.
(4) “Money market mutual fund” means a mutual fund that meets the conditions of 17 C.F.R. 270.2a-7, under the Investment Company Act of 1940, 15 U.S.C. Section 80a-1, et seq., as amended.
(5) “Obligation” means a bond, note, debenture, or trust certificate, including equipment certificate, production payment, negotiable bank certificate of deposit, banker's acceptance, credit tenant loan, loan secured by financing net leases, and other evidence of indebtedness for the payment of money, or participation, certificates, or other evidences of an interest in any of the foregoing, whether constituting a general obligation of the issuer or payable only out of certain revenues or certain funds pledged or otherwise dedicated for payment.
(6) “Qualified bank” means a national bank, state bank, or trust company that at all times is no less than adequately capitalized as determined by the standards provided by federal banking regulations and that is either regulated by state banking laws or is a member of the Federal Reserve System.
(7) “Repurchase transaction” means a transaction in which an insurer purchases securities from a business entity that is obligated to repurchase the purchased securities or equivalent securities from the insurer at a specified price, either within a specified period of time or upon demand.
(8) “Reverse repurchase transaction” means a transaction in which an insurer sells securities to a business entity and is obligated to repurchase the sold securities or equivalent securities from the business entity at a specified price, either within a specified period of time or upon demand.
(9) “Securities lending transaction” means a transaction in which securities are loaned by an insurer to a business entity that is obligated to return the loaned securities or equivalent securities to the insurer, either within a specified period of time or upon demand.
(10) “SVO” means the Securities Valuation Office of the National Association of Insurance Commissioners.
(a) Notwithstanding any provisions of Article 1 or Article 2 of this chapter to the contrary, an insurer may under this article acquire investments in investments pools that:
(1) Invest only in:
(A) Obligations that are rated 1 or 2 by the SVO or have an equivalent of an SVO 1 or 2 rating by a nationally recognized statistical rating organization recognized by the SVO or, in the absence of an SVO 1 or 2 rating or equivalent rating, the issuer has outstanding obligations with an SVO 1 or 2 rating or equivalent rating by a nationally recognized statistical rating organization recognized by the SVO and which have:
(i) A remaining maturity of 397 days or less or a put that entitles the holder to receive the principal amount of the obligation, which put may be exercised through maturity at specified intervals not exceeding 397 days; or
(ii) A remaining maturity of three years or less and a floating interest rate that resets no less frequently than quarterly on the basis of a current short-term index, including federal funds, prime rate, treasury bills, London InterBank Offered Rate (LIBOR), or commercial paper, and is subject to no maximum limit, if the obligations do not have an interest rate that varies inversely to market interest rate changes;
(B) Government money market mutual funds or class one money market mutual funds; or
(C) Securities lending, repurchase, and reverse repurchase transactions that meet all the requirements of Code Section 33-11-7; or
(2) Invest only in investments which an insurer may acquire under this title, if the insurer's proportionate interest in the amount invested in such investments does not exceed the applicable limits of this title.
For an investment in an investment pool to be qualified under this article, the investment pool shall not:
(1) Acquire securities issued, assumed, guaranteed, or insured by the insurer or an affiliate of the insurer;
(2) Borrow or incur an indebtedness for borrowed money, except for securities lending and reverse repurchase transactions that meet the requirements of this article; or
(3) Permit the aggregate value of securities then loaned or sold to, purchased from, or invested in any one business entity under this article to exceed 10 percent of the total assets of the investment pool.
The limitations of paragraphs (1) and (2) of Code Section 33-11-5 shall not apply to an insurer's investment in an investment pool; provided, however, that an insurer shall not acquire an investment in an investment pool under this article if, as a result of and after giving effect to the investment, the aggregate amount of investments then held by the insurer under this article:
(1) In any one investment pool would exceed 10 percent of its admitted assets;
(2) In all investment pools investing in investments permitted under paragraph (2) of subsection (a) of Code Section 33-11-83 would exceed 25 percent of its admitted assets; or
(3) In all investment pools would exceed 35 percent of its admitted assets.
For an investment in an investment pool to be qualified under this article, the manager of the investment pool shall:
(1) Be organized under the laws of the United States or a state and designated as the pool manager in a pooling agreement;
(2) Be the insurer, an affiliated insurer or a business entity affiliated with the insurer, a qualified bank, or a business entity registered under the Investment Advisors Act of 1940, 15 U.S.C. Section 80b-1, et seq., as amended; or, in the case of a reciprocal insurer or interinsurance exchange, be its attorney in fact; or, in cases of a United States branch of an alien insurer, be its United States manager or affiliates or subsidiaries of its United States manager;
(3) Compile and maintain detailed accounting records setting forth:
(A) The cash receipts and disbursements reflecting each participant's proportionate investment in the investment pool;
(B) A complete description of all underlying assets of the investment pool, including amount, interest rate, any maturity date, and other appropriate designations; and
(C) Such other records which, on a daily basis, allow third parties to verify each participant's investment in the investment pool; and
(4) Maintain the assets of the investment pool in one or more accounts, in the name of or on behalf of the investment pool, under a custodial agreement compliant with this title with a qualified bank. The custodial agreement shall include but not be limited to:
(A) A statement and recognition of the claims and rights of each participant;
(B) An acknowledgment that the underlying assets of the investment pool are held solely for the benefit of each participant in proportion to the aggregate amount of its investments in the investment pool; and
(C) An agreement that the underlying assets of the investment pool shall not be commingled with the general assets of the custodian qualified bank or any other person.
A pooling agreement under this article may not be entered into unless the insurer has notified the Commissioner in writing of the pooling agreement at least 30 days prior to entering into the pooling agreement and the Commissioner has not disapproved it within such period. The pooling agreement for each investment pool shall be in writing and shall provide that:
(1) An insurer and its affiliated insurers or, in the case of an investment pool investing solely in investments permitted under paragraph (1) of subsection (a) of Code Section 33-11-83, the insurer and its subsidiaries, affiliates, or any pension or profit-sharing plan of the insurer, its subsidiaries and affiliates, or, in the case of a United States branch of an alien insurer, affiliates or subsidiaries of its United States manager, shall, at all times, hold 100 percent of the interests in the investments pool;
(2) The underlying assets of the investment pool shall not be commingled with the general assets of the pool manager or any other person;
(3) In proportion to the aggregate amount of each pool participant's interest in the investment pool:
(A) Each participant owns an undivided interest in the underlying assets of the investment pool; and
(B) The underlying assets of the investment pool are held solely for the benefit of each participant;
(4) A participant, or in the event of the participant's insolvency, bankruptcy, or receivership, its trustee, receiver, or other successor in interest, may withdraw all or any portion of its investment from the pool under the terms of the pooling agreement;
(5) Withdrawals may be made on demand without penalty or other assessment on any business day, but settlement of funds shall occur within a reasonable and customary period thereafter not to exceed five business days. Distributions under this paragraph shall be calculated in each case net of all then applicable fees and expenses of the investment pool. The pooling agreement shall provide that the pool manager shall distribute to a participant, at the discretion of the pool manager:
(A) In cash, the then fair market value of the participant's pro rata share of each underlying asset of the investment pool;
(B) In kind, a pro rata share of each underlying asset; or
(C) In a combination of cash and in kind distributions, a pro rata share of each underlying asset; and
(6) The pool manager shall make the records of the investment pool available for inspection by the Commissioner.
An investment pool authorized under this article must be a business entity.
Transactions between an investment pool and its participants shall not be subject to the provisions of Code Section 33-13-5. Investment activities of an investment pool and transactions between such pools and pool participants shall be reported annually in the registration statement required by Code Section 33-13-4.
(a) Deposits required or permitted by law to be made by domestic life insurers and all other insurers shall be made with the Commissioner or with some strong corporation approved by the Commissioner.
(b) The Commissioner shall accept and hold in trust deposits of securities or funds by insurers as follows:
(1) Deposits required for authority to transact insurance in this state;
(2) Deposits of domestic, foreign, or alien insurers when made pursuant to the laws of other states, provinces, and countries as prerequisite for authority to transact insurance in such state, province, or country; or
(3) Deposits in such additional amounts as are permitted to be made by Code Section 33-12-6.
Deposits shall be held as follows:
(1) When the deposit is required for authority to transact insurance in this state, the deposit shall be held for the protection of all the insurer's policyholders or others entitled to the proceeds of policies within the United States, provided that this paragraph shall not apply to a deposit made under Code Section 33-3-9;
(2) When the deposit is required pursuant to the laws of another state, commonwealth, territory, district of the United States, province, or country, the deposit shall be held for such purposes as are required by such laws and as specified by the Commissioner at the time the deposit is made; or
(3) When the deposit is required pursuant to the retaliatory provision, Code Section 33-3-26, the deposit shall be held for purposes as specified in the Commissioner's order requiring the deposit.
(a) All deposits required for authority to transact insurance in this state shall consist of any combination of the securities eligible for the investment of capital funds of domestic insurers as enumerated and described in paragraph (3) of Code Section 33-11-5, except real estate, notes secured by real estate, stocks, or investment trust or investment company shares.
(b) All deposits required pursuant to the laws of another state, province, or country or pursuant to the retaliatory provisions of Code Section 33-3-26 shall consist of those assets as are required or permitted by law or as are required pursuant to a retaliatory provision.
(a) The Commissioner may designate any regularly constituted state depository having trust powers domiciled in this state as a depository to receive and hold deposit. A deposit so held shall be at the expense of the insurer. A depository shall give to the Commissioner proper trust and safekeeping, receipt upon which the Commissioner shall give official receipt to the insurer.
(b) The Commissioner shall be responsible for the safekeeping and return of all securities deposited pursuant to this title with the Commissioner or in any depository so designated.
(c) The Commissioner may by rule or regulation prescribe the methods by which book-entry securities may be accepted as securities required or permitted by law.
So long as the insurer remains solvent and complies with this title it may:
(1) Demand, receive, institute an action for, and recover the income from the securities deposited;
(2) Exchange and substitute for the deposited securities or any part thereof, with the approval of the Commissioner, eligible securities of equivalent or greater value; and
(3) Inspect at reasonable times any deposit.
An insurer may deposit eligible securities in an amount exceeding its deposit required or otherwise permitted under this title by not more than $100,000.00 for the purpose of absorbing fluctuations in the value of securities held in its deposit and to facilitate the exchange and substitution of securities deposited. During the solvency of the insurer any excess deposit or part thereof shall be released to the insurer upon its request, subject to Code Section 33-12-9. During the insolvency of the insurer the excess deposit shall be released only as provided in Code Section 33-12-8.
If for any reason the market value of assets and securities of an insurer held on deposit in this state under this title falls below the amount so required, the insurer shall promptly deposit other or additional assets or securities eligible for deposit sufficient to cure the deficiency. If the insurer has failed to cure the deficiency within 30 days after receipt of notice to deposit other or additional assets or securities by registered or certified mail or statutory overnight delivery from the Commissioner, the Commissioner shall revoke the insurer's certificate of authority.
Any deposit made in this state under this title shall be released:
(1) To the insurer upon extinguishment by reinsurance or otherwise of all liability of the insurer for the security of which the deposit is held;
(2) To the insurer to the extent such deposit is in excess of the amount required; or
(3) Upon proper order of a court of competent jurisdiction, to the receiver, conservator, rehabilitator, or liquidator of the insurer or to any other properly designated official or officials who succeed to the management and control of the insurer's assets.
No release of deposited funds shall be made except upon application to and the written order of the Commissioner. The Commissioner shall have no liability for any release of any deposit or part of a deposit so made by him in good faith.
No judgment creditor or other claimant of an insurer shall levy upon any deposit held pursuant to this title or upon any part of a deposit, except that such levy may be permitted if so specified in the Commissioner's order requiring the deposit pursuant to the retaliatory provision of Code Section 33-3-26.
Whenever any loss insured against shall occur, the insured or other person entitled to the proceeds of the policy, by judgment or otherwise, in order to secure his recovery, may give notice to the Commissioner of the occurrence of said loss and of the amount claimed, after which notice the Commissioner shall be bound to retain, subject to the order of a court of competent jurisdiction trying any action that may be brought for the recovery of the loss or any action which may be brought upon any judgment obtained in the courts of another state or the courts of the United States on account of the loss, a sufficient amount to pay the judgment in said case in event of recovery; and, if the amount for which the depositing insurer is liable shall not be paid within 30 days, said plaintiff may file an application with the judge of the superior court of the county where the case was tried for appointment of the Commissioner as receiver to take charge of as many securities as shall be necessary to satisfy the aforesaid judgment.
The Commissioner in his capacity as receiver shall apply to the judge of the superior court for an order of sale and in pursuance of said order shall sell said securities. After deducting any expenses as shall be allowed by the court, he shall pay over to the plaintiff or his attorney a sufficient amount to satisfy the judgment; and, if there shall remain any residue in the hands of the receiver, he shall pay over the same to the agent of the depositing company taking his receipt for the same, which shall be filed and recorded with the other papers in the case. The receipt shall be a complete discharge to the Commissioner.
If receiverships are ordered for the purpose of holding securities for the future satisfaction of more than one claim, the Commissioner shall retain securities deposited by the insurer and apply the securities to the judgments in the order of his appointments as receiver as provided in Code Section 33-12-11. If the receiver determines that the securities the insurer has on deposit are insufficient to cover the claim and if there is another receivership or there are other receiverships in this state against the same insurer in which distribution has not been completed, the Commissioner shall institute proceedings for a general receivership under Chapter 37 of this title.
Whenever, by means of Code Sections 33-12-11 through 33-12-13, the amount of securities so deposited shall be reduced, the Commissioner shall give notice to the insurer depositing and require more securities to be deposited so as always to maintain the original amount; and if the company so notified by the Commissioner shall fail to comply within 30 days, its certificate of authority to do business in this state shall be revoked, and the Commissioner shall at the same time give notice by publication of display advertising in bold type in a newspaper of general circulation throughout the state of the fact of the failure and revocation of certificate of authority. The cost of this publication shall be paid by the company failing to comply with this Code section.
Whenever a notice of claim is filed with the Commissioner as provided by law against the deposit of any insurance company doing business in Georgia and said claim has not been withdrawn at the expiration of seven years from the date of the notice of claim, the Commissioner is authorized to treat the notice as void and not binding unless the notice of claim is renewed within said seven-year period. In the event the Commissioner determines that a claim on which notice has been filed and not released by claimant has been settled or disposed of in any manner, it is authorized to proceed as if the notice of claim had never been filed.
Whenever a general receivership under Chapter 37 of this title is ordered by a court of this state, it shall supersede receiverships created under Code Sections 33-12-11 through 33-12-13.
When any depositing company shall desire to withdraw any deposit made with the Commissioner as provided by Code Section 33-12-1, and the Commissioner shall find that the deposit is no longer required, in whole or in part, in order to comply with the laws of this or any other state, he may to that extent release the deposit, and his certificate to that effect shall authorize the state to return the deposit so released to the depositing company. A certificate from the Commissioner or other official authorized to administer the insurance laws of any other state or states showing that the depositing company has fully satisfied or made provision for the full payment and satisfaction of all policy obligations in the other state or states or that such policy obligations in such other state or states have been otherwise adequately provided for shall be sufficient evidence that the deposit is no longer required by the laws of such other state or states; provided, however, that any notice of loss theretofore given in conformity with this law shall remain effective, and the Commissioner shall nevertheless retain securities in an amount sufficient to meet the requirements of Code Sections 33-12-11 and 33-12-12.
As used in this article, the term:
(1) “Affiliate,” including the term “affiliate of” or “person affiliated with” a specific person, means a person who directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with the person specified.
(2) “Commissioner” means the Commissioner of Insurance, the Commissioner's deputies, or the Department of Insurance, as appropriate.
(3) “Control,” including the terms “controlling,” “controlled by,” and “under common control with,” means the direct or indirect possession of the power to direct or cause the direction of the management and policies of a person whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position or corporate office held by the person. Control shall be presumed to exist if any person directly or indirectly owns, controls, holds with the power to vote, or holds proxies representing 10 percent or more of the voting securities of any other person. This presumption may be rebutted by a showing made in the manner provided by subsection (k) of Code Section 33-13-4 that control does not exist in fact. The Commissioner may determine after furnishing all persons in interest notice and opportunity to be heard and after making specific findings of fact to support such determination that control exists in fact, notwithstanding the absence of a presumption to that effect.
(4) “Enterprise risk” means any activity, circumstance, event, or series of events involving one or more affiliates of an insurer that, if not remedied promptly, is likely to have a material adverse effect upon the financial condition or liquidity of the insurer or its insurance holding company system as a whole, including, but not limited to, anything that would cause the insurer's risk-based capital to fall into company action level as set forth in Chapter 56 of this title or would cause the insurer to be in hazardous financial condition based on the standards prescribed by the Commissioner's rules and regulations.
(5) “Group-wide supervisor” means the regulatory official authorized to engage in conducting and coordinating group-wide supervision activities who is determined or acknowledged by the Commissioner under Code Section 33-13-7.1 to have sufficient significant contacts with an internationally active insurance group.
(6) “Group capital calculation instructions” mean the group capital calculation instructions as adopted and amended by the NAIC and as adopted by regulation promulgated by the Commissioner or as otherwise prescribed by regulation promulgated by the Commissioner.
(7) “Insurance holding company system” means two or more affiliated persons, one or more of which is an insurer.
(8) “Insurer” shall have the same meaning as set forth in Code Section 33-1-2, except that it shall not include agencies, authorities, or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state.
(9) “Internationally active insurance group” means an insurance holding company system that includes an insurer registered under Code Section 33-13-4 and that meets the following criteria:
(A) Premiums written in at least three countries;
(B) The percentage of gross premiums written outside the United States is at least 10 percent of the insurance holding company system's total gross written premiums; and
(C) Based on a three-year rolling average, the total assets of the insurance holding company system are at least $50 billion or the total gross written premiums of the insurance holding company system are at least $10 billion.
(10) “NAIC” means the National Association of Insurance Commissioners.
(11) “NAIC Liquidity Stress Test Framework” means the separate NAIC publication which includes a history of the NAIC's development of regulatory liquidity stress testing, the scope criteria applicable for a specific data year, and the liquidity stress test instructions and reporting templates as adopted and amended by the NAIC and as adopted by regulation by the Commissioner or as otherwise prescribed by regulation promulgated by the Commissioner.
(12) “Person” means an individual, a corporation, a limited liability company, a partnership, an association, a joint-stock company, a trust, an unincorporated organization, any similar entity, or any combination of the foregoing acting in concert, but shall not include any joint venture partnership exclusively engaged in owning, managing, leasing, or developing real or tangible personal property.
(13) “Scope criteria” as set forth in the NAIC Liquidity Stress Test Framework means the designated exposure bases along with the minimum magnitudes thereof for the specified data year, used to establish a preliminary list of insurers considered scoped into the NAIC Liquidity Stress Test Framework for that data year.
(14) “Securityholder” means one who owns any security of a person, including common stock, preferred stock, debt obligations, and any other security convertible into or evidencing the right to acquire any of the foregoing.
(15) “Subsidiary” means an affiliate controlled by a specified person directly or indirectly through one or more intermediaries.
(16) “Voting security” shall include any security convertible into or evidencing a right to acquire a voting security.
(a) Any domestic insurer either by itself or in cooperation with one or more persons may organize or acquire one or more subsidiaries. The subsidiaries may conduct any kind of business or businesses permitted by the Constitution and laws of this state; and their authority to do so shall not be limited by reason of the fact that they are subsidiaries of a domestic insurer.
(b) In addition to investments in common stock, preferred stock, debt obligations, and other securities permitted under all other Code sections of this title, a domestic insurer may also:
(1) Invest in common stock, preferred stock, debt obligations, and other securities of one or more subsidiaries amounts which do not exceed the lesser of 10 percent of the insurer's assets or 50 percent of the insurer's surplus as regards policyholders, provided that after the investments the insurer's surplus as regards policyholders will be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs. In calculating the amount of such investments, investments in domestic or foreign insurance subsidiaries and health maintenance organizations shall be excluded, and there shall be included:
(A) Total net moneys or other consideration expended and obligations assumed in the acquisition or formation of a subsidiary, including all organizational expenses and contributions to capital and surplus of the subsidiary whether or not represented by the purchase of capital stock or issuance of other securities; and
(B) All amounts expended in acquiring additional common stock, preferred stock, debt obligations, and other securities and all contributions to the capital or surplus of a subsidiary subsequent to its acquisition or formation;
(2) Invest any amount in common stock, preferred stock, debt obligations, and other securities of one or more subsidiaries engaged or organized to engage exclusively in the ownership and management of assets authorized as investments for the insurer, provided that each subsidiary agrees to limit its investments in any asset so that the investments will not cause the amount of the total investment of the insurer to exceed any of the investment limitations applicable to the insurer as specified in Chapter 11 of this title. For the purpose of this paragraph, “the total investment of the insurer” shall include:
(A) Any direct investment by the insurer in an asset; and
(B) The insurer's proportionate share of any investment in an asset by any subsidiary of the insurer which shall be calculated by multiplying the amount of the subsidiary's investment by the percentage of the insurer's ownership of such subsidiary; and
(3) Invest any amount in common stock, preferred stock, debt obligations, or other securities of one or more subsidiaries with the approval of the Commissioner, provided that after the investment the insurer's surplus as regards policyholders will be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs.
(c) Investments in common stock, preferred stock, debt obligations, or other securities of subsidiaries made pursuant to subsection (b) of this Code section shall not be subject to any of the otherwise applicable restrictions or prohibitions contained in this title applicable to the investments of insurers.
(d) Whether any investment pursuant to subsection (b) of this Code section meets the applicable requirements of that subsection is to be determined before the investment is made, by calculating the applicable investment limitations as though the investment had already been made, taking into account the then outstanding principal balance on all previous investments in debt obligations, and the value of all previous investments in equity securities as of the day they were made, net of any return of capital invested, not including dividends.
(e) If an insurer ceases to control a subsidiary, it shall dispose of any investment in the subsidiary made pursuant to this Code section within three years from the time of the cessation of control or within any further time as the Commissioner may prescribe unless at any time after the investment shall have been made the investment shall have met the requirements for investment under any other Code section of this title and the insurer notifies the Commissioner that the requirement has been met.
(a) Filing requirements.
(1) No person other than the issuer shall make a tender offer for or a request or invitation for tenders of, or enter into any agreement to exchange securities for, seek to acquire, or acquire, in the open market or otherwise, any voting security of a domestic insurer if after the consummation of the agreement the person would directly or indirectly or by conversion or by exercise of any right to acquire be in control of the insurer; and no person shall enter into an agreement to merge with or otherwise to acquire control of a domestic insurer or any person controlling a domestic insurer unless at the time the offer, request, or invitation is made or the agreement is entered into, or prior to the acquisition of the securities if no offer or agreement is involved, the person has filed with the Commissioner and has sent to the insurer a statement containing the information required by this Code section and the offer, request, invitation, agreement, or acquisition has been approved by the Commissioner in the manner prescribed in subsection (d) of this Code section.
(2) For the purposes of this Code section, any controlling person of a domestic insurer seeking to divest its controlling interest in the domestic insurer, in any manner, shall file with the Commissioner, with a copy to the insurer, confidential notice of its proposed divestiture at least 30 days prior to the cessation of control. The Commissioner shall determine those instances in which the party seeking to divest or to acquire a controlling interest in an insurer will be required to file for and obtain approval of the transaction. The information shall remain confidential until the conclusion of the transaction unless the Commissioner, in his or her discretion, determines that confidential treatment will interfere with enforcement of this Code section. If the statement referred to in paragraph (1) of this subsection is otherwise filed, this paragraph shall not apply.
(3) With respect to a transaction subject to this Code section, the acquiring person must also file a preacquisition notification with the Commissioner, which shall contain the information set forth in paragraph (1) of subsection (c) of Code Section 33-13-3.1. A failure to file the notification may be subject to penalties specified in paragraph (3) of subsection (e) of Code Section 33-13-3.1.
(4) For purposes of this Code section, a “domestic insurer” shall include any person controlling a domestic insurer unless the person, as determined by the Commissioner, is either directly or through its affiliates primarily engaged in business other than the business of insurance. For the purposes of this Code section, “person” shall not include any securities broker holding, in the usual and customary broker's function, less than 20 percent of the voting securities of an insurance company or of any person which controls an insurance company.
(b) Execution and content of statement. The statement to be filed with the Commissioner in accordance with this Code section shall be made under oath or affirmation and shall contain the following information:
(1) The name and address of each person, hereinafter called “acquiring party,” by whom or on whose behalf the merger or other acquisition of control referred to in subsection (a) of this Code section is to be effected and:
(A) If the person is an individual, his or her principal occupation and all offices and positions held during the past five years and any conviction of crimes other than minor traffic violations during the past ten years; and
(B) If the person is not an individual, a report of the nature of its business operations during the past five years or for any lesser periods as the person and any predecessors of such person shall have been in existence; an informative description of the business intended to be done by the person and the person's subsidiaries; and a list of all individuals who are or who have been selected to become directors or executive officers of the person or who perform or will perform functions appropriate to the positions. The list shall include for each individual the information required by subparagraph (A) of this paragraph;
(2) The source, nature, and amount of the consideration used or to be used in effecting the merger or other acquisition of control, a description of any transaction wherein funds were or are to be obtained for that purpose, including any pledge of the insurer's stock, or the stock of any of its subsidiaries or controlling affiliates, and the identity of persons furnishing the consideration; provided, however, that where a source of the consideration is a loan made in the lender's ordinary course of business, the identity of the lender shall remain confidential if the person filing the statement so requests;
(3) Fully audited financial information as to the earnings and financial condition of each acquiring party for the preceding five fiscal years of each acquiring party or for any lesser period as the acquiring party and any predecessors of the acquiring party shall have been in existence and similar unaudited information as of a date not earlier than 90 days prior to the filing of the statement;
(4) Any plans or proposals which each acquiring party may have to liquidate the insurer, to sell its assets or merge or consolidate it with any person, or to make any other material change in its business or corporate structure or management;
(5) The number of shares of any security referred to in subsection (a) of this Code section which each acquiring party proposes to acquire and the terms of the offer, request, invitation, agreement, or acquisition referred to in subsection (a) of this Code section and a statement as to the method by which the fairness of the proposal was arrived at;
(6) The amount of each class of any security referred to in subsection (a) of this Code section which is beneficially owned or concerning which there is a right to acquire beneficial ownership by each acquiring party;
(7) A full description of any contracts, arrangements, or understandings with respect to any security referred to in subsection (a) of this Code section in which any acquiring party is involved, including but not limited to transfer of any of the securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or guarantees of profits, division of losses or profits, or the giving or withholding of proxies; and the description shall identify the persons with whom the contracts, arrangements, or understandings have been entered into;
(8) A description of the purchase by any acquiring party of any security referred to in subsection (a) of this Code section during the 12 calendar months preceding the filing of the statement by any acquiring party, including the dates of purchase, names of the purchasers, and consideration paid or agreed to be paid;
(9) A description of any recommendations to purchase any security referred to in subsection (a) of this Code section made during the 12 calendar months preceding the filing of the statement by any acquiring party or by anyone based upon interviews or at the suggestion of the acquiring party;
(10) Copies of all tender offers for, requests or invitations for tenders of exchange offers for, and agreements to acquire or exchange any securities referred to in subsection (a) of this Code section and, if distributed, of additional soliciting material relating thereto;
(11) The terms of any agreement, contract, or understanding made with or proposed to be made with any broker-dealer as to solicitation of securities referred to in subsection (a) of this Code section for tender and the amount of any fees, commissions, or other compensation to be paid to broker-dealers with regard to the agreement, contract, or understanding;
(12) An agreement by the person required to file the statement referred to in subsection (a) of this Code section that it will provide the annual report, specified in paragraph (1) of subsection (l) of Code Section 33-13-4, for so long as control exists;
(13) An acknowledgment by the person required to file the statement referred to in subsection (a) of this Code section that the person and all subsidiaries within its control in the insurance holding company system will provide information to the Commissioner upon request as necessary to evaluate enterprise risk to the insurer; and
(14) Any additional information as the Commissioner may by rule or regulation prescribe as necessary or appropriate for the protection of policyholders of the insurer or in the public interest.
If the person required to file the statement referred to in subsection (a) of this Code section is a partnership, limited partnership, syndicate, or other group, the Commissioner may require that the information called for by paragraphs (1) through (14) of this subsection shall be given with respect to each partner of the partnership or limited partnership, each member of the syndicate or group, and each person who controls the partner or member. If any partner, member, or person is a corporation or the person required to file the statement referred to in subsection (a) of this Code section is a corporation, the Commissioner may require that the information called for by paragraphs (1) through (14) of this subsection shall be given with respect to the corporation, each officer and director of the corporation, and each person who is directly or indirectly the beneficial owner of more than 10 percent of the outstanding voting securities of the corporation. If any material change occurs in the facts set forth in the statement filed with the Commissioner and sent to the insurer pursuant to this Code section, an amendment setting forth the change, together with copies of all documents and other material relevant to the change, shall be filed with the Commissioner and sent to the insurer within two business days after the person learns of the change.
(c) Alternate filing materials. If any offer, request, invitation, agreement, or acquisition referred to in subsection (a) of this Code section is proposed to be made by means of a registration statement under the Securities Act of 1933, in circumstances requiring the disclosure of similar information, under the Securities Exchange Act of 1934, or under a state law requiring similar registration or disclosure, the person required to file the statement referred to in subsection (a) of this Code section may utilize the documents in furnishing the information called for by that statement.
(d) Approval or disapproval by Commissioner; hearings.
(1) The Commissioner shall approve any merger or other acquisition of control referred to in subsection (a) of this Code section unless, after a public hearing thereon, he or she finds that:
(A) After the change of control the domestic insurer referred to in subsection (a) of this Code section would not be able to satisfy the requirements for the issuance of a license to write the line or lines of insurance for which it is presently licensed;
(B) The effect of the merger or other acquisition of control would be substantially to lessen competition in insurance in this state or tend to create a monopoly. In applying the competitive standard in this subparagraph:
(i) The informational requirements of paragraph (1) of subsection (c) of Code Section 33-13-3.1 and the standards of paragraph (2) of subsection (d) of Code Section 33-13-3.1 shall apply;
(ii) The merger or other acquisition shall not be disapproved if the Commissioner finds that any of the situations meeting the criteria provided by paragraph (3) of subsection (d) of Code Section 33-13-3.1 exist; and
(iii) The Commissioner may condition the approval of the merger or other acquisition on the removal of the basis of disapproval within a specified period of time;
(C) The financial condition of any acquiring party is such as might jeopardize the financial stability of the insurer or prejudice the interest of its policyholders;
(D) The plans or proposals which the acquiring party has to liquidate the insurer, to sell its assets or consolidate or merge it with any person, or to make any other material change in its business or corporate structure or management are unfair and unreasonable to policyholders of the insurer and not in the public interest;
(E) The competence, experience, and integrity of those persons who would control the operation of the insurer are such that it would not be in the interest of policyholders of the insurer and of the public to permit the merger or other acquisition of control; or
(F) The acquisition is likely to be hazardous or prejudicial to the insurance buying public.
(2) The public hearing referred to in paragraph (1) of this subsection shall be held within 30 days after the statement required by subsection (a) of this Code section is filed; and at least 20 days' notice of the public hearing shall be given by the Commissioner to the person filing the statement. Not less than seven days' notice of the public hearing shall be given by the person filing the statement to the insurer and to any other persons as may be designated by the Commissioner. The Commissioner shall make a determination within the 60 day period preceding the effective date of the proposed transaction. At the hearing, the person filing the statement, the insurer, any person to whom notice of hearing was sent, and any other person whose interests may be affected thereby shall have the right to present evidence, examine and cross-examine witnesses, and offer oral and written arguments and in connection therewith shall be entitled to conduct discovery proceedings in the same manner as is presently allowed in the superior courts of this state. All discovery proceedings shall be concluded not later than three days prior to the commencement of the public hearing.
(3) If the proposed acquisition of control will require the approval of more than one commissioner, the public hearing referred to in paragraph (2) of this subsection may be held on a consolidated basis upon request of the person filing the statement referred to in subsection (a) of this Code section. Such person shall file the statement referred to in subsection (a) of this Code section with the NAIC within five days of making the request for a public hearing. A commissioner may opt out of a consolidated hearing and shall provide notice to the applicant of the opt-out within ten days of the receipt of the statement referred to in subsection (a) of this Code section. A hearing conducted on a consolidated basis shall be public and shall be held within the United States before the commissioners of the states in which the insurers are domiciled. Such commissioners shall hear and receive evidence. A commissioner may attend such hearing, in person or by telecommunication.
(4) In connection with a change of control of a domestic insurer, any determination by the Commissioner that the person acquiring control of the insurer shall be required to maintain or restore the capital of the insurer to the level required by the laws and regulations of this state shall be made not later than 60 days after the date of notification of the change in control submitted pursuant to paragraph (1) of subsection (a) of this Code section.
(5) The Commissioner may retain at the acquiring person's expense any attorneys, actuaries, accountants, and other experts not otherwise a part of the Commissioner's staff as may be reasonably necessary to assist the Commissioner in reviewing the proposed acquisition of control.
(e) Exemptions. This Code section shall not apply to any offer, request, invitation, agreement, or acquisition which the Commissioner by order shall exempt from this Code section as not having been made or entered into for the purpose and not having the effect of changing or influencing the control of a domestic insurer or as otherwise not comprehended within the purposes of this Code section.
(f) Violations. The following shall be violations of this Code section:
(1) The failure to file any statement, amendment, or other material required to be filed pursuant to subsection (a) or (b) of this Code section; or
(2) The effectuation or any attempt to effectuate an acquisition of control of or merger with a domestic insurer unless the Commissioner has given approval to the acquisition of control or merger.
(g) Jurisdiction; service of process. The courts of this state are vested with jurisdiction over every person not resident, domiciled, or authorized to do business in this state who files a statement with the Commissioner under this Code section and over all actions involving that person arising out of violations of this Code section; and each person shall be deemed to have performed acts equivalent to and constituting an appointment by that person of the Commissioner to be his or her true and lawful attorney upon whom may be served all lawful process in any action, suit, or proceeding arising out of violations of this Code section. Copies of all lawful process shall be served on the Commissioner and transmitted by registered or certified mail or statutory overnight delivery by the Commissioner to the person at his or her last known address.
(a) As used in this Code section, the term:
(1) “Acquisition” means any agreement, arrangement, or activity, the consummation of which results in a person acquiring directly or indirectly the control of another person and, includes, but is not limited to, the acquisition of voting securities, the acquisition of assets, bulk reinsurance, and mergers.
(2) “Involved insurer” includes an insurer which either acquires or is acquired, is affiliated with an acquirer or acquired, or is the result of a merger.
(b)(1) Except as exempted in paragraph (2) of this subsection, this Code section applies to any acquisition in which there is a change in control of an insurer authorized to do business in this state.
(2) This Code section shall not apply to the following:
(A) A purchase of securities solely for investment purposes so long as such securities are not used by voting or otherwise to cause or attempt to cause the substantial lessening of competition in any insurance market in this state. If a purchase of securities results in a presumption of control under paragraph (3) of Code Section 33-13-1, it is not solely for investment purposes unless the commissioner of the insurer's state of domicile accepts a disclaimer of control or affirmatively finds that control does not exist and such disclaimer action or affirmative finding is communicated by the domiciliary commissioner to the Commissioner of this state;
(B) The acquisition of a person by another person when both persons are neither directly nor through affiliates primarily engaged in the business of insurance, if preacquisition notification is filed with the Commissioner in accordance with paragraph (1) of subsection (c) of this Code section 30 days prior to the proposed effective date of the acquisition. However, such preacquisition notification is not required for exclusion from this Code section if the acquisition would otherwise be excluded from this Code section by any other subparagraph of this paragraph;
(C) The acquisition of already affiliated persons;
(D) An acquisition if, as an immediate result of the acquisition:
(i) In no market would the combined market share of the involved insurers exceed 5 percent of the total market;
(ii) There would be no increase in any market share; or
(iii) In no market would:
(I) The combined market share of the involved insurers exceed 12 percent of the total market; and
(II) The market share increase by more than 2 percent of the total market.
For the purpose of this subparagraph, the term “market” means a direct written insurance premium in this state for a line of business as contained in the annual statement required to be filed by insurers licensed to do business in this state;
(E) An acquisition for which a preacquisition notification would be required pursuant to this Code section due solely to the resulting effect on the ocean marine insurance line of business; or
(F) An acquisition of an insurer whose domiciliary commissioner affirmatively finds that such insurer is in failing condition; there is a lack of feasible alternative to improving such condition; the public benefits of improving such insurer's condition through the acquisition exceed the public benefits that would arise from not lessening competition; and such findings are communicated by the domiciliary commissioner to the Commissioner of this state.
(c) An acquisition covered by subsection (b) of this Code section may be subject to an order pursuant to subsection (e) of this Code section unless the acquiring person files a preacquisition notification and the waiting period has expired. The acquired person may file a preacquisition notification. The Commissioner shall give confidential treatment to information submitted under this subsection in the same manner as provided in Code Section 33-13-8:
(1) The preacquisition notification shall be in such form and contain such information as prescribed by the National Association of Insurance Commissioners and adopted by regulation promulgated by the Commissioner or as otherwise prescribed by regulation promulgated by the Commissioner relating to those markets which, under subparagraph (b)(2)(D) of this Code section, cause the acquisition not to be exempted from the provisions of this Code section. The Commissioner may require such additional material and information as he or she deems necessary to determine whether the proposed acquisition, if consummated, would violate the competitive standard of subsection (d) of this Code section. The required information may include an opinion of an economist as to the competitive impact of the acquisition in this state accompanied by a summary of the education and experience of such person indicating his or her ability to render an informed opinion; and
(2) The waiting period required shall begin on the date of receipt of the Commissioner of a preacquisition notification and shall end on the earlier of the thirtieth day after the date of such receipt or termination of the waiting period by the Commissioner. Prior to the end of the waiting period, the Commissioner on a one-time basis may require the submission of additional needed information relevant to the proposed acquisition, in which event the waiting period shall end on the earlier of the thirtieth day after receipt of such additional information by the Commissioner or termination of the waiting period by the Commissioner.
(d)(1) The Commissioner may enter an order under paragraph (1) of subsection (e) of this Code section with respect to an acquisition if there is substantial evidence that the effect of the acquisition may be substantially to lessen competition in any line of insurance in this state or tend to create a monopoly therein or if the insurer fails to file adequate information in compliance with subsection (c) of this Code section.
(2) In determining whether a proposed acquisition would violate the competitive standard of paragraph (1) of this subsection, the Commissioner shall consider the following:
(A) Any acquisition covered under subsection (b) of this Code section involving two or more insurers competing in the same market is prima-facie evidence of violation of the competitive standards:
(i) If the market is highly concentrated and the involved insurers possess the following shares of the market:
| Insurer A | Insurer B | | --- | --- | | 4 percent | 4 percent or more | | 10 percent | 2 percent or more | | 15 percent | 1 percent or more; or |
(ii) If the market is not highly concentrated and the involved insurers possess the following shares of the market:
| Insurer A | Insurer B | | --- | --- | | 5 percent | 5 percent or more | | 10 percent | 4 percent or more | | 15 percent | 3 percent or more | | 19 percent | 1 percent or more |
A highly concentrated market is one in which the share of the four largest insurers is 75 percent or more of the market. Percentages not shown in the tables are interpolated proportionately to the percentages that are shown. If more than two insurers are involved, exceeding the total of the two columns in the table is prima-facie evidence of violation of the competitive standard in paragraph (1) of this subsection. For the purpose of this subparagraph, the insurer with the largest share of the market shall be deemed to be Insurer A;
(B) There is a significant trend toward increased concentration when the aggregate market share of any grouping of the largest insurers in the market, from the two largest to the eight largest, has increased by 7 percent or more of the market over a period of time extending from any base year five to ten years prior to the acquisition up to the time of the acquisition. Any acquisition or merger covered under subsection (b) of this Code section involving two or more insurers competing in the same market is prima-facie evidence of violation of the competitive standard in paragraph (1) of this subsection if:
(i) There is a significant trend toward increased concentration in the market;
(ii) One of the insurers involved is one of the insurers in a grouping of such large insurers showing the requisite increase in the market share; and
(iii) Another involved insurer's market is 2 percent or more;
(C) For the purposes of this paragraph:
(i) The term “insurer” includes any company or group of companies under common management, ownership, or control;
(ii) The term “market” means the relevant product and geographical markets. In determining the relevant product and geographical markets, the Commissioner shall give due consideration to, among other things, the definitions or guidelines, if any, promulgated by the National Association of Insurance Commissioners and to information, if any, submitted by parties to the acquisition. In the absence of sufficient information to the contrary, the relevant product market is assumed to be the direct written insurance premium for a line of business, such line being that used in the annual statement required to be filed by insurers doing business in this state, and the relevant geographical market is assumed to be this state; and
(iii) The burden of showing prima-facie evidence of violation of the competitive standard rests upon the Commissioner; and
(D) Even though an acquisition is not prima-facie violative of the competitive standard under subparagraphs (A) and (B) of this paragraph, the Commissioner may establish the requisite anticompetitive effect based upon other substantial evidence. Even though an acquisition is prima-facie violative of the competitive standard under subparagraphs (A) and (B) of this paragraph, a party may establish the absence of the requisite anticompetitive effect based upon other substantial evidence. Relevant factors in making a determination under this paragraph include, but are not limited to, the following: market shares, volatility of ranking of market leaders, number of competitors, concentration, trend of concentration in the industry, and ease of entry into the market and exit from the market.
(3) An order may not be entered under paragraph (1) of subsection (e) of this Code section if:
(A) The acquisition will yield substantial economies of scale or economies in resource utilization that cannot be feasibly achieved in any other way, and the public benefits which would arise from such economies exceed the public benefits which would arise from not lessening competition; or
(B) The acquisition will substantially increase the availability of insurance, and the public benefits of such increase exceed the public benefits which would arise from not lessening competition.
(e)(1)(A) If an acquisition violates the standards of this Code section, the Commissioner may enter an order:
(i) Requiring an involved insurer to cease and desist from doing business in this state with respect to the line or lines of insurance involved in the violation; or
(ii) Denying the application of an acquired or acquiring insurer for a license to do business in this state.
(B) Such an order shall not be entered unless:
(i) There is a hearing;
(ii) Notice of such hearing is issued prior to the end of the waiting period and not less than 15 days prior to the hearing; and
(iii) The hearing is concluded and the order is issued no later than 60 days after the end of the waiting period. Every order shall be accompanied by a written decision of the Commissioner setting forth his or her findings of fact and conclusions of law.
(C) An order pursuant to this paragraph shall not apply if the acquisition is not consummated.
(2) Any person who violates a cease and desist order of the Commissioner under paragraph (1) of this subsection and while such order is in effect may after notice and hearing and upon order of the Commissioner, be subject, at the discretion of the Commissioner, to any one or more of the following:
(A) A monetary penalty of not more than $10,000.00 for every day of violation; or
(B) Suspension or revocation of such person's license.
(3) Any insurer or other person who fails to make any filing required by this subsection and who also fails to demonstrate a good faith effort to comply with any such filing requirement shall be subject to a fine of not more than $50,000.00.
(f) Subsections (b) and (c) of Code Section 33-13-10 and Code Section 33-13-12 shall not apply to acquisitions covered under this Code section.
(a) Requirement of registration generally. Every insurer which is authorized to do business in this state and which is a member of an insurance holding company system shall register with the Commissioner, except a foreign insurer subject to disclosure requirements and standards adopted by statute or regulation in the jurisdiction of its domicile which are substantially similar to those contained:
(1) In this Code section;
(2) In paragraph (1) of subsection (a), subsection (b), and subsection (d) of Code Section 33-13-5; and
(3) In either paragraph (2) of subsection (a) of Code Section 33-13-5 or a provision such as the following: “Each registered insurer shall keep current the information required to be disclosed in its registration statement by reporting all material changes or additions within 15 days after the end of the month in which it learns of each change or addition.”
Any insurer which is subject to registration under this Code section shall register within 15 days after it becomes subject to registration and annually thereafter by April 30 of each year for the previous calendar year, unless the Commissioner for good cause shown extends the time for registration, and then within the extended time. The Commissioner may require any insurer authorized to do business in this state which is a member of an insurance holding company system, and which is not subject to registration under this Code section, to furnish a copy of the registration statement, the summary specified in subsection (c) of this Code section, or other information filed by the insurance company with the insurance regulatory authority of its domiciliary jurisdiction.
(b) Contents of registration statement. Every insurer subject to registration shall file a registration statement with the Commissioner on a form and in a format prescribed by the NAIC and adopted by regulation promulgated by the Commissioner or as otherwise prescribed by regulation promulgated by the Commissioner, which statement shall contain current information about:
(1) The capital structure, general financial condition, ownership, and management of the insurer and any person controlling the insurer;
(2) The identity of every member of the insurance holding company system;
(3) The following agreements in force, relationships subsisting, and transactions outstanding between such insurer and its affiliates:
(A) Loans, other investments, or purchases, sales, or exchanges of the affiliates by the insurer or of the insurer by its affiliates;
(B) Purchases, sales, or exchanges of assets;
(C) Transactions not in the ordinary course of business;
(D) Guarantees or undertakings for the benefit of an affiliate which result in an actual contingent exposure of the insurer's assets to liability other than insurance contracts entered into in the ordinary course of the insurer's business;
(E) All management and service contracts and all cost-sharing arrangements;
(F) Reinsurance agreements;
(G) Dividends and other distributions to shareholders; and
(H) Consolidated tax allocation agreements;
(4) Any pledge of the insurer's stock, including stock of any subsidiary or controlling affiliate, for a loan made to any member of the insurance holding company system;
(5) If requested by the Commissioner, financial statements of or within an insurance holding company system, including all affiliates. Financial statements may include, but are not limited to, annual audited financial statements filed with the federal Securities and Exchange Commission pursuant to the federal Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended. An insurer required to file financial statements pursuant to this paragraph may satisfy the request by providing the Commissioner with the most recently filed parent corporation financial statements filed with the Securities and Exchange Commission;
(6) Other matters concerning transactions between registered insurers and any affiliates as may be included from time to time in any registration forms adopted or approved by the Commissioner;
(7) Statements that the insurer's board of directors is responsible for and oversees corporate governance and internal controls and that the insurer's officers or senior management have approved, implemented, and continue to maintain and monitor corporate governance and internal control procedures; and
(8) Any other information required by the Commissioner by rule or regulation.
(c) Summary of changes to registration statement. All registration statements shall contain a summary outlining all items in the current registration statement representing changes from the prior registration statement.
(d) Disclosure of nonmaterial information. No information need be disclosed on the registration statement filed pursuant to subsection (b) of this Code section if the information is not material for the purposes of this Code section. Unless the Commissioner by rule, regulation, or order provides otherwise, sales, purchases, exchanges, loans, extensions of credit, or investments involving one-half of 1 percent or less of an insurer's admitted assets as of December 31 of the preceding year shall not be deemed material for purposes of this Code section. The definition of materiality provided in this subsection shall not apply for purposes of the group capital calculation or the NAIC Liquidity Stress Test Framework.
(e) Reporting dividends to shareholders. Subject to subsection (b) of Code Section 33-13-5, each registered insurer shall report to the Commissioner all dividends and other distributions to shareholders within 15 business days following the declaration thereof.
(f) Information of insurers. Any person within an insurance holding company system subject to registration shall be required to provide complete and accurate information to an insurer, where the information is reasonably necessary to enable the insurer to comply with the provisions of this article.
(g) Termination of registration. The Commissioner shall terminate the registration of any insurer which demonstrates that it no longer is a member of an insurance holding company system.
(h) Filing of consolidated registration. The Commissioner may require or allow two or more affiliated insurers subject to registration under this Code section to file a consolidated registration statement.
(i) Filing of registration for affiliated insurer. The Commissioner may allow an insurer which is authorized to do business in this state and which is part of an insurance holding company system to register on behalf of any affiliated insurer which is required to register under subsection (a) of this Code section and to file all information and material required to be filed under this Code section.
(j) Exemptions. This Code section shall not apply to any insurer, information, or transaction if and to the extent that the Commissioner by rule, regulation, or order shall exempt the same from this Code section.
(k) Filing of disclaimer. Any person may file with the Commissioner a disclaimer of affiliation with any authorized insurer or the disclaimer may be filed by the insurer or any member of an insurance holding company system. The disclaimer shall fully disclose all material relationships and bases for affiliation between the persons and the insurer as well as the basis for disclaiming the affiliation. A disclaimer of affiliation shall be deemed to have been granted unless the Commissioner, within 30 days following receipt of a complete disclaimer, notifies the filing party the disclaimer is disallowed. In the event of disallowance, the disclaiming party may request an administrative hearing, which shall be granted. The disclaiming party shall be relieved of its duty to register under this Code section if approval of the disclaimer has been granted by the Commissioner, or if the disclaimer is deemed to have been approved.
(l)(1) Enterprise risk filing . The ultimate controlling person of every insurer subject to registration shall also file an annual enterprise risk report. The report shall, to the best of the ultimate controlling person's knowledge and belief, identify the material risks within the insurance holding company system that could pose enterprise risk to the insurer. The report shall be filed with the lead state commissioner of the insurance holding system as determined by the procedures within the Financial Analysis Handbook adopted by the NAIC and adopted by regulation promulgated by the Commissioner or as otherwise prescribed by regulation promulgated by the Commissioner.
(2) Group capital calculation. Except as provided below, the ultimate controlling person of every insurer subject to registration shall concurrently file with the registration an annual group capital calculation as directed by the lead state commissioner. The report shall be completed in accordance with the NAIC group capital calculation instructions, which may permit the lead state commissioner to allow a controlling person that is not the ultimate controlling person to file the group capital calculation. The report shall be filed with the lead state commissioner of the insurance holding company system as determined by the Commissioner in accordance with the procedures within the Financial Analysis Handbook adopted by the NAIC. Insurance holding company systems described below are exempt from filing the group capital calculation:
(A) An insurance holding company system that has only one insurer within its holding company structure, that only writes business and is only licensed in its domestic state, and assumes no business for any other insurer;
(B) An insurance holding company system that is required to perform a group capital calculation specified by the United States Federal Reserve Board. The lead state commissioner shall request the calculation from the Federal Reserve Board under the terms of information sharing agreements in effect. If the Federal Reserve Board cannot share the calculation with the lead state commissioner, the insurance holding company system is not exempt from the group capital calculation filing;
(C) An insurance holding company system whose non-United States group-wide supervisor is located within a reciprocal jurisdiction as described in division (a)(6)(A)(i) of Code Section 33-7-14 that recognizes the United States state regulatory approach to group supervision and group capital;
(D) An insurance holding company system:
(i) That provides information to the lead state that meets the requirements for accreditation under the NAIC financial standards and accreditation program, either directly or indirectly through the group-wide supervisor, who has determined such information is satisfactory to allow the lead state to comply with the NAIC Financial Analysis Handbook; and
(ii) Whose non-United States group-wide supervisor that is not in a reciprocal jurisdiction recognizes and accepts, as specified by the Commissioner in regulation, the group capital calculation as the world-wide group capital assessment for United States insurance groups who operate in that jurisdiction;
(E) Notwithstanding the provisions of subparagraphs (C) and (D) of this paragraph, a lead state commissioner shall require the group capital calculation for United States operations of any non-United States based insurance holding company system where, after any necessary consultation with other supervisors or officials, it is deemed appropriate by the lead state commissioner for prudential oversight and solvency monitoring purposes or for ensuring the competitiveness of the insurance marketplace;
(F) Notwithstanding the provisions of subparagraphs (A) and (D) of this paragraph, the lead state commissioner has the discretion to exempt the ultimate controlling person from filing the annual group capital calculation or to accept a limited group capital filing or report in accordance with criteria as specified by the commissioner in regulation; and
(G) If the lead state commissioner determines that an insurance holding company system no longer meets one or more of the requirements for an exemption from filing the group capital calculation under this subsection, the insurance holding company system shall file the group capital calculation at the next annual filing date unless given an extension by the lead state commissioner based on reasonable grounds shown.
(3) Liquidity stress test. The ultimate controlling person of every insurer subject to registration and also scoped into the NAIC Liquidity Stress Test Framework shall file the results of a specific year's liquidity stress test. The filing shall be made to the lead state insurance commissioner of the insurance holding company system as determined by the procedures within the Financial Analysis Handbook adopted by the NAIC:
(A)(i) The NAIC Liquidity Stress Test Framework includes scope criteria applicable to a specific data year. These scope criteria are reviewed at least annually by the NAIC Financial Stability Task Force or its successor. Any change to the NAIC Liquidity Stress Test Framework or to the data year for which the scope criteria are to be measured shall be effective on January 1 of the year following the calendar year when such changes are adopted.
(ii) Insurers meeting at least one threshold of the scope criteria are considered scoped into the NAIC Liquidity Stress Test Framework for the specified data year unless the lead state insurance commissioner, in consultation with the NAIC Financial Stability Task Force or its successor, determines the insurer should not be scoped into such framework for that data year.
(iii) Insurers that do not trigger at least one threshold of the scope criteria are considered scoped out of the NAIC Liquidity Stress Test Framework for the specified data year, unless the lead state insurance commissioner, in consultation with the NAIC Financial Stability Task Force or its successor, determines the insurer should be scoped into such framework for that data year.
(iv) The lead state insurance commissioner, in consultation with the NAIC Financial Stability Task Force or its successor, will assess the concern that state regulators wish to avoid having insurers scoped in and out of the NAIC Liquidity Stress Test Framework on a frequent basis as part of the determination for an insurer; and
(B) The performance of, and filing of the results from, a specific year's liquidity stress test shall comply with the NAIC Liquidity Stress Test Framework's instructions and reporting templates for that year and any lead state insurance commissioner determinations, in consultation with the NAIC Financial Stability Task Force or its successor, provided within such framework.
(m) Violations. The failure to file a registration statement or any amendment to the registration statement required by this Code section within the time specified for the filing shall be a violation of this Code section.
(a)(1) Transactions within a holding company system to which an insurer subject to registration is a party shall be subject to the following standards:
(A) The terms shall be fair and reasonable;
(B) Agreements for cost sharing services and management shall include such provisions as required by the Commissioner by rule or regulation;
(C) Charges or fees for services performed shall be reasonable;
(D) Expenses incurred and payment received shall be allocated to the insurer in conformity with customary insurance accounting practices consistently applied;
(E) The books, accounts, and records of each party to all such transactions shall be so maintained as to clearly and accurately disclose the nature and details of the transactions, including such accounting information as is necessary to support the reasonableness of the charges or fees to the respective parties;
(F) The insurer's surplus with regard to policyholders following any dividends or distributions to shareholder affiliates shall be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs;
(G)(i) If an insurer subject to this article is deemed by the Commissioner to be in a hazardous financial condition based upon standards prescribed by the Commissioner's rules and regulations or a condition that would be grounds for supervision, conservation, or a delinquency proceeding, then the Commissioner may require the insurer to secure and maintain either a deposit, held by the Commissioner, or a bond, as determined by the insurer at the insurer's discretion, for the protection of the insurer for the duration of any contracts or agreements or the existence of the condition for which the Commissioner required the deposit or the bond.
(ii) In determining whether a deposit or a bond is required, the Commissioner should consider whether concerns exist with respect to the affiliated person's ability to fulfill any contracts or agreements if the insurer were to be put into liquidation. Once the insurer is deemed to be in a hazardous financial condition or a condition that would be grounds for supervision, conservation, or a delinquency proceeding, and a deposit or bond is necessary, the Commissioner has discretion to determine the amount of the deposit or bond, not to exceed the value of the contracts or agreements in any one year, and whether such deposit or bond should be required for a single contract, multiple contracts, or a contract only with a specified person or persons;
(H)(i) All records and data of the insurer held by an affiliate are and remain the property of the insurer, are subject to control of the insurer, are identifiable, and are segregated or readily capable of segregation, at no additional cost to the insurer, for all other persons' records and data. This includes all records and data that are otherwise the property of the insurer, in whatever form maintained, including but not limited to: claims and claims files; policyholder lists; application files; litigation files; premium records; rate books; underwriting manuals; personnel records; financial records; and similar records within the possession, custody, or control of the affiliate.
(ii) At the request of the insurer, the affiliate shall provide that the receiver can: obtain a complete set of all records of any type that pertain to the insurer's business; obtain access to the operational systems on which the data is maintained; obtain the software that runs those systems either through assumption of licensing agreements or otherwise; and restrict the use of the data by the affiliate if it is not operating the insurer's business. The affiliate shall provide a waiver of any landlord lien or other encumbrance to give the insurer access to all records and data in the event of the affiliates' default under a lease other agreement; and
(I) Premiums or other funds belonging to the insurer that are collected by or held by an affiliate are the exclusive property of the insurer and are subject to the control of the insurer. Any right of offset in the event an insurer is placed into receivership shall be subjected to Chapter 37 of this title.
(2) The following transactions involving a domestic insurer and any person in its holding company system, including amendments or modifications of affiliate agreements previously filed pursuant to this Code section, which are subject to any materiality standards contained in subparagraphs (A) through (G) of this paragraph, may not be entered into unless the insurer has notified the Commissioner in writing of its intention to enter into such transaction at least 30 days prior thereto, or such shorter period as the Commissioner may permit, and the Commissioner has not disapproved it within such period. The notice for amendments or modifications shall include the reasons for the change and the financial impact on the domestic insurer. Informal notice shall be reported, within 30 days after a termination of a previously filed agreement, to the Commissioner for determination of the type of filing required, if any:
(A) Sales, purchases, exchanges, loans or extensions of credit, guarantees, or investments, provided such transactions are equal to or exceed: with respect to nonlife insurers, the lesser of 3 percent of the insurer's admitted assets or 25 percent of surplus as regards policyholders; or with respect to life insurers, 3 percent of the insurer's admitted assets; each as of December 31 next preceding;
(B) Loans or extensions of credit to any person who is not an affiliate, where the insurer makes such loans or extensions of credit with the agreement or understanding that the proceeds of such transactions, in whole or in substantial part, are to be used to make loans or extensions of credit to, to purchase assets of, or to make investments in any affiliate of the insurer making such loans or extensions of credit to purchase assets of, or to make investments in, any affiliate of the insurer making the loans or extensions of credit, provided such transactions are equal to or exceed: with respect to nonlife insurers, the lesser of 3 percent of the insurer's admitted assets or 25 percent of surplus with regard to policyholders; or with respect to life insurers, 3 percent of the insurer's admitted assets; each as of December 31 next preceding;
(C) Reinsurance agreements or modifications thereto, including:
(i) All reinsurance pooling agreements; and
(ii) Agreements in which the reinsurance premium or a change in the insurer's liabilities, or the projected reinsurance premium or a change in the insurer's liabilities in any of the next three years, equals or exceeds 5 percent of the insurer's surplus with regard to policyholders, as of December 31 next preceding, including those agreements which may require as consideration the transfer of assets from an insurer to a nonaffiliate, if an agreement or understanding exists between the insurer and nonaffiliate that any portion of the assets will be transferred to one or more affiliates of the insurer;
(D) All management agreements, service contracts, tax allocation agreements, guarantees, and all cost-sharing agreements;
(E) Guarantees when made by a domestic insurer; provided, however, that a guarantee which is quantifiable as to amount is not subject to the notice requirements of this paragraph unless it exceeds the lesser of one-half of 1 percent of the insurer's admitted assets or 10 percent of surplus as regards policyholders as of December 31 next preceding. Further, all guarantees which are not quantifiable as to amount are subject to the notice requirements of this paragraph;
(F) Direct or indirect acquisitions or investments in a person that controls the insurer or in an affiliate of the insurer in an agreement which, together with its present holdings in such investments, exceeds 2 1/2 percent of the insurer's surplus to policyholders. Direct or indirect acquisitions or investments in subsidiaries acquired pursuant to Code Section 33-13-2 or authorized under any other Code section of this title, or in nonsubsidiary insurance affiliates that are subject to the provisions of this article, are exempt from this requirement; and
(G) Any material transactions, specified by regulation, which the Commissioner determines may adversely affect the interests of the insurer's policyholders.
Nothing contained in this paragraph shall be deemed to authorize or permit any transactions which, in the case of an insurer that is not a member of the same holding company system, would be otherwise contrary to law.
(3) A domestic insurer may not enter into transactions which are part of a plan or series of like transactions with persons within the holding company system if the purpose of those separate transactions is to avoid the statutory threshold amount and thus avoid the review that would occur otherwise. If the Commissioner determines that such separate transactions were entered into over any 12 month period for such purpose, the Commissioner may exercise his or her authority under Code Section 33-13-11.
(4) The Commissioner, in reviewing transactions pursuant to paragraph (2) of this subsection, shall consider whether the transactions comply with the standards set forth in paragraph (1) of this subsection and whether they may adversely affect the interests of policyholders.
(5) The Commissioner shall be notified within 30 days of any investment of the domestic insurer in any one corporation if the total investment in such corporation by the insurance holding company system exceeds 10 percent of such corporation's voting securities.
(6)(A) Any affiliate that is party to an agreement or contract with a domestic insurer that is subject to subparagraph (a)(2)(D) of this Code section shall be subject to the jurisdiction of any supervision, seizure, conservatorship, or receivership proceedings against the insurer and to the authority of any supervisor, conservator, rehabilitator, or liquidator for the insurer appointed pursuant to Chapter 37 of this title for the purpose of interpreting, enforcing, and overseeing the affiliates' obligations under the agreement or contract to perform services for the insurer that:
(i) Are an integral part of the insurer's operations, including but not limited to: management; administration; accounting; data processing; marketing; underwriting; claims handling; investment; and any other similar functions; or
(ii) Are essential to the insurer's ability to fulfill its obligations under insurance policies.
(B) The Commissioner may require that an agreement or contract pursuant to subparagraph (a)(2)(D) of this Code section for the provision of services described in divisions (i) and (ii) of subparagraph (A) of this paragraph specify that the affiliate consents to the jurisdiction as set forth in this paragraph.
(b)(1) No domestic insurer shall apply any extraordinary dividend or make any other extraordinary distribution to its shareholders until 30 days after the Commissioner has received notice of the declaration thereof and has not within such period disapproved such payment, or until the Commissioner has approved such payment within such 30 day period.
(2) For the purposes of this subsection, an extraordinary dividend or distribution includes any dividend or distribution of cash or other property, whose fair market value together with that of other dividends or distributions made within the preceding 12 months exceeds the greater of 10 percent of such insurer's surplus with regard to policyholders as of December 31 next preceding, or the net gain from operations of such insurer, if such insurer is a life insurer, or the net income, if such insurer is not a life insurer, not including realized capital gains, for the 12 month period ending December 31 next preceding, but shall not include pro rata distributions of any class of the insurer's own securities.
(3) In determining whether a dividend or distribution is extraordinary, an insurer other than a life insurer may carry forward net income from the previous two calendar years that has not already been paid out as dividends. This carry-forward shall be computed by taking the net income from the second and third preceding calendar years, not including realized capital gains, less dividends paid in the second and immediate preceding calendar years.
(4) Notwithstanding any other provision of law, an insurer may declare an extraordinary dividend or distribution which is conditional upon the Commissioner's approval thereof, and such a declaration shall confer no rights upon shareholders until the Commissioner has approved the payment of such a dividend or distribution or the Commissioner has not disapproved such payment within the 30 day period referred to in paragraph (1) of this subsection.
(c) For purposes of this article, in determining whether an insurer's surplus with regard to policyholders is reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs, the following factors, among others, shall be considered:
(1) The size of the insurer as measured by its assets, capital and surplus, reserves, premium writings, insurance in force, and other appropriate criteria;
(2) The extent to which the insurer's business is diversified among the several lines of insurance;
(3) The number and size of risks insured in each line of business;
(4) The extent of the geographical dispersion of the insurer's insured risks;
(5) The nature and extent of the insurer's reinsurance program;
(6) The quality, diversification, and liquidity of the insurer's investment portfolio;
(7) The recent past and projected future trend in the size of the insurer's surplus as regards policyholders;
(8) The surplus with regard to policyholders maintained by other comparable insurers;
(9) The adequacy of the insurer's reserves; and
(10) The quality and liquidity of investments in affiliates. The Commissioner may treat any such investment as a disallowed asset for purposes of determining the adequacy of surplus with regard to policyholders whenever in the judgment of the Commissioner the investment so warrants.
(a) Powers of Commissioner. Subject to the limitation contained in this Code section and in addition to the powers which the Commissioner has under this title relating to the examination of insurers, the Commissioner shall have the power to examine any insurer registered under Code Section 33-13-4 and its affiliates to ascertain the financial condition of the insurer, including the enterprise risk to the insurer by the ultimate controlling party, or by any entity or combination of entities within the insurance holding company system, or by the insurance holding company system on a consolidated basis.
(b) Access to books and records .
(1) The Commissioner may order any insurer registered under Code Section 33-13-4 to produce such records, books, or other information in the possession of the insurer or its affiliates as are reasonably necessary to determine compliance with this article.
(2) To determine compliance with this article, the Commissioner may order any insurer registered under Code Section 33-13-4 to produce information not in the possession of the insurer if the insurer can obtain access to such information pursuant to contractual relationships, statutory obligations, or other method. In the event the insurer cannot obtain the information requested by the Commissioner, the insurer shall provide the Commissioner a detailed explanation of the reason that the insurer cannot obtain the information and the identity of the holder of information. Whenever it appears to the Commissioner that the detailed explanation is without merit, the Commissioner may require, after notice and hearing, the insurer to pay a penalty of $1,000.00 for each day's delay, or may suspend or revoke the insurer's license.
(c) Use of consultants. The Commissioner may retain at the registered insurer's expense such attorneys, actuaries, accountants, and other experts not otherwise a part of the Commissioner's staff as shall be reasonably necessary to assist in the conduct of the examination under subsection (a) of this Code section. Any persons so retained shall be under the direction and control of the Commissioner and shall act in a purely advisory capacity.
(d) Expenses. Each registered insurer producing for examination records, books, and papers pursuant to subsection (a) of this Code section shall be liable for and shall pay the expense of the examination in accordance with Code Section 33-2-15.
(e) Compelling production. In the event the insurer fails to comply with an order, the Commissioner shall have the power to examine the affiliates to obtain the information. The Commissioner shall also have the power to issue subpoenas, to administer oaths, and to examine under oath any person for purposes of determining compliance with this subsection. Upon the failure or refusal of any person to obey a subpoena, the Commissioner may petition a court of competent jurisdiction, and upon proper showing, the court may enter an order compelling the witness to appear and testify or produce documentary evidence. Failure to obey the court order shall be punishable as contempt of court. Every person shall be obliged to attend as a witness at the place specified in the subpoena, when subpoenaed, anywhere within the state. He or she shall be entitled to the same fees and mileage, if claimed, as a witness in superior court, which fees, mileage, and actual expense, if any, necessarily incurred in securing the attendance of witnesses, and their testimony, shall be itemized and charged against, and be paid by, the company being examined.
(a) Power of Commissioner. With respect to any insurer registered under Code Section 33-13-4, and in accordance with subsection (c) of this Code section, the Commissioner shall also have the power to participate in a supervisory college for any domestic insurer that is part of an insurance holding company system with international operations in order to determine compliance by the insurer with this title. For purposes of this chapter, “supervisory colleges” means a forum for cooperation and communication between the involved supervisors established for the fundamental purpose of facilitating the effectiveness of the supervision of entities belonging to an insurance group. The powers of the Commissioner with respect to supervisory colleges include, but are not limited to, the following:
(1) Initiating the establishment of a supervisory college;
(2) Clarifying the membership and participation of other supervisors in the supervisory college;
(3) Clarifying the functions of the supervisory college and the role of other regulators, including the establishment of a group-wide supervisor;
(4) Coordinating the ongoing activities of the supervisory college, including planning meetings, supervisory activities, and processes for information sharing; and
(5) Establishing a crisis management plan.
(b) Expenses. Each registered insurer subject to this Code section shall be liable for and shall pay the reasonable expenses of the Commissioner's participation in a supervisory college in accordance with subsection (c) of this Code section, including reasonable travel expenses. For purposes of this Code section, a supervisory college may be convened as either a temporary or permanent forum for communication and cooperation between the regulators charged with the supervision of the insurer or its affiliates, and the Commissioner may establish a regular assessment to the insurer for the payment of these expenses.
(c) Supervisory college. In order to assess the business strategy, financial position, legal and regulatory position, risk exposure, risk management and governance processes, and as part of the examination of individual insurers in accordance with Code Section 33-13-6, the Commissioner may participate in a supervisory college with other regulators charged with supervision of the insurer or its affiliates, including other state, federal, and international regulatory agencies. The Commissioner may enter into agreements in accordance with subsection (c) of Code Section 33-13-8 providing the basis for cooperation between the Commissioner and the other regulatory agencies, and the activities of the supervisory college. Nothing in this Code section shall delegate to the supervisory college the authority of the Commissioner to regulate or supervise the insurer or its affiliates within its jurisdiction.
(a) The Commissioner is authorized to act as the group-wide supervisor for any internationally active insurance group in accordance with the provisions of this Code section. However, the Commissioner may acknowledge another regulatory official as the group-wide supervisor where the internationally active insurance group:
(1) Does not have substantial insurance operations in the United States;
(2) Has substantial insurance operations in the United States but not in this state; or
(3) Has substantial insurance operations in the United States and this state, but the Commissioner has determined pursuant to the factors set forth in subsections (b) and (f) of this Code section that the other regulatory official is the appropriate group-wide supervisor.
An insurance holding company system that does not otherwise qualify as an internationally active insurance group may request that the Commissioner make a determination or acknowledgment as to a group-wide supervisor pursuant to this Code section.
(b) In cooperation with other state, federal, and international regulatory agencies, the Commissioner shall identify a single group-wide supervisor for an internationally active insurance group. The Commissioner may determine that he or she is the appropriate group-wide supervisor for an internationally active insurance group that conducts substantial insurance operations concentrated in this state. However, the Commissioner may acknowledge that a regulatory official from another jurisdiction is the appropriate group-wide supervisor for an internationally active insurance group. The Commissioner shall consider the following factors when making a determination or acknowledgment under this subsection:
(1) The place of domicile of the insurers within the internationally active insurance group that hold the largest share of the group's written premiums, assets, or liabilities;
(2) The place of domicile of the top-tiered insurer or insurers in the insurance holding company system of the internationally active insurance group;
(3) The location of the executive offices or largest operational offices of the internationally active insurance group;
(4) Whether another regulatory official is acting or is seeking to act as the group-wide supervisor under a regulatory system that the Commissioner determines to be:
(A) Substantially similar to the system of regulation provided under the laws of this state; or
(B) Otherwise sufficient in terms of providing for group-wide supervision, enterprise risk analysis, and cooperation with other regulatory officials; and
(5) Whether another regulatory official acting or seeking to act as the group-wide supervisor provides the Commissioner with reasonably reciprocal recognition and cooperation.
The Commissioner acting as the group-wide supervisor may determine that it is appropriate to acknowledge another supervisor to serve as the group-wide supervisor. The acknowledgment of the group-wide supervisor shall be made after consideration of the factors listed in paragraphs (1) through (5) of this subsection, in cooperation with and subject to the acknowledgment of other regulatory officials involved with supervision of the members of the internationally active insurance group, and in consultation with the internationally active insurance group.
(c) Notwithstanding any other provision of law, when another regulatory official is acting as the group-wide supervisor of an internationally active insurance group, the Commissioner shall acknowledge such regulatory official as the group-wide supervisor. In the event of a material change in the internationally active insurance group that results in such group's insurers domiciled in this state holding the largest share of the group's premiums, assets, or liabilities or that results in this state being the place of domicile of the top tiered insurer or insurers in the insurance holding company system of the internationally active insurance group, the Commissioner shall make a determination or acknowledgment as to the appropriate group-wide supervisor for such internationally active insurance group pursuant to subsection (b) of this Code section.
(d) Pursuant to Code Section 33-13-6, the Commissioner is authorized to collect from any insurer registered pursuant to Code Section 33-13-4 all information necessary to determine whether the Commissioner may act as the group-wide supervisor of an internationally active insurance group or if the Commissioner may acknowledge another regulatory official to act as the group-wide supervisor. Prior to issuing a determination that an internationally active insurance group is subject to group-wide supervision by the Commissioner, the Commissioner shall notify the insurer registered pursuant to Code Section 33-13-4 and the ultimate controlling person within the internationally active insurance group. The internationally active insurance group shall have not less than 30 days to provide the Commissioner with additional information pertinent to the pending determination. The Commissioner shall publish in a newspaper having general state-wide circulation and on its internet website the identity of internationally active insurance groups that the Commissioner has determined are subject to group-wide supervision by the Commissioner.
(e) If the Commissioner is the group-wide supervisor for an internationally active insurance group, the Commissioner is authorized to engage in any of the following group-wide supervision activities:
(1) Assess the enterprise risks within the internationally active insurance group to ensure that:
(A) The material financial condition and liquidity risks to the members of the internationally active insurance group that are engaged in the business of insurance are identified by management; and
(B) Reasonable and effective mitigation measures are in place;
(2) Request from any member of such group information necessary and appropriate to assess enterprise risk, including, but not limited to, information about the members of the internationally active insurance group regarding:
(A) Governance, risk assessment, and management;
(B) Capital adequacy; and
(C) Material intercompany transactions;
(3) Coordinate and, through the authority of the regulatory officials of the jurisdictions where members of the internationally active insurance group are domiciled, compel development and implementation of reasonable measures designed to ensure that the internationally active insurance group is able to timely recognize and mitigate enterprise risks to members of such internationally active insurance group that are engaged in the business of insurance;
(4) Communicate with other state, federal, and international regulatory agencies for members within the internationally active insurance group and share relevant information subject to the confidentiality provisions of Code Section 33-13-8 through supervisory colleges as set forth in Code Section 33-13-7 or otherwise;
(5) Enter into agreements with or obtain documentation from any insurer registered under Code Section 33-13-4, any member of the internationally active insurance group, and any other state, federal, and international regulatory agencies for members of the internationally active insurance group, providing the basis for or otherwise clarifying the Commissioner's role as group-wide supervisor, including provisions for resolving disputes with other regulatory officials. Such agreements or documentation shall not serve as evidence in any proceeding that any insurer or person within an insurance holding company system not domiciled or incorporated in this state is doing business in this state or is otherwise subject to jurisdiction in this state; and
(6) Other group-wide supervision activities consistent with the authorities and purposes enumerated in this subsection as deemed necessary by the Commissioner.
(f) If the Commissioner acknowledges that another regulatory official from a jurisdiction that is not accredited by the National Association of Insurance Commissioners is the group-wide supervisor, the Commissioner is authorized to reasonably cooperate, through supervisory colleges or otherwise, with group-wide supervision undertaken by such group-wide supervisor, provided that:
(1) The Commissioner's cooperation is in compliance with the laws of this state; and
(2) The regulatory official acknowledged as the group-wide supervisor also recognizes and cooperates with the Commissioner's activities as a group-wide supervisor for other internationally active insurance groups where applicable. Where such recognition and cooperation is not reasonably reciprocal, the Commissioner is authorized to refuse recognition and cooperation.
(g) The Commissioner is authorized to enter into agreements with or obtain documentation from any insurer registered under Code Section 33-13-4, any affiliate of the insurer, and other state, federal, and international regulatory agencies for members of the internationally active insurance group that provide the basis for or otherwise clarify a regulatory official's role as group-wide supervisor.
(h) The Commissioner may promulgate rules and regulations necessary for the administration of this Code section.
(i) A registered insurer subject to this Code section shall be liable for and shall pay the reasonable expenses of the Commissioner's participation in the administration of this Code section, including the engagement of attorneys, actuaries, and any other professionals and all reasonable travel expenses.
(a)(1) Documents, materials, or other information in the possession or control of the department that are obtained by or disclosed to the Commissioner or any other person in the course of an examination or investigation made pursuant to Code Section 33-13-6 and all information reported or provided to the department pursuant to paragraphs (12) and (13) of subsection (b) of Code Section 33-13-3 and Code Sections 33-13-4, 33-13-5, and 33-13-7.1 are recognized by this state as being proprietary and to contain trade secrets, and shall be confidential by law and privileged, shall not be subject to public disclosure under Article 4 of Chapter 18 of Title 50, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. However, the Commissioner is authorized to use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the Commissioner's official duties. The Commissioner shall not otherwise make the documents, materials, or other information public without the prior written consent of the insurer to which it pertains unless the Commissioner, after giving the insurer and its affiliates that would be affected thereby notice and opportunity to be heard, determines that the interest of policyholders, shareholders, or the public will be served by the publication thereof, in which event the Commissioner may publish all or any part in such manner as may be deemed appropriate.
(2) For purposes of the information reported and provided to the department pursuant to paragraph (2) of subsection (l) of Code Section 33-13-4, the Commissioner shall maintain the confidentiality of the group capital calculation and group capital ratio produced within the calculation and any group capital information received from an insurance holding company supervised by the Federal Reserve Board or any United States group-wide supervisor.
(3) For purposes of the information reported and provided to the department pursuant to paragraph (3) of subsection (l) of Code Section 33-13-4, the Commissioner shall maintain the confidentiality of the liquidity stress test results and supporting disclosures and any liquidity stress test information received from an insurance holding company supervised by the Federal Reserve Board and non-United States group-wide supervisors.
(b) Neither the Commissioner nor any person who received documents, materials, or other information while acting under the authority of the Commissioner or with whom such documents, materials, or other information are shared pursuant to this article shall be permitted or required to testify in any private civil action concerning any confidential documents, materials, or other information subject to subsection (a) of this Code section.
(c) In order to assist in the performance of the Commissioner's duties, the Commissioner:
(1) May share documents, materials, or other information, including the confidential and privileged documents, materials, or other information subject to subsection (a) of this Code section, and including proprietary and trade secret documents and materials, with other state, federal, and international regulatory agencies, with the NAIC, any third-party consultant designated by the Commissioner, and state, federal, and international law enforcement authorities, including members of any supervisory college described in Code Section 33-13-7, provided that the recipient agrees in writing to maintain the confidentiality and privileged status of the document, material, or other information and has verified in writing the legal authority to maintain confidentiality;
(2) Notwithstanding paragraph (1) of this subsection, may only share confidential and privileged documents, materials, or other information reported pursuant to paragraph (1) of subsection (l) of Code Section 33-13-4 with commissioners of states having statutes or regulations substantially similar to subsection (a) of this Code section and who have agreed in writing not to disclose such information;
(3) May receive documents, materials, or other information, including otherwise confidential and privileged documents, materials, or other information, including proprietary and trade secret information from the NAIC and from regulatory and law enforcement officials of other foreign or domestic jurisdictions and shall maintain as confidential or privileged any document, material, or other information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or other information; and
(4) Shall enter into written agreements with the NAIC and any third-party consultant designated by the Commissioner governing sharing and use of information provided pursuant to this article consistent with this subsection that shall:
(A) Specify procedures and protocols regarding the confidentiality and security of information shared with the NAIC or a third-party consultant designated by the Commissioner pursuant to this article, including procedures and protocols for sharing by the NAIC with other state, federal, and international regulatory agencies. The agreement shall provide that the recipient agrees in writing to maintain the confidentiality and privileged status of the documents, materials, or other information and has verified in writing the legal authority to maintain such confidentiality;
(B) Specify that ownership of information shared with the NAIC or a third-party consultant designated by the Commissioner pursuant to this article remains with the Commissioner and that the NAIC's or designated third-party consultant's use of the information is subject to the direction of the Commissioner;
(C) Excluding documents, materials, or information reported pursuant to paragraph (3) of subsection (l) of Code Section 33-13-4, prohibit the NAIC or a third-party consultant designated by the Commissioner from storing the information shared pursuant to this article in a permanent database after the underlying analysis is completed;
(D) Require prompt notice to be given to an insurer whose confidential information in the possession of the NAIC or a third-party consultant designated by the Commissioner pursuant to this article is subject to a request or subpoena to the NAIC a third-party consultant designated by the Commissioner for disclosure or production;
(E) Require the NAIC or a third-party consultant designated by the Commissioner to consent to intervention by an insurer in any judicial or administrative action in which the NAIC or a third-party consultant designated by the Commissioner may be required to disclose confidential information about the insurer shared with the NAIC or a third-party consultant designated by the Commissioner pursuant to this article; and
(F) For documents, materials, or information reporting pursuant to paragraph (3) of subsection (l) of Code Section 33-13-4, in the case of an agreement with a third-party consultant designated by the Commissioner, provide for notification of the identity of the consultant to the applicable insurers.
(d) The sharing of information by the Commissioner pursuant to this article shall not constitute a delegation of regulatory authority or rule making, and the Commissioner is solely responsible for the administration, execution, and enforcement of the provisions of this article.
(e) No waiver of any applicable privilege or claim of confidentiality in the documents, materials, or other information shall occur as a result of disclosure to the Commissioner under this Code section or as a result of sharing as authorized in subsection (c) of this Code section.
(f) Documents, materials, or other information in the possession or control of the NAIC or a third-party consultant designated by the Commissioner pursuant to this article shall be confidential by law and privileged, shall not be subject to the open records laws, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action.
(g) The group capital calculation and resulting group capital ratio required under paragraph (2) of subsection (l) of Code Section 33-13-4 and the liquidity stress test along with its results and supporting disclosures required under paragraph (3) of subsection (l) of Code Section 33-13-4 are regulatory tools for assessing group risks and capital adequacy and group liquidity risks, respectively, and are not intended as a means to rank insurers or insurance company systems generally. Therefore, except as otherwise may be required under the provisions of this article, the making, publishing, disseminating, circulating, or placing before the public, or causing directly or indirectly to be made, published, disseminated, circulated, or placed before the public in a newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio or television station or any electronic means of communication available to the public, or in any other way as an advertisement, announcement, or statement containing a representation or statement with regard to the group capital calculation, group capital ratio, the liquidity stress test results, or supporting disclosures for the liquidity stress test of any insurer or any insurer group, or of any component derived in the calculation by any insurer, broker, or other person engaged in any manner in the insurance business would be misleading and is therefore prohibited; provided, however, that if any materially false statement with respect to the group capital calculation, resulting group capital ratio, an inappropriate comparison of any amount to an insurer's or insurance group's group capital calculation or resulting group capital ratio, liquidity stress test result, supporting disclosures for the liquidity stress test, or an inappropriate comparison of any amount to an insurer's or insurance group's liquidity stress test result or supporting disclosures is published in any written publication and the insurer is able to demonstrate to the Commissioner with substantial proof the falsity of such statement or the inappropriateness, as the case may be, then the insurer may publish announcements in a written publication if the sole purpose of the announcement is to rebut the materially false statement.
The Commissioner may, upon notice and opportunity for all interested persons to be heard, issue any rules, regulations, and orders as shall be necessary to carry out this article.
(a) Injunctions. Whenever it appears to the Commissioner that any insurer or any director, officer, employee, or agent of any insurer has committed or is about to commit a violation of this article or of any rule, regulation, or order issued by the Commissioner under this article, the Commissioner may apply to the superior court of the county in which the principal office of the insurer is located or, if the insurer has no such office in this state, to the Superior Court of Fulton County for an order enjoining the insurer or the director, officer, employee, or agent of such insurer from violating or continuing to violate this article or any rule, regulation, or order and for any other equitable relief as the nature of the case and the interests of the insurer's policyholders, creditors, and shareholders or the public may require.
(b) Voting of securities; when prohibited. No security which is the subject of any agreement or arrangement regarding acquisition or which is acquired or to be acquired in contravention of this article or of any rule, regulation, or order issued by the Commissioner under this article may be voted at any shareholders' meeting or counted for quorum purposes; and any action of shareholders requiring the affirmative vote of a percentage of shares may be taken as though such securities were not issued and outstanding; but no action taken at any such meeting shall be invalidated by the voting of such securities unless the action would materially affect control of the insurer or unless the courts of this state have so ordered. If an insurer or the Commissioner has reason to believe that any security of the insurer has been or is about to be acquired in contravention of this article or of any rule, regulation, or order issued by the Commissioner under this article, the insurer or the Commissioner may apply to the Superior Court of Fulton County or to the superior court of the county in which the insurer has its principal place of business to enjoin any offer, request, invitation, agreement, or acquisition made in contravention of Code Section 33-13-3 or any rule, regulation, or order issued by the Commissioner under Code Section 33-13-3 to enjoin the voting of any security so acquired, to void any vote of the security already cast at any meeting of shareholders, and for any other equitable relief as the nature of the case and the interests of the insurer's policyholders, creditors, and shareholders or the public may require.
(c) Sequestration of voting securities. In any case in which a person has acquired or is proposing to acquire any voting securities in violation of this article or any rule, regulation, or order issued by the Commissioner under this article, the Superior Court of Fulton County or the superior court of the county in which the insurer has its principal place of business, on any notice as the court deems appropriate and upon the application of the insurer or the Commissioner, may seize or sequester any voting securities of the insurer owned directly or indirectly by the person and issue such orders with respect to the seizure or sequestration as may be appropriate to effectuate this article. Notwithstanding any other provisions of law, for the purposes of this article the situs of the ownership of the securities of domestic insurers shall be deemed to be in this state.
(a) Any insurer failing, without just cause, to file any registration statement as required in this article shall be required, after notice and hearing, to pay a penalty of $1,000.00 for each day's delay. The maximum penalty under this Code section is $50,000.00. The Commissioner may reduce the penalty if the insurer demonstrates to the Commissioner that the imposition of the penalty would constitute a financial hardship to the insurer.
(b) Every director or officer of an insurance holding company system who knowingly violates, participates in, or assents to or who knowingly shall permit any of the officers or agents of the insurer to engage in transactions or make investments which have not been properly reported or submitted pursuant to subsection (a) of Code Section 33-13-4, paragraph (2) of subsection (a) of Code Section 33-13-5, or subsection (b) of Code Section 33-13-5, or which violate this article, shall pay, in their individual capacity, a civil forfeiture of not more than $50,000.00 per violation, after notice and hearing before the Commissioner. In determining the amount of the civil forfeiture, the Commissioner shall take into account the appropriateness of the forfeiture with respect to the gravity of the violation, the history of previous violations, and such other matters as justice may require.
(c) Whenever it appears to the Commissioner that any insurer subject to this article or any director, officer, employee, or agent thereof has engaged in any transaction or entered into a contract which is subject to Code Section 33-13-5 and which would not have been approved had the approval been requested, the Commissioner may order the insurer to cease and desist immediately any further activity under that transaction or contract. After notice and hearing the Commissioner may also order the insurer to void any contracts and restore the status quo if the action is in the best interest of its policyholders, creditors, or the public.
(d) Whenever it appears to the Commissioner that any insurer or any director, officer, employee, or agent thereof has committed a willful violation of this article, the Commissioner may cause criminal proceedings to be instituted by the Superior Court of Fulton County against the insurer or the responsible director, officer, employee, or agent thereof. Any insurer which willfully violates this article may be fined not more than $100,000.00. Any individual who willfully violates this article may be fined in his or her individual capacity not more than $100,000.00 or be imprisoned for not more than one to three years, or both.
(e) Any officer, director, or employee of an insurance holding company system who willfully and knowingly subscribes to or makes or causes to be made any false statements or false reports or false filings with the intent to deceive the Commissioner in the performance of his or her duties under this article upon conviction shall be imprisoned for not more than three years or fined $100,000.00, or both. Any fines imposed shall be paid by the officer, director, or employee in his or her individual capacity.
(f) Whenever it appears to the Commissioner that any person has committed a violation of Code Section 33-13-3 and which prevents the full understanding of the enterprise risk to the insurer by affiliates or by the insurance holding company system, the violation may serve as an independent basis for disapproving dividends or distributions and for placing the insurer under an order of supervision in accordance with Code Section 33-3-18.
Whenever it appears to the Commissioner that any person has committed a violation of this article which so impairs the financial condition of a domestic insurer as to threaten insolvency or make the further transaction of business by it hazardous to its policyholders, creditors, shareholders, or the public, the Commissioner may proceed as provided in Chapter 37 of this title to take possession of the property of the domestic insurer and to conduct the business of the domestic insurer.
Whenever it appears to the Commissioner that any person has committed a violation of this article which makes the continued operation of an insurer contrary to the interests of policyholders or the public, the Commissioner may, after giving notice and an opportunity to be heard, determine to suspend, revoke, or refuse to renew the insurer's license or authority to do business in this state for any period as he or she finds is required for the protection of policyholders or the public. Any determination shall be accompanied by specific findings of fact and conclusions of law.
(a) If an order for the liquidation, rehabilitation, or conservation of an insurer authorized to do business in this state is entered under Chapter 37 of this title, the receiver appointed under the order shall have a right to recover on behalf of the insurer (i) from any parent corporation or holding company or person or affiliate who otherwise controlled the insurer, the amount of distributions, other than distributions of shares of the same class of stock, paid by the insurer on its capital stock, or (ii) any payment in the form of a bonus, termination settlement, or extraordinary lump sum salary adjustment made by the insurer or its subsidiary to a director, officer, or employee, where the distribution or payment pursuant to (i) or (ii) is made at any time during the one year preceding the petition for liquidation, conservation, or rehabilitation, as the case may be, subject to the limitations of subsections (b), (c), and (d) of this Code section.
(b) No distribution shall be recoverable if that insurer shows that when paid the distribution was lawful and reasonable and that the insurer did not know and could not reasonably have known that the distribution might adversely affect the ability of the insurer to fulfill the obligations to claimants under its insurance contracts.
(c)(1) Any person who was a parent corporation or holding company or a person who otherwise controlled the insurer or affiliate at the time the distributions were paid shall be liable up to the amount of distributions or payments under subsection (a) of this Code section which the person received.
(2) Any person who otherwise controlled the insurer at the time the distributions were declared shall be liable up to the amount of distributions he or she would have received if they had been paid immediately.
(3) If under paragraphs (1) and (2) of this subsection two persons are liable with respect to the same distributions, they shall be jointly and severally liable.
(d) The maximum amount recoverable under this Code section shall be the amount needed in excess of all other available assets of the impaired or insolvent insurer to pay the contractual obligations of the impaired or insolvent insurer and to reimburse any guaranty funds.
(e) To the extent that any person liable under subsection (c) of this Code section is insolvent or otherwise fails to pay claims due from it, its parent corporation or holding company or person who otherwise controlled it at the time the distribution was paid, shall be jointly and severally liable for any resulting deficiency in the amount recovered from the parent corporation or holding company or person who otherwise controlled it.
(a) Any person aggrieved by any act, determination, rule, regulation, or order or any other action of the Commissioner pursuant to this article may appeal the action to the Superior Court of Fulton County. The court shall conduct its review without a jury and by trial de novo, except that, if all parties including the Commissioner so stipulate, the review shall be confined to the record. Portions of the record may be introduced by stipulation into evidence in a trial de novo as to those parties so stipulating.
(b) The filing of an appeal pursuant to this Code section shall stay the application of any such rule, regulation, order, or other action of the Commissioner to the appealing party unless the court, after giving the party notice and an opportunity to be heard, determines that such a stay would be detrimental to the interests of policyholders, shareholders, creditors, or the public.
(c) Any person aggrieved by any failure of the Commissioner to act or make a determination required by this article may petition the Superior Court of Fulton County for a writ in the nature of a mandamus or a peremptory mandamus directing the Commissioner to act or make the determination immediately.
(a) The General Assembly finds and declares that an Own Risk and Solvency Assessment Summary Report will contain confidential and sensitive information related to an insurer or insurance group's identification of risks material and relevant to the insurer or insurance group filing the report. This information will include proprietary and trade secret information that has the potential for harm and competitive disadvantage to the insurer or insurance group if the information is made public.
(b) It is the intent of the General Assembly that the Own Risk and Solvency Assessment Summary Report shall be a confidential document filed with the Commissioner, that the Own Risk and Solvency Assessment Summary Report will be shared only as stated in this article and to assist the Commissioner in the performance of his or her duties, and that in no event shall the Own Risk and Solvency Assessment Summary Report be subject to public disclosure.
The purpose of this article is to provide the requirements for maintaining a risk management framework and completing an Own Risk and Solvency Assessment and provide guidance and instructions for filing an Own Risk and Solvency Assessment Summary Report with the Commissioner. The requirements of this article shall apply to all insurers domiciled in this state unless exempt pursuant to Code Section 33-13-36.
As used in this article, the term:
(1) “Insurance group” means those insurers and affiliates included within an insurance holding company system as defined in paragraph (7) of Code Section 33-13-1.
(2) “Insurer” shall have the same meaning as set forth in Code Section 33-1-2, except that it shall not include agencies, authorities, or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state.
(3) “Own Risk and Solvency Assessment” or “ORSA” means a confidential internal assessment, appropriate to the nature, scale, and complexity of an insurer or insurance group, conducted by that insurer or insurance group of the material and relevant risks associated with the insurer or insurance group's current business plan and the sufficiency of capital resources to support those risks.
(4) “ORSA Guidance Manual” means the Own Risk and Solvency Assessment Guidance Manual developed and adopted by the National Association of Insurance Commissioners and as amended from time to time. A change in the ORSA Guidance Manual shall be effective on January 1 following the calendar year in which the changes have been adopted by the National Association of Insurance Commissioners.
(5) “ORSA Summary Report” means a confidential high-level summary of an insurer or insurance group's ORSA.
An insurer shall maintain a risk management framework to assist the insurer with identifying, assessing, monitoring, managing, and reporting on its material and relevant risks. This requirement may be satisfied if the insurance group of which the insurer is a member maintains a risk management framework applicable to the operations of the insurer.
Subject to Code Section 33-13-36, an insurer, or the insurance group of which the insurer is a member, shall regularly conduct an ORSA consistent with a process comparable to the ORSA Guidance Manual. The ORSA shall be conducted no less than annually, but also at any time when there are significant changes to the risk profile of the insurer or the insurance group of which the insurer is a member.
(a) Upon the Commissioner's request, and no more than once each year, an insurer shall submit to the Commissioner an ORSA Summary Report or any combination of reports that together contain the information described in the ORSA Guidance Manual, applicable to the insurer or the insurance group of which it is a member. Notwithstanding any request from the Commissioner, if the insurer is a member of an insurance group, the insurer shall submit the report or reports required by this subsection if the Commissioner is the lead state commissioner of the insurance group as determined by the procedures within the Financial Analysis Handbook adopted by the National Association of Insurance Commissioners.
(b) The report or reports shall include a signature of the insurer or insurance group's chief risk officer or other executive having responsibility for the oversight of the insurer's enterprise risk management process attesting to the best of his or her belief and knowledge that the insurer applies the enterprise risk management process described in the ORSA Summary Report and that a copy of the report has been provided to the insurer's board of directors or the appropriate committee.
(c) An insurer may comply with subsection (a) of this Code section by providing the most recent and substantially similar report or reports provided by the insurer or another member of an insurance group of which the insurer is a member to the commissioner of another state or to a supervisor or regulator of a foreign jurisdiction, if that report provides information that is comparable to the information described in the ORSA Guidance Manual. Any such report in a language other than English must be accompanied by a translation of that report into the English language.
(a) An insurer shall be exempt from the requirements of this article, if:
(1) The insurer has annual direct written and unaffiliated assumed premium, including international direct and assumed premium, but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than $500 million; and
(2) The insurance group of which the insurer is a member has annual direct written and unaffiliated assumed premium, including international direct and assumed premium, but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than $1 billion.
(b) If an insurer qualifies for exemption pursuant to paragraph (1) of subsection (a) of this Code section, but the insurance group of which the insurer is a member does not qualify for exemption pursuant to paragraph (2) of subsection (a) of this Code section, then the ORSA Summary Report that may be required pursuant to Code Section 33-13-35 shall include every insurer within the insurance group. This requirement may be satisfied by the submission of more than one ORSA Summary Report for any combination of insurers, provided that any combination of reports includes every insurer within the insurance group.
(c) If an insurer does not qualify for exemption pursuant to paragraph (1) of subsection (a) of this Code section, but the insurance group of which it is a member qualifies for exemption pursuant to paragraph (2) of subsection (a) of this Code section, then the only ORSA Summary Report that may be required pursuant Code Section 33-13-35 shall be the report applicable to that insurer.
(d) An insurer that does not qualify for exemption pursuant to subsection (a) of this Code section may apply to the Commissioner for a waiver from the requirements of this article based upon unique circumstances. In deciding whether to grant the insurer's request for waiver, the Commissioner may consider the type and volume of business written, ownership and organizational structure, and any other factor the Commissioner considers relevant to the insurer or insurance group of which the insurer is a member. If the insurer is part of an insurance group with insurers domiciled in more than one state, the Commissioner shall coordinate with the lead state commissioner and with the other domiciliary commissioners in considering whether to grant the insurer's request for a waiver.
(e) Notwithstanding the exemptions stated in this Code section:
(1) The Commissioner may require that an insurer maintain a risk management framework, conduct an ORSA, and file an ORSA Summary Report based on unique circumstances, including, but not limited to, the type and volume of business written, ownership and organizational structure, federal agency requests, and international supervisor requests; and
(2) The Commissioner may require that an insurer maintain a risk management framework, conduct an ORSA, and file an ORSA Summary Report if the insurer has risk-based capital for a company action level event as set forth in Chapter 56 of this title, meets one or more of the standards of an insurer deemed to be in hazardous financial condition as provided for pursuant to the Commissioner's rules and regulations, or otherwise exhibits qualities of a troubled insurer as determined by the Commissioner.
(f) If an insurer that qualifies for an exemption pursuant to subsection (a) of this Code section subsequently no longer qualifies for that exemption due to changes in premium as reflected in the insurer's most recent annual statement or in the most recent annual statements of the insurers within the insurance group of which the insurer is a member, the insurer shall have one year following the year the threshold is exceeded to comply with the requirements of this article.
(a) The ORSA Summary Report shall be prepared consistently with the ORSA Guidance Manual, subject to the requirements of subsection (b) of this Code section. Documentation and supporting information shall be maintained and made available upon examination or upon request of the Commissioner.
(b) The review of the ORSA Summary Report and any additional requests for information shall be made using similar procedures used in the analysis and examination of multistate or global insurers and insurance groups.
(a) Documents, materials, or other information, including the ORSA Summary Report, in the possession of or control of the Department of Insurance that are obtained by, created by, or disclosed to the Commissioner or any other person under this article is recognized by this state as being proprietary and containing trade secrets. All such documents, materials, or other information shall be confidential by law and privileged, shall not be subject to Article 4 of Chapter 18 of Title 50, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. However, the Commissioner is authorized to use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the Commissioner's official duties. The Commissioner shall not otherwise make the documents, materials, or other information public without the prior written consent of the insurer.
(b) Neither the Commissioner nor any person who received documents, materials, or other ORSA related information, through examination or otherwise, while acting under the authority of the Commissioner or with whom such documents, materials, or other information are shared pursuant to this article shall be permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject to subsection (a) of this Code section.
(c) In order to assist in the performance of the Commissioner's regulatory duties, the Commissioner:
(1) May upon request share documents, materials, or other ORSA related information, including the confidential and privileged documents, materials, or information subject to subsection (a) of this Code section, including proprietary and trade secret documents and materials with other state, federal, and international financial regulatory agencies, including members of any supervisory college as described in Code Section 33-13-7, with the National Association of Insurance Commissioners and with any third-party consultants designated by the Commissioner, provided that the recipient agrees in writing to maintain the confidentiality and privileged status of the ORSA related documents, materials, or other information and has verified in writing the legal authority to maintain confidentiality;
(2) May receive documents, materials, or other ORSA related information, including otherwise confidential and privileged documents, materials, or information, including proprietary and trade secret information or documents, from regulatory officials of other foreign or domestic jurisdictions, including members of any supervisory college as described in Code Section 33-13-7, and from the National Association of Insurance Commissioners, and shall maintain as confidential or privileged any documents, materials, or information received with notice or the understanding that such documents, materials, or information are confidential or privileged under the laws of the jurisdiction that is the source of such documents, materials, or information; and
(3) Shall enter into a written agreement with the National Association of Insurance Commissioners or a third-party consultant governing sharing and use of information provided pursuant to this article, consistent with this subsection that shall:
(A) Specify procedures and protocols regarding the confidentiality and security of information shared with the National Association of Insurance Commissioners or a third-party consultant pursuant to this article, including procedures and protocols for sharing by the National Association of Insurance Commissioners with other state regulators from states in which the insurance group has domiciled insurers. The agreement shall provide that the recipient agrees in writing to maintain the confidentiality and privileged status of the ORSA related documents, materials, or other information and has verified in writing the legal authority to maintain confidentiality;
(B) Specify that ownership of information shared with the National Association of Insurance Commissioners or a third-party consultant pursuant to this article remains with the Commissioner and that the use of information by the National Association of Insurance Commissioners or a third-party consultant is subject to the direction of the Commissioner;
(C) Prohibit the National Association of Insurance Commissioners or third-party consultant from storing the information shared pursuant to this article in a permanent data base after the underlying analysis is completed;
(D) Require prompt notice to be given to an insurer whose confidential information in the possession of the National Association of Insurance Commissioners or a third-party consultant pursuant to this article is subject to a request or subpoena to the National Association of Insurance Commissioners or a third-party consultant for disclosure or production;
(E) Require the National Association of Insurance Commissioners or a third-party consultant to consent to intervention by an insurer in any judicial or administrative action in which the National Association of Insurance Commissioners or a third-party consultant may be required to disclose confidential information about the insurer shared with the National Association of Insurance Commissioners or a third-party consultant pursuant to this article; and
(F) In the case of an agreement involving a third-party consultant, provide for the insurer's written consent.
(d) The sharing of information and documents by the Commissioner pursuant to this article shall not constitute a delegation of regulatory authority or rulemaking, and the Commissioner is solely responsible for the administration, execution, and enforcement of the provisions of this article.
(e) No waiver of any applicable privilege or claim of confidentiality in the documents, proprietary and trade secret materials, or other ORSA related information shall occur as a result of disclosure of such ORSA related information or documents to the Commissioner under this Code section or as a result of sharing as authorized in this article.
(f) Documents, materials, or other information in the possession or control of the National Association of Insurance Commissioners or a third-party consultant pursuant to this article shall be confidential by law and privileged, shall not be subject to Article 4 of Chapter 18 of Title 50, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action.
Any insurer failing, without just cause, to timely file the ORSA Summary Report as required in this article may be subject to any penalty set forth in subsection (g) of Code Section 33-2-24. The Commissioner may reduce the monetary penalty if the insurer demonstrates to the Commissioner that the imposition of the monetary penalty would constitute a financial hardship to the insurer.
The requirements of this article shall become effective on July 1, 2015. The first filing of the ORSA Summary Report shall be required in 2015 pursuant to Code Section 33-13-35.
This chapter shall be known and may be cited as the “Mutual Insurance Holding Company Act.”
As used in this chapter, the term:
(1) “Intermediate stock holding company” means one or more stock corporations that own all of the shares of voting stock of one or more reorganized stock insurers after a reorganization under Code Section 33-13A-3 or a merger under Code Section 33-13A-4.
(2) “Majority of the voting stock of the reorganized stock insurer” means shares of the capital stock of the reorganized stock insurer that carry the right to cast a majority of the votes entitled to be cast by all of the outstanding shares of the capital stock of the reorganized stock insurer for the election of directors and on all other matters submitted to a vote of the shareholders of the reorganized stock insurer. The ownership of a majority of the voting stock of the reorganized stock insurer that is required pursuant to this chapter to be at all times owned by a mutual insurance holding company includes indirect ownership through one or more intermediate stock holding companies in a corporate structure approved by the Commissioner. However, indirect ownership through one or more intermediate stock holding companies shall not result in the mutual insurance holding company owning less than the equivalent of a majority of the voting stock of the reorganized stock insurer. The Commissioner shall have jurisdiction over an intermediate stock holding company as if it were a mutual insurance holding company.
(3) “Member” means a person who obtains a membership interest in a mutual insurance holding company by virtue of being a policyholder of a mutual insurer that is the subject of a reorganization plan under Code Section 33-13A-3 or a merger plan under Code Section 33-13A-4.
(4) “Merger plan” means a plan approved by a mutual insurer's board of directors under Code Section 33-13A-4 which proposes to merge a domestic or foreign mutual insurer into an existing mutual insurance holding company or into an intermediate stock holding company, thereby converting the domestic or foreign mutual insurer into a stock insurer.
(5) “Mutual insurance holding company” means a domestic corporation incorporated pursuant to a reorganization plan under Code Section 33-13A-3 or a merger plan under Code Section 33-13A-4, which company is the ultimate parent of a reorganized stock insurer and which may be the parent company of one or more intermediate stock holding companies.
(6) “Policyholder” means a person who is insured under one or more insurance policies or annuity contracts by a mutual insurer at the time of a reorganization under Code Section 33-13A-3 or a merger under Code Section 33-13A-4.
(7) “Reorganization plan” means a reorganization plan adopted by a mutual insurer's board of directors in accordance with Code Section 33-13A-3 or 33-13A-4 which proposes to convert the domestic or foreign mutual insurer into a stock insurer.
(8) “Reorganized stock insurer” means the domestic or foreign stock insurer resulting from a domestic or foreign mutual insurer's reorganization under Code Section 33-13A-3 or merger under Code Section 33-13A-4.
(9) “Voting stock” means securities of any class or any ownership interest having voting power for the election of directors, trustees, or management of a corporation. Voting stock shall also mean any security convertible into or evidencing a right to acquire a voting security.
(a) A domestic mutual insurer, upon approval of the Commissioner, may reorganize by forming an insurance holding company system, which shall be designated as a mutual insurance holding company, based upon a reorganization plan and continuing the corporate existence of the reorganizing insurer as a stock insurer. Such a reorganization plan must be adopted by the affirmative vote of not less than two-thirds of the mutual insurer's board of directors. The Commissioner, after a public hearing as provided in paragraph (2) of subsection (d) of Code Section 33-13-3, if satisfied that the interests of the policyholders are properly protected and that the reorganization plan is fair and equitable to the policyholders, may approve the proposed reorganization plan and may require as a condition of approval such modifications of the reorganization plan as the Commissioner finds necessary for the protection of the policyholders' interests. A reorganization pursuant to this Code section is subject to the requirements of Code Section 33-13-3. The Commissioner shall retain jurisdiction over a mutual insurance holding company organized pursuant to this Code section to ensure that policyholder interests are protected.
(b) All of the initial shares of the capital stock of the reorganized stock insurer shall be issued to the mutual insurance holding company or to an intermediate stock holding company. The membership interests of the policyholders of the reorganized stock insurer shall become membership interests in the mutual insurance holding company. Policyholders of the reorganized stock insurer shall be members of the mutual insurance holding company in accordance with the articles of incorporation and bylaws of the mutual insurance holding company. The mutual insurance holding company shall at all times own a majority of the voting stock of the reorganized stock insurer or an intermediate stock holding company.
(c) The reorganization plan shall provide that all of the initial shares of capital stock of the reorganized stock insurer shall be issued to the mutual insurance holding company or to an intermediate stock holding company. The reorganization plan shall provide that the mutual insurance holding company shall at all times own a majority of the voting stock of the reorganized stock insurer or, alternatively, that the mutual insurance holding company shall at all times own the majority of voting stock in an intermediate stock holding company, which intermediate stock holding company shall at all times own all of the voting stock of the reorganized stock insurer. The shares of voting stock required to be owned by the mutual insurance holding company or by an intermediate stock holding company shall not be pledged, hypothecated, or in any way encumbered with regard to any obligation, guaranty, or commitment undertaken by or on behalf of the mutual insurance holding company or the intermediate stock holding company, if any. The reorganization plan shall also provide that the board of directors of the mutual insurance holding company will be elected by the members.
(d) The reorganization plan shall provide that membership interests of the policyholders of the mutual insurer shall automatically convert to membership interests in the mutual insurance holding company so long as the policy is in force as of the date the reorganization plan was adopted by the board of directors of the mutual insurer and that, concurrently upon the effective date of the reorganization, the policyholder's membership interests in the mutual insurer shall be extinguished.
(a) A domestic mutual insurer, upon the approval of the Commissioner, may reorganize by merging its policyholders' membership interests into a mutual insurance holding company formed pursuant to Code Section 33-13A-3 and continuing the corporate existence of the reorganizing insurer as a stock insurer subsidiary of the mutual insurance holding company or an intermediate stock holding company. The Commissioner, after a public hearing as provided in paragraph (2) of subsection (d) of Code Section 33-13-3, if satisfied that the interests of the policyholders are properly protected and that the merger plan is fair and equitable to the policyholders, may approve the merger plan and may require as a condition of approval such modifications of the merger plan as the Commissioner finds necessary for the protection of the policyholders' interests. The Commissioner shall retain jurisdiction over the mutual insurance holding company organized pursuant to this Code section to ensure that policyholder interests are protected.
(b) All of the initial shares of the capital stock of the reorganized stock insurer shall be issued to the mutual insurance holding company or to an intermediate stock holding company. The membership interests of the policyholders of the reorganized stock insurer shall become membership interests in the mutual insurance holding company. Policyholders of the reorganized stock insurer shall be members of the mutual insurance holding company in accordance with the articles of incorporation and bylaws of the mutual insurance holding company. The mutual insurance holding company shall at all times own a majority of the voting stock of the reorganized stock insurer or an intermediate stock holding company. A merger of policyholders' membership interests in a mutual insurer into a mutual insurance holding company shall be deemed to be the acquisition of an insurance control company pursuant to Code Section 33-13-3 and is subject to the requirements of Code Section 33-13-3.
(c) A foreign mutual insurer which, if a domestic mutual insurer, would be organized under Chapter 14 of this title may reorganize upon the approval of the Commissioner and in compliance with the requirements of any law or rule applicable to the foreign mutual insurer by merging its policyholders' membership interests into a mutual insurance holding company formed pursuant to Code Section 33-13A-3 and continuing the corporate existence of the reorganizing foreign mutual insurer as a foreign stock insurer subsidiary of the mutual insurance holding company or one or more intermediate stock holding companies. The Commissioner, after a public hearing as provided in paragraph (2) of subsection (d) of Code Section 33-13-3, may approve the proposed merger. The reorganizing foreign mutual insurer may remain a foreign company or foreign corporation after the merger and may be admitted to do business in this state, upon approval by the Commissioner. A foreign mutual insurer that is a party to the merger may at the same time redomesticate in this state by complying with the applicable requirements of this state and its state of domicile. The provisions of subsection (b) of this Code section shall apply to a merger authorized under this subsection.
A mutual insurance holding company resulting from the reorganization of a domestic mutual insurer and the reorganized stock insurer shall be incorporated and governed pursuant to Chapter 14 of this title and subject to Chapter 13 of this title. This requirement shall supersede any conflicting provisions of Chapter 2 of Title 14. The articles of incorporation and any amendments to such articles of the mutual insurance holding company shall be subject to approval of the Commissioner in the same manner as those of an insurer. An intermediate stock holding company shall be incorporated and governed pursuant to Chapter 2 of Title 14.
A mutual insurance holding company is deemed to be an insurer subject to this title and shall automatically be a party to any proceeding under this title involving an insurer that, as a result of a reorganization pursuant to Code Section 33-13A-3 or a merger pursuant to Code Section 33-13A-4, is a subsidiary of the mutual insurance holding company or one or more intermediate stock holding companies. In any proceeding involving the reorganized stock insurer, the assets of the mutual insurance holding company are deemed to be assets of the estate of the reorganized stock insurer for purposes of satisfying the claims of the reorganized stock insurer's policyholders. A mutual insurance holding company shall not be dissolved or liquidated without the prior approval of the Commissioner.
(a) Code Section 33-14-76 is not applicable to a reorganization or merger pursuant to this chapter.
(b) The demutualization of a mutual insurance holding company is subject to the requirements of Code Section 33-14-76.
A membership interest in a mutual insurance holding company shall not constitute a security as such term is defined in Code Section 11-8-102.
(a) The offerings of voting stock by a reorganized stock insurer or intermediate stock holding company to any person other than the mutual insurance holding company or a wholly owned subsidiary thereof, which offering is to occur in connection with the reorganization or merger or is the first to occur after the effective date of the reorganization or merger, shall be made only in accordance with such provisions as the reorganization plan or merger plan may contain governing such an initial offering or with the prior approval of the Commissioner after submission of an application by the proposed issuer. The reorganization plan or merger plan shall describe the terms on which members, officers, and directors of the mutual insurance holding company, as well as any other persons, may participate in such offering. The Commissioner may approve any such application unless the Commissioner finds that the offering would be prejudicial to the members of the mutual holding company.
(b) The Commissioner may retain any attorneys, actuaries, accountants, and other experts not otherwise a part of the Commissioner's staff as may be reasonably necessary to assist the Commissioner in reviewing an application submitted pursuant to this Code section, the cost of which shall be borne by the proposed issuer submitting such application.
(a) Within 45 days after the date of the Commissioner's approval of a reorganization plan or merger plan pursuant to this chapter, unless extended by the Commissioner for good cause, the mutual insurer shall hold a meeting of its policyholders to vote upon such plan. The mutual insurer shall give notice at least 30 days before the time fixed for the meeting, by first-class mail to the last known address of each policyholder, that the reorganization plan or merger plan will be voted upon at a regular or special meeting of the policyholders. The notice shall include a brief description of the reorganization plan or merger plan and a statement that the Commissioner has approved such plan. The notice shall also include information regarding where the policyholder can obtain copies of the full reorganization plan or merger at no cost to the policyholder. The notice to each policyholder shall also include a written proxy permitting the policyholder to vote for or against the reorganization plan or merger plan. A reorganization plan or merger plan shall be approved only if not less than two-thirds of the policyholders voting in person or by proxy at the meeting vote in favor of such plan. Each policyholder shall be entitled to only one vote regardless of the number of policies owned by the policyholder.
(b) If a mutual insurer complies substantially and in good faith with the notice requirements of this Code section, the mutual insurer's failure to give any policyholder any required notice does not impair the validity of any action taken under this Code section.
(c) For purposes of voting, policyholder means a person who is eligible to vote under the mutual insurer's articles of incorporation or bylaws and who is also a policyholder of the mutual insurer as of the date on which the reorganization plan or merger plan is initially approved by the board of directors of the mutual insurer.
The majority of the voting stock of the reorganized stock insurer, which is required by this Code section to be at all times owned by a mutual insurance holding company, shall not be conveyed, transferred, assigned, pledged, subject to a security interest or lien, encumbered, or otherwise hypothecated or alienated by the mutual insurance holding company or intermediate stock holding company. Any conveyance, transfer, assignment, pledge, security interest, lien, encumbrance, hypothecation, or alienation of, in or on the majority of the voting stock of the reorganized stock insurer that is required by this Code section to be at all times owned by a mutual insurance holding company, is in violation of the provisions of this Code section and shall be void in inverse chronological order of the date of such conveyance, transfer, assignment, pledge, security interest, lien, encumbrance, hypothecation, or alienation as to the shares necessary to constitute a majority of such voting stock. The majority of the voting stock of the reorganized stock insurer that is required by this Code section to be at all times owned by a mutual insurance holding company shall not be subject to execution and levy. The shares of the capital stock of the surviving or new company resulting from a merger or consolidation of two or more reorganized stock insurers or two or more intermediate stock holding companies that were subsidiaries of the same mutual insurance holding company are subject to the same requirements, restrictions, and limitations as provided in this Code section to which the shares of the merging or consolidating reorganized stock insurers or intermediate stock holding companies were subject as provided in this Code section prior to the merger or consolidation.
It is the intent of the General Assembly that the formation of a mutual insurance holding company shall not increase the Georgia tax burden of the mutual insurance holding company system and that a reorganized stock insurer shall continue to be subject to Georgia insurance premium taxation in lieu of all other taxes except as provided in Chapter 8 of this title.
The Commissioner shall have the authority to promulgate rules and regulations to implement and enforce the provisions of this chapter.
This chapter shall govern domestic mutual and stock insurers.
As used in this chapter, the term:
(1) “Mutual insurer” means an incorporated insurer without capital stock or shares which is owned and governed by its policyholders.
(2) “Stock insurer” means an incorporated insurer with capital divided into shares and owned by its shareholders.
The applicable statutes of this state relating to the powers and procedures of domestic private corporations formed for profit shall apply to domestic stock insurers and to domestic mutual insurers, except where in conflict with the express provisions of this title and the reasonable implications of those provisions.
(a) Five or more individuals of the age of 18 years or more of good moral character who have not been convicted of any crime involving moral turpitude may incorporate a stock insurer; ten or more such individuals may incorporate a mutual insurer. Not less than two-thirds of the incorporators shall be citizens of the United States and residents of this state.
(b) The application for charter shall be signed by the persons applying for the charter and shall state:
(1) The name of the corporation;
(2) That the corporation shall have perpetual duration, unless otherwise limited in the application for charter. Each domestic stock and mutual insurance corporation existing on April 1, 1969, and thereafter shall have perpetual duration unless its charter is subsequently amended under this chapter to provide for a limited period of duration;
(3) The names and addresses of the incorporators;
(4) The kinds of insurance the corporation is formed to transact according to the definitions of insurance set forth in Chapter 7 of this title;
(5) If a stock corporation, the authorized capital and the par value of each share, which par value shall be at least $1.00 per share; provided, however, that after the corporation has operated for three consecutive years the par value may be reduced below $1.00 per share but not below a par value of 50¢ per share. Shares without par value shall not be authorized. The capitalization shall not be less than that required of the insurer under the provisions of Chapter 3 of this title;
(6) If a mutual corporation, the maximum contingent liability of its members other than as to nonassessable policies for payment of losses and expenses incurred, which liability shall be not less than one nor more than six times the premium for the member's policy at the annual premium rate for a term of one year;
(7) The number of directors, which number shall not be less than three, who shall conduct the affairs of the corporation and the names and addresses of the corporation's first directors and the officers for stated terms of office of not more than one year;
(8) The name of the city or town and county in this state in which is to be located its home office and principal place of business;
(9) If a stock corporation, the extent, if any, to which shares of its stock shall be subject to assessment;
(10) If a stock corporation, the number of shares subscribed, if any, by each incorporator;
(11) The limitations, if any, on the corporation's indebtedness; and
(12) Such other provisions not inconsistent with law deemed appropriate by the incorporators.
(a) The application for charter with any and all exhibits that may be included with the application shall be filed in triplicate in the office of the Commissioner of Insurance and a fee of $100.00 shall be paid to the Commissioner to be paid by him or her into the state treasury. The Commissioner shall not receive the application until the fee shall be paid.
(b) Immediately upon receipt of the triplicate copies of the application, with any and all exhibits included with the application, the Commissioner shall certify one of the copies of the application and deliver the same to the applicants and the same shall be published by the applicants once a week for four weeks in the newspaper in which is published the legal advertisements of the county where the principal office of the company is to be located. When the application with any and all exhibits attached to it shall have been published once a week for four weeks, the applicants may apply to the judge of the probate court of the county to certify the fact of such publication, which certificate shall be filed by the applicants in the office of the Commissioner of Insurance.
(c) The Commissioner shall approve or disapprove the application within 45 days of the date the application is received by the Commissioner.
(d) The Commissioner shall examine the application to determine whether the charter, if granted, will enable the insurer to comply with the applicable insurance laws of this state; and, if the Commissioner finds that the charter, if granted, will enable the insurer to comply with the applicable provisions of law for carrying on the business for which incorporation is sought, the Commissioner shall issue under his or her hand and official seal a certificate approving the granting of the charter for such insurer and shall transmit a copy of the certificate of approval to the Secretary of State.
(e) If the Commissioner finds that the proposed application for a charter does not comply with the law, or that the corporation, if organized, could not meet the requirements for a certificate of authority as set forth in this chapter or any other provision of this title, the Commissioner shall refuse to approve the application for charter and shall notify the incorporators in writing, as to his or her reasons for such failure to approve; and the Commissioner shall issue under his or her hand and official seal a certificate disapproving the granting of the charter for such insurer.
(a) All corporate powers and privileges to insurance companies shall be issued and granted by the Secretary of State upon the terms, liabilities, and restrictions of and subject to this title and the laws and Constitution of this state. If from any cause the Secretary of State should be disqualified from issuing and granting said powers, the duties required by this title to be performed by the Secretary of State shall be performed by the Commissioner of Insurance.
(b) When the certificate of the judge of the probate court as to the fact of publication of the application for charter and the certificate of the Commissioner as to his or her approval of the application for charter shall have been received in the office of the Secretary of State, the Secretary of State shall issue to the corporation under the seal of the state a certificate of incorporation. The corporation shall not transact business as an insurer until it has applied for and received from the Commissioner a certificate of authority as provided by this title.
(c) The Secretary of State shall record the application for charter, the certificate of approval of the Commissioner, the certificate of the judge of the probate court as to publication, and the certificate of incorporation.
(d) No corporation shall directly or indirectly take risks or transact any business of insurance in this state by any agent or agents in this state until it shall have appointed an attorney in this state on whom process of law can be served and filed in the office of the Commissioner a written instrument duly signed and sealed certifying such appointment which shall continue until another attorney shall be substituted. Any process issued by any court of record in this state and served upon the attorney by the proper officer of the county in which the attorney may reside or may be found shall be deemed a sufficient service of process upon the company, but service of process upon the company may also be made in any other manner provided by law. Any violation of this subsection shall subject the party violating this subsection to a penalty of not less than $100.00 nor more than $500.00.
(a) No name shall be adopted by a domestic mutual or stock insurance corporation which is so similar to any name already in use by any such existing corporation, company, or association organized or doing business in this state as to be confusing or misleading and the Commissioner shall not approve an application from the applicant nor shall the Secretary of State issue a charter to the applicant.
(b) The name of the corporation shall include the word “company” or “corporation” or have such word or words, abbreviation, suffix, or prefix included in the name or attached to it in such a manner as will clearly indicate that it is a corporation.
(c) Except as provided in subsection (d) of Code Section 33-14-76 with regard to converted insurers, if the corporation is a mutual insurer, the term “mutual” shall also be a part of the name.
(a) A domestic insurer may amend its charter for any lawful purpose by written authorization by the holders of a majority of the voting power of its outstanding capital stock, by members if a mutual insurer, or by affirmative vote of such a majority voting at a lawful meeting of stockholders or members of which the notice given to stockholders or members included prior notice of not less than ten days of the proposal to amend.
(b) Upon authorization of such an amendment, the insurer shall file in the office of the Commissioner of Insurance an application asking that its charter be so amended and a fee of $50.00 shall be paid to the Commissioner to be transmitted by him or her into the state treasury; and the Commissioner shall not receive said application until said fee shall be paid. The application with any and all exhibits that may be included shall be filed in triplicate, signed with the corporate name and under the corporate seal, and shall state:
(1) The name and character of the corporation, the city or town, and county in this state in which is located its principal place of business;
(2) The date of its original charter and any and all amendments to the charter, and the date or dates of renewal of the charter; and
(3)(A) That it desires an amendment to its charter and the purpose of said amendment;
(B) There shall be annexed to the application a certificate in triplicate under the corporate seal of the insurer and executed by the insurer's president or vice-president and attested to by the secretary or assistant secretary under the seal of the corporation, setting forth that amendment has been authorized in writing by the holders of a majority of the voting power of the outstanding capital stock, by members if a mutual insurer, or by affirmative vote of such a majority voting at a lawful meeting of stockholders or members of which the notice given to stockholders or members included prior notice of not less than ten days of the proposal to amend.
(c) Immediately upon receipt of the triplicate copies of the application, with any and all exhibits included with the application, the Commissioner shall certify one of the copies of the application and deliver the same to the applicants and the same shall be published by the applicants once a week for four weeks in the newspaper in which is published the legal advertisements of the county where the principal office of said company is to be located. When the application, with any and all exhibits attached to it, shall have been published once a week for four weeks, the applicants may apply to the judge of the probate court of the county to certify the fact of such publication, which certificate shall be filed by the applicants in the office of the Commissioner. The Commissioner shall approve or disapprove the application within 45 days of the date the application is received by him or her.
(d) No amendment shall be granted which will reduce authorized capital of a stock insurer below the amount required by this title for the kinds of insurance thereafter to be transacted; and no amendment shall reduce the surplus of a mutual insurer below the amount required by this title for the kinds of insurance thereafter to be transacted.
(e) If an amendment of the charter would reduce the authorized capital stock of a stock insurer below the amount then outstanding, the Commissioner shall not approve the amendment if he has reason to believe that the interest of policyholders or creditors of the insurer would be materially prejudiced by such reduction. If any reduction of capital stock is effectuated, the insurer may require return of the original certificates of stock held by each stockholder in exchange for new certificates for such number of shares as the stockholder is then entitled in the proportion that the reduced capital bears to the amount of capital stock outstanding as of immediately prior to the effective date of the reduction.
(f) When the certificate of the judge of the probate court as to the fact of publication of the application for amendment to the charter and the certificate of the Commissioner as to his approval of the application for amendment shall have been received in the office of the Secretary of State, the Secretary of State shall issue to the corporation under the great seal of the state a certificate of amendment. The Secretary of State shall record the application for amendment to the charter, the certificate of approval of the Commissioner, the certificate of the judge of the probate court as to publication, and the certificate of amendment in a book to be kept by him for that purpose.
(g) A petition for renewal of the charter shall follow the procedure set forth in subsections (b) through (f) of this Code section, except that the fee for filing a petition for renewal of the charter shall be $100.00.
Every corporation organized under this title shall have the same corporate powers as are conferred upon private corporations except where inconsistent with this chapter.
(a) As used in this Code section, “insurance securities” means the securities of an insurer who is the issuer of a security as the word “security” is defined in Chapter 5 of Title 10, the “Georgia Uniform Securities Act of 2008.”
(b) No person shall sell, offer for sale, or propose to sell to the public any subscriptions for insurance securities in this state unless the insurer which shall issue the insurance securities provided in the subscription has applied for, qualified for, received, and holds authority to transact insurance in this state from the Commissioner, or has an effective registration of the subscriptions for insurance securities with the Securities and Exchange Commission, or unless the subscriptions are sold by or through a broker in accordance with the rules of the Securities and Exchange Commission.
(c) No person shall sell, offer for sale, or propose to sell to the public any insurance securities in this state unless the insurer which shall issue said insurance securities has applied for, qualified for, received, and holds authority to transact insurance in this state from the Commissioner, or has an effective registration of such securities with the Securities and Exchange Commission, or unless such securities are sold by or through a broker in accordance with the rules of the Securities and Exchange Commission.
(d) Nothing contained in this Code section shall be deemed to repeal any of Chapter 5 of Title 10 but shall be supplementary and in addition thereto.
(e) Any person violating this Code section shall be guilty of a misdemeanor.
(f) The Commissioner shall be authorized to withhold the authority of any insurer to transact insurance in this state so long as any person who has been convicted of any offense defined in this Code section remains an officer, employee, or agent of the person or entity seeking the authority to transact insurance.
An insurer shall have power to make donations for the public welfare or for charitable, scientific, or educational purposes subject to such limitations, if any, as may be contained in its charter or any amendment thereto.
(a) The affairs of every domestic insurer shall be managed by not less than three directors.
(b) Directors must be elected by the members or stockholders of a domestic insurer at the annual meeting of stockholders or members. Directors may be elected for terms of not more than three years each and until their successors are elected and have qualified; and if to be elected for terms of more than one year the insurer's bylaws shall provide for a staggered term system under which the terms of a proportionate part of the members of the board of directors will expire on the date of each annual meeting of stockholders or members.
(c) At least one-fourth of the directors of the insurer must be residents of this state. A majority of the directors must be citizens of the United States.
(a) Every domestic insurer shall have and maintain its principal place of business in this state, and shall keep in its principal place of business complete records of the assets, transactions, and affairs in accordance with the methods and systems which are customary or suitable as to the kind or kinds of insurance transacted.
(b) Every domestic insurer shall have and maintain its assets in this state, except as to:
(1) Real property and personal property appurtenant thereto lawfully owned by the insurer and located outside of this state; and
(2) Any property of the insurer as may be customary, necessary, and convenient to enable and facilitate the operation of its branch offices and regional home offices located outside of this state, as referred to in subsection (d) of this Code section.
(c) Removal of all or a material part of the records or assets of a domestic insurer from this state except pursuant to a plan of merger or consolidation approved by the Commissioner under this title, or for any reasonable purposes and periods of time as may be approved by the Commissioner in writing in advance of any removal or concealment of such records or assets or material part thereof from the Commissioner is prohibited. Any insurer or representative of an insurer who removes or attempts to remove such records or assets or any material part thereof from the home office or other place of business or of safekeeping of the insurer in this state with the intent to remove the same from this state or conceals or attempts to conceal the same from the Commissioner in violation of this subsection shall have its corporate charter forfeited and its certificate of authority to do business shall be revoked. Upon any removal or attempted removal of the records or assets or upon retention of the records or assets or material part of the records or assets outside this state, beyond the period specified in the Commissioner's consent under which the records were permitted to be removed, or upon concealment of or attempts to conceal records or assets in violation of this subsection, the Commissioner may institute proceedings against the insurer pursuant to Chapter 37 of this title.
(d) This Code section shall not be deemed to prohibit or prevent an insurer from:
(1) Establishing and maintaining branch offices or regional home offices in other states or foreign countries where necessary or convenient to the transaction of its business and keeping therein the detailed records and assets customary and necessary for the servicing of the insurance in force in the jurisdiction served by such an office as long as the records and assets are made readily available at such office for examination by the Commissioner at his request; or
(2) Having, depositing, or transmitting funds and assets of the insurer in or to jurisdictions outside of this state as reasonably and customarily required in the regular course of its business.
(a) No domestic insurer shall make any contract whereby any person is granted or is to enjoy in fact the management of the insurer to the substantial exclusion of its board of directors or to have the controlling or preemptive right to produce substantially all insurance business for the insurer unless the contract is filed with and approved by the Commissioner. The contract shall be deemed approved unless disapproved by the Commissioner within 45 days after date of filing, subject to such reasonable extension of time as the Commissioner may require by notice given within such 45 days. Any disapproval shall be delivered to the insurer in writing, stating the grounds therefor.
(b) Any contract shall provide that any manager or producer of its business shall within 90 days after expiration of each calendar year furnish the insurer's board of directors a written statement of amounts received under or on account of the contract and amounts expended under or on account of the contract during the calendar year, including the emoluments received therefrom by the respective directors, officers, and other principal management personnel of the manager or producer, with such classification of items and further detail as the insurer's board of directors may reasonably require.
(c) The Commissioner shall disapprove any contract if he finds that it:
(1) Subjects the insurer to excessive charges;
(2) Is to extend for an unreasonable length of time;
(3) Does not contain fair and adequate standards of performance; or
(4) Contains other inequitable provision or provisions which impair the proper interest of stockholders or members of the insurer.
(a) A domestic stock or mutual insurer may borrow money to defray the expenses of its organization, to provide it with surplus funds, or for any purpose required by its business upon a written agreement that the money is required to be repaid only out of the insured's surplus in excess of that stipulated in the agreement. The agreement may provide for interest not exceeding a reasonable rate per annum which interest shall or shall not constitute a liability as provided in said agreement.
(b) Money so borrowed together with interest on the borrowed money if so stipulated in the agreement shall not be considered on the financial statements of the insurer as a legal liability or be the basis of any setoff; but until repaid, financial statements filed or published by the insurer shall show as a footnote thereto the amount of borrowed money then unpaid together with any interest on the money accrued but unpaid. No borrowed surplus shall be returned to the lender except out of earned surplus in excess of that surplus required by this title to transact the kind of insurance for which the company is authorized; provided, however, that on liquidation of the company said borrowed surplus will be paid off out of any assets remaining after the payment of all other liabilities of the companies.
(c) In advance of any such loan the insurer shall file with the Commissioner a statement of the purposes of the loan and a copy of the proposed loan agreement which shall be subject to the Commissioner's approval. The loan and agreement shall be deemed approved unless within 45 days after date of such filing with the Commissioner the insurer is notified in writing of the Commissioner's disapproval and the reasons for the disapproval. The Commissioner shall so disapprove any such proposed loan or agreement if he finds that the loan is reasonably unnecessary or excessive for the purpose intended, that the terms of the loan agreement are not fair and equitable to the parties, to other similar lenders, if any, or to the insurer, that it is not fair to policyholders, or that the information so filed by the insurer is inadequate.
(d) Any loan to a mutual insurer or a substantial portion of the loan shall be repaid by the insurer when no longer reasonably necessary for the purpose originally intended. No repayment of the loan shall be made by a mutual insurer unless pursuant to regulations made by the Commissioner.
(e) This Code section shall not apply to loans obtained by the insurer in the ordinary course of business from banks and other financial institutions nor to loans secured by pledge of assets.
(a) If so provided in its charter, a domestic stock or domestic mutual insurer may issue any or all of its policies with or without participation in profits, savings, or unabsorbed portions of premiums, may classify policies issued on a participating or nonparticipating basis, and may determine the right to participate and the extent of participation of any class or classes of policies. Any classification or determination shall be reasonable and shall not unfairly discriminate as between policyholders within the same classification.
(b) No dividend, otherwise earned, shall be made contingent upon the payment of a renewal premium on any policy.
(a) As used in this Code section, the term “voting security” means any instrument which in law or by contract gives the holder the right to vote, consent, or authorize any corporate action of an insurer.
(b) The Commissioner may by regulation prescribe the form, content, and manner of solicitation of any proxy, consent, or authorization in respect to any voting security issued by a domestic insurer as necessary or appropriate for the public interest or for the proper protection of investors in the voting securities issued by the insurer or necessary to ensure the fair dealing in the voting securities.
(c) No person and no domestic insurer or any director, officer, or employee of an insurer shall solicit or permit the use of his name to solicit by mail or otherwise any person to give or to refrain from giving any proxy, consent, or authorization in respect to any voting security issued by the insurer in contravention of any rule or regulation the Commissioner may prescribe pursuant to this Code section.
(d) Failure to comply with any rule or regulation of the Commissioner made pursuant to this Code section shall be unlawful and compliance may be enforced by appropriate action in law or equity. If a domestic insurer or any person who is legally entitled to vote, consent, or authorize by virtue of being the holder of record of such voting security shall fail to commence such action within 15 days after the date on which the vote was cast or counted, the Commissioner may enforce compliance with the rules and regulations made pursuant to this Code section by appropriate action in law or equity; provided, however, no action shall be brought more than 30 days after the date on which the vote, consent, or authorization was to have been effected.
(e) This Code section shall not apply to voting securities of a domestic insurer if the voting securities shall be registered pursuant to Section 12 of the Securities Exchange Act of 1934, 1 as amended.
1 15 U.S.C.A. § 78l.
(a) Any corporation or other form of business entity which is organized for the purpose of organizing or holding the stock of a domestic insurer shall first obtain the written approval of the Commissioner prior to offering its stock for sale to the public. Prior to any offer of stock for sale to the public a registration statement shall be filed with the Commissioner which shall contain the following information:
(1) Name and address of the main office of the issuer of the securities;
(2) Title of the securities and the total amount of the securities to be offered;
(3) Price at which the securities are to be offered for sale to the public and the amount of such securities to be offered in this state;
(4) Maximum amount of commission or other form of remuneration to be paid in cash or otherwise, directly or indirectly, for or in connection with the sale or offering for sale of such securities;
(5) Date and place of organization of the issuer, form of organization of the issuer, and the general character and location of its business;
(6) A copy offering circular or prospectus to be used in connection with the offering; and
(7) Any other information which the Commissioner may deem pertinent.
(b) The Commissioner may make any investigation of any securities described in the registration statement filed with him as he may deem advisable to enable him to determine whether the sale of the securities would work or tend to work a fraud on the purchasers thereof. If the Commissioner finds from the information disclosed or in his possession that the sale of the securities would work or tend to work a fraud on purchasers thereof, he shall not approve such issue and sale of such securities in this state. The Commissioner shall not grant any domestic insurer whose stock is held by a holding company which has not obtained approval of the issuance of its stock under this Code section a certificate of authority to transact insurance in this state. Compliance with this Code section shall not dispense with the necessity of approval of such stock issue also by the Secretary of State, ex officio as securities commissioner, as now or hereafter may be required by law.
(a) Any officer, director, member of any committee, or an employee of a domestic insurer who is charged with the duty of investing or handling the insurer's funds shall not:
(1) Deposit or invest the funds except in the insurer's corporate name, except as otherwise authorized by this title;
(2) Borrow the funds of the insurer;
(3) Be pecuniarily interested in any loan, pledge of deposit, security, investment, sale, purchase, exchange, reinsurance, or other similar transaction or property of such insurer except as a stockholder or member unless:
(A) The insurer has provided the Commissioner with written notice of the proposed transaction no later than 30 days prior to such transaction, or such lesser period as may be permitted by the Commissioner, and the Commissioner has not disapproved the proposed transaction within that period; provided, however, that the Commissioner may, upon written notice given to the insurer no less than five days prior to the expiration of the initial review period, extend the review period for an additional time not to exceed 30 days; and
(B) The proposed transaction has been approved by directors' action in accordance with the provisions of Code Section 14-2-862, or by shareholders' action in accordance with the provisions of Code Section 14-2-863, if the proposed transaction would be a director's conflicting interest transaction as defined by Code Section 14-2-860; or
(4) Take or receive to his or her own use any fee, brokerage, commission, gift, or other consideration for or on account of any such transaction made by or on behalf of the insurer.
(b) No insurer shall guarantee any financial obligation of any of its officers or directors.
(c) This Code section shall not prohibit a director, officer, member of a committee, or employee from becoming a policyholder of the insurer and enjoying the usual rights provided for its policyholders.
(d) The Commissioner may by regulation define and permit additional exceptions to the prohibition contained in subsection (a) of this Code section solely to enable payment of reasonable compensation to a director who is not otherwise an officer or employee of the insurer or to a corporation or firm in which a director is interested for necessary services performed or sales or purchases made to or for the insurer in the ordinary course of the insurer's business and in the usual private professional or business capacity of the director or the corporation or firm.
(a) No officer, agent, or other person selling or negotiating stock in any domestic insurance company shall receive either directly or indirectly more than 10 percent of the sales price of any of said stock. No president, vice-president, secretary, treasurer, or director or any other executive officer of any insurance company shall participate in the commission received by any person selling or negotiating the sale of any stock of any insurance company either directly or indirectly.
(b) No salaried officer of any insurance company shall participate in the commissions deriving from the sale of life insurance policies or agency contracts of the companies.
The total expenses of organization of any insurer organized under this chapter including commissions for the sale of stock shall not exceed 12 1/2 percent of the amount for which the stock is sold in the case of a stock insurer and 12 1/2 percent of the paid-in surplus in the case of a mutual insurer.
(a) If the capital of a domestic stock insurer becomes impaired or the assets of a domestic mutual insurer are less than its liabilities and the minimum amount of surplus required of it by this chapter for authority to transact the kinds of insurance being transacted, the Commissioner shall at once determine the amount of the deficiency and serve notice upon the insurer to make good the deficiency within 60 days after service of the notice.
(b) The deficiency may be made good in cash or in assets eligible under this title for the investment of the insurer's funds; or if a stock insurer by reduction of the insurer's capital to an amount not below the minimum required for the kinds of insurance thereafter to be transacted; or if a mutual insurer, by amendment of its certificate of authority to cover only such kinds of insurance for which the insurer has on deposit sufficient surplus.
(c) If the deficiency is not made good and proof of the act filed with the Commissioner within such 60 day period, the insurer shall be deemed insolvent and the Commissioner shall institute delinquency proceedings against it as authorized by this title. If the deficiency exists because of increased loss reserves required by the Commissioner or because of disallowance by the Commissioner of certain assets or reduction of the value at which carried in the insurer's accounts, the Commissioner may in his or her discretion and upon application and good cause shown extend for not more than an additional 60 days the period within which the deficiency may be so made good and the proof thereof so filed.
(a) The corporate charter of any other corporation formed under the laws of this state for the purpose of becoming an insurer, and which corporation, during any period of 36 consecutive months after January 1, 1961, is not actively engaged in business as a domestic insurer under a certificate of authority issued to it by the Commissioner under laws currently in force is automatically extinguished and nullified at the expiration of such 36 month period.
(b) Upon certification by the Commissioner of such facts under subsection (a) of this Code section to the Secretary of State, the Secretary of State shall enter an order extinguishing and nullifying the corporate charter.
(c) The period during which any corporation referred to in subsection (a) of this Code section is the subject of delinquency proceedings under Chapter 37 of this title shall not be counted as part of any 36 month period.
(d) Upon merger or consolidation of a domestic insurer with another insurer under this chapter, the corporate charter of the merged or consolidated domestic insurer shall thereby automatically be extinguished and nullified.
(a) If, while a domestic stock or mutual insurer is fully solvent and it is deemed by its board of directors to be in the best interests of the insurer and its stockholders or members that the insurer be dissolved, the board of directors shall adopt a resolution to that effect and call a special meeting of its stockholders or members to consider and take action upon the proposal to dissolve the insurer corporation. The meeting shall be held upon not less than 30 days' written notice to the stockholders or members in advance of the meeting, which notice shall contain a statement of the dissolution proposal. The notice shall be given in the manner provided in the insurer's bylaws for a special meeting of stockholders or members.
(b) If, at the special meeting or any adjournment thereof, the holders of record of stock entitled to exercise two-thirds of all the voting power on such proposal or if a mutual insurer, two-thirds of the insurer's members present or represented by proxy at the meeting shall by resolution consent that the dissolution shall take place, a copy of the resolution together with a list of the names and residences of the directors and officers certified by the president or a vice-president and the secretary or an assistant secretary or the treasurer or an assistant treasurer of the insurer shall be filed in triplicate with the application to surrender the charter required in Code Section 33-14-25 and one copy shall be filed for record in the office of the clerk of the superior court of the county in which the office or principal place of business of the insurer is located in this state.
(c) Whenever all the stockholders of record of a domestic stock insurer having power to vote on a proposal to dissolve consent in writing to the dissolution, no meeting of the stockholders shall be necessary.
(d) The effective date of the dissolution shall be the date of the issuance of the order by the Secretary of State dissolving the insurer under Code Section 33-14-25.
(e) No dissolution shall be effected, however, until after the insurer has reinsured in another authorized insurer or has otherwise terminated all its insurance then in force; nor, in the case of a domestic mutual insurer, until after the proposed plan of dissolution together with the proposed plan for distribution of assets among the insurer's members has been filed with and approved by the Commissioner after having been found by him or her to be fair and equitable to the members of the domestic mutual insurer.
(a) Any insurance corporation chartered by the Secretary of State may surrender its charter upon the company filing in the office of the Commissioner of Insurance an application in triplicate, signed with its corporate name and under its corporate seal, stating:
(1) The name of the company and the location of its principal place of business in this state;
(2) The date of its charter and all amendments thereto and the date or dates of renewal or renewals of its charter;
(3) That it desires to surrender its charter and franchise to the state;
(4) A certificate attested to by two officers of the company that the procedure required by Code Section 33-14-24 has been carried out; and
(5) Any other information deemed necessary by the Commissioner of Insurance.
(b) Upon receipt thereof, the Commissioner shall take such action to investigate the proposed surrender to determine if the rights of policyholders, creditors, stockholders or members, and third party claimants under liability policies of the insurer have been paid or properly provided for in a fair and equitable manner. The Commissioner shall after making his or her determination issue under his or her hand and official seal a certificate approving or disapproving the application for surrender of the charter and shall transmit a copy of such certificate of approval to the Secretary of State. If the Commissioner does not approve the application, the Commissioner shall notify the insurer in writing of his or her reasons for not approving the application for surrender of the charter.
(c) The fee and publication requirements set out in subsections (a) through (c) of Code Section 33-14-5 shall be applicable to a surrender of charter under this Code section.
(d) Upon receipt of the certificate of the judge of the probate court as to the publication of the application and the certificate of approval of the surrender from the Commissioner, the Secretary of State shall issue under the seal of the state a certificate dissolving the insurer; and the Secretary of State shall record the application, the certificate of the judge of the probate court, the certificate of approval of the Commissioner, and the certificate dissolving the insurer.
Upon the dissolution of a domestic stock or mutual insurer under Code Section 33-14-25, or upon the expiration of the period of its corporate existence in any other manner, except under Chapter 37 of this title, the directors of the corporation shall be trustees of the corporation with the full power to settle the affairs, collect the outstanding debts, sell and convey the property, real and personal, of the corporation, and divide its assets among its stockholders or members entitled to the assets, after paying or adequately providing for the payment of its liabilities and obligations. Vacancies in the number of directors may be filled by the remaining directors, but any director may be replaced on the vote of a majority of the stockholders, or members of the corporation, if a mutual insurer.
All domestic stock and mutual insurance corporations, whether they expire by their own limitation or are otherwise dissolved, shall nevertheless be continued for a term of three years from such expiration or dissolution, except in any dissolution under Chapter 37 of this title, as bodies corporate for the purpose of prosecuting and defending actions by or against them and of enabling them to settle and close their business, to dispose of and convey their property, and to divide their assets among those entitled to such assets, but not for the purpose of continuing business as insurers; provided, however, that as to any action or proceeding commenced by or against the corporation prior to such expiration or dissolution and with respect to any action or proceeding commenced by or against the corporation within three years after the date of the expiration or dissolution, the corporation shall for the purpose of the actions or proceedings only be continued as bodies corporate beyond the three-year period and until any judgments, orders, or decrees in the expiration or dissolution actions or proceedings are fully executed.
(a) A domestic stock insurer may accept reinsurance for the same kinds of insurance and within the same limits as it is authorized to transact direct insurance unless such reinsurance is prohibited by its charter.
(b) A domestic stock insurer may reinsure all or substantially all of its business in force or substantially all of a major class thereof with another insurer by an agreement of bulk insurance; but the agreement shall not become effective unless filed with and approved in writing by the Commissioner.
(c) The Commissioner shall approve agreements of bulk insurance within 60 days after their filing unless he finds that it is inequitable to the stockholders of the domestic insurer or would substantially reduce the protection or service to its policyholders. If the Commissioner does not approve the agreement, he shall so notify the insurer in writing specifying his reasons therefor.
(a) As used in this Code section, the term “unassigned surplus” means, with respect to a stock insurer, undistributed, accumulated surplus, including net income and unrealized gains, since the organization of such insurer.
(b) A domestic stock insurer may pay dividends to its stockholders only out of unassigned surplus or upon special approval of the Commissioner upon the terms and conditions set out in subsection (c) of this Code section.
(c) Notwithstanding any other provision of the law, a domestic stock insurer may, conditioned upon receipt of the Commissioner's approval, declare a dividend from other than unassigned surplus; provided, however, that such declaration shall confer no rights upon the security holders of such insurer and such insurer may not pay such dividend until the Commissioner has:
(1) Approved the payment of such dividend; or
(2) Not disapproved the payment of such dividend within 30 days after receipt of notice from such insurer of the declaration thereof.
(a) Any director of a domestic stock insurer who votes for or concurs in declaration or payment of an illegal dividend to stockholders shall upon conviction thereof be guilty of a misdemeanor and shall be jointly and severally liable together with other such directors for any loss thereby sustained by the insurer.
(b) The stockholders receiving such an illegal dividend shall be liable in the amount thereof to the insurer.
(c) The Commissioner may revoke or suspend the certificate of authority of an insurer which has declared or paid an illegal dividend.
(a) A domestic stock insurer may merge or consolidate with one or more domestic, alien, or foreign stock corporations by complying with the applicable laws of this state governing the merger or consolidation of stock corporations formed for profit and Code Sections 33-14-5 and 33-14-6.
(b) No director, officer, agent, or employee of any insurer party to such merger or consolidation shall receive any fee, commission, compensation, or other valuable consideration whatsoever for or in any manner aiding, promoting, or assisting therein except as set forth in the plan or agreement.
(c) The Commissioner may permit the formation of a domestic insurance company that is established for the sole purpose of merging or consolidating with an existing domestic insurer simultaneously with a division authorized by Article 6 of this chapter. Upon request of the dividing insurer, as defined in Code Section 33-14-120, the Commissioner may waive the requirements of subsection (a) of this Code section, Code Section 33-3-15, and Chapter 13 of this title. Each insurer formed under this subsection shall be deemed to exist before a merger and division under this Code section becomes effective, but solely for the purpose of being a party to such merger and division. The Commissioner shall not require that such insurer be licensed to transact insurance business in this state before such merger and division. All insurance policies, annuities, or reinsurance agreements allocated to such insurer shall become the obligation of the insurer that survives the merger simultaneously with the effectiveness of the merger and division. The plan of merger shall be deemed to have been approved by such insurer if the dividing insurer approved such plan. The certificate of merger shall state that it was approved by the insurer formed under this subsection.
(a) A domestic stock insurer certified to issue only those kinds of insurance which domestic mutual insurers are authorized to issue under this title may become a domestic mutual insurer pursuant to such plan and procedure as may be approved in advance by the Commissioner.
(b) The Commissioner shall not approve any such plan or procedure unless:
(1) It is equitable to stockholders and policyholders;
(2) It is subject to approval by the holders of not less than three-fourths of the insurer's outstanding capital stock having voting rights and by not less than two-thirds of the insurer's policyholders who vote on the plan in person, by proxy, or by mail pursuant to such notice and procedure as may be approved by the Commissioner;
(3) If a life insurer, the right to vote on such plan is limited as provided in the bylaws;
(4) Mutualization will result in retirement of shares of the insurer's capital stock at a price not in excess of the fair market value of the insurer's capital stock as determined by competent disinterested appraisers;
(5) The plan provides for the purchase of the shares of any nonconsenting stockholder in the same manner and subject to the same applicable conditions as provided by the general corporation laws of this state as to rights of nonconsenting stockholders with respect to consolidation or merger of private corporations;
(6) The plan provides for definite conditions to be fulfilled by a designated early date upon which the mutualization will be deemed effective; and
(7) The mutualization leaves the insurer with surplus funds reasonably adequate for the security of its policyholders and to enable it to continue successfully in business in the states in which it is then authorized to transact insurance, and for the kinds of insurance included in its certificate of authority in those states.
(c) This Code section shall not apply to mutualization under order of court pursuant to rehabilitation of an insurer under Chapter 37 of this title.
A domestic stock insurer may have one or more classes of common or preferred shares, all of which shall be shares with par value in accordance with paragraph (5) of subsection (b) of Code Section 33-14-4 and any or all of which may, subject to any restrictions of this title, consist of shares with full, limited, multiple, fractional, or no voting rights and such designations, preferences, qualifications, privileges, limitations, redemption provisions (in the case of preferred shares), options, conversion rights, and other special rights as shall be stated in this article. Except as otherwise stated in this article, this title, or other applicable laws, each share shall be equal in all respects to every other share.
(a) The initial board of directors of a domestic mutual insurer shall adopt original bylaws subject to the approval of the insurer's members at the next succeeding meeting. The members shall have power to adopt, modify, and revoke bylaws.
(b) The bylaws shall provide:
(1) That each member is entitled to one vote upon each matter coming to a vote at meetings of members or to more votes in accordance with a reasonable classification of members as set forth in the bylaws and based upon the amount of insurance in force, numbers of policies held, upon the amount of the premiums paid by such members, or upon other reasonable factors. A member shall have the right to vote in person or by his written proxy. No such proxy shall be made irrevocable;
(2) For election of directors by the members and for the number, qualifications, terms of office, and powers of directors;
(3) The time, notice, quorum, and conduct of annual and special meetings of members and voting procedures at the meetings. The bylaws may provide that the annual meeting shall be held at a place, date, and time to be set forth in the policy and that no other notice of the meeting shall be required;
(4) The number, designation, election, terms, and powers and duties of the respective corporate officers;
(5) For deposit, custody, disbursement, and accounting for corporate funds; and
(6) For any other reasonable provisions customary, necessary, or convenient for the management or regulation of its corporate affairs and not inconsistent with law.
(c) The insurer shall promptly file with the Commissioner a copy of its bylaws certified by the insurer's secretary or assistant secretary, and of every modification thereof or addition thereto. The Commissioner shall disapprove any bylaw provision deemed by him to be unlawful, unreasonable, inadequate, unfair, or detrimental to the proper interests or protection of the insurer's members of any class of members. The insurer shall not, after receiving written notice of such disapproval and during the existence of the corporation, effectuate any bylaw provision so disapproved.
(a) When newly organized, a domestic mutual insurer may be authorized to transact any one of the kinds of insurance listed in the schedule contained in subsection (b) of this Code section and as limited in Code Section 33-3-5.
(b) When applying for an original certificate of authority, the insurer must be otherwise qualified therefor under this title, and must have received and accepted bona fide applications as to substantial insurable subjects for insurance coverage of a substantial character of the kind of insurance proposed to be transacted, must have collected in cash and full premium therefor at rates meeting the requirements of Chapter 9 of this title, if a property and casualty company must have surplus funds on hand as of the date the insurance coverages are to become effective, or, in lieu of such applications, premiums, and surplus, may deposit surplus, all in accordance with that part of the following schedule which applies to the kind of insurance the insurer proposes to transact:
| | (A) | (B) | (C) | (D) | (E) | (F) | (G) | (H) | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | | | | | | Kind of Insurance | Mins. No. of Application Accepted | Min. No. of Subjects Covered | Minimum Premiums Coll. | Min. Amt. Ins. Each Subject | Max. Amt. Ins. Each Subject (V) | Minimum Surplus Funds (VI) | Deposit of Surplus (VI) | | | | | | | | | | | | (I) | Life․․․․․․․․․․․․․․․․․․․․ | 500 | 500 | Ann. | $1,000 | $2,500 | $3 million | $3 million | | | | | | | | | | | | (II) | Accident & Sickness․․․․․ | 500 | 500 | Quar. | 10 (Weekly Indem.) | 25 (Weekly Indem.) | 3 million | 3 million | | | | | | | Indem.) | Indem.) | | | | | | | | | | | | | | (III) | Property․․․․․․․․․․․․․․․․ | 100 | 250 | Ann. | 1,000 | 3,000 | 3 million | 3 million | | | | | | | | | | | | (IV) | Casualty․․․․․․․․․․․․․․․․ | 250 | 500 | Ann. | 1,000 | 10,000 | 3 million | 3 million | | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | | | | | | | | | | Casualty with Workers' Compensation | 250 | 1,500 | Quar. | 1,000 | Statutory | 3 million | 3 million | |
(c) The provisos listed in this subsection are respectively applicable to the schedule and provisions set out in subsection (b) of this Code section as indicated by like Roman numerals which appear in such schedule:
(I) All applicants must be bona fide residents of this state; and no group insurance or term policies for terms of less than 20 years shall be included;
(II) All applicants must be bona fide residents of this state. No group or blanket plans of insurance shall be included. In lieu of weekly indemnity a like premium value in medical, surgical, and hospital benefits may be provided;
(III) Only insurance of the owner's interest in real property situated in this state may be included;
(IV) The policy must include insurance of legal liability for bodily injury and property damage to which the maximum and minimum insured amounts apply. All applicants must be bona fide residents of this state;
(V) The maximums provided for in column (F) are net after deducting applicable reinsurance; and
(VI) The deposit of surplus in the amount specified in columns (G) and (H) must thereafter be maintained unimpaired. The deposit is subject to Chapter 12 of this title.
A domestic mutual insurer formed after January 1, 1961, after being authorized to transact one kind of insurance shall be authorized by the Commissioner to transact such additional kinds of insurance as are permitted under Code Section 33-3-5, while otherwise in compliance with this title and while maintaining unimpaired surplus funds in an amount not less than the amount of paid-in capital stock required of a domestic stock insurer transacting like kinds of insurance, subject further to the additional expendable surplus requirements of this title applicable to such a stock insurer.
(a) Prior to the solicitation of any applications for insurance pursuant to the requirements for a certificate of authority of a mutual insurer, the incorporators of the proposed insurer shall file with the Commissioner a corporate surety bond in the penalty of $15,000.00 in favor of the state and for the use and benefit of the state and of applicant members and creditors of the corporation. The bond shall be conditioned as follows:
(1) For the prompt return to applicant members of all premiums collected in advance;
(2) For payment of all indebtedness of the corporation; and
(3) For payment of costs incurred by the state in the event of any legal proceedings for liquidation or dissolution of the corporation.
All of the conditions shall become due and payable only in the event the corporation fails to complete its organization and secure a certificate of authority within two years from and after the date of the certificate of incorporation.
(b) In lieu of such bond, the incorporators may deposit with the Commissioner $15,000.00 in cash or United States government bonds negotiable and payable to the bearer, with a market value at all times of not less than $15,000.00, to be held in trust upon the same conditions as required for the bond.
(c) Any such bond filed or deposit made or remaining portion thereof held under this Code section shall be released and discharged upon settlement and termination of all liabilities against it.
(a) Upon receipt of the Commissioner's approval of the bond or deposit required by Code Section 33-14-63, the directors and officers of the proposed domestic mutual insurer may commence solicitation of such requisite applications for insurance policies as they may accept and may receive deposits of premiums thereon.
(b) All applications shall be in writing signed by the applicant.
(c) All applications shall provide that:
(1) Issuance of the policy is contingent upon the insurer qualifying for and receiving a certificate of authority; and
(2) No insurance is in effect unless and until the certificate of authority has been issued.
(d) All qualifying premiums collected shall be in cash.
(a) All sums collected by a domestic mutual corporation as premiums or fees on qualifying applications for insurance with such corporation shall be deposited in trust in a bank or trust company in this state which is authorized under the laws of this state to act as a depository of state funds and which has its deposits insured by the Federal Deposit Insurance Corporation under a written trust agreement consistent with this Code section. The corporation shall file an executed copy of the trust agreement with the Commissioner.
(b) Upon issuance to the corporation of a certificate of authority as an insurer for the kind of insurance for which the applications were solicited, all funds so held in trust shall become the funds of the insurer and the insurer shall issue and deliver its policies for which premiums have been paid and accepted. The insurance provided by the policies shall be effective as of the date of the certificate of authority.
If the proposed domestic mutual insurer fails to complete its organization and to secure its original certificate of authority within two years from and after the date of its incorporation, the corporation shall be dissolved by the Commissioner and the Commissioner shall return or cause to be returned to the persons entitled thereto all advance deposits or payments of premiums held in trust under Code Section 33-14-65.
(a) Each policyholder of a domestic mutual insurer other than of a reinsurance contract is a member of the insurer with all rights and obligations of such membership, and the policy shall so specify.
(b) Any person, government, or governmental agency, state or political subdivision thereof, public or private corporation, board, association, firm, estate, trustee, or fiduciary may be a member of a domestic, foreign, or alien mutual insurer. Any officer, stockholder, trustee, or legal representative of any corporation, board, association, or estate may be recognized as acting for or on its behalf for the purpose of membership, and shall not be personally liable upon any contract of insurance for acting in a representative capacity.
(c) Any domestic corporation may participate as a member of a mutual insurer as an incidental purpose for which the corporation is organized and as such is granted the rights and powers expressly conferred.
(a) Each member of a domestic mutual insurer shall, except as provided in Code Section 33-14-71 with respect to nonassessable policies, have a contingent liability, pro rata and not one for another, for the discharge of its obligations, which contingent liability shall be in the maximum amount stated in the insurer's charter.
(b) Each policy issued by the insurer shall contain a statement of the contingent liability, if any, of its members.
(c) Termination of the policy of any member shall not relieve the member of contingent liability for his proportion, if any, of the obligations of the insurer which accrued while the policy was in force.
(d) Unrealized contingent liability of members does not constitute an asset of the insurer in any determination of its financial condition.
(a) If at any time the assets of a domestic mutual insurer are less than its liabilities and the minimum amount of surplus required of it by this title for authority to transact the kinds of insurance being transacted and the deficiency is not cured from other sources, its directors shall levy an assessment only upon its members who at any time within the 12 months immediately preceding the date notice of the assessment was mailed to them held policies providing for contingent liability; and the members shall be liable to the insurer for the amount so assessed.
(b) The assessment shall be for the amount necessary to cure the deficiency and to provide a reasonable amount of working funds above the minimum amount of surplus; but the working funds so provided shall not exceed 5 percent of the insurer's liabilities as of the date as of which the amount of the deficiency was determined.
(c) In levying an assessment on policies providing for contingent liability, the assessment shall be computed on a basis of premium earned on the policy.
(d) No member shall have an offset against any assessment for which he is liable on account of any claim for unearned premium or loss payable.
(a) Any assessment made by an insurer under Code Sections 33-14-68 and 33-14-69 is prima facie correct. The amount of the assessment to be paid by each member as determined by the insurer is likewise prima facie correct.
(b) The insurer shall notify each member of the amount of the assessment to be paid by written notice mailed to the address of the member last of record with the insurer. Failure of the member to receive the notice so mailed within the time specified therein for the payment of the assessment or at all shall be no defense in any action to collect the assessment.
(c) If a member fails to pay the assessment within the period specified in the notice, which period shall not be less than 20 days after mailing, the insurer may institute an action to collect same.
(d) As to life insurance, any part of the assessment upon a member which remains unpaid following notice of assessment, demand for payment, and lapse of a reasonable waiting period as specified in the notice, may, if approved by the Commissioner as being in the best interests of the insurer and its members, be secured by placing a lien upon the cash surrender values and accumulated dividends held by the insurer to the credit of the member.
(a) While a domestic mutual insurer maintains the deposits and surplus funds necessary for the kinds of insurance it is transacting and is otherwise in compliance with this title and is in a sound condition it may extinguish the contingent liability of its members as to all its policies in force and may omit provisions imposing contingent liability in all its policies currently issued upon receiving written approval by the Commissioner. The Commissioner shall revoke the authority of a domestic mutual insurer to issue policies without contingent liability at any time the insurer's assets are less than the sum of its liabilities and the surplus required for the authority or if the insurer, by resolution of the board of directors approved by a majority of its members present and voting in person or by proxy at a meeting called for that purpose, requests that the authority be revoked.
(b) A foreign or alien mutual insurer may issue nonassessable policies to its members in this state pursuant to its articles of incorporation and the laws of its domicile.
(a) A domestic mutual company transacting insurance business under the laws of this state with the approval of the Commissioner may reinsure all risks undertaken by it in any company authorized to transact a similar class of insurance business in this state and transfer to the company assuming such risks all or such of its assets, reserves, liabilities, and obligations of every character as the agreement approved by the Commissioner shall provide.
(b) This Code section shall not prevent a domestic mutual company from reinsuring any risks or fractional parts thereof not situated in this state in any company licensed by the state in which such risks are located.
(a) The directors of a domestic mutual insurer may from time to time apportion and pay or credit to its members dividends only out of that part of its surplus funds which represent net realized savings and net realized earnings from its business.
(b) A dividend otherwise proper may be payable out of the savings and earnings even though the insurer's total surplus is then less than the aggregate of its contributed surplus.
Any director of a domestic mutual insurer who willfully and with knowledge votes for or concurs in a declaration or payment of a dividend which reduces surplus below the minimum required surplus shall be guilty of a misdemeanor and shall be jointly and severally liable, together with other such directors likewise voting for or concurring in willfully and with knowledge, for any loss thereby sustained by the insurer.
(a) Upon complying with the applicable procedures prescribed by the statutes of this state applying to corporations formed for profit except as provided in subsection (c) of this Code section, any domestic mutual insurer is authorized to merge or consolidate with any domestic company or with any foreign or alien company if such merger or consolidation is authorized by the laws of the state or country under which such foreign or alien company is incorporated or organized.
(b) The plan and agreement for merger or consolidation shall be submitted to and approved by at least two-thirds of the members of each mutual insurer involved voting on the merger or consolidation in person or by proxy at meetings called for the purpose pursuant to ten days' notice and such procedure as has been approved by the Commissioner. If a life insurer, right to vote may be limited to members whose policies are other than term or group policies and have been in effect for more than one year as the bylaws may provide.
(c) No merger or consolidation shall be effectuated unless in advance thereof the plan and agreement therefor have been filed with the Commissioner and approved by him in writing. The Commissioner shall give his approval within 60 days after the filing unless he finds such plan or agreement:
(1) Is inequitable to the policyholders or any domestic insurer involved; or
(2) Would substantially reduce the security of and service to be rendered to policyholders of the domestic insurer in this state and elsewhere.
(d) If the Commissioner does not approve the plan or agreement he shall so notify the insurers in writing specifying his reasons for disapproving the merger or consolidation.
(a) A mutual insurer may become a stock insurer under any plan and procedure as may be approved by the Commissioner.
(b) The Commissioner shall not approve the plan or procedure unless:
(1) It is equitable to the insurer's members;
(2) It is subject to approval by vote of not less than 60 percent of the insurer's current members who cast votes on such plan in person, by proxy, or by mail at a meeting of members called for the purpose pursuant to 20 days' notice and procedure as may be approved by the Commissioner;
(3) If a life insurer, the right to vote may be limited as the bylaws shall provide to members whose policies are other than term or group policies and have been in effect for more than one year;
(4) The equity of each policyholder in the insurer is determinable under a fair formula approved by the Commissioner, which equity shall be based upon not less than the insurer's entire statutory surplus after deducting contributed or borrowed surplus funds plus a reasonable present equity in its reserves and in all nonadmitted assets, less expenses of the conversion;
(5) The policyholders entitled to participate in the purchase of stock or distributing of assets shall include all current policyholders who own a policy for which all premiums due have been fully paid on the date the plan was adopted by the board of directors of the insurer;
(6) The plan, as elected by the insurer and voted upon by the members, gives to each policyholder of the insurer as specified in paragraph (5) of this subsection one of the following:
(A)(i) A preemptive right to acquire his or her proportionate part of all of the proposed capital stock of the insurer within a designated reasonable period and to apply upon the purchase price thereof the amount of his or her equity in the insurer as determined in paragraph (4) of this subsection.
(ii) Shares are so offered to policyholders at a price not greater than that to be thereafter offered to others.
(iii) The plan provides for payment, to each policyholder not electing to apply his or her equity in the insurer for or upon the purchase price of stock to which preemptively entitled, of cash in the amount of not less than 50 percent of the amount of his or her equity not so used for the purchase of stock, which cash payment together with stock so purchased, if any, shall constitute full payment and discharge of the policyholder's equity as an owner of the mutual insurer;
(B)(i) Payment in cash to each policyholder of 100 percent of his or her equity in the insurer, as determined in paragraph (4) of this subsection.
(ii) If a life insurer, payment may be provided as a paid-up life insurance policy with a cash value equal to 100 percent of the policyholder's equity in the insurer; provided, however, that the insurer may not impose a surrender charge on any policyholder electing to surrender his or her paid-up life insurance policy for its cash value; or
(C)(i) A preemptive right to acquire a percentage of his or her proportionate part of all of the proposed capital stock of the insurer within a designated reasonable period and to apply upon the purchase price thereof that same percentage amount of his or her equity in the insurer as determined in paragraph (4) of this subsection.
(ii) Shares are so offered to policyholders at a price not greater than that to be thereafter offered to others.
(iii) The plan provides for payment, to each policyholder not electing to apply his or her equity in the insurer for or upon the purchase price of stock to which preemptively entitled, of cash in the amount of not less than 50 percent of the amount of his or her equity not so used for the purchase of stock, which cash payment together with stock so purchased, if any, shall constitute full payment and discharge of the policyholder's equity as an owner of the mutual insurer; and
(7) The plan when completed would provide for the converted insurer paid-in capital stock in an amount not less than the minimum paid-in capital required of a domestic stock insurer transacting like kinds of insurance together with surplus funds in an amount required for the insurer under this title.
(c) The corporate existence of a mutual insurer converting to a stock insurer pursuant to this Code section shall not terminate upon such conversion, but the new stock insurer shall be deemed to be a continuation of the mutual insurer and to have been organized on the date the mutual insurer was originally organized.
(d) The insurer which has converted from a mutual to a stock company may continue to use its old name or may change its name pursuant to the laws of this state. In the event the converted insurer continues to use the word mutual in its name, then it shall include words after its name identifying the converted insurer as a stock insurer.
(e)(1) The Commissioner may approve any plan or procedure to become a stock insurer filed by a mutual insurer which at the time of the filing of such plan or procedure is insolvent or does not meet the minimum statutory surplus requirements, provided that such plan or procedure, on the date such plan or procedure is completed, would provide for the converted insurer paid-in capital stock in an amount not less than the minimum paid-in capital required of a domestic stock insurer transacting like kinds of insurance together with surplus funds in an amount required for the insurer under this title. The mutual insurer may provide in the plan or procedure for the waiver of the requirement to give notice to policyholders, to obtain policyholder approval of the plan or procedure, or to make any distribution of the policyholders' equity in the mutual insurer to any policyholder where the value of the mutual insurer, due to its insolvency or its failure to meet minimum statutory surplus requirements, does not warrant any such notice, approval, or distribution under the circumstances, including the expense involved in such a distribution.
(2) A plan or procedure described in paragraph (1) of this subsection must include a description of how the mutual insurer will meet the statutory surplus and capital requirements on the date the plan or procedure is completed, which may involve the issuance and sale directly to one or more purchasers of the capital stock of the converted insurer or of a corporation which will own 100 percent of the converted insurer.
(a) Upon any liquidation of a domestic mutual insurer, its assets remaining after discharge of its indebtedness, policy obligations, repayment of contributed or borrowed surplus, if any, and expenses of administration shall be distributed to existing persons who were its members at any time within 12 months immediately preceding the date such liquidation was authorized or ordered or the date of last termination of the insurer's certificate of authority, whichever date is the earlier; except that if the Commissioner has reason to believe that those in charge of the management of the insurer have caused or encouraged the reduction of the members of the insurer in anticipation of liquidation and for the purpose of reducing thereby the number of persons who may be entitled to share in distribution of the insurer's assets, he may enlarge the 12 month qualification period provided for in this subsection by any additional period as he may deem to be reasonable.
(b) The distributive share of each such member shall be in the proportion that the aggregate premiums earned by the insurer on the policies of the member during the combined periods of his membership bear to the aggregate of all premiums earned on the policies of all members. The insurer may and if a life insurer shall make reasonable classifications of its policies held by members and make a formula based upon the classification for determining the equitable distributive shares of each member. Such classification and formula shall be subject to the approval of the Commissioner.
As used in this article, “equity security” means any stock or similar security; any security convertible, with or without consideration, into such a security or carrying any warrant or right to subscribe to or purchase such a security; any such warrant or right; or any other security which the Commissioner shall deem to be of similar nature and consider necessary or appropriate, by any rules and regulations as he may prescribe in the public interest or for the protection of investors, to treat as an equity security.
Every person who is directly or indirectly the beneficial owner of more than 10 percent of any class of any equity security of a domestic stock insurer or who is a director or an officer of such insurer shall file in the office of the Commissioner within ten days after the person becomes the beneficial owner, director, or officer a statement in such form as the Commissioner may prescribe of the amount of all equity securities of the insurer of which the person is the beneficial owner; and within ten days after the close of each calendar month after the person becomes the beneficial owner, director, or officer, if there has been a change in such ownership during such month, the person shall file in the office of the Commissioner a statement in such form as the Commissioner may prescribe indicating his ownership at the close of the calendar month and such changes in his ownership as have occurred during that calendar month.
For the purpose of preventing the unfair use of information which may have been obtained by a beneficial owner, director, or officer by reason of his relationship to an insurer, any profit realized by him from any purchase and sale, or any sale and purchase, of any equity security of the insurer within any period of less than six months, unless the security was acquired in good faith in connection with a debt previously contracted, shall inure to and be recoverable by the insurer irrespective of any intention on the part of the beneficial owner, director, or officer in entering into the transaction of holding the security purchased or of not repurchasing the security sold for a period exceeding six months. An action to recover such profit may be instituted in any court of competent jurisdiction by the insurer or by the owner of any security of the insurer in the name and in behalf of the insurer if the insurer shall fail or refuse to bring an action within 60 days after request or shall fail diligently to prosecute the same thereafter; but no action shall be brought more than two years after the date the profit was realized. This Code section shall not be construed to cover any transaction in which the beneficial owner was not such both at the time of the purchase and sale, or the sale and purchase, of the security involved or any transaction or transactions which the Commissioner by rules and regulations may exempt as not comprehended within the purpose of this Code section.
It shall be unlawful for any beneficial owner, director, or officer directly or indirectly to sell any equity security of such insurer if the person selling the security or his principal:
(1) Does not own the security sold;
(2) If owning the security, does not deliver it against such sale within 20 days thereafter; or
(3) Does not within five days after the sale deposit it in the mails or other usual channels of transportation;
but no person shall be deemed to have violated this Code section if he proves that notwithstanding the exercise of good faith he was unable to make the delivery or deposit within that time or that to do so would cause undue inconvenience or expense.
Code Section 33-14-92 shall not apply to any purchase and sale, or sale and purchase, and Code Section 33-14-93 shall not apply to any sale of an equity security of a domestic stock insurer not then or theretofore held by him in an investment account by a dealer in the ordinary course of his business and incident to the establishment or maintenance by him of a primary or secondary market otherwise than on an exchange as defined in the Securities Exchange Act of 1934 1 for such security. The Commissioner may by any rules and regulations as he deems necessary or appropriate in the public interest define and prescribe terms and conditions with respect to securities held in an investment account and transactions made in the ordinary course of business and incident to the establishment or maintenance of a primary or secondary market.
1 15 U.S.C.A. § 78a et seq.
Code Sections 33-14-91 through 33-14-93 shall not apply to foreign or domestic arbitrage transactions unless made in contravention of any rules and regulations as the Commissioner may adopt in order to carry out the purposes of this article.
Code Sections 33-14-91 through 33-14-93 shall not apply to equity securities of a domestic stock insurer if the securities shall be registered pursuant to Section 12 of the Securities Exchange Act of 1934, 1 as amended.
1 15 U.S.C.A. § 78l.
(a) The Commissioner shall have the power to make any reasonable rules and regulations as may be necessary for the execution of the functions vested in him by this article and may for that purpose classify domestic stock insurers, securities, and other persons or matters within his jurisdiction.
(b) No provision of Code Sections 33-14-91 through 33-14-93 imposing any liability shall apply to any act done or omitted in good faith in conformity with any rule or regulation of the Commissioner notwithstanding that the rule or regulation may after the act or omission be amended or rescinded or determined by judicial or other authority to be invalid for any reason.
As used in this article, the term:
(1) “Limited purpose subsidiary” means a subsidiary life, accident, and sickness reinsurer that is organized under this article and is wholly owned by an organizing domestic reinsurer.
(2) “Organizing domestic reinsurer” means a domestic life, accident, and sickness reinsurer that organizes a limited purpose subsidiary under this article.
(3) “Reinsurer” means an insurer that:
(A) Is principally engaged in the business of reinsurance;
(B) Does not conduct a significant amount of direct insurance as a percentage of the insurer's net premiums; and
(C) Is not engaged on an ongoing basis in the business of soliciting direct insurance.
(4) “Risk” means a risk that is associated with an insurance policy or annuity that is assumed by an organizing domestic reinsurer and for which the organizing domestic reinsurer is required to hold statutory reserves for the policy or annuity.
A domestic life, accident, and sickness reinsurer may organize a domestic limited purpose subsidiary pursuant to the provisions of this article.
(a) Before assuming risk under a reinsurance agreement, a limited purpose subsidiary must:
(1) Obtain from the Commissioner approval of the limited purpose subsidiary's plan of operation; and
(2) Be granted a certificate of authority to engage in the business of reinsurance in Georgia.
(b) A limited purpose subsidiary shall produce or disclose in its plan of operation, amendments, and records, books, documents, reports, and other information that the Commissioner requires the limited purpose subsidiary to produce or disclose under:
(1) This article;
(2) Rules adopted pursuant to this article; or
(3) An order pursuant to an examination performed in accordance with the provisions of Chapter 2 of this title.
(c) The Commissioner shall examine domestic limited purpose subsidiaries pursuant to Code Section 33-2-11.
A limited purpose subsidiary that is granted a certificate of authority by the Commissioner under this article:
(1) Is wholly owned by the organizing domestic reinsurer;
(2) Is authorized to engage in the business of reinsurance only for the lines of insurance for which the organizing domestic reinsurer is authorized;
(3) May reinsure only risks of the organizing domestic reinsurer; and
(4) May access alternative forms of financing.
An organizing domestic reinsurer may invest funds from the surplus of the organizing domestic reinsurer in a limited purpose subsidiary that is organized by the organizing domestic reinsurer pursuant to this article.
The officers and directors of an organizing domestic reinsurer may serve as officers and directors of a limited purpose subsidiary organized by the organizing domestic reinsurer pursuant to this article.
A limited purpose subsidiary may, upon approval of the Commissioner, reinsure the risks assumed by the limited purpose subsidiary.
(a) Assets of a limited purpose subsidiary that are approved by the Commissioner as admitted assets must comply with requirements established by the Commissioner under rules adopted pursuant to this article.
(b) All other assets shall not be admitted assets.
The following provisions of this title shall not apply to a limited purpose subsidiary organized under this article:
(1) Code Section 33-3-6;
(2) Code Section 33-3-7;
(3) Code Section 33-3-8;
(4) Code Section 33-7-14;
(5) Article 2 of Chapter 11;
(6) Code Section 33-13-4;
(7) Code Section 33-13-5;
(8) Code Section 33-14-40; and
(9) Chapter 56.
(a) The Commissioner shall, before approving a limited purpose subsidiary under this article, adopt rules pursuant to Code Section 33-2-9 to implement this article.
(b) The rules adopted under subsection (a) of this Code section shall address, but not be limited to, the following concerning limited purpose subsidiaries:
(1) Requirements for organization of a limited purpose subsidiary;
(2) Requirements for a plan of operation;
(3) Capital, surplus, and risk-based capital requirements;
(4) Requirements for reporting and notifications;
(5) Requirements for reserves, including actuarial certification;
(6) Requirements for authorized investments;
(7) Requirements with respect to reinsurance ceded or assumed by the limited purpose subsidiary;
(8) Requirements and restrictions for material transactions;
(9) Requirements for dividends and distributions;
(10) Requirements for operations; and
(11) Conditions of, forms for, and approval of the financing of a limited purpose subsidiary.
As used in this article, the term:
(1) “Capital” means the capital stock component of statutory surplus, as defined in the National Association of Insurance Commissioners Accounting Practices and Procedures Manual, version effective January 1, 2001, and subsequent revisions.
(2) “Director” means a person:
(A) By or under whose authority the powers of a corporation are exercised; and
(B) Under whose direction the business and affairs of the corporation are managed pursuant to the articles of incorporation or bylaws of the corporation.
(3) “Divide” or “division” means a transaction in which a domestic insurer divides into two or more resulting domestic insurers.
(4) “Dividing insurer” means a domestic insurer that approves a plan of division pursuant to Code Section 33-14-122.
(5) “Liability” means a debt, obligation, or any other liability arising in any manner, regardless of whether it is secured or contingent.
(6) “New insurer” means a domestic insurer that is created by a division occurring on or after July 1, 2019.
(7) “Property” means all property, whether real, personal, or mixed, tangible or intangible, or any right or interest therein, including rights under contracts and other binding agreements.
(8) “Resulting insurer” means a new insurer or a dividing insurer that survives a division.
(9) “Share” means a share of membership in a corporation.
(10) “Shareholder” means the person in whose name shares are registered in the records of a corporation or the beneficial owner of shares to the extent of the rights granted by a nominee certificate on file with a corporation.
(11) “Sign” or “signature” means any manual, facsimile, conformed, or electronic signature.
(12) “Surplus” means total statutory surplus less capital stock, adjusted for the par value of any treasury stock, calculated in accordance with the National Association of Insurance Commissioners Accounting Practices and Procedures Manual, version effective January 1, 2001, and subsequent revisions.
(13) “Transfer” means an assignment, conveyance, sale, lease, or encumbrance, including a mortgage or security interest, gift, or transfer by operation of law.
(a) Any domestic insurer may, in accordance with the requirements of this article, divide into two or more resulting insurers pursuant to a plan of division.
(b)(1) A plan of division shall include:
(A) The name of the dividing insurer seeking to divide;
(B) The name of each resulting insurer or insurers that will be created by the proposed division, including its proposed articles of incorporation and proposed bylaws;
(C) The manner of allocating between or among the resulting insurers:
(i) The property of the dividing insurer that will not be owned by all of the resulting insurers as tenants in common pursuant to Code Section 33-14-125; and
(ii) Those policies and other liabilities of the dividing insurer to which not all of the resulting insurers will be jointly and severally liable pursuant to paragraph (3) of subsection (a) of Code Section 33-14-126;
(D) The manner of distributing shares in a new insurer to the dividing insurer or its shareholders;
(E) A reasonable description of liabilities, capital, surplus, or other property the dividing insurer proposes to allocate to a new insurer, including the manner by which each reinsurance contract is to be allocated;
(F) All terms and conditions required by the laws of this state or the articles of incorporation or bylaws of the dividing insurer; and
(G) All other terms and conditions of the division.
(2) If the dividing insurer will survive the division, the plan of division shall include, in addition to the information required by paragraph (1) of this subsection:
(A) All proposed amendments to the dividing insurer's articles of incorporation and bylaws, if any;
(B) If the dividing insurer desires to cancel some but not all shares in the dividing insurer, the manner in which it will cancel such shares; and
(C) If the dividing insurer desires to convert some but not all shares in the dividing insurer into interests, securities, shares, obligations, money, other property, or rights to acquire interests, securities, or shares, or any combination thereof, a statement disclosing the manner in which it will convert such shares.
(3) If the dividing insurer will not survive the proposed division, the plan of division shall contain, in addition to the information required by paragraph (1) of this subsection, the manner in which the dividing insurer will cancel or convert shares in the dividing insurer into interests, securities, shares, obligations, money, other property, or rights to acquire interests, securities, or shares, or any combination thereof.
(c) A dividing insurer may amend a plan of division in accordance with any procedures set forth in the plan or, if no such procedures are set forth in the plan, in any manner determined by the board of directors of the dividing insurer, except that a shareholder that was entitled to vote on or consent to approval of the plan of division is entitled to vote on or consent to any amendment of the plan that will change:
(1) The amount or kind of interests, securities, shares, obligations, money, other property, or rights to acquire interests, securities, or shares, or any combination thereof, to be received by any of the shareholders of the dividing insurer under the plan;
(2) The articles of incorporation of any resulting insurer that will be in effect when the division becomes effective, except for changes that do not require approval of the shareholders of the resulting insurer under its articles of incorporation; or
(3) Any other terms or conditions of the plan, if the change would adversely affect the shareholders in any material respect.
(d)(1) A dividing insurer may abandon a plan of division after it has approved the plan without any action by the shareholders and in accordance with any procedures set forth in the plan or, if no such procedures are set forth in the plan, in a manner determined by the board of directors of the dividing insurer.
(2) A dividing insurer may abandon a plan of division after it has delivered a certificate of division to the Secretary of State by delivering to the Secretary of State a certificate of abandonment signed by the dividing insurer. The certificate of abandonment shall be effective on the date it is filed with the Secretary of State, and the dividing insurer shall be deemed to have abandoned its plan of division on such date.
(3) A dividing insurer may not abandon its plan of division once the division becomes effective.
(a) Except as provided in subsections (b) and (c) of this Code section, a dividing insurer shall not file a plan of division with the Commissioner unless such plan has been approved in accordance with:
(1) All provisions of its articles of incorporation and bylaws; or
(2) If its articles of incorporation and bylaws do not provide for approval of a division, all provisions of its articles of incorporation and bylaws that provide for approval of a merger.
(b) Shareholder approval of a plan of division shall not be required unless:
(1) The articles of incorporation and bylaws of the dividing insurer require such approval;
(2) The plan makes an amendment to the articles of incorporation and bylaws requiring such approval; or
(3) The dividing insurer will not survive the proposed division and has only one class of shares outstanding and the shares of each new insurer will not be distributed pro rata to the shareholders.
(c)(1) If any provision of the articles of incorporation and bylaws of a dividing insurer adopted before July 1, 2019, requires that a specific number or percentage of directors or shareholders approve the proposal or adoption of a plan of merger, or imposes other special procedures for the proposal or adoption of a plan of merger, such dividing insurer shall adhere to such provision in proposing or adopting a plan of division.
(2) If a provision of any debt security, note, or similar evidence of indebtedness for money borrowed, whether secured or unsecured, indenture or other contract relating to indebtedness, or a provision of any other type of contract other than an insurance policy, annuity, or reinsurance agreement, that was issued, incurred, or executed by the domestic insurer before July 1, 2019, requires the consent of the obligee to a merger of the insurer or treats such a merger as a default and does not provide that a division of the insurer does not require the consent of the obligee or treat a division as a default, as applicable, then such provision applies to a division of the insurer as if such division were a merger.
(3) If any provision described in paragraph (1) or (2) of this subsection is amended on or after July 1, 2019, such provision shall thereafter apply to a division only in accordance with its express terms.
(a) A division does not become effective until it is approved by the Commissioner after reasonable notice and a public hearing. A hearing conducted under this Code section must be conducted pursuant to Chapter 2 of this title.
(b) Subject to subsection (l) of this Code section, the Commissioner shall approve a plan of division unless the Commissioner finds any of the following:
(1) The interest of the policyholders of the dividing insurer that may become policyholders of a resulting insurer will not be adequately protected by the resulting insurer or acquiring party of a resulting insurer, if any;
(2) After the division, any resulting insurer would not be able to satisfy the requirements for the issuance of a certificate of authority;
(3) The division would substantially lessen competition in insurance in this state or tend to create a monopoly in this state;
(4) The financial condition of an acquiring party of a resulting insurer, if any, is such that it might jeopardize the financial stability of the insurer, or prejudice the interest of its policyholders or the interests of a remaining shareholder that is unaffiliated with the acquiring party;
(5) The terms of the plan of division are unfair and unreasonable to the dividing insurer's policyholders or shareholders;
(6) An acquiring party of a resulting insurer, if any, has plans or proposals to liquidate the resulting insurer, sell its assets, or consolidate or merge the resulting insurer with a person, or to make any other material change in its business or corporate structure or management, that are unfair and unreasonable to the resulting insurer's policyholders, and not in the public interest;
(7) The competence, experience, and integrity of the persons who would control the operation of a resulting insurer are such that it would not be in the interest of the resulting insurer's policyholders or the general public to permit the division;
(8) The division is likely to be hazardous or prejudicial to the insurance-buying public;
(9) The proposed division violates Article 4 of Chapter 2 of Title 18, the “Uniform Voidable Transactions Act”;
(10) The division is being made for purposes of hindering, delaying, or defrauding any policyholders or other creditors of the dividing insurer;
(11) One or more resulting insurers will not be solvent on the consummation of the division; or
(12) The assets allocated to one or more resulting insurers will be, on consummation of a division, unreasonably small in relation to the business and transactions in which the resulting insurer was engaged or is about to engage.
(c) If a division is undertaken in conjunction with the divestiture of one of the resulting insurers, the Commissioner shall not approve the division until the potential acquiring party has received the necessary approval under Code Section 33-13-3.
(d) In determining whether the standard set forth in paragraph (9) of subsection (b) of this Code section has been satisfied, the Commissioner shall only apply the “Uniform Voidable Transactions Act” to a dividing insurer in its capacity as a resulting insurer and shall not apply the “Uniform Voidable Transactions Act” to any dividing insurer that is not proposed to survive the division.
(e) In determining whether the standards set forth in paragraphs (9), (10), (11), and (12) of subsection (b) this Code section have been satisfied, the Commissioner may consider, among other things, all assets, liabilities, and cash flows.
(f) In determining whether the standard set forth in paragraph (9) of subsection (b) of this Code section has been satisfied, with respect to each resulting insurer, the Commissioner shall, in applying the “Uniform Voidable Transactions Act,” do all of the following:
(1) Treat the resulting insurer as a debtor;
(2) Treat liabilities allocated to the resulting insurer as obligations incurred by a debtor;
(3) Treat the resulting insurer as not having received reasonably equivalent value in exchange for incurring the obligations; and
(4) Treat assets allocated to the resulting insurer as remaining property.
(g) All information, documents, materials, and copies of documents and materials submitted to, obtained by, or disclosed to the Commissioner in connection with a plan of division or in contemplation of a plan of division, including any information, documents, materials, or copies provided by or on behalf of a domestic stock insurer in advance of its adoption or submission of a plan of division, are confidential and are subject to the same protection and treatment in accordance with Code Section 33-2-14 as information and documents disclosed to or obtained by the Commissioner in the course of an examination or investigation made under Code Section 33-2-11 until the time, if any, that a notice of the hearing contemplated by subsection (a) of this Code section is issued.
(h) From and after the issuance of a notice of the hearing contemplated by subsection (a) of this Code section, all business, financial, and actuarial information for which the domestic stock insurer requests confidential treatment, other than the plan of division and any materials incorporated by reference into or otherwise made a part of the plan of division that must not be eligible for confidential treatment after the issuance of a notice of the hearing, continues to be confidential and is not available for public inspection and must be subject to the same protection and treatment in accordance with Code Section 33-2-14 as information and documents disclosed to or obtained by the Commissioner in the course of an examination or investigation made under Code Section 33-2-11. However, if the Commissioner determines that the interest of the public in making the information available for public inspection outweighs the interest of the dividing insurer in keeping the information confidential, the Commissioner may, after notice and an opportunity to be heard, make the information available to public inspection.
(i) All expenses incurred by the Commissioner in connection with proceedings under this Code section, including expenses for the services of any attorneys, actuaries, accountants, and other experts not otherwise a part of the department staff as may be reasonably necessary to assist the Commissioner in reviewing the proposed division, must be paid by the dividing insurer filing the plan of division. A dividing insurer may allocate expenses described in this subsection in a plan of division in the same manner as any other liability.
(j) If the Commissioner approves a plan of division, the Commissioner shall issue an order approving the plan of division that must be accompanied by findings of fact and conclusions of law.
(k) The conditions in this Code section for freeing one or more of the resulting insurers from the liabilities of the dividing insurer and for allocating some or all of the liabilities of the dividing insurer are conclusively satisfied if the plan of division has been approved by the Commissioner in a final order, after all relevant appeals relating to the final order have been exhausted.
(l) The Commissioner may establish any additional procedures necessary or appropriate in connection with his or her review of a plan of division.
(a) After a plan of division has been adopted and approved under Code Sections 33-14-122 and 33-14-123, an officer or duly authorized representative of the dividing insurer shall sign a certificate of division.
(b) The certificate of division shall set forth:
(1) The name of the dividing insurer;
(2) A statement disclosing whether the dividing insurer will survive the division;
(3) The name of each resulting insurer;
(4) The date on which the division is to be effective, which shall not be more than 90 days after the dividing insurer has filed the certificate of division with the Secretary of State;
(5) A statement that the division was approved by the dividing insurer in accordance with Code Section 33-14-122;
(6) A statement that the division was approved by the Commissioner in accordance with Code Section 33-14-123;
(7) A statement that the dividing insurer provided, not later than ten business days after the dividing insurer filed the plan of division with the Commissioner, reasonable notice to each insurer or reinsurer that is party to a reinsurance contract allocated in the plan of division;
(8) If the dividing insurer will survive the division, any amendment to its articles of incorporation approved as part of the plan of division;
(9) For each new insurer created by the division, its articles of incorporation, which need not state the name or address of an incorporator of a corporation; and
(10) A reasonable description of the capital, surplus, other property, and policies and other liabilities of the dividing insurer that are to be allocated to each resulting insurer.
(c) The articles of incorporation, if any, of each new insurer must satisfy the requirements of the laws of this state, but such articles need not be signed or include any provision that need not be included in a restatement of such articles.
(d) A certificate of division shall be effective when filed with the Secretary of State or on such other date specified in the plan of division, whichever is later; provided, however, that a certificate of division shall become effective not more than 90 days after it is filed with the Secretary of State. A division shall be effective when the relevant certificate of division becomes effective.
(a) When a division becomes effective pursuant to subsection (d) of Code Section 33-14-124:
(1) If the dividing insurer has survived the division:
(A) It continues to exist;
(B) Its articles of incorporation, if any, shall be amended as provided in the plan of division; and
(C) Its bylaws, if any, shall be amended as provided in the plan of division;
(2) If the dividing insurer has not survived the division, its separate existence ceases to exist;
(3) Each new insurer:
(A) Comes into existence;
(B) Shall hold any capital, surplus, and other property allocated to it as a successor to the dividing insurer, and not by transfer, whether directly or indirectly; and
(C) Its articles of incorporation and bylaws shall be effective;
(4) Capital, surplus, and other property of the dividing insurer:
(A) That is allocated by the plan of division either:
(i) Vests in the new insurers as provided in the plan of division; or
(ii) Remains vested in the dividing insurer;
(B) That is not allocated by the plan of division:
(i) Remains vested in the dividing insurer, if the dividing insurer survives the division; or
(ii) Is allocated to and vests equally in the resulting insurers as tenants in common, if the dividing insurer does not survive the division; or
(C) Vests as provided in this subsection without transfer, reversion, or impairment;
(5) A resulting insurer to which a cause of action is allocated as provided in paragraph (4) of this subsection may be substituted or added in any pending action or proceeding to which the dividing insurer is a party when the division becomes effective;
(6) The policies and other liabilities of the dividing insurer are allocated among the resulting insurers as provided in Code Section 33-14-126 and the resulting insurers to which policies or other liabilities are allocated are liable for those policies and other liabilities as successors to the dividing insurer, and not by transfer, whether directly or indirectly;
(7) Any division that becomes effective pursuant to subsection (d) of Code Section 33-14-124 shall not be deemed to constitute an assignment of any insurance policy, annuity, reinsurance agreement, or any other type of contract under the laws of this state; and
(8) The shares in the dividing insurer that are to be converted or canceled in the division are converted or canceled, and the shareholders of those shares are entitled only to the rights provided to them under the plan of division and any appraisal rights they may have pursuant to Code Section 33-14-127.
(b) Except as provided in the articles of incorporation or bylaws of the dividing insurer, the division shall not give rise to any rights that a director, shareholder, or third party would have upon a dissolution, liquidation, or winding up of the dividing insurer.
(c) The allocation to a new insurer of capital, surplus, or other property that is collateral covered by an effective financing statement shall not be effective until a new financing statement naming the new insurer as a debtor is effective under Articles 1 through 9 of Title 11.
(d) Unless otherwise provided in the plan of division, the interests in and any shares of each new insurer shall be distributed to:
(1) The dividing insurer, if it survives the division; or
(2) The shareholders of the shares of the dividing insurer that do not assert appraisal rights, pro rata, if the dividing insurer does not survive the division.
(a) Except as provided in this Code section, when a division becomes effective, a resulting insurer shall be responsible:
(1) Individually for the policies and other liabilities the resulting insurer issues, undertakes, or incurs in its own name after the division;
(2) Individually for the policies and other liabilities of the dividing insurer that are allocated to or remain the liability of the resulting insurer to the extent specified in the plan of division; and
(3) Jointly and severally with the other resulting insurers for the policies and other liabilities of the dividing insurer that are not allocated by the plan of division.
(b) If a division breaches an obligation of the dividing insurer, all of the resulting insurers shall be liable, jointly and severally, for the breach, but the validity and effectiveness of the division shall not be affected by the breach.
(c) A direct or indirect allocation of capital, surplus, property, or policies or other liabilities in a division shall not be considered a distribution for purposes of the articles of incorporation or bylaws of the dividing insurer or any of the resulting insurers.
(d) Liens, security interests, and other charges on the capital, surplus, or other property of the dividing insurer shall not be impaired by the division, notwithstanding any otherwise enforceable allocation of policies or other liabilities of the dividing insurer.
(e) If the dividing insurer is bound by a security agreement governed by Article 9 of Title 11, or Article 9 of the Uniform Commercial Code as enacted in any other jurisdiction, and the security agreement provides that the security interest attaches to after-acquired collateral, each resulting insurer shall be bound by the security agreement.
(f) Except as provided in the plan of division and specifically approved by the Commissioner, an allocation of a policy or other liability shall not affect the rights under any other law of a policyholder or creditor owed payment on the policy, or payment of any other type of liability or performance of the obligation that creates the liability, except that those rights shall be available only against a resulting insurer responsible for the policy, liability, or obligation under this Code section.
A shareholder of a dividing insurer shall be entitled to appraisal rights and to obtain payment of the fair value of that shareholder's shares pursuant to Code Section 14-2-1302.
The Commissioner may, in accordance with the procedures set forth in Code Section 33-2-9, promulgate rules and regulations necessary to implement and enforce the provisions of this article. If the Commissioner should find that extraordinary circumstances exist and that it would be in the best interests of the citizens of this state, the Commissioner may suspend temporarily the applicability of any rule or regulation promulgated pursuant to this article.
Any incorporated society, order, or supreme lodge, without capital stock, including one exempted under the provisions of paragraph (2) of subsection (a) of Code Section 33-15-123, whether incorporated or not, conducted solely for the benefit of its members and their beneficiaries and not for profit, operated on a lodge system with ritualistic form of work, having a representative form of government, and which provides benefits in accordance with this chapter is declared to be a fraternal benefit society.
(a) A society is operating on the lodge system if it has a supreme governing body and subordinate lodges into which members are elected, initiated, or admitted in accordance with its laws, rules, and ritual. Subordinate lodges shall be required by the laws of the society to hold regular meetings periodically in furtherance of the purposes of the society.
(b) A society may, at its option, organize and operate lodges for children under the minimum age for adult membership. Membership and initiation in local lodges shall not be required of such children nor shall they have a voice or vote in the management of the society.
A society has a representative form of government when:
(1) It has a supreme governing body constituted in one of the following ways:
(A) The supreme governing body is an assembly composed of delegates elected directly by the members or at intermediate assemblies or conventions of members or their representatives, together with other delegates as may be prescribed in the society's laws. A society may provide for election of delegates by mail. The elected delegates shall constitute a majority in number and shall not have less than a majority of the votes and not less than the number of votes required to amend the society's laws. The assembly shall be elected and shall meet at least once every four years and shall elect a board of directors to conduct the business of the society between meetings of the assembly. Vacancies on the board of directors between elections may be filled in the manner prescribed by the society's laws; or
(B) The supreme governing body is a board composed of persons elected by the members, either directly or by their representatives in intermediate assemblies, and any other persons prescribed in the society's laws. A society may provide for election of the board by mail. Each term of a board member may not exceed four years. Vacancies on the board between elections may be filled in the manner prescribed by the society's laws. Those persons elected to the board shall constitute a majority in number and not less than the number of votes required to amend the society's laws. A person filling the unexpired term of an elected board member shall be considered to be an elected member. The board shall meet at least quarterly to conduct the business of the society;
(2) The officers of the society are elected either by the supreme governing body or by the board of directors;
(3) Only benefit members are eligible for election to the supreme governing body, the board of directors, or any intermediate assembly; and
(4) Each voting member shall have one vote and no vote may be cast by proxy.
As used in this chapter, the term:
(1) “Benefit contract” means the agreement for provision of benefits authorized by Code Section 33-15-60, as that agreement is described in subsection (a) of Code Section 33-15-63.
(2) “Benefit member” means an adult member who is designated by the laws or rules of the society to be a benefit member under a benefit contract.
(3) “Certificate” means the document issued as written evidence of the benefit contract.
(4) “Laws” means the society's articles of incorporation, charter, constitution, and bylaws, however designated.
(5) “Lodge” means subordinate member units of the society, known as camps, courts, councils, branches, or by any other designation.
(6) “Premiums” means premiums, rates, dues, or other required contributions by whatever name known, which are payable under the certificate.
(7) “Rules” means all rules, regulations, or resolutions adopted by the supreme governing body or board of directors which are intended to have general application to the members of the society.
(8) “Society” means fraternal benefit society, unless otherwise indicated.
(a) A society shall operate for the benefit of members and their beneficiaries by:
(1) Providing benefits as specified in Code Section 33-15-60; and
(2) Operating for one or more social, intellectual, educational, charitable, benevolent, moral, fraternal, patriotic, or religious purposes for the benefit of its members, which may also be extended to others.
Such purposes may be carried out directly by the society or indirectly through subsidiary corporations or affiliated organizations.
(b) Every society shall have the power to adopt laws and rules for the government of the society, the admission of its members, and the management of its affairs. It shall have the power to change, alter, add to, or amend such laws and rules and shall have such other powers as are necessary and incidental to carrying into effect the objects and purposes of the society.
(a) A society shall specify in its laws or rules:
(1) Eligibility standards for each and every class of membership, provided that if benefits are provided on the lives of children, the minimum age for adult membership shall be set at not less than age 15 and not greater than age 21;
(2) The process for admission to membership for each membership class; and
(3) The rights and privileges of each membership class, provided that only benefit members shall have the right to vote on the management of the insurance affairs of the society.
(b) A society may also admit social members who shall have no voice or vote in the management of the insurance affairs of the society.
(c) Membership rights in the society are personal to the member and are not assignable.
(a) The principal office of any domestic society shall be located in this state. The meetings of its supreme governing body may be held in any state, district, province, or territory wherein such society has at least one subordinate lodge, or in such other location as determined by the supreme governing body, and all business transacted at such meetings shall be as valid in all respects as if such meetings were held in this state. The minutes of the proceedings of the supreme governing body and of the board of directors shall be in the English language.
(b)(1) A society may provide in its laws for an official publication in which any notice, report, or statement required by law to be given to members, including notice of election, may be published. Such required reports, notices, and statements shall be printed conspicuously in the publication. If the records of a society show that two or more members have the same mailing address, an official publication mailed to one member is deemed to be mailed to all members at the same address unless a member requests a separate copy.
(2) Not later than June 1 of each year, a synopsis of the society's annual statement providing an explanation of the facts concerning the condition of the society thereby disclosed shall be printed and mailed to each benefit member of the society or, in lieu thereof, such synopsis may be published in the society's official publication.
(c) A society may provide in its laws or rules for grievance or complaint procedures for members.
(a) The officers and members of the supreme governing body or any subordinate body of a society shall not be personally liable for any benefits provided by a society.
(b) Any person may be indemnified and reimbursed by any society for expenses reasonably incurred by and liabilities imposed upon such person in connection with or arising out of any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, or threat thereof, in which the person may be involved by reason of the fact that he or she is or was a director, officer, employee, or agent of the society or of any firm, corporation, or organization which he or she served in any capacity at the request of the society. A person shall not be so indemnified or reimbursed: (1) in relation to any matter in such action, suit, or proceeding as to which he or she shall finally be adjudged to be or have been guilty of breach of a duty as a director, officer, employee, or agent of the society, or (2) in relation to any matter in such action, suit, or proceeding, or threat thereof, which has been made the subject of a compromise settlement; unless in either such case the person acted in good faith for a purpose the person reasonably believed to be in or not opposed to the best interests of the society and, in a criminal action or proceeding, in addition, had no reasonable cause to believe that his or her conduct was unlawful. The determination whether the conduct of such person met the standard required in order to justify indemnification and reimbursement in relation to any matter described in this subsection may only be made by the supreme governing body or board of directors by a majority vote of a quorum consisting of persons who were not parties to such action, suit, or proceeding or by a court of competent jurisdiction. The termination of any action, suit, or proceeding by judgment, order, settlement, conviction, or upon a plea of no contest, as to such person shall not in itself create a conclusive presumption that the person did not meet the standard of conduct required in order to justify indemnification and reimbursement. The foregoing right of indemnification and reimbursement shall not be exclusive of other rights to which such person may be entitled as a matter of law and shall inure to the benefit of his or her heirs, executors, and administrators.
(c) A society shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the society, or who is or was serving at the request of the society as a director, officer, employee, or agent of any other firm, corporation, or organization against any liability asserted against such person and incurred by him or her in any such capacity or arising out of his or her status as such, whether or not the society would have the power to indemnify the person against such liability under this Code section.
The laws of the society may provide that no subordinate body nor any of its subordinate officers or members shall have the power or authority to waive any of the provisions of the laws of the society. Such provision shall be binding on the society and every member and beneficiary of a member.
(a) A domestic society organized on or after January 1, 1994, shall be formed as provided in this Code section. Ten or more citizens of the United States, a majority of whom are citizens of this state, who desire to form a fraternal benefit society, may make, sign, and acknowledge before some officer competent to take acknowledgment of deeds, a petition for a charter, in which shall be stated:
(1) The proposed corporate name of the society, which shall not so closely resemble the name of any society or insurance company as to be misleading or confusing;
(2) The purposes for which it is being formed and the mode in which its corporate powers are to be exercised. Such purposes shall not include more liberal powers than are granted by this chapter; and
(3) The names and residences of the incorporators and the names, residences, and official titles of all the officers, trustees, directors, or other persons who are to have and exercise the general control of the management of the affairs and funds of the society for the first year or until the ensuing election at which all such officers shall be elected by the supreme governing body, which election shall be held not later than one year from the date of issuance of the permanent certificate of authority.
(b) The petition for a charter, duly certified copies of the society's bylaws and rules, copies of all proposed forms of certificates, applications therefor, circulars to be issued by the society, and a bond conditioned upon the return to applicants of the advanced payments if the organization is not completed within one year shall be filed with the Secretary of State, who may require such further information which is deemed necessary. The bond with sureties approved by the Commissioner shall be in such amount, not less than $300,000.00 nor more than $1.5 million, as required by the Commissioner. All documents filed are to be in the English language. The Secretary of State shall transmit immediately one copy of the petition to the Commissioner and shall return one copy to the petitioner. The petition for a charter, with any and all exhibits attached thereto, shall be published in the manner provided in subsection (b) of Code Section 33-14-5. If the purposes of the society conform to the requirements of this chapter and all provisions of the law have been complied with, the Commissioner shall so certify in writing to the Secretary of State and shall furnish the incorporators a preliminary certificate of authority authorizing the society to solicit members as hereinafter provided, but only after the granting of the certificate of incorporation by the Secretary of State.
(c) No preliminary certificate of authority granted under the provisions of this Code section shall be valid after one year from its date or after such further period, not exceeding one year, as may be authorized by the Commissioner upon cause shown, unless the 500 applicants hereinafter required have been secured and the organization has been completed as provided in this chapter. The charter and all other proceedings thereunder shall become null and void in one year from the date of the preliminary certificate of authority, or at the expiration of the extended period, unless the society shall have completed its organization and received a certificate of authority to do business as provided in subsection (f) of this Code section.
(d) A fraternal benefit society shall be incorporated by the Secretary of State upon compliance with the applicable provisions of law.
(e) Upon receipt of a preliminary certificate of authority from the Commissioner, the society may solicit members for the purpose of completing its organization, shall collect from each applicant the amount of not less than one regular monthly premium in accordance with its table of rates, and shall issue to each such applicant a receipt for the amount so collected. No society shall incur any liability other than for the return of such advance premium, nor issue any certificate, nor pay, allow, or offer or promise to pay or allow any benefit to any person until:
(1) Actual bona fide applications for benefits have been secured aggregating at least $500,000.00 on not less than 500 applicants and any necessary evidence of insurability has been furnished to and approved by the society;
(2) At least ten subordinate lodges have been established into which the 500 applicants have been admitted;
(3) There has been submitted to the Commissioner, under oath of the president or secretary or corresponding officer of the society, a list of such applicants, giving their names, addresses, date each was admitted, name and number of the subordinate lodge of which each applicant is a member, amount of benefits to be granted, and the premiums therefor; and
(4) It shall have been shown to the Commissioner, by sworn statement of the treasurer or corresponding officer of such society, that at least 500 applicants have each paid in cash at least one regular monthly premium as provided in this subsection, which premiums in the aggregate shall amount to at least $150,000.00. Said advance premiums shall be held in trust during the period of organization and, if the society has not qualified for a certificate of authority within one year as provided in this Code section, such premiums shall be returned to said applicants.
(f) The Commissioner may make such examination and require such further information as the Commissioner deems advisable. Upon presentation of satisfactory evidence that the society has complied with all the provisions of law, the Commissioner shall issue to the society a certificate of authority to that effect and that the society is authorized to transact business pursuant to the provisions of this chapter. The certificate of authority shall be prima-facie evidence of the existence of the society at the date of such certificate. The Commissioner shall cause a record of such certificate of authority to be made. A certified copy of such record may be given in evidence with like effect as the original certificate of authority.
(g) Any incorporated society authorized to transact business in this state on January 1, 1994, shall not be required to reincorporate.
(a) A domestic society may amend its laws in accordance with the provisions thereof by action of its supreme governing body at any regular or special meeting thereof or, if its laws so provide, by referendum. Such referendum may be held in accordance with the provisions of its laws by the vote of the voting members of the society, by the vote of delegates or representatives of voting members, or by the vote of local lodges. A society may provide for voting by mail. No amendment submitted for adoption by referendum shall be adopted unless, within six months from the date of submission thereof, a majority of the members voting shall have signified their consent to such amendment by one of the methods specified in this Code section. Charter amendments shall be filed in triplicate with the Commissioner, published, and approved only under the procedure established in Code Section 33-14-8.
(b) No amendment to the laws of any domestic society shall take effect unless approved by the Commissioner and granted by the Secretary of State as provided in Code Section 33-14-8. The Commissioner and Secretary of State shall approve the amendment if they find that it has been duly adopted and is not inconsistent with any requirement of the laws of this state or with the character, objects, and purposes of the society. Unless the Commissioner shall disapprove any such amendment within 30 days after the filing of same, such amendment shall be considered approved. The approval or disapproval of the Commissioner shall be forwarded, in writing, to the Secretary of State and also mailed to the secretary or corresponding officer of the society at its principal office. If the Commissioner disapproves such amendment, the reasons therefor shall be stated in such written notice. Amendments to charters shall not be effective until granted by the Secretary of State.
(c) Within 90 days from the approval thereof by the Commissioner, all such amendments or a synopsis thereof shall be furnished to all members of the society either by mail or by publication in full in the official publication of the society. The affidavit of any officer of the society or of anyone authorized by it to mail any amendments or synopsis thereof, stating facts which show that same have been duly addressed and mailed, shall be prima-facie evidence that such amendments or synopsis thereof have been furnished the addressee.
(d) Every foreign or alien society authorized to do business in this state shall file with the Commissioner a duly certified copy of all amendments of, or additions to, its laws within 30 days after the enactment of same.
(e) Printed copies of the laws as amended, certified by the secretary or corresponding officer of the society, shall be prima-facie evidence of the legal adoption thereof.
A society may create, maintain, and operate, or may establish organizations to operate, not for profit institutions to further the purposes permitted by paragraph (2) of subsection (a) of Code Section 33-15-5. Such institutions may furnish services free or at a reasonable charge. Any real or personal property owned, held, or leased by the society for this purpose shall be reported in every annual statement. No society shall own or operate funeral homes or undertaking establishments.
(a) A domestic society may, by a reinsurance agreement, cede any individual risk or risks in whole or in part to an insurer other than another fraternal benefit society having the power to make such reinsurance and authorized to do business in this state, in accordance with Code Section 33-7-14.
(b) Notwithstanding the limitation in subsection (a) of this Code section, a society may reinsure the risks of another society in a consolidation or merger approved by the Commissioner under Code Section 33-15-44.
(a) A domestic society may consolidate or merge with any other society by complying with the provisions of this Code section. The filing of application, fee, and publication requirements of subsections (a) through (c) of Code Section 33-14-5 shall be applicable to merger under this chapter.
(b) The application shall state the names and respective locations of the proposed merged or consolidated societies with the dates of their original charters, all amendments thereto, and the name and location of the proposed consolidated or merged society. The application shall be signed with the corporate names and under the corporate seals of the societies.
(c) There shall be filed with the application:
(1) A certified copy of the written contract containing in full the terms and conditions of the consolidation or merger;
(2) A sworn statement by the president and secretary or corresponding officers of each society showing the financial condition thereof on a date fixed by the Commissioner but not earlier than December 31 next preceding the date of the contract;
(3) A certificate of such officers, duly verified by their respective oaths, that the consolidation or merger has been approved by a two-thirds' vote of the supreme governing body of each society, such vote being conducted at a regular or special meeting of each such body or, if the society's laws so permit, by mail;
(4) Evidence that at least 60 days prior to the action of the supreme governing body of each society, the text of the contract has been furnished to all members of each society either by mail or by publication in full in the official publication of each society; and
(5) In the event any society which is a party to the contract is incorporated under the laws of any other state or territory, a certificate of approval as provided by the laws of such state or territory; if the laws of such state or territory contain no such provision, then a certificate of approval of the proposed consolidation or merger must be approved by the supervising insurance official of such state or territory.
(d) If the Commissioner finds that the contract containing the terms and conditions of the proposed consolidation or merger is in conformity with this Code section, that the financial statements are correct, and that the consolidation or merger is just and equitable to the members of each society, he shall approve the contract and issue his certificate to such effect, transmitting a copy of such certificate of approval to the Secretary of State. If the Commissioner does not approve the contract, he shall notify the society and shall transmit a copy of his certificate of disapproval to the Secretary of State. In case such contract is not approved, it shall be inoperative, and the fact of submission and its contents shall not be disclosed by the Commissioner.
(e) Upon receipt of the certificate as to the publication of the application and the certificate of approval of the Commissioner, the Secretary of State shall issue, under the great seal of the state, a certificate of merger, which certificate shall be the charter of the consolidated or merged society. The Secretary of State shall record the application, the contract of merger and the other documents required to be filed, the certificate of the judge of the probate court, the certificate of the Commissioner, and the certificate of merger in a book to be kept by him for that purpose.
(f) Upon the consolidation or merger becoming effective as provided in subsection (e) of this Code section, all the rights, franchises, and interests of the consolidated or merged societies in and to every species of property, real, personal, or mixed, and things in action belonging to the consolidated or merged societies shall be vested in the society resulting from or remaining after the consolidation or merger without any other instrument, except that conveyances of real property may be evidenced by proper deeds, and the title to any real estate or interest therein vested under the laws of this state in any of the societies consolidated or merged shall not revert or be in any way impaired by reason of the consolidation or merger but shall vest absolutely in the society resulting from or remaining after such consolidation or merger.
(g) The affidavit of any officer of the society or of anyone authorized by it to mail any notice or document, stating that such notice or document has been duly addressed and mailed, shall be prima-facie evidence that such notice or document has been furnished the addressees.
Any domestic fraternal benefit society may be converted and licensed as a mutual life insurance company by compliance with all the applicable requirements of Chapter 14 of this title if the plan of conversion has been approved by the Commissioner. A plan of conversion shall be prepared in writing by the board of directors setting forth in full the terms and conditions of conversion. The affirmative vote of two-thirds of all members of the supreme governing body at a regular or special meeting shall be necessary for the approval of such plan. No such conversion shall take effect unless and until approved by the Commissioner who may give such approval if the Commissioner finds that the proposed change is in conformity with the requirements of law and not prejudicial to the certificate holders of the society.
(a) A society may provide the following contractual benefits in any form:
(1) Death benefits;
(2) Endowment benefits;
(3) Annuity benefits;
(4) Temporary or permanent disability benefits;
(5) Hospital, medical, or nursing benefits;
(6) Monument or tombstone benefits to the memory of deceased members; and
(7) Such other benefits as authorized for life insurers and which are not inconsistent with this chapter.
(b) A society shall specify in its rules those persons who may be issued or covered by the contractual benefits in subsection (a) of this Code section, consistent with providing benefits to members and their dependents. A society may provide benefits on the lives of children under the minimum age for adult membership upon application of an adult person.
(a) The owner of a benefit contract shall have the right at all times to change the beneficiary or beneficiaries in accordance with the laws or rules of the society unless the owner waives this right by specifically requesting in writing that the beneficiary designation be irrevocable. A society may, through its laws or rules, limit the scope of beneficiary designations and shall provide that no revocable beneficiary shall have or obtain any vested interest in the proceeds of any certificate until the certificate has become due and payable in conformity with the provisions of the benefit contract.
(b) A society may make provision for the payment of funeral benefits to the extent of such portion of any payment under a certificate as might reasonably appear to be due to any person equitably entitled thereto by reason of having incurred expense occasioned by the burial of the member.
(c) If, at the death of any person insured under a benefit contract, there is no lawful beneficiary to whom the proceeds shall be payable, the amount of such benefit, except to the extent that funeral benefits may be paid as provided in subsection (b) of this Code section, shall be payable to the estate of the deceased insured the same as other property not exempt, provided that if the owner of the certificate is other than the insured, such proceeds shall be payable to such owner.
No money or other benefit, charity, relief, or aid to be paid, provided, or rendered by any society shall be liable to attachment, garnishment, or other process or to be seized, taken, appropriated, or applied by any legal or equitable process or operation of law to pay any debt or liability of a member or beneficiary, or any other person who may have a right thereunder, either before or after payment by the society.
(a) Every society authorized to do business in this state shall issue to each owner of a benefit contract a certificate specifying the amount of benefits provided thereby. The certificate, together with any riders or endorsements attached thereto, the laws of the society, the application for membership, the application for insurance and declaration of insurability, if any, signed by the applicant, and all amendments to each thereof shall constitute the benefit contract, as of the date of issuance, between the society and the owner, and the certificate shall so state. A copy of the application for insurance and declaration of insurability, if any, shall be endorsed upon or attached to the certificate. All statements on the application shall be representations and not warranties. Any waiver of this provision shall be void.
(b) Any changes, additions, or amendments to the laws of the society duly made or enacted subsequent to the issuance of the certificate shall bind the owner and the beneficiaries and shall govern and control the benefit contract in all respects the same as though such changes, additions, or amendments had been made prior to and were in force at the time of the application for insurance, except that no change, addition, or amendment shall destroy or diminish benefits which the society contracted to give the owner as of the date of issuance.
(c) Any person upon whose life a benefit contract is issued prior to attaining the age of majority shall be bound by the terms of the application and certificate and by all the laws and rules of the society to the same extent as though the age of majority had been attained at the time of application.
(d) A society shall provide in its laws that if its reserves as to all or any class of certificates become impaired, its board of directors or corresponding body may require that there shall be paid by the owner to the society the amount of the owner's equitable proportion of such deficiency as ascertained by its board and that if the payment is not made either:
(1) It shall stand as an indebtedness against the certificate and draw interest not to exceed the rate specified for certificate loans under the certificates; or
(2) In lieu of or in combination with paragraph (1) of this subsection, the owner may accept a proportionate reduction in benefits under the certificate.
The society may specify the manner of the election and which alternative is to be presumed if no election is made.
(e) Copies of any of the documents mentioned in this Code section, certified by the secretary or corresponding officer of the society, shall be received in evidence of the terms and conditions thereof.
(f) No certificate shall be delivered or issued for delivery in this state unless a copy of the form has been filed with the Commissioner in the manner provided for like policies issued by life insurers in this state. Every life, accident and sickness, or disability insurance certificate and every annuity certificate issued on or after one year from January 1, 1994, shall meet the standard contract provision requirements not inconsistent with this chapter for like policies issued by life insurers in this state, except that a society may provide for a grace period for payment of premiums of one full month in its certificates. The certificate shall also contain a provision stating the amount of premiums which are payable under the certificate and a provision reciting or setting forth the substance of any sections of the society's laws or rules in force at the time of issuance of the certificate which, if violated, will result in the termination or reduction of benefits payable under the certificate. If the laws of the society provide for expulsion or suspension of a member, the certificate shall also contain a provision that any member so expelled or suspended, except for nonpayment of a premium or within the contestable period for material misrepresentation in the application for membership or insurance, shall have the privilege of maintaining the certificate in force by continuing payment of the required premium.
(g) Benefit contracts issued on the lives of persons below the society's minimum age for adult membership may provide for transfer of control of ownership to the insured at an age specified in the certificate. A society may require approval of an application for membership in order to effect this transfer and may provide in all other respects for the regulation, government, and control of such certificates and all rights, obligations, and liabilities incident thereto and connected therewith. Ownership rights prior to such transfer shall be specified in the certificate.
(h) A society may specify the terms and conditions on which benefit contracts may be assigned.
(a) Any provision of a certificate which stipulates or relates to the control of the exercise of all rights incident to the certificate shall be set out under a separate caption and shall be printed in boldface type.
(b) Any provision of a certificate which changes the control of the exercise of all rights incident to the certificate from the original applicant to the named member upon such member's attainment of a certain age, which is less than the age of legal majority as provided in Code Section 39-1-1, shall not become effective unless written notice has been given to the original applicant and the named member and the written consent of such parties has been obtained as provided in subsection (c) of this Code section.
(c) The notice as required in subsection (b) of this Code section shall be given 180 days prior to the date the member will attain the designated age. The notice shall be delivered in person or given by depositing the notice in the United States mail to be dispatched by at least first-class mail to the last addresses of record of the original applicant and the named member and receiving the receipt provided by the United States Postal Service or such other evidence as prescribed or accepted by the United States Postal Service.
(d) In the event the written consent of the original applicant and the named member is not obtained prior to the date such member reaches the age designated in the certificate, the original applicant shall retain control of the exercise of all rights incident to the policy until the date the named member reaches the age of legal majority as defined in Code Section 39-1-1.
(a) For certificates issued prior to one year after January 1, 1994, the value of every paid-up nonforfeiture benefit and the amount of any cash surrender value, loan, or other option granted shall comply with the provisions of law applicable immediately prior to January 1, 1994.
(b) For certificates issued on or after one year from January 1, 1994, for which reserves are computed on the Commissioners 1941 Standard Ordinary Mortality Table, the Commissioners 1941 Standard Industrial Table, the Commissioners 1958 Standard Ordinary Mortality Table, or the Commissioners 1980 Standard Mortality Table, or any more recent table made applicable to life insurers, every paid-up nonforfeiture benefit and the amount of any cash surrender value, loan, or other option granted shall not be less than the corresponding amount ascertained in accordance with the laws of this state applicable to life insurers issuing policies containing like benefits based upon such tables.
A society shall invest its funds only in such investments as are authorized by the laws of this state for the investment of assets of life insurers and subject to the limitations thereon. Any foreign or alien society permitted or seeking to do business in this state which invests its funds in accordance with the laws of the state, district, territory, country, or province in which it is incorporated shall be held to meet the requirements of this Code section for the investment of funds.
(a) All assets shall be held, invested, and disbursed for the use and benefit of the society, and no member or beneficiary shall have or acquire individual rights therein or become entitled to any apportionment on the surrender of any part thereof, except as provided in the benefit contract.
(b) A society may create, maintain, invest, disburse, and apply any special fund or funds necessary to carry out any purpose permitted by the laws of such society.
(c) A society may, pursuant to resolution of its supreme governing body, establish and operate one or more separate accounts and issue contracts on a variable basis, subject to the provisions of law regulating life insurers establishing such accounts and issuing such contracts. To the extent the society deems it necessary in order to comply with any applicable federal or state laws or any rules issued thereunder, the society may adopt special procedures for the conduct of the business and affairs of a separate account; may, for persons having beneficial interests therein, provide special voting and other rights, including, without limitation, special rights and procedures relating to investment policy, investment advisory services, selection of certified public accountants, and selection of a committee to manage the business and affairs of the account; and may issue contracts on a variable basis to which subsections (b) and (d) of Code Section 33-15-63 shall not apply.
Except as otherwise provided in this chapter, societies shall be governed by this chapter and shall be exempt from all other provisions of the insurance laws of this state unless they are expressly designated therein or unless they are specifically made applicable by this chapter.
Every society organized or licensed under this chapter is declared to be a charitable and benevolent institution, and all of its funds shall be exempt from all and every state, county, district, municipal, and school taxes other than taxes on real estate and office equipment.
(a) Standards of valuation for certificates issued prior to one year after January 1, 1994, shall be those provided by the laws applicable immediately prior to January 1, 1994.
(b) The minimum standards of valuation for certificates issued on or after one year from January 1, 1994, shall be based on the following tables:
(1) For certificates of life insurance--the Commissioners 1941 Standard Ordinary Mortality Table, the Commissioners 1941 Standard Industrial Table, the Commissioners 1958 Standard Ordinary Mortality Table, the Commissioners 1980 Standard Ordinary Mortality Table, or any more recent table made applicable to life insurers; and
(2) For annuity and pure endowment certificates, for total and permanent disability benefits, for accidental death benefits, and for noncancelable accident and health benefits--such tables as are authorized for use by life insurers in this state.
All of the above shall be under valuation methods and standards, including interest assumptions, in accordance with the laws of this state applicable to life insurers issuing policies containing like benefits.
(c) The Commissioner may, in his or her discretion, accept other standards for valuation if the Commissioner finds that the reserves produced thereby will not be less in the aggregate than reserves computed in accordance with the minimum valuation standard prescribed in subsection (b) of this Code section. The Commissioner may, in his or her discretion, vary the standards of mortality applicable to all benefit contracts on substandard lives or other extrahazardous lives by any society authorized to do business in this state.
(d) Any society, with the consent of the commissioner of insurance of the state of domicile of the society and under such conditions, if any, which the commissioner may impose, may establish and maintain reserves on its certificates in excess of the reserves required thereunder, but the contractual rights of any benefit member shall not be affected thereby.
(a) Reports shall be filed in accordance with the provisions of this Code section. Every society transacting business in this state shall annually, on or before March 1, unless for cause shown such time has been extended by the Commissioner, file with the Commissioner a true statement of its financial condition, transactions, and affairs for the preceding calendar year. The statement shall be in general form and context as approved by the National Association of Insurance Commissioners for fraternal benefit societies and as supplemented by additional information required by the Commissioner.
(b) As part of the annual statement required by this Code section, each society shall, on or before March 1, file with the Commissioner a valuation of its certificates in force on December 31 last preceding, provided the Commissioner may, in his or her discretion for cause shown, extend the time for filing such valuation for not more than two calendar months. Such valuation shall be done in accordance with the standards specified in Code Section 33-15-100. Such valuation and underlying data shall be certified by a qualified actuary or, at the expense of the society, verified by the actuary of the department of insurance of the state of domicile of the society.
(c) A society neglecting to file the annual statement in the form and within the time provided by this Code section shall forfeit $100.00 for each day during which such neglect continues and, upon notice by the Commissioner to that effect, its authority to do business in this state shall cease while such default continues.
The authority of all societies licensed may thereafter be renewed annually but in all cases to terminate on the succeeding June 30. However, a license so issued shall continue in full force and effect until the new license is issued or specifically refused. For each such license or renewal the society shall pay the Commissioner a fee as specified in Code Section 33-8-1. A duly certified copy or duplicate of such license shall be prima-facie evidence that the licensee is a fraternal benefit society within the meaning of this chapter.
(a) The Commissioner or any person he or she may appoint may examine any domestic, foreign, or alien society transacting or applying for admission to transact business in this state in the same manner as authorized for examination of domestic, foreign, or alien insurers. Requirements of notice and an opportunity to respond before findings are made public as provided in the laws regulating insurers shall also be applicable to the examination of societies.
(b) The expense of each examination and of each valuation, including compensation and actual expenses of examiners, shall be paid by the society examined or whose certificates are valued, upon statements furnished by the Commissioner.
(a) No foreign or alien society shall transact business in this state without a license issued by the Commissioner. Any such society desiring admission to this state shall comply substantially with the requirements and limitations of this chapter applicable to domestic societies. Any such society may be licensed to transact business in this state upon a showing that its assets are invested in accordance with the provisions of this chapter and upon filing with the Commissioner:
(1) A duly certified copy of its articles of incorporation;
(2) A copy of its bylaws, certified by its secretary or corresponding officer;
(3) A power of attorney to the Commissioner as prescribed in Code Section 33-15-120;
(4) A statement of its business under oath of its president and secretary or corresponding officers in a form prescribed by the Commissioner, duly verified by an examination made by the supervisory insurance official of its home state or other state, territory, province, or country, satisfactory to the Commissioner of this state;
(5) Certification from the proper official of its home state, territory, province, or country that the society is legally incorporated and licensed to transact business therein;
(6) Copies of its certificate forms; and
(7) Such other information as the Commissioner may deem necessary.
(b) A society domiciled in any other state, territory, province, or country shall comply fully with this chapter and agree to be treated as a domestic society unless:
(1) The state, territory, province, or country of domicile is accredited under the National Association of Insurance Commissioners Financial Regulation Standards and Accreditation Program; and
(2) The state, territory, province, or country of domicile has a statute or regulation governing fraternal benefit societies which is substantially similar to this chapter.
(a) When the Commissioner upon investigation finds that a domestic society:
(1) Has exceeded its powers;
(2) Has failed to comply with any provision of this chapter;
(3) Is not fulfilling its contracts in good faith;
(4) Has a membership of less than 400 after an existence of one year or more; or
(5) Is conducting business fraudulently or in a manner hazardous to its members, creditors, the public, or the business,
the Commissioner shall notify the society of such deficiency or deficiencies in the manner and under the procedures provided by Chapter 2 of this title.
(b) A domestic society may surrender its charter under the procedure in Code Section 33-14-25.
(a) When the Commissioner upon investigation finds that a foreign or alien society transacting or applying to transact business in this state:
(1) Has exceeded its powers;
(2) Has failed to comply with any of the provisions of this chapter;
(3) Is not fulfilling its contracts in good faith; or
(4) Is conducting its business fraudulently or in a manner hazardous to its members or creditors or the public,
the Commissioner shall notify the society of such deficiency or deficiencies in the manner and under the procedures provided by Chapter 2 of this title.
(b) Nothing contained in this Code section shall be taken or construed as preventing any such society from continuing in good faith all contracts made in this state during the time such society was legally authorized to transact business in this state.
(a) Except as provided in subsections (b) and (c) of this Code section, agents of societies shall be licensed in accordance with the provisions of Chapter 23 of this title.
(b) No examination or license shall be required of any regular salaried officer, employee, or member of a licensed society who devotes substantially all of his or her services to activities other than the solicitation of fraternal insurance contracts from the public, and who receives for the solicitation of such contracts no commission or other compensation directly dependent upon the amount of business obtained.
(c) Any agent or representative of a society who devotes, or intends to devote, less than 50 percent of his time to solicitation and procurement of insurance contracts for such society shall be exempt from the requirements of subsection (a) of this Code section. Any person who in the immediately preceding calendar year solicited and procured life insurance contracts on behalf of any society on the persons of more than 25 individuals and who received or will receive a commission or other compensation therefor, is presumed to be devoting or intending to devote 50 percent of his time to the solicitation or procurement of insurance contracts for the society.
Every society authorized to do business in this state shall be subject to the provisions of Chapter 6 of this title, relating to unfair trade practices; provided, however, that nothing in such provisions shall be construed as applying to or affecting the right of any society to determine its eligibility requirements for membership or be construed as applying to or affecting the offering of benefits exclusively to members or persons eligible for membership in the society by a subsidiary corporation or affiliated organization of the society.
(a) Every society authorized to do business in this state shall appoint in writing the Commissioner and each successor in office to be its true and lawful attorney upon whom all lawful process in any action or proceeding against it shall be served and shall agree in such writing that any lawful process against it which is served on said attorney shall be of the same legal force and validity as if served upon the society and that the authority shall continue in force so long as any liability remains outstanding in this state. Copies of such appointment, certified by said Commissioner, shall be deemed sufficient evidence thereof and shall be admitted in evidence with the same force and effect as the original thereof might be admitted.
(b) Service shall only be made upon the Commissioner or, if absent, upon the person in charge of the Commissioner's office. It shall be made in duplicate and shall constitute sufficient service upon the society. When legal process against a society is served upon the Commissioner, the Commissioner shall forthwith forward one of the duplicate copies by registered or certified mail or statutory overnight delivery, prepaid, directed to the secretary or corresponding officer. No such service shall require a society to file its answer, pleading, or defense in less than 30 days from the date of mailing the copy of the service to a society. Legal process shall not be served upon a society except in the manner provided in this Code section. At the time of serving any process upon the Commissioner, the plaintiff or complainant in the action shall pay to the Commissioner a fee of $15.00.
All decisions and findings of the Commissioner made under the provisions of this chapter shall be subject to review as provided by Chapter 2 of this title.
(a) Any person, officer, member, or examining physician of any society doing business under this chapter who shall knowingly or willfully make any false or fraudulent statement or representation in or relating to any application for membership or for the purpose of obtaining money from or a benefit in any society shall be guilty of a misdemeanor.
(b) Any person who willfully makes a false or fraudulent statement in any verified report or declaration under oath required or authorized by this chapter or of any material fact or thing contained in a sworn statement concerning the death or disability of an insured for the purpose of procuring payment of a benefit named in the certificate shall be guilty of false swearing and shall be subject to the penalties therefor prescribed by Code Section 16-10-71.
(c) Any person who solicits membership for, or in any manner assists in procuring membership in, any society not licensed to do business in this state shall, upon conviction thereof, be fined not less than $50.00 nor more than $200.00.
(d) Any person guilty of a willful violation of, or neglect or refusal to comply with, the provisions of this chapter for which a penalty is not otherwise prescribed shall, upon conviction thereof, be subject to a fine not to exceed $200.00.
(a) Nothing contained in this chapter shall be so construed as to affect or apply to:
(1) Grand or subordinate lodges of societies, orders, or associations doing business in this state on January 1, 1994, which provide benefits exclusively through local or subordinate lodges;
(2) Orders, societies, or associations which admit to membership only persons engaged in one or more crafts or hazardous occupations or persons in the same or similar lines of business, insuring only their own members and their families, and the ladies' societies or ladies' auxiliaries to such orders, societies, or associations;
(3) Orders, societies, or associations insuring only their own members, their families and descendants of members, and the ladies' societies or ladies' auxiliaries to such orders, societies, or associations;
(4) Domestic societies which limit their membership to employees of a particular city or town, designated firm, business house, or corporation which provide for a death benefit of not more than $400.00 or disability benefits of not more than $350.00 to any person in any one year, or both; or
(5) Domestic societies or associations of a purely religious, charitable, or benevolent description which provide for a death benefit of not more than $400.00 or for disability benefits of not more than $350.00 to any one person in any one year, or both.
(b) Any such society or association described in paragraph (3) or (5) of subsection (a) of this Code section which provides for death or disability benefits for which benefit certificates are issued, and any such society or association included in paragraph (5) of subsection (a) of this Code section which has more than 1,000 members shall not be exempted from the provisions of this chapter but shall comply with all requirements of this chapter.
(c) No society which, by the provisions of this Code section, is exempt from the requirements of this chapter, except any society described in paragraph (2) or (3) of subsection (a) of this Code section, shall give or allow, or promise to give or allow, to any person any compensation for procuring new members.
(d) Every society which provides for benefits in case of death or disability resulting solely from accident and which does not obligate itself to pay natural death or sick benefits shall have all of the privileges and be subject to all the applicable provisions and regulations of this chapter except that the provisions thereof relating to medical examination, valuations of benefit certificates, and incontestability shall not apply to such society.
(e) The Commissioner may require from any society or association, by examination or otherwise, such information as will enable the Commissioner to determine whether such society or association is exempt from the provisions of this chapter.
(f) Societies exempted under the provisions of this Code section shall also be exempt from all other provisions of the general insurance laws of this state.
This chapter applies only to domestic farmers' mutual fire insurance companies.
(a) “Domestic farmers' mutual fire insurance companies” are companies organized for the purpose of insuring property against loss or damage by fire, lightning, windstorm, extended coverage, and hail, and for all, or any, of such purposes.
(b) Domestic farmers' mutual fire insurance companies may write insurance against said hazards on such property risks as their charter and bylaws may provide.
(a) Twenty or more persons a majority of whom are citizens of this state may become a body corporate for the purpose of transacting insurance upon the farmers' mutual fire insurance plan as defined in Code Section 33-16-2 by making an application for a charter signed by the persons applying for the charter or their counsel in triplicate specifying:
(1) The name of the proposed corporation. The name shall contain the words “Farmers’ Mutual” and shall not be so similar to any name already used by any other corporation authorized to transact business in this state as to be confusing or misleading;
(2) The purpose for which the corporation is formed;
(3) The name of the county in this state in which the corporation will have its principal office and the names of any other counties in which it proposes to operate;
(4) The name and address of each incorporator;
(5) The names and addresses of those composing the board of directors of the corporation in which the management shall be vested until the first meeting of the members; and
(6) Any other provisions not inconsistent with this chapter or other applicable laws as are deemed desirable by the incorporators or as may be required by the Commissioner.
(b) The corporate charter shall be granted by the Secretary of State as provided in Chapter 14 of this title.
(a) No person shall transact or attempt to transact business as a farmers' mutual fire insurance company unless so authorized by an effective certificate of authority issued by the Commissioner.
(b) The Commissioner shall not issue or permit to exist any certificate of authority as to any insurer not qualified for such certificate unless it is shown to the satisfaction of the Commissioner that:
(1) The farmers' mutual fire insurance company maintains the minimum surplus required by subsection (a) of Code Section 33-16-13;
(2) The farmers' mutual fire insurance company maintains a security deposit as required by subsection (c) of Code Section 33-16-13;
(3) The farmers' mutual fire insurance company has submitted an acceptable business plan to the Commissioner that includes, but is not limited to, two-year financial projections and supporting assumptions reflecting expected premiums and losses, counties where the farmers' mutual fire insurance company intends to insure property, and the contingent liability, if any, of its members; and
(4) It must otherwise be in compliance with the requirements of this chapter.
(c) Any proposed changes to a farmers' mutual fire insurance company's plan of operation subsequent to licensure pursuant to this chapter, including but not limited to geographical expansion, shall be filed and approved in advance by the Commissioner.
Farmers' mutual fire insurance companies shall pay no annual fees or charges other than an annual license fee as provided in Code Section 33-8-1.
In companies organized under this chapter, the number of directors shall be not less than three. A majority of the board of directors shall be a quorum for the transaction of business. No person shall be or act as a director of the insurer who does not have insurance in force in the insurer.
The board of directors of a farmers' mutual fire insurance company may, at any time, borrow such sum or sums of money as they may deem necessary to pay its losses, accrued or unaccrued, and may pledge the assets of the company including the contingent liability of policyholders for the losses as security for the loan.
(a) The bylaws shall state the time and manner of the levy and payment of all premiums or assessments for all insurance written by the company.
(b) The bylaws shall also fix the liability of the policyholders for all losses accrued while the policies are in force, in addition to the regular premium or assessment of the policyholders, and the time and manner of payment of such liability.
(c) The bylaws may be amended and any such amendment shall be filed with the Commissioner at least 30 days prior to its adoption.
(d) The bylaws may contain provisions for the exclusion of any member of the company who refuses or neglects to pay his or her assessment or for any other reasons satisfactory to the directors to be excluded from the insurer.
The portion of the bylaws which affects the insuring agreement shall be contained in the policy. Each policy issued by the insurer shall contain a statement of the contingent liability, if any, of its members.
The companies may provide in the policy that officers and agents elected by them do not have the power to waive any provision of the bylaws.
An annual meeting of such company shall be held at such a time as is fixed in the bylaws of the company. Special meetings may be held for such purposes and in such manner as may be specified in the insurer's bylaws, consistent with this chapter. All such meetings shall be held in the insurer's county of domicile or other location in this state that is convenient for its membership and specified in the insurer's bylaws. Notice of such meeting shall be mailed or otherwise given to each member not less than 20 days in advance of the meeting, and notice of any special meeting called by the board of directors shall be given in writing not less than ten days in advance stating the purpose of the meeting so called.
Each policyholder in a farmers' mutual fire insurance company shall be entitled to only one vote in all policyholders' meetings. No voting by proxy shall be permitted unless it is specially authorized in the bylaws and approved by the Commissioner.
(a) The amount of minimum surplus required for each farmers' mutual fire insurance company shall be determined on an individual basis; however, no farmers' mutual fire insurance company shall be issued a certificate of authority unless it shall possess and thereafter maintain a minimum of $150,000.00 in surplus.
(b) Minimum surplus of up to $150,000.00 shall be maintained in any of the following:
(1) Cash;
(2) Certificates of deposit or similar certificates or evidence of deposits in banks or trust companies but only to the extent that the certificates or deposits are insured by the Federal Deposit Insurance Corporation; or
(3) Savings accounts, certificates of deposit, or similar certificates or evidence of deposit in savings and loan associations and building and loan associations but only to the extent that the same are insured by the Federal Savings and Loan Insurance Corporation.
(c) A portion of the minimum surplus, in an amount determined by the Commissioner, must be deposited with this state prior to the issuance of the certificate of authority. Chapter 12 of this title shall apply to the deposit required by this subsection.
(d) Any additional surplus in excess of $150,000.00 required by the Commissioner pursuant to subsection (a) of this Code section may be provided and maintained in any of the following:
(1) Any eligible investments of minimum capital or surplus authorized by Code Section 33-11-5; or
(2) Any other investments approved by the Commissioner that do not impair the financial solvency of the farmers' mutual fire insurance company.
(a) The maximum amount of insurance that a farmers' mutual fire insurance company may retain on any subject or subjects of insurance reasonably exposed to loss from the same fire shall not exceed 10 percent of its surplus.
(b) In determining the amount at risk and retained by the insurer, any valid and applicable reinsurance authorized shall be deducted from the gross amount of risk directly assumed by the insurer.
A farmers' mutual fire insurance company shall not accept reinsurance of the risk of any other insurer.
No member of such insurer shall be liable to assessment to pay losses and expenses accruing prior to the time his policy became effective nor for losses and expenses accruing after termination or expiration of the policy.
Companies organized under this chapter may bring and defend actions in the name under which they are doing business.
Every farmers' mutual fire insurance company shall, on or before March 1 of each year, make and file with the Commissioner an annual statement of its business as of December 31 of the preceding year, on the form prescribed by the Commissioner.
The Commissioner shall at least once in five years, or as often as he or she deems necessary, examine farmers' mutual fire insurance companies. The costs of the examination shall be paid by the company.
Any company organized under this chapter shall be exempt from all taxes, costs, and fees, including those listed in Chapter 8 of this title, except as expressly provided in this chapter and except taxes payable upon real and personal property owned by the company.
In addition to this chapter, farmers' mutual fire insurance companies shall be subject to the following chapters of this title to the extent so applicable: Chapters 1, 2, 5, 6, 12, and 37, and Article 1 of Chapter 11.
Any company organized under this chapter may be converted into a mutual insurance company by complying with the applicable provisions of Chapter 14 of this title.
As used in this chapter, the term:
(1) “Attorney” means the attorney in fact of a reciprocal insurer. The attorney may be an individual, firm, or corporation.
(2) “Reciprocal insurance” means insurance resulting from an interexchange among persons, known as subscribers, of reciprocal agreements of indemnity, the interexchange being effectuated through an attorney in fact common to all such persons; provided, however, that reciprocal agreements or contracts of indemnity executed prior to March 8, 1960, creating funds for the purpose of satisfying the obligations of self-insured employers under Chapter 9 of Title 34 shall not be deemed reciprocal insurance as defined in this Code section.
(3) “Reciprocal insurer” means an unincorporated aggregation of subscribers operating individually and collectively through an attorney in fact to provide reciprocal insurance among themselves.
(a) All authorized reciprocal insurers shall be governed by those Code sections of this chapter not expressly made applicable to domestic reciprocal insurers.
(b) Authorized reciprocal insurers shall comply with this chapter and shall make any amendments to their subscribers' agreement, power of attorney, policies, and other documents and accounts and perform any other acts as may be required for such compliance.
A reciprocal insurer may be authorized to transact insurance in this state subject to the applicable provisions of this title.
(a) A reciprocal insurer may, upon qualifying as a reciprocal insurer as provided for by this title, transact any kind or kinds of insurance defined by this title other than life or title insurance.
(b) A reciprocal insurer may purchase reinsurance upon the risk of any subscriber and may grant reinsurance as to any kind of insurance it is authorized to transact directly.
A reciprocal insurer shall:
(1) Have and use a business name. The name shall include the word “reciprocal” or “interinsurer” or “interinsurance” or “exchange” or “underwriters” or “underwriting”; and
(2) Bring and defend actions in its own name.
(a) Twenty-five or more persons domiciled in this state may organize a domestic reciprocal insurer and make application to the Commissioner for a certificate of authority to transact insurance.
(b) The proposed attorney shall fulfill the requirements of and shall execute and file with the Commissioner when applying for a certificate of authority a declaration setting forth:
(1) The name of the insurer;
(2) The location of the insurer's principal office, which shall be the same as that of the attorney and shall be maintained within this state;
(3) The kinds of insurance proposed to be transacted;
(4) The names and addresses of the original subscribers;
(5) The designation and appointment of the proposed attorney and a copy of the power of attorney;
(6) The names and addresses of the officers and directors of the attorney, if a corporation, or its members, if a firm;
(7) The powers of the subscribers' advisory committee and the names and terms of office of the members of the committee;
(8) That all moneys paid to the reciprocal shall, after deducting therefrom any sum payable to the attorney, be held in the name of the insurer and for the purposes specified in the subscribers' agreement;
(9) A copy of the subscribers' agreement;
(10) A statement that each of the original subscribers has in good faith applied for insurance of a kind proposed to be transacted, and that the insurer has received from each such subscriber the full premium or premium deposit required for which the subscriber has applied for a term of not less than six months at an adequate rate that has been filed with and approved by the Commissioner;
(11) A statement of the financial condition of the insurer, a schedule of its assets, and a statement that the surplus as required by Code Section 33-17-16 is on hand; and
(12) A copy of each policy, endorsement, and application form it then proposes to issue or use.
(c) Such declaration shall be acknowledged by the attorney before an officer authorized to take acknowledgments.
(a) The certificate of authority to transact business of a reciprocal insurer shall be issued to its attorney in the name of the insurer.
(b) The Commissioner may refuse, suspend, or revoke the certificate of authority to transact business, in addition to other grounds for refusal, suspension, or revocation, for failure of the attorney to comply with any provision of this title.
(c) The certificate shall be renewed annually and shall be issued and renewed upon payment of the fees required of insurers under this title.
(d) Each holder of a certificate of authority to transact business of a reciprocal insurer shall pay all fees required by this title and shall pay all of the taxes required by law to be paid by companies doing a like business in this state.
(a) Concurrently with the filing of the declaration provided for in Code Section 33-17-6, the attorney of a domestic reciprocal insurer shall file with the Commissioner a bond in favor of the Commissioner for the benefit of all persons damaged as a result of breach by the attorney of the conditions of his or her bond as set forth in subsection (b) of this Code section. The bond shall be executed by the attorney and by an authorized corporate surety and shall be subject to the Commissioner's approval.
(b) The bond shall be in the penal sum of $25,000.00, aggregate in form, conditioned that the attorney will faithfully account for all moneys and other property of the insurer coming into his or her hands and that he or she will not withdraw or appropriate to his or her own use from the funds of the insurer any moneys or property to which he or she is not entitled under the power of attorney.
(c) The bond shall provide that it is not subject to cancellation unless 30 days' advance notice in writing of cancellation is given to both the attorney and the Commissioner.
In lieu of the bond required under Code Section 33-17-8, the attorney may maintain on deposit with the state through the office of the Commissioner a like amount in cash or in value of securities qualified for deposit under Chapter 11 of this title, subject to the same conditions as the bond.
Action on the attorney's bond or to recover against a deposit made in lieu of the bond may be brought at any time by one or more subscribers suffering loss through a violation of its conditions or by the Commissioner as liquidator of the insurer. Amounts recovered on the bond shall be deposited in and become part of the insurer's funds. The total aggregate liability of the surety shall be limited to the amount of the penalty of the bond.
(a) The rights and powers of the attorney of a reciprocal insurer shall be as provided in the power of attorney given to it by the subscribers.
(b) The power of attorney must set forth:
(1) The powers of the attorney;
(2) That the attorney is authorized to accept service of process on behalf of the insurer in actions against the insurer upon contracts exchanged;
(3) The general services to be performed by the attorney;
(4) The maximum amounts to be deducted from advance premiums or deposits to be paid to the attorney and the general items of expense in addition to losses to be paid by the insurer; and
(5) Except as to nonassessable policies, a provision for a contingent several liability of each subscriber in a specified amount, which amount shall be not less than one nor more than ten times the premium or premium deposit stated in the policy.
(c) The power of attorney may:
(1) Provide for the right of substitution of the attorney and revocation of the power of attorney and rights thereunder;
(2) Impose any restrictions upon the exercise of the power as are agreed upon by the subscribers;
(3) Provide for the exercise of any right reserved to the subscribers directly or through their advisory committee; and
(4) Contain other lawful provisions deemed advisable.
(d) The terms of any power of attorney or agreement collateral to such power shall be reasonable and equitable and shall be subject to review and approval by the Commissioner.
(e) A copy of the power of attorney shall be furnished each subscriber.
(a) The attorney of a foreign or alien reciprocal insurer, which insurer is duly authorized to transact insurance in this state, shall not, by virtue of discharge of his or her duties as such attorney with respect to the insurer's transactions in this state, be thereby deemed to be doing business in this state within the meaning of any laws of this state applying to foreign firms or corporations.
(b) The office of the attorney shall be maintained at such place as is designated by the subscribers in the power of attorney.
(a) Every reciprocal insurer authorized to transact business in this state shall file with the Commissioner a written statement or power of attorney duly signed and sealed appointing and authorizing some person, who shall be a resident of this state, to acknowledge or accept service of process for and in behalf of such reciprocal insurer, and upon whom all process may be served against said reciprocal insurer, in all proceedings that may be instituted against the reciprocal insurer in any of the courts of this state or of the United States, and consenting that service of process upon any agent or attorney appointed under this Code section shall be as valid as if served on the reciprocal insurer.
(b) Legal process shall be served upon the reciprocal insurer by serving the insurer's attorney at his or her principal office in this state or by serving the Commissioner as the insurer's agent.
(c) Any judgment based upon legal process served in the manner prescribed in subsection (b) of this Code section shall be binding upon each of the insurer's subscribers as their respective interests may appear but in an amount not exceeding their respective contingent liabilities, if any, as though personal service of process was had upon each subscriber.
(a) The advisory committee of a domestic reciprocal insurer exercising the subscribers' rights shall be selected under such rules as the subscribers adopt.
(b) The committee shall:
(1) Supervise the finances of the insurer;
(2) Supervise the insurer's operations to such extent as to assure conformity with the subscribers' agreement and power of attorney;
(3) Procure the audit of the accounts and records of the insurer and of the attorney at the expense of the insurer; and
(4) Have any additional powers and functions as may be conferred by the subscribers' agreement.
Modifications of the terms of the subscribers' agreement or of the power of attorney of a domestic reciprocal insurer shall be made jointly by the attorney and the subscribers' advisory committee. No modification shall be effective until it has been filed with and approved by the Commissioner, and no modification shall be effective retroactively. Furthermore, no modification shall affect any insurance contract issued prior to the modification.
(a) A domestic reciprocal insurer formed under this chapter, if it has otherwise complied with the applicable provisions of this title, may be authorized to transact insurance if it has and thereafter maintains surplus funds as follows:
(1) To transact property insurance, surplus funds of not less than $1.5 million; and
(2) To transact casualty insurance, surplus funds of not less than $1.5 million.
(b) In addition to surplus required to be maintained under subsection (a) of this Code section, the insurer shall have, when first authorized to transact insurance, expendable surplus in such amount as is required of a like foreign reciprocal insurer under Code Section 33-3-7.
(c) A domestic reciprocal insurer may be authorized to transact additional kinds of insurance if it has otherwise complied with the provisions of this title applicable to a domestic reciprocal insurer and possesses and so maintains surplus funds in an amount equal to the minimum paid-in capital stock required of a stock insurer for authority to transact a like combination of kinds of insurance.
(d) There shall be maintained at all times assets in cash, premium balances, or securities authorized by the laws of this state for the investment of assets of insurance companies doing a similar business in an amount equivalent to the pro rata unearned premiums or deposits of subscribers and reserves for losses outstanding and unpaid or any other liabilities of the reciprocal insurer.
The attorney or other parties may advance to a domestic reciprocal insurer upon reasonable terms any funds as it may require from time to time in its operations. Sums so advanced shall not be treated as a liability of the insurer and, except upon liquidation of the insurer, shall not be withdrawn or repaid except out of the insurer's realized earned surplus in excess of its minimum required surplus. No withdrawal or repayment shall be made without the advance approval of the Commissioner.
(a) Individuals, partnerships, and corporations of this state may make application to, enter into agreement for, hold policies or contracts in or with, and be a subscriber of any domestic, foreign, or alien reciprocal insurer.
(b) Any corporation organized under the laws of this state shall, in addition to the rights, powers, and franchises specified in its charter, have full power and authority as a subscriber to exchange insurance contracts through such reciprocal insurer. The right to exchange such contracts is declared to be incidental to the purposes for which the corporations are organized and to be as fully granted as the rights and powers expressly conferred upon the corporations. Government or governmental agencies, state or political subdivisions thereof, boards, associations, estates, trustees, or fiduciaries are authorized to exchange nonassessable reciprocal interinsurance contracts with each other and with individuals, partnerships, and corporations to the same extent that individuals, partnerships, and corporations are authorized under this Code section to exchange reciprocal interinsurance contracts.
(c) Any officer, representative, trustee, receiver, or legal representative of any subscriber shall be recognized as acting for or on its behalf for the purpose of the contract but shall not be personally liable upon the contract by reason of acting in a representative capacity.
(a) The liability of each subscriber, other than as to a nonassessable policy, for the obligations of the reciprocal insurer shall be an individual, several, and proportionate liability, and not joint.
(b) Except as to a nonassessable policy, each subscriber shall have a contingent assessment liability, in the amount provided for in the power of attorney or in the subscribers' agreement, for payment of actual losses and expenses incurred while his policy was in force. The contingent liability may be at the rate of not less than one nor more than ten times the premium or premium deposit stated in the policy, and the maximum aggregate of contingent liability shall be computed in the manner set forth in Code Section 33-17-24.
(c) Each assessable policy issued by the insurer shall contain a statement of the contingent liability.
(a) No action shall lie against any subscriber upon any obligation claimed against the insurer until a final judgment has been obtained against the insurer and remains unsatisfied for 30 days.
(b) Any judgment shall be binding upon each subscriber only in such proportion as his interests may appear and in amount not exceeding his contingent liability, if any.
In determining the financial condition of a reciprocal insurer, the Commissioner shall apply the following rules:
(1) He shall charge as liabilities the same reserves as are required of incorporated insurers issuing nonassessable policies on a reserve basis;
(2) The surplus deposits of subscribers shall be allowed as assets, except that any premium deposits delinquent for 90 days shall first be charged against such surplus deposit;
(3) The surplus deposits of subscribers shall not be charged as a liability;
(4) All premium deposits delinquent less than 90 days shall be allowed as assets;
(5) An assessment levied upon subscribers and not collected shall not be allowed as an asset;
(6) The contingent liability of subscribers shall not be allowed as an asset; and
(7) The computation of reserves shall be based upon premium deposits other than membership fees without any deduction for expenses and the compensation of the attorney.
(a) Assessments may from time to time be levied upon subscribers of a domestic reciprocal insurer liable therefor under the terms of their policies by the attorney upon approval in advance by the subscribers' advisory committee and the Commissioner or by the Commissioner in liquidation of the insurer.
(b) Each subscriber's share of a deficiency for which an assessment is made, but not exceeding in any event his aggregate contingent liability as computed in accordance with Code Section 33-17-24, shall be computed by applying to the premium earned on the subscriber's policy or policies during the period to be covered by the assessment the ratio of the total deficiency to the total premiums earned during the period upon all policies subject to the assessment.
(c) In computing the earned premiums for the purposes of this Code section, the gross premium received by the insurer for the policy shall be used as a base deducting therefrom solely charges not recurring upon the renewal or extension of the policy.
(d) No subscriber shall have an offset against any assessment for which he is liable on account of any claim for unearned premium or losses payable.
Every subscriber of a domestic reciprocal insurer having contingent liability shall be liable for and shall pay his share of any assessment, as computed and limited in accordance with this chapter, if:
(1) While his or her policy is in force or within one year after its termination, he or she is notified by either the attorney or the Commissioner of his or her intentions to levy the assessment; or
(2) If an order to show cause why the receiver, conservator, rehabilitator, or liquidator of the insurer should not be appointed is issued while his or her policy is in force or within one year after its termination.
No one policy or subscriber as to the policy shall be assessed or charged with an aggregate of contingent liability as to obligations incurred by a domestic reciprocal insurer in any one calendar year in excess of the amount provided for in the power of attorney or in the subscriber's agreement computed solely upon premium earned on the policy during that year.
(a) If the assets of a domestic reciprocal insurer are at any time insufficient to discharge its liabilities, other than any liability on account of funds contributed by the attorney or others, and to maintain the required surplus, its attorney shall immediately make up the deficiency or levy an assessment upon the subscribers for the amount needed to make up the deficiency, subject to the limitations set forth in the power of attorney or policy.
(b) If the attorney fails to make up the deficiency or to make the assessment within 30 days after the Commissioner orders him or her to do so or if the deficiency is not fully made up within 60 days after the date the assessment was made, the insurer shall be deemed insolvent and shall be proceeded against as authorized by this title.
(c) If liquidation of an insurer is ordered, an assessment shall be levied upon the subscribers for an amount, subject to limits as provided by this chapter, as the Commissioner determines to be necessary to discharge all liabilities of the insurer, exclusive of any funds contributed by the attorney or other persons but including the reasonable costs of the liquidation.
(a) If a reciprocal insurer has a surplus of assets over all liabilities at least equal to the minimum paid-in capital stock required of a domestic stock insurer authorized to transact like kinds of insurance, upon application of the attorney and as approved by the subscribers' advisory committee, the Commissioner shall issue a certificate authorizing the insurer to extinguish the contingent liability of subscribers under its policies then in force in this state and to omit provisions imposing contingent liability in all policies delivered or issued for delivery in this state for so long as all the surplus remains unimpaired.
(b) Upon impairment of the surplus, the Commissioner shall immediately revoke the certificate. The revocation shall not render subject to contingent liability any policy then in force and for the remainder of the period for which the premium has theretofore been paid but, after revocation, no policy shall be issued or renewed without providing for contingent assessment liability of the subscriber.
(c) The Commissioner shall not authorize a domestic reciprocal insurer so to extinguish the contingent liability of any of its subscribers or in any of its policies to be issued, unless it qualifies to and does extinguish the liability of all its subscribers and in all the policies for all kinds of insurance transacted by it. If required by the laws of another state in which the insurer is transacting insurance as an authorized insurer, the insurer may issue policies providing for the contingent liability of such of its subscribers as may acquire the policies in the state and need not extinguish the contingent liability applicable to policies theretofore in force in the state.
A reciprocal insurer may from time to time return to its subscribers any unused premiums, savings, credits, or profits accruing to their accounts. Any such distribution shall not unfairly discriminate between classes of risks or policies or between subscribers, but the distribution may vary as to classes of subscribers based upon the experience of the subscribers. In no event shall there be any distribution whatsoever by a domestic reciprocal insurer while notes or advances to the minimum surplus required by Code Section 33-17-17 are outstanding, unless the Commissioner shall first approve the distribution.
Upon the liquidation of a domestic reciprocal insurer, its assets remaining after discharges of its indebtedness and policy obligations, the return of any contributions of the attorney or other persons to its surplus made as provided in Code Section 33-17-17, and the return of any unused premiums, savings, or credit then standing on subscribers' accounts shall be distributed to its subscribers who were such within the 12 months prior to the last termination of its certificate of authority, according to such reasonable formula as the Commissioner may approve.
(a) The annual financial statement of a reciprocal insurer shall be made and filed with the Commissioner by its attorney on or before March 1 of each year.
(b) The information required by this title of other insurers doing a like insurance business in this state shall be included in the annual financial statement.
(c) The statement shall be supplemented by such information as may be required by the Commissioner relative to the affairs and transactions of the attorney, insofar as they relate to the reciprocal insurer.
(a) A domestic reciprocal insurer, upon affirmative vote of not less than two-thirds of its subscribers who vote on the merger pursuant to due notice and the approval of the Commissioner of the terms for such merger, may merge with another reciprocal insurer or be converted to a stock or mutual insurer.
(b) Such a stock or mutual insurer shall be subject to the same capital or surplus requirements and shall have the same rights as a like domestic insurer transacting like kinds of insurance.
(c) The Commissioner shall not approve any plan for merger or conversion which is inequitable to subscribers or which, if for conversion to a stock insurer, does not give each subscriber preferential right to acquire stock of the proposed insurer proportionate to his interest in the reciprocal insurer as determined in accordance with Code Section 33-17-28 and a reasonable length of time within which to exercise such right.
(d) Reinsurance of all or substantially all of the insurance in force of a domestic reciprocal insurer in another insurer shall be deemed to be a merger for the purposes of this Code section.
Any attorney who shall exchange any contract or indemnity of the kind and character specified in this chapter or who shall directly or indirectly solicit or negotiate any application for the contracts without first complying with all the provisions of this chapter shall be guilty of a misdemeanor, but the Commissioner may in his discretion and upon such terms and conditions as he may prescribe issue a permit for organizational purposes to continue in force and effect until canceled at the pleasure of the Commissioner.
This chapter shall be known and may be cited as the “Health Care Plan Act.”
It is the purpose and intent of this chapter and the policy of this state to promote and finance quality health care services of demonstrated need, efficiently provided and properly utilized at a reasonable cost, in order to maintain the standing and promote the progress of comprehensive health care services in this state. This chapter shall be construed liberally to promote its humanitarian purposes.
As used in this chapter, the term:
(1) “Beneficiary” or “covered dependent” means a person designated in the subscription certificate or application therefor of a subscriber as entitled to health care service with respect to whom appropriate periodic payments are made, all subject to acceptance by the health care corporation.
(2) “Health care corporation” means a corporation established in accordance with the provisions of this chapter to administer one or more health care plans.
(3) “Health care plan” means a plan or arrangement under which health care services are or may be rendered to a subscriber or a covered dependent or other beneficiary at the expense of a health care corporation in consideration of periodic payments made by the subscriber or another in his or her behalf.
(4) “Health care services” means the examination or treatment of persons for the prevention of illness or the correction or treatment of any physical or mental condition resulting from illness, injury, or other human physical problem and includes but is not limited to:
(A) Hospital services which include the general and usual care, services, supplies, and equipment furnished by hospitals;
(B) Medical services which include the general and usual services and care rendered and administered by doctors of medicine, doctors of dental surgery, and doctors of podiatry; and
(C) Other health care services which include appliances and supplies; nursing care by a registered nurse or a licensed practical nurse; care furnished by such other licensed practitioners as may be expressly approved by the board of directors from time to time; institutional services including the general and usual care, services, supplies, and equipment furnished by health care institutions and agencies or entities other than hospitals; physiotherapy; ambulance services; drugs and medications; therapeutic services and equipment including oxygen and the rental of oxygen equipment; hospital beds; iron lungs; orthopedic services and appliances including wheelchairs, trusses, braces, crutches, and prosthetic devices including artificial limbs and eyes; and any other appliance, supply, or service related to health care.
(5) “Income at risk” means the amount of income earned on an account in which a risk of underwriting loss due to adverse claims experience exists. In the case of any risk account as to which the rate is not established directly by the health care corporation, income at risk shall be the sum total of benefits paid and administrative costs incurred for such account for which the health care corporation has been or will be reimbursed.
(6) “Participating facility” means a hospital, extended care facility, or other facility, institution, agency, or entity providing health care services which agrees in writing with a health care corporation to provide services specified in the subscription contracts issued by the corporation at such rates of compensation as shall be determined by the board of directors of the corporation and which agrees to abide by the bylaws, rules, and regulations of the corporation applicable to participating facilities. A participating facility must be licensed or approved as such by the appropriate agency of this state, some other state, or the federal government or shall meet such requirements as shall be established by the health care corporation if no regulatory license or approval is required.
(7) “Participating physician” means a doctor of medicine licensed to practice medicine or surgery in this state under Chapter 34 of Title 43, a dental surgeon licensed to practice dental surgery in this state under Chapter 11 of Title 43, or a podiatrist licensed to practice podiatry in this state under Chapter 35 of Title 43 who agrees with a health care corporation to perform medical services under the conditions specified in the subscription contracts issued by the corporation.
(8) “Person” means a natural person, a partnership, an association, a common-law trust, or a corporation.
(9) “Provider” means any physician, hospital, or other person who is licensed or otherwise authorized in this state to furnish health care services.
(10) “Subscriber” or “member” means a person to whom a subscriber's certificate is issued by a health care corporation, which certificate sets forth the kinds and extent of the health care services which may be all or a part of the total health care services used by or provided to a subscriber for which the corporation is liable to make total or partial payment.
(11) “Subscriber surplus” means the excess of the admitted assets of a health care corporation over its liabilities as reported in the annual statement filed with the Commissioner.
(12) “Surviving corporation” means a health care corporation which is:
(A) The surviving corporation in a merger which includes one or more health care corporations;
(B) A health care corporation which has amended its articles of incorporation to become a corporation governed by Chapter 2 of Title 14, the “Georgia Business Corporation Code”; or
(C) The subsidiary of a corporation described in subparagraph (A) or (B) of this paragraph.
Health care corporations may be incorporated for the purpose of establishing, maintaining, and operating one or more health care plans, providing administrative or other services to employers or others that offer plans furnishing or reimbursing for health care services, including without limitation establishing, administrating, promoting, and developing programs requested, desired, or sponsored by employers or other groups, and for the other purposes authorized by this chapter.
(a) Any five or more persons, all of whom shall be residents of this state, upon filing a petition with the Secretary of State for a corporate charter as provided in Chapter 3 of Title 14, the “Georgia Nonprofit Corporation Code,” or, if the resulting health care corporation is to be a surviving corporation, Chapter 2 of Title 14, the “Georgia Business Corporation Code,” which petition shall also contain the information required by Chapter 14 of this title, may form a health care corporation under and in conformity with this chapter for the purpose of establishing, maintaining, and operating one or more health care plans, whereby health care services are or may be provided at the expense of the corporation. Other benefits including complete employee welfare and employee benefit programs may be added from time to time as the corporation may determine with the approval of the Commissioner.
(b) A health care corporation shall be subject to regulation and supervision by the Commissioner in the same manner as life insurers are subject to such regulation and supervision and shall be governed by the corporation laws of this state.
The treasurer of a health care corporation shall be required to give a fidelity bond with corporate surety in such sum as may be determined by the directors of the corporation and all funds collected from the subscribers of the corporation shall be deposited to the account of the corporation in a bank which is a state depository.
(a) Except for corporations subject to this chapter which are surviving corporations, a health care corporation may issue contracts only after the Commissioner has authorized it to do so.
(b) Every application for a certificate of authority shall be accompanied by copies of the following documents and information:
(1) A certified copy of its charter or certificate of incorporation;
(2) A copy of its bylaws certified by the lawful custodian of the original;
(3) Proposed contracts between the corporation and participating physicians, participating facilities, or other providers of health care services showing the terms under which health care service is to be furnished to subscribers, beneficiaries, and covered dependents;
(4) A statement of the county or counties in which it proposes to operate health care plans;
(5) A statement of its financial condition and business in such form and detail as the Commissioner may require including the amounts of contributions paid for working capital, the name or names of each contributor, and the terms of such contributions signed and sworn to by its president and secretary or other proper officers. Contributions not paid, but agreed to be paid, may be reported as a separate item but shall not be admitted assets of the corporation; and
(6) Such other documents and information as the Commissioner may reasonably require to be filed.
(a) The Commissioner shall be authorized to issue a certificate of authority in accordance with this chapter and other proper requirements of the Commissioner if the Commissioner is satisfied that:
(1) All items required to be filed are in proper form and meet his approval;
(2) The applicant is established as a bona fide health care corporation;
(3) The services rendered by the corporation are not an unnecessary duplication of similar services in the community served and are desirable for the public necessity and convenience;
(4) The applicant's proposed methods of solicitation of contracts and its proposed conditions or methods of operation appear to be fair and reasonable;
(5) The method of establishing rates charged is fair, reasonable, and adequate and the benefits to be provided are fair and reasonable, provided that rates established in accordance with the applicable provisions of this chapter and Chapter 24 of this title may differ for separate services or classes or kinds of service, including service in different facilities, and between subscribers in different groups if based upon the experience of the group or locality and between subscribers in groups and individual subscribers not in groups; and
(6) The amount provided as working capital is only provided by individuals or groups which have no financial interest in the activities of the health care corporation. Interest charged for working capital, if any, shall be reasonable, shall be subject to the general laws of this state governing permissible rates of interest, and shall be approved by the Commissioner; and payment of interest, if any, and repayment of such working capital shall be permitted only after provision has been adequately made for operating expenses, payments of benefits, and the establishment of required services.
(b) On an application for an original certificate of authority, the Commissioner may, in his discretion, consider and rely upon recommendations of the medical societies, the hospitals, or any other persons in the areas in which the health care corporation proposes to operate.
(a) All certificates of authority shall expire at 12:00 Midnight on June 30 following the date of issuance or renewal. A health care corporation desiring renewal shall file on March 1 preceding expiration a copy of its annual statement as of December 31 of the preceding year in a form approved for current use by the Commissioner, provided that the Commissioner may for good cause grant an extension of time for filing such annual statement not to exceed 60 days. If the health care corporation qualifies therefor its certificate shall be renewed annually; provided, however, that any certificate of authority shall continue in full force and effect until the new certificate is issued or specifically refused.
(b) The Commissioner may amend a certificate of authority at any time to accord with changes in the health care corporation's charter or powers.
The Commissioner may refuse to issue, or after a hearing refuse to renew, or revoke or suspend a health care corporation's certificate of authority in addition to other grounds provided for in this title if the corporation:
(1) Violates any provision of this title other than the provisions of Code Section 33-20-12 as to which refusal, suspension, or revocation is mandatory;
(2) Knowingly fails to comply with any lawful rule, regulation, or order of the Commissioner;
(3) Is found by the Commissioner to be in unsound condition or in such condition as to render its further transaction of business in this state hazardous to its subscribers or to the public;
(4) As a general scheme or plot, without just cause compels claimants to accept less than the amount due them or to bring action against it to secure full payment of claims;
(5) Refuses to be examined or to produce its accounts, records, and files for examination by the Commissioner when required or refuses to furnish such other additional information as the Commissioner may deem advisable to consider the application for renewal of the corporation's certificate of authority;
(6) Fails to pay any final judgment rendered against it in this state within 30 days after the judgment becomes final; or
(7) Is affiliated with and under the same general management or interlocking directorate or ownership as another insurer or person which transacts direct insurance or other business in this state without having a certificate of authority or otherwise being authorized to do so, except as permitted under Chapter 5 of this title.
The Commissioner shall refuse to issue or to renew or shall revoke or suspend a health care corporation's certificate of authority:
(1) If such action is required by any provision of this title; or
(2) If the health care corporation no longer meets the requirements for the authority originally granted on account of deficiency in assets or otherwise.
(a) Health care corporations shall be governed and conducted as corporations and the necessary expenses of administering the affairs of the corporations may be paid from the payments collected from subscribers.
(b) A health care corporation may in its discretion limit the benefits that it will furnish, may divide such benefits as it elects to furnish into classes or kinds, and may furnish different benefits with different kinds or classes of contracts. A health care corporation may also select the hospitals and other participating facilities with which it shall contract and may establish its own standards for approval of such facilities or classes of facilities as it shall determine appropriate, as well as levels of payment which may differ between participating and nonparticipating facilities and different classes of facilities, provided that the contracts shall be fair and reasonable and the standards and levels of payment shall be fair and reasonable and shall not be unfairly discriminatory against any persons or facilities or classes of persons or facilities.
(c) A health care corporation shall establish and maintain at all times proper reserves subject to the approval of the Commissioner in accordance with such standards and requirements as the Commissioner may establish by rule or regulation after any notice and hearing required for unearned subscription fees, for unpaid claims, for unreported claims, and for other known liabilities.
(d) A health care corporation shall at all times maintain a minimum subscriber's surplus of not less than $1 million or such higher amount as the Commissioner may require by rule or regulation after any required notice and hearing for the protection of the subscribers.
(e) A health care corporation shall be required to charge a minimum of one-half of 1 percent of income at risk on all accounts as a contribution towards subscriber's surplus and such funds derived therefrom shall be contributed to such health care corporation's subscriber's surplus under such terms and conditions as the Commissioner may reasonably require by order or regulation after any required notice and hearing, provided that, if the Commissioner determines after notice and hearing that the level of accumulated subscriber's surplus for a health care corporation is in excess of that reasonably required for the protection of the corporation's subscribers, the Commissioner shall have the authority to suspend the operation of this subsection until such time as the corporation's accumulated subscriber's surplus has returned to a level which is adequate for the protection of policyholders but not excessive.
When organized, health care corporations shall be authorized to accept applicants individually or in groups who may become subscribers of the corporation furnishing health care services under a contract which shall entitle each subscriber, beneficiary, and covered dependent to the health care services for such period of time as is provided in the contract.
(a) Every health care corporation shall issue to its subscribers a membership certificate which shall describe the health care plan under which the subscriber is enrolled and shall specify how the holder of such contract may obtain the name or names and addresses of participating providers of health care services upon whom the subscriber shall have the right to call for health care services and the nature of such services. The description in the membership certificate shall be consistent with this chapter and the purposes thereof.
(b) The form, size of type, general arrangement, and contents of the membership certificate shall be subject to the approval of the Commissioner and shall be filed with and approved by him in accordance with Chapter 24 of this title and such rules, regulations, and procedures as the Commissioner may from time to time prescribe.
Every doctor of medicine, every doctor of dental surgery, every podiatrist, and every health care provider within a class approved by the health care corporation who is appropriately licensed to practice and who is reputable and in good standing shall have the right to become a participating physician or approved health care provider for medical or surgical care, or both, as the case may be, under such terms or conditions as are imposed on other participating physicians or approved health care providers within such approved class under similar circumstances in accordance with this chapter.
(a) Any health care corporation organized or operated under this chapter and engaged in the operation of a health care plan may contract with any agency, instrumentality, or political subdivision of the United States of America or of this state for the furnishing of health care services and in aid or furtherance of said contract, may accept, receive, and administer in trust funds directly or indirectly made available by the agency, instrumentality, or political subdivision and, further, any health care corporation may subcontract with any organization which has contracted with any agency, instrumentality, or political subdivision of the United States of America or of this state for the furnishing of medical, hospital, and other health care services, by which subcontract the health care corporation undertakes to furnish the services required by the basic contract.
(b) A health care corporation may enter into contracts with a corporation or association in this state or elsewhere so that reciprocity of benefits may be provided to subscribers; transfer of subscribers from one corporation to another may be effected to conform to the subscriber's place of residence; uniform benefits may be provided for all or for separate categories of employees and the dependents of such employees of corporations and other organizations transacting business in this state or elsewhere and a composite rate, that is, a rate representing the composite experience of the areas involved, may be charged for such employees and their dependents; or hospital or other health care services may be provided for subscribers of the corporation or other corporations or associations by means of risk sharing and other joint undertakings, including reinsurance, which the directors of the corporation may from time to time approve in accordance with the laws of this state. Group master contracts and the contracts issued to subscribers by a corporation subject to this chapter may specify the circumstances under which payments will be made and the rates of such payment to hospitals or other health care providers, wherever located, with which the corporation has no contract for hospital service or other health care service furnished the subscribers and other beneficiaries under the contract.
(c) Each health care corporation may in its discretion receive and accept from governmental agencies payment covering all or part of the cost to provide health care services for needy or other persons. Each health care corporation may in its discretion receive and accept payments from private agencies, corporations, associations, groups of individuals, or others covering all or part of the cost of subscriptions to provide health care service for needy and other persons.
(a) Health care corporations shall have the right to sell contracts providing for the payment of specified charges made by participating physicians furnishing medical or surgical care, or both, to the holders of such contracts, their beneficiaries, and covered dependents as provided for in this Code section.
(b) The contracts shall not in any manner restrict the right of the holder to obtain the services of any physician nor shall such contracts attempt to control the relationship existing between any holder or beneficiary of any such contract and his physician.
(c) The private physician-patient relationship shall be maintained, and a subscriber shall at all times have free choice of any physician or of any health care provider or facility within a class approved by the corporation in accordance with this chapter; provided, however, that nothing contained in this Code section shall be deemed to prohibit the use of either a group of participating physicians or approved health care providers and representatives of approved facilities which have been approved by the medical societies in the county or counties in which corporations operate to review charges made by physicians or other providers of health care services participating in the plan so as to ensure that the charges do not exceed the usual, customary, and reasonable charges made by other physicians or other providers of health care services for similar services and that such services are necessary and do not involve unnecessary utilization of services or facilities.
(d) No provision of this chapter shall be construed as authorizing the corporate practice of medicine; and health care corporations shall not practice medicine. No physician rendering service or called on to render service to a member, beneficiary, or covered dependent and no other provider of health care services shall be construed to be an agent or employee of such corporation; and such corporation shall not be liable for the negligence, misfeasance, malfeasance, or nonfeasance of any provider of health care services or of any physician rendering medical or surgical services to any member, beneficiary, or covered dependent.
Health care corporations shall be subject to regulation and supervision by the Commissioner and shall be required to pay any fees and taxes, including premium taxes, as are now or may hereafter be required of life insurers under this title in accordance with Chapters 2, 3, 8, and 12 of this title and the other applicable provisions of this title.
Except for corporations subject to this chapter which are surviving corporations, health care corporations shall before accepting applications from subscribers in a nonprofit health care plan submit to the Commissioner a plan of operating and overhead expenses, operation cost, and salaries paid or to be paid during any current year together with a schedule of its rates to be charged and the amount of health care service contracted to be rendered, which plan, rates, and amount of service shall be first approved by the Commissioner as fair and reasonable before the corporation shall engage in business.
Except for corporations subject to this chapter which are surviving corporations, the Commissioner shall first approve the rates of payment to be made by health care corporations to providers of health care services on behalf of said corporation, its subscribers, beneficiaries, and covered dependents as being fair and reasonable before said corporation shall engage in business.
Health care corporations shall invest in or lend their funds on security of and shall hold as invested assets only such assets as are authorized by Articles 1 and 3 of Chapter 11 of this title for the investments of assets of domestic insurance companies and such investments shall be subject to the same requirements, conditions, restrictions, and limitations as are applicable to the investments by such insurers.
Every health care corporation shall keep complete books and records in accordance with the requirements of the Commissioner showing all funds collected and disbursed. All books and records shall be subject to examination by the Commissioner in accordance with Chapter 2 of this title applicable to life insurers and the expenses of the examination borne by said corporation.
Every health care corporation shall on or before March 1 in each year after it shall have commenced to do business pursuant to a certificate of authority make and file with the Commissioner a report of its affairs and operations during the year ending December 31 of the preceding year. The annual report shall be made in such form and contain such information as the Commissioner may by regulation from time to time prescribe and require in protecting the public interest and the interest of the subscribers of any health care corporation. The Commissioner may by regulation require such additional periodic reports as he may from time to time prescribe as necessary or appropriate to protect the policyholders and the public and to ensure the solvency of any health care corporation. The Commissioner may require that the reports be verified under oath by such appropriate officers or agents as he may designate by regulation and may require the reports to be published. Compliance with this Code section shall be a condition to the renewal of a certificate of authority under Code Section 33-20-10.
Any and all supervision, conservation, rehabilitation, liquidation, or examination of the affairs of any corporation by the Commissioner shall be at the expense of the corporation.
The Commissioner shall have the authority to take appropriate actions authorized by this title for the protection of a health care corporation's subscribers and the public health and welfare, including but not limited to those authorized in Code Section 33-2-24, and shall have authority to institute civil actions and other appropriate proceedings authorized by and in accordance with Chapter 37 of this title to conserve the assets of, rehabilitate, or liquidate a health care corporation organized under or subject to this chapter in the same manner and under the same conditions and causes applicable to domestic life insurers under Chapter 37 of this title.
(a) The Commissioner may after a hearing impose upon a health care corporation an administrative fine if he finds that the corporation through the acts of its officers, employees, agents, or representatives has with such frequency as to indicate its general business practice in this state:
(1) Refused without just cause to pay proper claims arising under coverage provided by its contracts whether the claim is in favor of a subscriber or in favor of any other person entitled to the proceeds of a contract; or
(2) Compelled without just cause subscribers, claimants, or other persons entitled to the proceeds of its contracts in this state to accept less than the amount due them or to bring action against the corporation to secure full payment or settlement of their claims.
(b) The administrative fine imposed for violations set forth in paragraph (1) or (2) of subsection (a) of this Code section shall not exceed $1,000.00 for each act of misconduct constituting a violation; provided, however, that a fine of not more than $5,000.00 for each act of willful misconduct constituting a violation may be imposed.
Whenever the Commissioner finds after investigation that an organizer, agent, or solicitor of a health care corporation has unfairly or improperly solicited subscription certificates by misrepresenting the terms of the certificates or has engaged in any other unfair or deceptive practice, or for any reason is incompetent to serve as an organizer, agent, or solicitor, or that his or her services are not, in fact, needed, he or she shall order such corporation to dispense with the services and the organizer, agent, or solicitor of the corporation. The corporation shall be subject to the fines, penalties, and provisions of Chapter 6 of this title and Code Section 33-2-24 that are applicable to life insurers and their agents and that are not inconsistent with this chapter.
It shall be unlawful for any person except a health care corporation established in accordance with this chapter and operating in accordance with authority from the Commissioner to establish, maintain, or operate a health care plan or to solicit subscribers to or enter into contracts with respect to a health care plan, provided that nothing in this chapter shall be construed as preventing a person from furnishing medical services for the prevention of disease among his employees or from furnishing such medical services as are required under the workers' compensation law or other laws of this state, as preventing any duly licensed insurance company from writing medical indemnity insurance or otherwise operating in accordance with this title, as preventing any duly authorized corporation from operating in accordance with Chapter 18 or 19 of this title, or as preventing any other duly authorized person or entity from operating in accordance with any other provisions of this title.
Any dispute arising within the purview of this chapter with reference to the regulation and supervision of any health care corporation shall within 30 days after such dispute arises be submitted by the aggrieved person to the Commissioner for his decision with reference thereto, provided nothing in this Code section shall authorize or require the Commissioner to determine the contractual rights between the parties interested in any such corporations. After proper notice and hearing, any decisions and order of the Commissioner made pursuant to this chapter shall be binding on the persons involved unless set aside on review as provided by this Code section.
Except for corporations subject to this chapter which are surviving corporations, this chapter shall not apply to nor govern any corporation which is organized for profit or which contemplates any pecuniary gain to its shareholders or members. A corporation subject to this chapter may organize subsidiary or affiliated corporations to engage in allied business ventures in accordance with Chapters 13 and 14 of this title.
Except where the context otherwise requires, the applicable provisions of Title 14 shall govern a health care corporation. A health care corporation shall not be considered to be a corporation described in paragraph (2) of subsection (a) of Code Section 14-3-1302. All of the provisions of this title which are not in conflict with this chapter shall be applicable to any health care corporation subject to such modifications as the Commissioner may prescribe by order, directive, interpretation, guideline, or rule or regulation after any notice and hearing as may be required by this title.
(a) No reserved funds as defined in subsection (b) of this Code section or surplus of such nonprofit health care corporation as increased pursuant to the charge required in subsection (e) of Code Section 33-20-13 shall be distributed or paid to any person as a part of any plan of conversion of a nonprofit health care corporation to a for profit health care corporation.
(b) For the purposes of this Code section, “reserved funds” means those funds as described and defined in subsection (c) of Code Section 33-20-13 and any unassigned funds.
(c) A health care corporation which issues shares in connection with an initial public offering shall first offer such shares to its subscribers on similar terms as such shares are offered to the public consistent with applicable federal law and regulations.
(d) No options, warrants, or fees shall be paid to any officer, director, or trustee of a nonprofit health care corporation in connection with a conversion from a nonprofit to a for profit health care corporation or in regard to the initial public offering of a health care corporation.
(e) A health care corporation shall be required to pay any and all fees, taxes, including premium taxes, and assessments, specifically excluding assessments with respect to the Georgia Life and Health Insurance Guaranty Association, as are required of other companies which provide life and accident and sickness insurance under Georgia law.
(f) A health care corporation, including a surviving corporation, subject to this chapter shall be subject to all the provisions of this title not otherwise provided for in this chapter which are applicable to other insurers which provide life or accident and sickness insurance.
(g) Any distribution of surplus funds by a surviving corporation shall be subject to regulation by the Commissioner pursuant to the provisions of this title governing distributions by insurers which provide life or accident and sickness insurance and shall in no event cause the surplus funds of the surviving corporation to be less than that of the predecessor corporation as of the date of the conversion, unless the Commissioner finds that such distribution is in the public interest.
(a)(1) Any health care corporation which is governed generally by Chapter 3 of Title 14, the “Georgia Nonprofit Corporation Code,” and authorized under this chapter may merge with, or amend its articles of incorporation to become, a corporation governed by Chapter 2 of Title 14, the “Georgia Business Corporation Code,” provided a detailed, written plan is submitted to the Commissioner for such conversion, written notice of such submission is given to the Attorney General, and, after a public hearing thereon, such plan is approved by the Commissioner after being found to be in the best interest of the company, its policyholders, and the general public.
(2) In any such public hearing, the Attorney General may appear before the Commissioner and make such presentation as he or she shall deem to be in the public's interest. The Attorney General shall provide representation to the Commissioner in any other legal action relating thereto. Nothing in this Code section shall be construed as a limitation upon the Attorney General in providing legal representation to the Commissioner during the pendency of any decision concerning conversion.
(b) The Commissioner may promulgate rules and regulations which are necessary to implement the provisions of this Code section.
This article shall be known and may be cited as the “Patient Protection Act of 1996.”
(a) The General Assembly finds and declares that it is a vital government concern that the citizens of the State of Georgia have access to quality health care services and that informed consumers will be better able to identify and select plans that offer quality health care services if they are provided specific information before they enroll in health care plans. As the health care market becomes increasingly dominated by health care plans that use managed care techniques that include decisions as to the appropriateness of care, the General Assembly finds and declares that it is a vital government function to protect patients from managed care practices which have the effect of denying or limiting appropriate care. The General Assembly further finds that it is the public policy of the State of Georgia that physicians and health care providers be encouraged to advocate for medically appropriate health care for their patients.
(b) To achieve these ends, the General Assembly declares it necessary for the Commissioner of Insurance to certify qualified managed care plans to conduct business in the State of Georgia and for the Commissioner of Insurance to establish standards for such certification.
As used in this article, the term:
(1) “Emergency services” or “emergency care” means those physical or mental health care services that are provided for a condition of recent onset and sufficient severity, including, but not limited to, severe pain, regardless of the initial, interim, final, or other diagnoses that are given, that would lead a prudent layperson, possessing an average knowledge of medicine and health, to believe that his or her condition, sickness, or injury is of such a nature that failure to obtain immediate medical care could result in:
(A) Placing the patient's health in serious jeopardy;
(B) Serious impairment to bodily functions; or
(C) Serious dysfunction of any bodily organ or part.
(2) “Enrollee” means an individual who has elected to contract for or participate in a managed care plan for that individual or for that individual and that individual's eligible dependents.
(3) “Facility” means a hospital, ambulatory surgical treatment center, birthing center, diagnostic and treatment center, hospice, or similar institution for examination, diagnosis, treatment, surgery, or maternity care but does not include physicians' or dentists' private offices and treatment rooms in which such physicians or dentists primarily see, consult with, and treat patients.
(4) “Health benefit plan” has the same meaning as provided in Code Section 33-24-59.5.
(5) “Health care provider” or “provider” means any physician, dentist, podiatrist, pharmacist, optometrist, psychologist, clinical social worker, advanced practice nurse, registered optician, licensed professional counselor, physical therapist, marriage and family therapist, chiropractor, athletic trainer qualified pursuant to Code Section 43-5-8, occupational therapist, speech language pathologist, audiologist, dietitian, or physician assistant.
(6) “Home health care provider” means any provider or agency that provides health care services in a patient's home including the supply of durable medical equipment for use in a patient's home.
(7) “Limited utilization incentive plan” means any compensation arrangement between the plan and a health care provider or provider group that has the effect of reducing or limiting services to patients.
(8) “Managed care contractor” means a person who:
(A) Establishes, operates, or maintains a network of participating providers;
(B) Conducts or arranges for utilization review activities; and
(C) Contracts with an insurance company, a hospital or medical service plan, an employer, an employee organization, or any other entity providing coverage for health care services to operate a managed care plan.
(9) “Managed care entity” includes an insurance company, hospital or medical service plan, hospital, health care provider network, physician hospital organization, health care provider, health maintenance organization, health care corporation, employer or employee organization, or managed care contractor that offers a managed care plan.
(10) “Managed care plan” means a major medical, hospitalization, or dental plan that provides for the financing and delivery of health care services to persons enrolled in such plan through:
(A) Arrangements with selected providers to furnish health care services;
(B) Explicit standards for the selection of participating providers; and
(C) Cost savings for persons enrolled in the plan to use the participating providers and procedures provided for by the plan; provided, however, that the term “managed care plan” does not apply to Chapter 9 of Title 34, relating to workers' compensation.
(11) “Nonurgent procedure” means any nonemergency or elective care that can be scheduled at least 24 hours prior to the service without posing a significant threat to the patient's health or well-being.
(12) “Out of network” or “point of service” refers to health care items or services provided to an enrollee by providers who do not belong to the provider network in the managed care plan.
(13) “Patient” means a person who seeks or receives health care services under a managed care plan.
(14) “Precertification” or “preauthorization” means any written or oral determination made at any time by an insurer or any agent thereof that an enrollee's receipt of health care services is a covered benefit under the applicable plan and that any requirement of medical necessity or other requirements imposed by such plan as prerequisites for payment for such services have been satisfied. “Agent” as used in this paragraph shall not include an agent or agency as defined in Code Section 33-23-1.
(15) “Qualified managed care plan” means a managed care plan that the Commissioner certifies as meeting the requirements of this article.
(16) “Verification of benefits” means any written or oral determination by an insurer or agent thereof of whether given health care services are a covered benefit under the enrollee's health benefit plan without a determination of precertification or preauthorization as to such services. “Agent” as used in this paragraph shall not include an agent or agency as defined in Code Section 33-23-1.
(a) In addition to other requirements of law, prior to offering a managed care plan to any resident in Georgia, a managed care entity must first obtain a certificate from the Commissioner of Insurance indicating that such managed care plan meets the requirements of this article. The Commissioner may impose such costs, by rule or regulation, on managed care entities as deemed necessary to carry out the provisions of this article.
(b) The Commissioner shall establish procedures for the periodic review and recertification of qualified managed care plans.
(c) The Commissioner shall terminate the certification of a qualified managed care plan, revoke or suspend the license of a managed care entity, or in lieu thereof impose a monetary penalty in accordance with Chapter 2 of this title, if the Commissioner determines that such plan no longer meets the applicable requirements for certification or violates any provision of this article. Before effecting any such sanction, the Commissioner shall provide the plan with notice and opportunity for a hearing on the proposed sanctions. Nothing in this Code section shall be construed as precluding other remedies at law.
(d) The Commissioner shall establish a process for certification through alternative methods providing that:
(1) An eligible organization, as defined in Section 1876(b) of the federal Social Security Act, 1 shall be deemed to meet the requirements of subsections (a) and (b) of this Code section for certification as a qualified managed care plan; or
(2) If the Commissioner finds that a national accreditation body has established requirements for accreditation of a managed care entity which offers a managed care plan that are at least equivalent to the requirements established under this article and that the eligible organization and its plans comply with the requirements of such national accreditation body, then such organization and its plans shall be deemed to meet the requirements of subsections (a) and (b) of this Code section.
1 42 U.S.C.A. § 1395mm(b).
The Commissioner shall establish standards for the certification of qualified managed care plans that conduct business in this state. Such standards must include the following provisions:
(1) DISCLOSURE TO ENROLLEES AND PROSPECTIVE ENROLLEES.
(A) A managed care entity shall disclose to enrollees and prospective enrollees who inquire as individuals into a plan or plans offered by the managed care entity the information required by this paragraph. In the case of an employer negotiating for a health care plan or plans on behalf of his or her employees, sufficient copies of disclosure information shall be made available to employees upon request. Disclosure of information under this paragraph shall be readable, understandable, and on a standardized form containing information regarding all of the following for each plan it offers:
(i) The health care services or other benefits under the plan offered as well as limitations on services, kinds of services, benefits, or kinds of benefits to be provided, which disclosure may also be published on an Internet service site made available by the managed care entity at no cost to such enrollees;
(ii) Rules regarding copayments, prior authorization, or review requirements including, but not limited to, preauthorization review, concurrent review, postservice review, or postpayment review that could result in the patient's being denied coverage or provision of a particular service;
(iii) Potential liability for cost sharing for out-of-network services, including, but not limited to, providers, drugs, and devices or surgical procedures that are not on a list or a formulary;
(iv) The financial obligations of the enrollee, including premiums, deductibles, copayments, and maximum limits on out-of-pocket expenses for items and services (both in and out of network);
(v) The number, mix, and distribution of participating providers. An enrollee or a prospective enrollee shall be entitled to a list of individual participating providers upon request, and the list of individual participating providers shall also be updated at least every 30 days and may be published on an Internet service site made available by the managed care entity at no cost to such enrollees;
(vi) Enrollee rights and responsibilities, including an explanation of the grievance process provided under this article;
(vii) An explanation of what constitutes an emergency situation and what constitutes emergency services;
(viii) The existence of any limited utilization incentive plans;
(ix) The existence of restrictive formularies or prior approval requirements for prescription drugs. An enrollee or a prospective enrollee shall be entitled, upon request, to a description of specific drug and therapeutic class restrictions;
(x) The existence of limitations on choices of health care providers;
(xi) A statement as to where and in what manner additional information is available;
(xii) A statement that a summary of the number, nature, and outcome results of grievances filed in the previous three years shall be available for inspection. Copies of such summary shall be made available at reasonable costs; and
(xiii) A summary of any agreements or contracts between the managed care plan and any health care provider or hospital as they pertain to the provisions of Code Sections 33-20A-6 and 33-20A-7. Such summary shall not be required to include financial agreements as to actual rates, reimbursements, charges, or fees negotiated by the managed care plan and any health care provider or hospital; provided, however, that such summary may include a disclosure of the category or type of compensation, whether capitation, fee for service, per diem, discounted charge, global reimbursement payment, or otherwise, paid by the managed care plan to each class of health care provider or hospital under contract with the managed care plan.
(B) Such information shall be disclosed to each enrollee under this article at the time of enrollment and at least annually thereafter.
(C) Any managed care plan licensed under Chapter 21 of this title is deemed to have met the certification requirements of this paragraph.
(D) A managed care entity which negotiates with a primary care physician to become a health care provider under a managed care plan shall furnish that physician, beginning on and after January 1, 2001, with a schedule showing fees payable for common office based services provided by such physicians under the plan;
(2) ACCESS TO SERVICES.A managed care entity must demonstrate that its plan:
(A) Makes benefits available and accessible to each enrollee electing the managed care plan in the defined service area with reasonable promptness and in a manner that promotes continuity in the provision of health care services, including continuity in the provision of health care services after termination of a physician's contract as provided in Code Section 33-20A-61;
(B) When medically necessary provides health care services 24 hours a day and seven days a week;
(C) Provides payment or reimbursement for emergency services and out-of-area services; and
(D) Complies with the provisions of Code Section 33-20A-9.1 relating to nomination and reimbursement of out of network health care providers and hospitals; and
(3) QUALITY ASSURANCE PROGRAM.A managed care plan shall comply with the following requirements:
(A) A managed care plan must have arrangements, established in accordance with regulations of the Commissioner, for an ongoing quality assurance program for health care service it provides to such individuals; and
(B) The quality assurance program shall:
(i) Provide for a utilization review program which, in addition to the requirements of Chapter 46 of this title:
(I) Stresses health outcomes;
(II) Provides for the establishment of written protocols for utilization review, based on standards of the relevant health care profession;
(III) Provides review by physicians and appropriate health care providers of the process followed in the provision of such health care services;
(IV) Monitors and evaluates high volume and high risk services and the care of acute and chronic conditions;
(V) Evaluates the continuity and coordination of care that enrollees receive; and
(VI) Has mechanisms to detect both underutilization and overutilization of services; and
(ii) Establish a grievance procedure which provides the enrollee with a prompt and meaningful hearing on the issue of denial, in whole or in part, of a health care treatment or service or claim therefor. Such hearing shall be conducted by a panel of not less than three persons, at least one member of which shall be a physician other than the medical director of the plan and at least one member of which shall be a health care provider competent by reason of training and licensure in the treatment or procedure which has been denied. The enrollee shall be provided prompt notice in writing of the outcome of the grievance procedure. In the event the outcome of the grievance is favorable to the enrollee, appropriate relief shall be granted without delay. In the event the outcome is adverse to the enrollee, the notice shall include specific findings related to the care, the policies and procedures relied upon in making the determination, the physician's and provider's recommendations, including any recommendations for alternative procedures or services, and a description of the procedures, if any, for reconsideration of the adverse decision.
(a) A managed care plan may not use a financial incentive or disincentive program that directly or indirectly compensates a health care provider or hospital for ordering or providing less than medically necessary and appropriate care to his or her patients or for denying, reducing, limiting, or delaying such care. Nothing in this Code section shall be deemed to prohibit a managed care entity from using a capitated payment arrangement consistent with the intent of this Code section.
(b) A managed care plan shall make full and timely payment or reimbursement to any health care provider or hospital in the same manner and subject to the same penalties as required of insurers for group accident and sickness insurance policies under paragraph (5) of subsection (b) of Code Section 33-30-6.
(a) No health care provider may be penalized for considering, studying, or discussing medically necessary or appropriate care with or on behalf of his or her patient.
(b) No health care provider may be penalized by a managed care plan for providing testimony, evidence, records, or any other assistance to an enrollee who is disputing a denial, in whole or in part, of a health care treatment or service or claim therefor.
(c) A finding of a violation of this Code section or Code Section 33-20A-6 by a managed care plan shall constitute an unfair trade practice punishable under Article 1 of Chapter 6 of this title.
(a)(1) The provisions of this chapter shall apply to any managed care plan offered pursuant to Article 1 of Chapter 18 of Title 45 and to any managed care plan offered by any managed care entity.
(2) When an enrollee, provider, facility, or home health care provider calls during regular business hours to request verification of benefits from a managed care plan, the caller shall have the clear and immediate option to speak to an employee or agent of such managed care plan who shall advise the caller that:
(A) Such verification is only a determination of whether given health care services are a covered benefit under the health benefit plan and is not a guarantee of payment for those services; and
(B) If the health care services so verified are a covered benefit, whether precertification is required and the phone number to request precertification.
(3) If a managed care plan provides verification of benefits after regular business hours or by electronic or recorded means, the enrollee, provider, facility, or home health care provider making the request shall be provided by either electronic or recorded means or, at the option of the insurer, by a live person the information required in subparagraphs (A) and (B) of paragraph (2) of this subsection.
(b) When an enrollee, provider, facility, or home health care provider obtains precertification for any covered health care service, the managed care plan is liable for such precertified services at the reimbursement level provided under the health benefit plan for such services where rendered within the time limits set in the precertification unless the enrollee is no longer covered under the plan at the time the services are received by the enrollee, benefits under the contract or plan have been exhausted, or there exists substantiation of fraud by the enrollee, provider, facility, or home health care provider.
(c) Any managed care plan which requires precertification shall have sufficient personnel available 24 hours a day, seven days a week, to provide such precertifications for all procedures, other than nonurgent procedures; to advise of acceptance or rejection of such request for precertification; and to provide reasons for any such rejection. Such acceptance or rejection of a precertification request may be provided through a recorded or computer generated communication, provided that the individual requesting precertification has the clear and immediate option to speak to an employee or representative of the managed care plan capable of providing information about the precertification request.
Each managed care plan shall establish procedures to safeguard the privacy of individually identifiable patient information and to maintain accurate and timely records for patients.
Every managed care plan shall include provisions that:
(1)(A) In the event that a patient seeks emergency services and if necessary in the opinion of the emergency health care provider responsible for the patient's emergency care and treatment and warranted by his or her evaluation, such emergency provider may initiate necessary intervention to stabilize the condition of the patient without seeking or receiving prospective authorization by the managed care entity or managed care plan. No managed care entity or private health benefit plan may subsequently deny payment for an evaluation, diagnostic testing, or treatment provided as part of such intervention for an emergency condition. For purposes of this Code section, the term “emergency health care provider” includes without limitation an emergency services provider and a licensed ambulance service providing 911 emergency medical transportation.
(B) No managed care entity or private health benefit plan which has given prospective authorization after the stabilization of a person's condition for an evaluation, diagnostic testing, or treatment may subsequently deny payment for the provision of such evaluation, diagnostic testing, or treatment. An acknowledgment of an enrollee's eligibility for benefits by the managed care entity or private health benefit plan shall not, by itself, be construed as a prospective authorization for the purposes of this Code section.
(C) If in the opinion of the emergency health care provider, a patient's condition has stabilized and the emergency health care provider certifies that the patient can be transported to another facility without suffering detrimental consequences or aggravating the patient's condition, the patient may be relocated to another facility which will provide continued care and treatment as necessary; and
(2) When a managed care plan uses a restrictive formulary for prescription drugs, such use shall include a written procedure whereby patients can obtain, without penalty and in a timely fashion, specific drugs and medications not included in the formulary when:
(A) The formulary's equivalent has been ineffective in the treatment of the patient's disease or condition; or
(B) The formulary's drug causes or is reasonably expected to cause adverse or harmful reactions in the patient.
(a) It is the intent of the General Assembly to allow citizens to have the right to choose their own health care providers and hospitals with as few mandates from government and business as possible. It is also the intent to allow these choices with minimal additional cost to any business or consumer in this state.
(b) As used in this Code section, the term “consumer choice option” means a plan for health care delivery which grants enrollees a right to receive covered services outside of any plan provider panel and under the terms and conditions of the plan.
(c) Except for managed care plans offering a consumer choice option under subparagraph (d)(2)(C) of this Code section, every managed care plan offered by a managed care entity shall offer a separate consumer choice option to enrollees at least annually with the following provisions:
(1) Every enrollee of a managed care plan shall have the right to nominate one or more out of network health care providers or hospitals for use by that enrollee and that enrollee's eligible dependents, if:
(A) Such health care provider or hospital is located within and licensed by the state;
(B) Such health care provider or hospital agrees to accept reimbursement from both the plan and the enrollee at the rates and on the terms and conditions applicable to similarly situated participating providers and hospitals. The reimbursement rates for the plan may be proportionally reduced from those paid to participating providers if the cost-sharing provisions in paragraph (3) of subsection (d) of this Code section are utilized in the consumer choice option;
(C) Such health care provider or hospital agrees to adhere to the managed care plan's quality assurance requirements and to provide the plan with necessary medical information related to such care; and
(D) Such health care provider or hospital meets all other reasonable criteria as required by the managed care plan of in network providers and hospitals; and
(2) Each nominated health care provider or hospital which meets the requirements of subparagraphs (A), (B), (C), and (D) of paragraph (1) of this subsection shall be reimbursed by the plan, subject to the agreement in subparagraph (B) of paragraph (1) of this subsection, as though it belonged to the managed care plan's provider network. Such reimbursement shall be full and final payment for the health care services provided to the enrollee and no health care provider or hospital shall bill the enrollee for any portion of a payment exclusive of the requirements of subparagraph (B) of paragraph (1) of this subsection.
(d)(1) An enrollee who selects the consumer choice option shall be responsible for any increases in premiums and cost sharing associated with the option; provided, however, that any differential in cost sharing as provided in paragraph (3) of this subsection shall only apply when the enrollee goes out of network.
(2) Any increases in premiums for the consumer choice option shall be limited as follows:
(A) For health benefit plans offered by health maintenance organizations under Chapter 21 of this title, the managed care entity may offer both of the following options, but must offer either:
(i) The actuarial basis of the option taking into account administrative and other costs associated with the exercise of this option or a 17.5 percent increase in premium over the plan without the option, whichever is less; or
(ii) The actuarial basis of the option with cost sharing as provided under paragraph (3) of this subsection taking into account administrative and other costs associated with the exercise of this option or a 15 percent increase in premium over the plan without the option and with cost sharing as provided under paragraph (3) of this subsection, whichever is less;
(B) For all other managed care plans under this chapter, the managed care entity may offer both of the following options, but must offer either:
(i) The actuarial basis of the option taking into account administrative and other costs associated with the exercise of this option or a 10 percent increase in premium over the plan without the option, whichever is less; or
(ii) The actuarial basis of the option with cost sharing as provided under paragraph (3) of this subsection taking into account administrative and other costs associated with the exercise of this option or a 7.5 percent increase in premium over the plan without the option and with cost sharing as provided under paragraph (3) of this subsection, whichever is less;
(C) Notwithstanding subparagraph (B) of this paragraph, for all other managed care plans under this chapter, a health benefit plan may offer at no additional premiums or cost sharing a preferred provider organization network plan under Article 2 of Chapter 30 of this title, which plan contains standards for participating providers and hospitals which:
(i) Meets the requirements of subparagraphs (A), (C), and (D) of paragraph (1) of subsection (c) of this Code section; and
(ii) Includes only health care providers and hospitals which agree to accept the reimbursement from both the plan and the enrollee at the rates and on the terms and conditions applicable to similarly situated participating providers and hospitals and under any cost-sharing conditions required of other similarly situated preferred providers, which reimbursement shall be accepted as full and final payment for the covered health care services provided to the enrollee and no preferred provider shall bill the enrollee for any portion of a payment exclusive of the requirements of this subparagraph.
Managed care plans offering the preferred provider organization network plan under this subparagraph shall not place capacity limits on the number or classes of providers authorized to be preferred providers except where the services regularly performed by a particular class of providers are not covered services within the scope of the health benefit plan or plans offered by the managed care plan pursuant to Article 2 of Chapter 30 of this title. This subparagraph shall not supersede any other requirement of this title regarding the coverage of a certain class or classes of providers.
(3) Except as provided in subparagraph (C) of paragraph (2) of this subsection for a consumer choice option without cost sharing, any increases in cost sharing for the consumer choice option, as compared to in network cost sharing, shall be limited as follows:
(A) If deductibles are used in network, any deductibles in the consumer choice option shall not exceed a 20 percent difference between in and out of network; provided, however, that deductibles cannot be accumulated separately between in network and out of network;
(B) If copayments are used in network, any copayments in the consumer choice option shall not exceed a 20 percent difference between in and out of network;
(C) In all cases, any coinsurance in the consumer choice option shall not exceed 10 percentage points difference between in and out of network; and
(D) In all cases, the maximum differential for out-of-pocket expenditures of the consumer choice option shall not exceed 20 percent as compared to in network; provided, however, that out-of-pocket expenditures cannot be accumulated separately between in network and out of network. Further, all cost sharing that is counted toward the out-of-pocket limit for the consumer choice option shall be the same as that counted toward the in network plan.
(4) After 12 months of full implementation, the pricing of the consumer choice option may be reevaluated to consider actual costs incurred and the experience of the standard plan without the option as compared to the consumer choice option. Based on an independent actuarial evaluation of such actual costs incurred and experience, managed care entities may apply for a waiver of the cost provisions of paragraphs (2) and (3) of this subsection to the Insurance Commissioner's office.
(e) The consumer choice option shall have substantially the same covered benefits as the managed care plan without the option.
(f) For an enrollee who chooses the consumer choice option, the managed care entity shall provide such enrollee with a form to be completed by the enrollee nominated health care provider or hospital. This form shall indicate such health care provider's or hospital's agreement to accept reimbursement as provided in subparagraph (c)(1)(B) of this Code section and such health care provider's or hospital's agreement to adhere to the quality assurance requirements and other reasonable criteria of the plan as provided in subparagraphs (c)(1)(C) and (c)(1)(D) of this Code section. The form required by this subsection shall be one page, shall be signed and dated by the nominated health care provider or hospital, and shall be mailed to the managed care entity at the address indicated on the form. In a timely manner and upon receipt of such form from a nominated health care provider or hospital, the plan shall indicate acceptance of the health care provider or hospital and provide any necessary information to the health care provider or hospital including but not limited to a complete copy of the reimbursement terms, quality assurance requirements, and any other reasonable criteria required by the managed care plan of in network health care providers and hospitals. The plan may refuse to approve for reimbursement an enrollee nominated health care provider or hospital only upon a showing by clear and convincing evidence that the health care provider or hospital does not meet the requirements of paragraph (1) of subsection (c) of this Code section.
Nothing in this article shall apply to Chapter 9 of Title 34, relating to workers' compensation.
This article shall be known and may be cited as the “Patient's Right to Independent Review Act.”
As used in this article, the term:
(1) “Addictive disease” has the same meaning as in Code Section 37-1-1.
(1.1) “Department” means the Department of Insurance.
(2) “Eligible enrollee” means a person who:
(A) Is an enrollee or an eligible dependent of an enrollee of a managed care plan or was an enrollee or an eligible dependent of an enrollee of such plan at the time of the request for treatment;
(B) Seeks a treatment which reasonably appears to be a covered service or benefit under the enrollee's evidence of coverage; provided, however, that this subparagraph shall not apply if the notice from a managed care plan of the outcome of the grievance procedure was that a treatment is experimental; and
(C) Is not a Medicaid care management member.
(2.1) “Generally accepted standards of mental health or substance use disorder care” means evidence based independent standards of care and clinical practice that are generally recognized by health care providers practicing in relevant clinical specialties such as psychiatry, psychology, clinical sociology, addiction medicine and counseling, and behavioral health treatment. Valid, evidence based sources reflecting generally accepted standards of mental health or substance use disorder care may include peer reviewed scientific studies and medical literature, consensus guidelines and recommendations of nonprofit health care provider professional associations and specialty societies, and nationally recognized clinical practice guidelines, including, but not limited to, patient placement criteria and clinical practice guidelines; guidelines or recommendations of federal government agencies; and drug labeling approved by the United States Food and Drug Administration.
(3) “Grievance procedure” means the grievance procedure established pursuant to Code Section 33-20A-5.
(4) “Independent review organization” means any organization certified as such by the department under Code Section 33-20A-39.
(5) “Medicaid care management member” means a recipient of medical assistance, as that term is defined in paragraph (7) of Code Section 49-4-141, and shall also include a child receiving health care benefits pursuant to Article 13 of Chapter 5 of Title 49.
(6) “Medical and scientific evidence” means:
(A) Peer reviewed scientific studies published in or accepted for publication by medical journals that meet nationally recognized requirements for scientific manuscripts and that submit most of their published articles for review by experts who are not part of the editorial staff;
(B) Peer reviewed literature, biomedical compendia, and other medical literature that meet the criteria of the National Institutes of Health's National Library of Medicine for indexing in Index Medicus, Excerpta Medicus (EMBASE), Medline, and MEDLARS data base or Health Services Technology Assessment Research (HSTAR);
(C) Medical journals recognized by the United States secretary of health and human services, under Section 1861(t)(2) of the Social Security Act; 1
(D) The following standard reference compendia: the American Hospital Formulary Service-Drug Information, the American Medical Association Drug Evaluation, the American Dental Association Accepted Dental Therapeutics, and the United States Pharmacopoeia-Drug Information; or
(E) Findings, studies, or research conducted by or under the auspices of federal government agencies and nationally recognized federal research institutes including the Federal Agency for Health Care Policy and Research, National Institutes of Health, National Cancer Institute, National Academy of Sciences, the Centers for Medicare and Medicaid Services, and any national board recognized by the National Institutes of Health for the purpose of evaluating the medical value of health services.
(7) “Medical necessity,” “medically necessary care,” or “medically necessary and appropriate” means:
(A) Except as otherwise provided in subparagraph (B) of this paragraph, care based upon generally accepted medical practices in light of conditions at the time of treatment which is:
(i) Appropriate and consistent with the diagnosis and the omission of which could adversely affect or fail to improve the eligible enrollee's condition;
(ii) Compatible with the standards of acceptable medical practice in the United States;
(iii) Provided in a safe and appropriate setting given the nature of the diagnosis and the severity of the symptoms;
(iv) Not provided solely for the convenience of the eligible enrollee or the convenience of the health care provider or hospital; and
(v) Not primarily custodial care, unless custodial care is a covered service or benefit under the eligible enrollee's evidence of coverage; or
(B) With respect to the treatment of a mental health or substance use disorder, a service or product addressing the specific needs of that patient for the purpose of screening, preventing, diagnosing, managing or treating an illness, injury, condition, or its symptoms, including minimizing the progression of an illness, injury, condition, or its symptoms, in a manner that is:
(i) In accordance with the generally accepted standards of mental health or substance use disorder care;
(ii) Clinically appropriate in terms of type, frequency, extent, site, and duration; and
(iii) Not primarily for the economic benefit of the insurer, purchaser, or for the convenience of the patient, treating physician, or other health care provider.
(7.1) “Mental health or substance use disorder” means a mental illness or addictive disease.
(7.2) “Mental illness” has the same meaning as in Code Section 37-1-1.
(8) “Treatment” means a medical or mental health or substance use disorder service, diagnosis, procedure, therapy, drug, or device.
(9) Any term defined in Code Section 33-20A-3 shall have the meaning provided for that term in Code Section 33-20A-3 except that “enrollee” shall include the enrollee's eligible dependents.
1 42 U.S.C.A. § 1395x(t)(2).
An eligible enrollee shall be entitled to appeal to an independent review organization when:
(1) The eligible enrollee has received notice of an adverse outcome pursuant to a grievance procedure or the managed care entity has not complied with the requirements of Code Section 33-20A-5 with regard to such procedure; or
(2) A managed care entity determines that a proposed treatment is excluded as experimental under the managed care plan, and all of the following criteria are met:
(A) The eligible enrollee has a terminal condition that, according to the treating physician, has a substantial probability of causing death within two years from the date of the request for independent review or the eligible enrollee's ability to regain or maintain maximum function, as determined by the treating physician, would be impaired by withholding the experimental treatment;
(B) After exhaustion of standard treatment as provided by the evidence of coverage or a finding that such treatment would be of substantially lesser or of no benefit, the eligible enrollee's treating physician certifies that the eligible enrollee has a condition for which standard treatment would not be medically indicated for the eligible enrollee or for which there is no standard treatment available under the evidence of coverage of the eligible enrollee more beneficial than the treatment proposed;
(C) The eligible enrollee's treating physician has recommended and certified in writing treatment which is likely to be more beneficial to the eligible enrollee than any available standard treatment;
(D) The eligible enrollee has requested a treatment as to which the eligible enrollee's treating physician, who is a licensed, board certified or board eligible physician qualified to practice in the area of medicine appropriate to treat the eligible enrollee's condition, has certified in writing that scientifically valid studies using accepted protocols, such as control group or double-blind testing, published in peer reviewed literature, demonstrate that the proposed treatment is likely to be more beneficial for the eligible enrollee than available standard treatment; and
(E) A specific treatment recommended would otherwise be included within the eligible enrollee's certificate of coverage, except for the determination by the managed care entity that such treatment is experimental for a particular condition.
Except where required pursuant to Code Section 51-1-49, a proposed treatment must require the expenditure of a minimum of $500.00 to qualify for independent review.
(a) The parent or guardian of a minor who is an eligible enrollee may act on behalf of the minor in requesting independent review. The legal guardian or representative of an incapacitated eligible enrollee shall be authorized to act on behalf of the eligible enrollee in requesting independent review. Except as provided in Code Section 51-1-49, independent review may not be requested by persons other than the eligible enrollee or a person acting on behalf of the eligible enrollee as provided in this Code section.
(b) A managed care entity shall be required to pay the full cost of applying for and obtaining the independent review.
(c) The eligible enrollee and the managed care entity shall cooperate with the independent review organization to provide the information and documentation, including executing necessary releases for medical records, which are necessary for the independent review organization to make a determination of the claim.
(a) In the event that the outcome of the grievance procedure under Code Section 33-20A-5 is adverse to the eligible enrollee, the managed care entity shall include with the written notice of the outcome of the grievance procedure a statement specifying that any request for independent review must be made to the department on forms developed by the department, and such forms shall be included with the notification. Such statement shall be in simple, clear language in boldface type which is larger and bolder than any other typeface which is in the notice and in at least 14 point typeface.
(b) An eligible enrollee must submit the written request for independent review to the department. Instructions on how to request independent review shall be given to all eligible enrollees with the written notice required under this Code section together with instructions in simple, clear language as to what information, documentation, and procedure are required for independent review.
(c) Upon receipt of a completed form requesting independent review as required by subsection (a) of this Code section, the department shall notify the eligible enrollee of receipt and assign the request to an independent review organization on a rotating basis according to the date the request is received.
(d) Upon assigning a request for independent review to an independent review organization, the department shall provide written notification of the name and address of the assigned organization to both the requesting eligible enrollee and the managed care entity.
(e) No managed care entity may be certified by the Commissioner under Article 1 of this chapter unless the entity agrees to pay the costs of independent review to the independent review organization assigned by the department to conduct each review involving such entity's eligible enrollees.
(a) Within three business days of receipt of notice from the department of assignment of the application for determination to an independent review organization, the managed care entity shall submit to that organization the following:
(1) Any information submitted to the managed care entity by the eligible enrollee in support of the eligible enrollee's grievance procedure filing;
(2) A copy of the contract provisions or evidence of coverage of the managed care plan; and
(3) Any other relevant documents or information used by the managed care entity in determining the outcome of the eligible enrollee's grievance.
Upon request, the managed care entity shall provide a copy of all documents required by this subsection, except for any proprietary or privileged information, to the eligible enrollee. The eligible enrollee may provide the independent review organization with any additional information the eligible enrollee deems relevant.
(b) The independent review organization shall request any additional information required for the review from the managed care entity and the eligible enrollee within five business days of receipt of the documentation required under this Code section. Any additional information requested by the independent review organization shall be submitted within five business days of receipt of the request, or an explanation of why the additional information is not being submitted shall be provided.
(c) Additional information obtained from the eligible enrollee shall be transmitted to the managed care entity, which may determine that such additional information justifies a reconsideration of the outcome of the grievance procedure. A decision by the managed care entity to cover fully the treatment in question upon reconsideration using such additional information shall terminate independent review.
(d) The expert reviewer of the independent review organization shall make a determination within 15 business days after expiration of all time limits set forth in this Code section, but such time limits may be extended or shortened by mutual agreement between the eligible enrollee and the managed care entity. The determination shall be in writing and state the basis of the reviewer's decision. A copy of the decision shall be delivered to the managed care entity, the eligible enrollee, and the department by at least first-class mail.
(e) The independent review organization's decision shall be based upon a review of the information and documentation submitted to it.
(f) Information required or authorized to be provided pursuant to this Code section may be provided by facsimile transmission or other electronic transmission.
(a) A decision of the independent review organization in favor of the eligible enrollee shall be final and binding on the managed care entity and the appropriate relief shall be provided without delay. A managed care entity bound by such decision of an independent review organization shall not be liable pursuant to Code Section 51-1-48 for abiding by such decision. Nothing in this Code section shall relieve the managed care entity from liability for damages proximately caused by its determination of the proposed treatment prior to such decision.
(b) A determination by the independent review organization in favor of a managed care entity shall create a rebuttable presumption in any subsequent action that the managed care entity's prior determination was appropriate.
(c) In the event that, in the judgment of the treating health care provider, the health condition of the enrollee is such that following the provisions of Code Section 33-20A-36 would jeopardize the life or health of the eligible enrollee or the eligible enrollee's ability to regain maximum function, as determined by the treating health care provider, an expedited review shall be available. The expedited review process shall encompass all elements enumerated in Code Sections 33-20A-36 and 33-20A-40; provided, however, that a decision by the expert reviewer shall be rendered within 72 hours after the expert reviewer's receipt of all available requested documents.
Neither an independent review organization nor its employees, agents, or contractors shall be liable for damages arising from determinations made pursuant to this article, unless an act or omission thereof is made in bad faith or through gross negligence, constitutes fraud or willful misconduct, or demonstrates malice, wantonness, oppression, or that entire want of care which would raise the presumption of conscious indifference to the consequences.
(a) The department shall certify independent review organizations that meet the requirements of this Code section and any regulations promulgated by the department consistent with this article. The department shall deem certified any independent review organization meeting standards developed for this purpose by an independent national accrediting organization. To qualify for certification, an independent review organization must show the following:
(1) Expert reviewers assigned by the independent review organization must be physicians or other appropriate providers who meet the following minimum requirements:
(A) Are expert in the treatment of the medical condition at issue and are knowledgeable about the recommended treatment through actual clinical experience;
(B) Hold a nonrestricted license issued by a state of the United States and, for physicians, a current certification by a recognized American medical specialty board in the area or areas appropriate to the subject of review; and
(C) Have no history of disciplinary action or sanctions, including, but not limited to, loss of staff privileges or participation restriction, taken or pending by any hospital, government, or regulatory body;
(2) The independent review organization shall not be a subsidiary of, nor in any way owned or controlled by, a health plan, a trade association of health plans, a managed care entity, or a professional association of health care providers; and
(3) The independent review organization shall submit to the department the following information upon initial application for certification, and thereafter within 30 days of any change to any of the following information:
(A) The names of all owners of more than 5 percent of any stock or options, if a publicly held organization;
(B) The names of all holders of bonds or notes in excess of $100,000.00, if any;
(C) The names of all corporations and organizations that the independent review organization controls or is affiliated with, and the nature and extent of any ownership or control, including the affiliated organization's type of business; and
(D) The names of all directors, officers, and executives of the independent review organization, as well as a statement regarding any relationships the directors, officers, and executives may have with any health care service plan, disability insurer, managed care entity or organization, provider group, or board or committee.
(b) Neither the independent review organization nor any expert reviewer of the independent review organization may have any material professional, familial, or financial conflict of interest with any of the following:
(1) A managed care plan or entity being reviewed;
(2) Any officer, director, or management employee of a managed care plan which is being reviewed;
(3) The physician, the physician's medical group, health care provider, or the independent practice association proposing a treatment under review;
(4) The institution at which a proposed treatment would be provided;
(5) The eligible enrollee or the eligible enrollee's representative; or
(6) The development or manufacture of the treatment proposed for the eligible enrollee whose treatment is under review.
(c) As used in subsection (b) of this Code section, the term “conflict of interest” shall not be interpreted to include a contract under which an academic medical center or other similar medical research center provides health care services to eligible enrollees of a managed care plan, except as subject to the requirement of paragraph (4) of subsection (b) of this Code section; affiliations which are limited to staff privileges at a health care facility; or an expert reviewer's participation as a contracting plan provider where the expert is affiliated with an academic medical center or other similar medical research center that is acting as an independent review organization under this article. An agreement to provide independent review for an eligible enrollee or managed care entity is not a conflict of interest under subsection (b) of this Code section.
(d) The independent review organization shall have a quality assurance mechanism in place that ensures the timeliness and quality of the reviews, the qualifications and independence of the experts, and the confidentiality of medical records and review materials.
(e) The department shall provide upon the request of any interested person a copy of all nonproprietary information filed with it pursuant to this article. The department shall provide at least quarterly a current list of certified independent review organizations to all managed care entities and to any interested persons.
(a) For the purposes of this article, in making a determination as to whether a treatment is medically necessary and appropriate, the expert reviewer shall use the definition provided in paragraph (7) of Code Section 33-20A-31.
(b) For the purposes of this article, in making a determination as to whether a treatment is experimental, the expert reviewer shall determine:
(1) Whether such treatment has been approved by the federal Food and Drug Administration; or
(2) Whether medical and scientific evidence demonstrates that the expected benefits of the proposed treatment would be greater than the benefits of any available standard treatment and that the adverse risks of the proposed treatment will not be substantially increased over those of standard treatments.
For either determination, the expert reviewer shall apply prudent professional practices and shall assure that at least two documents of medical and scientific evidence support the decision.
The department shall provide necessary rules and regulations for the implementation and operation of this article.
Medicaid care management members shall, after first exhausting the grievance procedure of the managed care plan providing health care benefits pursuant to Article 7 of Chapter 4 of Title 49 or Article 13 of Chapter 5 of Title 49, be afforded the fair hearing rights provided pursuant to Code Section 49-4-153 or the state plan provided for in Article 13 of Chapter 5 of Title 49.
As used in this article, the term:
(1) “Agent” shall not include an agent or agency as defined in Code Section 33-23-1.
(2) “Carrier” means an accident and sickness insurer, fraternal benefit society, health care corporation, health maintenance organization, provider sponsored health care corporation, or any similar entity and any self-insured health benefit plan not subject to the exclusive jurisdiction of the federal Employee Retirement Income Security Act of 1974, 29 U.S.C. Section 1001, et seq., which entity provides for the financing or delivery of health care services through a health benefit plan, or the plan administrator of any health benefit plan established pursuant to Article 1 of Chapter 18 of Title 45.
(3) “Claimant” means any provider, facility, or individual making a claim under a health benefit plan on behalf of an enrollee.
(4) “Enrollee” has the same meaning as provided in Code Section 33-20A-3.
(5) “Health benefit plan” has the same meaning as provided in Code Section 33-24-59.5.
(6) “Physician contract” means any contract between a physician and a carrier or a carrier's network, physician panel, intermediary, or representative providing the terms under which the physician agrees to provide health care services to an enrollee pursuant to a health benefit plan.
(7) “Postpayment audit” means an investigation by a health benefit plan, carrier, insurer, or panel, or agent thereof, of whether a claim was properly paid to a claimant.
(8) “Retroactive denial of a previously paid claim” or “retroactive denial of payment” means any attempt by a carrier retroactively to collect payments already made to a claimant with respect to a claim, or any portion thereof, by requiring repayment of such payments, by reducing other payments owed to the claimant, by withholding or setting off against future payments, or in any other manner reducing or affecting the future claim payments to the claimant.
(a) Every physician contract entered into, amended, extended, or renewed after July 1, 2002, by a carrier shall contain a specific provision which shall provide that, in the event that an insurance carrier, plan, network, panel, or any agent thereof should terminate a physician's contract and thereby affect any enrollee's opportunity to continue receiving health care services from that physician under the plan, any such enrollee who is suffering from and receiving active health care services for a chronic or terminal illness or who is an inpatient shall have the right to continue to receive health care services from that physician for a period of up to 60 days from the date of the termination of the physician's contract. Any enrollee who is pregnant and receiving treatment in connection with that pregnancy at the time of the termination of that enrollee's physician's contract shall have the right to continue receiving health care services from that physician throughout the remainder of that pregnancy, including six weeks' postdelivery care. During such continuation of coverage period, the physician shall continue providing such services in accordance with the terms of the contract applicable at the time of the termination, and the carrier, plan, network, panel, and all agents thereof shall continue to meet all obligations of such physician's contract. The enrollee shall not have the right to the continuation provisions provided in this Code section if the physician's contract is terminated because of the suspension or revocation of the physician's license or if the carrier, plan, network, panel, or any agent thereof determines that the physician poses a threat to the health, safety, or welfare of enrollees.
(b) Every physician contract entered into, amended, extended, or renewed after July 1, 2002, by a carrier shall contain a specific provision which shall provide that, in the event that a physician should terminate his or her contract with an insurance carrier, plan, network, panel, or any agent thereof and thereby affect any enrollee's opportunity to continue receiving health care services from that physician under the plan, any such enrollee who is suffering from and receiving active health care services for a chronic or terminal illness or who is an inpatient shall have the right to receive health care services from that physician for a period of up to 60 days from the date of the termination of the physician's contract. Any enrollee who is pregnant and receiving health care services in connection with that pregnancy at the time of the termination of that enrollee's physician's contract shall have the right to continue receiving health care services from that physician throughout the remainder of that pregnancy, including six weeks' postdelivery care. During such continuation of coverage period, the physician shall continue providing such services in accordance with the terms of the contract applicable at the time of the termination, and the carrier, plan, network, panel, and all agents thereof shall continue to meet all obligations of such physician's contract. The enrollee shall not have the right to the continuation provisions provided in this Code section if the physician terminates his or her contract because of the suspension or revocation of the physician's license or for reasons related to the quality of health care services rendered or issues related to the health, safety, or welfare of enrollees.
(a) No carrier, plan, network, panel, or any agent thereof may conduct a postpayment audit or impose a retroactive denial of payment on any claim by any claimant relating to the provision of health care services that was submitted within 90 days of the last date of service or discharge covered by such claim unless:
(1) The carrier, plan, network, panel, or agent thereof has provided to the claimant in writing notice of the intent to conduct such an audit or impose such a retroactive denial of payment of such claim or any part thereof and has provided in such notice the specific claim and the specific reason for the audit or retroactive denial of payment;
(2) Not more than 12 months have elapsed since the last date of service or discharge covered by the claim prior to the delivery to the claimant of such written notice; and
(3) Any such audit or retroactive denial of payment must be completed and notice provided to the claimant of any payment or refund due within 18 months of the last date of service or discharge covered by such claim.
(b) No carrier, plan, network, panel, or any agent thereof may conduct a postpayment audit or impose a retroactive denial of payment on any claim by any claimant relating to the provision of health care services that was submitted more than 90 days after the last date of service or discharge covered by such claim unless:
(1) The carrier, plan, network, panel, or agent thereof has provided to the claimant in writing notice of the intent to conduct such an audit or impose such a retroactive denial of payment of such claim or any part thereof and has provided in such notice the specific claim and the specific reason for the audit or retroactive denial of payment;
(2) Not more than 12 months have elapsed since such claim was initially submitted by the claimant prior to the delivery to the claimant of such written notice; and
(3) Any such audit or retroactive denial of payment must be completed and notice provided to the claimant of any payment or refund due within the sooner of 18 months after the claimant's initial submission of such a claim or 24 months after the date of service.
(c) No carrier, plan, network, panel, or any agent thereof shall be required to respond to a provider or facility's request for additional payment or to adjust any previously paid provider or facility's claim or any part thereof following a final payment unless:
(1) The provider or facility makes a request in writing to the carrier, plan, network, panel, or any agent thereof specifically identifying the previously paid claim or any part thereof and provides the specific reason for additional payment; and
(2) If the provider or facility's claim was submitted within 90 days of the last date of service or discharge covered by such claim, the written request for additional payment or adjustment must be submitted within the earlier of 12 months of the date both the provider or facility and the insurer, network, panel, plan, or carrier or any agent thereof agree that all payments relative to the claim have been made and all appeals of such determinations have been made or waived by the provider or facility or 24 months have elapsed from the date of service or discharge.
(d) No carrier, plan, network, panel, or any agent thereof shall be required to respond to a provider or facility's request for additional payment or to adjust any previously paid provider or facility's claim or any part thereof following a final payment unless:
(1) The provider or facility makes a request in writing to the carrier, plan, network, panel, or any agent thereof specifically identifying the previously paid claim or any part thereof and provides the specific reason for additional payment; and
(2) If the provider or facility's claim was submitted more than 90 days after the last date of service or discharge covered by such claim, the written request for additional payment or adjustment must be submitted within the earlier of six months of the date both the provider or facility and the insurer, network, panel, plan, or carrier or any agent thereof agree that all payments relative to the claim have been made and all appeals of such determinations have been made or waived by the provider or facility or 24 months have elapsed from the date of service or discharge.
(e) An enrollee who is not billed for services by any provider, facility, or agent thereof within 45 days of the date that the provider, facility, or agent thereof knew that further payment was due as the result of a postpayment audit, retroactive denial, or rejected request to adjust a previously paid claim shall be relieved of any and all legal obligations to respond to a request for additional payment.
(f) Notwithstanding any other provision in this article to the contrary, when precertification has been obtained for a service, the insurer, carrier, plan, network, panel, or agent thereof shall be prohibited from contesting, requesting payment, or reopening such claim or any portion thereof at any time following precertification except to the extent the insurer is not liable for the payment under Code Section 33-20A-7.1.
(g) Nothing in this article shall be construed as prohibiting reimbursement subject to Code Section 33-24-56.1.
This chapter shall be known and may be cited as the “Essential Rural Health Care Provider Access Act.”
As used in this chapter, the term:
(1) “Essential rural health care provider” means any hospital, federally qualified health center, or rural health clinic, as such terms are defined in this Code section, which is located in a rural area and which complies with the provisions of Code Section 33-20B-3.
(2) “Federally qualified health center” means, for the purposes of this Code section, a facility which meets the definition of a federally qualified health center as described in Section 1395x(aa)(4) of Title 42 of the United States Code Annotated and which is located in a rural area.
(3) “Health benefit plan” or “plan” means the health insurance policy or subscriber agreement between a covered person or policyholder and a health care insurer which defines the covered services and benefit levels available.
(4) “Health care insurer” means an insurer, a fraternal benefit society, a health care plan, a health care corporation, a health maintenance organization, or any other entity authorized to sell accident and sickness insurance policies, subscriber certificates, or other contracts of health insurance by whatever name called under this title.
(5) “Health care services” means services rendered or products sold by an essential rural health care provider within the scope of such provider's license or legal authorization.
(6) “Hospital” means any building or facility licensed by the Department of Community Health as a hospital under this chapter which:
(A) Operates no more than 100 beds;
(B) Provides 24 hour emergency care as well as a range of health care services sufficient to support the practice of a primary care physician; and
(C) For at least one of the immediately preceding two fiscal years, derived at least 40 percent of its patient revenues from medicare, Medicaid, or any combination of medicare and Medicaid.
(7) “Physician” for purposes of this Code section only means any person who is licensed to practice medicine by the Georgia Composite Medical Board pursuant to Chapter 34 of Title 43 who practices as a family physician, general internist, pediatrician, general practitioner, general surgeon, or obstetrician/gynecologist and who has medical staff privileges at a hospital as defined in paragraph (6) of this Code section.
(8) “Rural area” means any county having a population of less than 35,000 according to the United States decennial census of 1990 or any future such census.
(9) “Rural health clinic” means a facility which is located in a rural area and which meets the definition of a rural health clinic as described in Section 1395x(aa)(2) of Title 42 of the United States Code Annotated.
(a) Any essential rural health care provider shall have the opportunity to become a participating provider of health care services in a health benefit plan if such provider meets all of the following conditions:
(1) Participates in the medicare and Medicaid programs;
(2) Adopts and complies with a policy for the provision of health care services to indigent and charity patients;
(3) Is licensed, where required under law, and qualified to render the services provided by the plan;
(4) Agrees to payment terms which are either:
(A) The same payment terms applicable to other similar participating providers in the plan; or
(B) Such payment terms as may be mutually agreed upon by such provider and a health care insurer; and
(5) Meets the reasonable and nondiscriminatory qualifications and standards established by the plan. Plan standards must comply with all applicable laws and regulations, but such qualifications and standards may not discriminate against essential rural health care providers on the basis of geographic proximity to other participating providers or corporate status.
(b) All essential rural health care providers within a defined service area who meet the conditions established in subsection (a) of this Code section shall be given the opportunity to apply to become a participating provider in a plan. Provisions within a health benefit plan applicable to providers in such plan shall be applied by the health care insurer in a uniform and consistent manner to similarly situated providers. In the event an essential rural health care provider requests the opportunity to become a participating provider in any health benefit plan, the health care insurer shall conduct reasonable and good faith negotiations with such essential rural health care provider to determine whether it meets the applicable qualifications and standards established by the plan in accordance with all applicable laws, rules, and regulations as promulgated by the Commissioner of Insurance.
(c) Health benefit plans shall include sufficient and reasonable numbers of physicians located in rural areas.
When reviewing a health maintenance organization's request to originate or expand an area of service into a rural area, the commissioner of community health shall consider whether the health maintenance organization has demonstrated its willingness to grant reasonable consideration to essential rural health care providers in the negotiating and contracting process.
To deny, reject, or terminate an essential rural health care provider from serving as a participating provider in a health benefit plan, the health care insurer shall:
(1) Inform the essential rural health care provider in writing of the basis for such rejection or termination, including a reference to any specific qualification or standard established by the plan in accordance with all applicable laws and regulations which the provider failed to meet; and
(2) Where possible, afford the essential rural health care provider a reasonable opportunity to cure the deficiency which is the basis for such rejection or termination.
Any essential rural health care provider which is denied, rejected, or terminated from serving as a participating provider in a health benefit plan shall have the right of hearing and appeal before the Commissioner, or his or her designee, if that provider believes there has been a violation of this chapter and of judicial appeal as provided in Chapter 2 of this title. To the extent proprietary materials, trade secrets, rate data, or other materials not generally known to the public are presented at a hearing or an appeal, such information shall be admissible but shall be sealed by the Commissioner and held as confidential and shall not be subject to Article 4 of Chapter 18 of Title 50.
The administration of this chapter shall be through the Commissioner of Insurance.
As used in this chapter, the term:
(1) “Covered person” means a policyholder, subscriber, enrollee, or other individual participating in a health benefit plan.
(2) “Facility” means an institution providing physical, mental, or behavioral health care services or a healthcare setting, including, but not limited to, hospitals; licensed inpatient centers; ambulatory surgical centers; skilled nursing facilities; residential treatment centers; diagnostic, treatment, or rehabilitation centers; imaging centers; and rehabilitation and other therapeutic health settings.
(3) “Health benefit plan” means a policy, contract, certificate, or agreement entered into, offered by, or issued by an insurer to provide, deliver, arrange for, pay for, or reimburse any of the costs of healthcare services, including a standalone dental plan.
(4) “Health benefit plan surprise bill rating” means the number of checkmarks and X-marks between zero and four that a health benefit plan's in-network hospital has earned based upon the number of qualified hospital based specialty group types with which such health benefit plan is contracted for the provision of healthcare services. Each checkmark indicates the presence of a in-network particular type of qualified hospital based specialty group. An X-mark indicates the absence of an in-network particular type of qualified hospital based specialty group. If a hospital does not provide one of the qualified hospital based specialties, the absence of that specialty shall be designated by a green N/A mark. Any color advertisement which includes a health benefit plan surprise bill rating shall use green checkmarks, red X-marks, and green N/A marks.
(5) “Healthcare professional” means a physician or other healthcare practitioner licensed, accredited, or certified to perform specified physical, mental, or behavioral healthcare services consistent with his or her scope of practice under state law.
(6) “Healthcare provider” or “provider” means a healthcare professional, pharmacy, or facility.
(7) “Healthcare services” means services for the diagnosis, prevention, treatment, cure, or relief of a physical, mental, or behavioral health condition, illness, injury, or disease, including mental health and substance abuse disorders.
(8) “Insurer” means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the Commissioner, that contracts, offers to contract, or enters into an agreement to provide, deliver, arrange for, pay for, or reimburse any of the costs of healthcare services, including an accident and sickness insurance company, a health maintenance organization, a healthcare plan, or any other entity providing a health insurance plan, a health benefit plan, or healthcare services.
(9) “Network” means the group or groups of participating healthcare providers providing services under a network plan.
(10) “Network plan” means a health benefit plan of an insurer that either requires a covered person to use healthcare providers managed by, owned by, under contract with, or employed by the insurer or that creates incentives, including financial incentives, for a covered person to use such healthcare providers.
(11) “Qualified hospital based specialty group” means a medical group of anesthesiologists, pathologists, radiologists, or emergency medicine physicians.
(12) “Standalone dental plan” means a plan of an insurer that provides coverage substantially all of which is for treatment of the mouth, including any organ or structure within the mouth, which is provided under a separate policy, certificate, or contract of insurance or is otherwise not an integral part of a group benefit plan.
(13) “Tiers” or “tiered network” means a network that identifies and groups some or all types of providers and facilities into specific groups to which different provider reimbursement, covered person cost sharing, or provider access requirements, or any combination thereof, apply for the same services.
(a)(1) An insurer shall post on its website a current and accurate electronic provider directory for each of its network plans with the information described in Code Section 33-20C-4. Such online provider directory shall be easily accessible in a standardized, downloadable, searchable, and machine readable format.
(2) In making the provider directory available online, the insurer shall ensure that the general public is able to view all of the current providers for a network plan through a clearly identifiable link or tab and without creating or accessing an account or entering a policy or contract number.
(3) The insurer shall update each network plan on the online provider directory no less than every 30 days.
(b) An insurer shall provide a print copy of a current provider directory, or a print copy of the requested directory information, with the information described in Code Section 33-20C-5 upon request by a covered person or a prospective covered person.
(c) For each network plan, an insurer shall include in plain language, in both the online and print directory, the following general information:
(1) A description of the criteria the insurer has used to build its provider network;
(2) If applicable, a description of the criteria the insurer has used to tier providers;
(3) If applicable, how the insurer designates the different provider tiers or levels, such as by name, symbols, or grouping, in the network and for each specific provider in the network, which tier each is placed in order for a covered person or a prospective covered person to be able to identify the provider tier; and
(4) If applicable, a notice that authorization or referral may be required to access some providers.
(d) The insurer shall make clear for both its online and print directories the provider directory that applies to each network plan by identifying the specific name of the network plan as marketed and issued in this state.
(e) The insurer shall make available through its online and print directories the source of the information required pursuant to Code Sections 33-20C-4 and 33-20C-5 pertaining to each health care provider and any limitations, if applicable.
(f) Provider directories, whether in electronic or print format, shall be accessible to individuals with disabilities and individuals with limited English proficiency as defined in 45 C.F.R. Section 92.201 and 45 C.F.R. Section 155.205(c).
(g)(1) When an insurer's provider directory accessed through the insurer's website includes a provider as a participating provider for a network plan at such time as a prospective covered person selects his or her health benefit plan during the designated open enrollment time frame, and subsequent to open enrollment in the succeeding plan year, the provider is no longer in-network for the covered person's benefit plan, such insurer shall, subject to the coverage terms of the health benefit plan, reimburse the provider at its most recent contracted in-network rates for a period ending 180 days after the date upon which the provider contract terminates or ending on the last day of the covered person's coverage, whichever occurs sooner. The provider shall accept the insurer's payment in full. Any amount paid to the provider by the insurer pursuant to this subsection shall not be required to include any amount of coinsurance, copayment, or deductible owed by the covered person or already paid by such covered person.
(2) In the event of a public health emergency, including but not limited to a public health emergency as defined in Code Section 31-12-1.1, an insurer shall, for a period commencing on the effective date of the public health emergency and ending 150 days after the expiration of such public health emergency:
(A) Be prohibited from terminating a provider from the insurer's network; and
(B) Reimburse a provider at its most recent contracted in-network rates.
(3) This subsection shall not apply if the:
(A) Provider becomes out-of-network due to suspension, expiration, or revocation of such provider's license;
(B) Provider unilaterally terminates participation in the insurer's network plan without cause; or
(C) Insurer terminates the provider for cause for fraud, misrepresentation, or other actions constituting a termination for cause under such provider's contract.
(4) Paragraph (1) of this subsection shall not apply if the insurer's provider directory accessed through the insurer's website accurately displayed any future date on which such provider would become out of network, 15 days prior to the beginning of and all during, the designated open enrollment time frame.
(5) The provisions of subsection (d) of Code Section 33-20C-3 shall not apply to the circumstances described in paragraph (1) of this subsection.
(a) The insurer shall include in both its online and print directories a clearly identifiable telephone number and either a dedicated e-mail address or a link to a dedicated webpage that covered persons or the general public may use to report to the insurer inaccurate information listed in the provider directory. Whenever an insurer receives such a report, it shall promptly investigate such report and no later than 30 days following receipt of such report either verify the accuracy of the information or update the information, as applicable.
(b)(1) An insurer shall take appropriate steps to ensure the accuracy of the information concerning each provider listed in the insurer's provider directory and shall, no later than January 1, 2017, review and update the entire provider directory for each network plan offered. Thereafter, the insurer shall, at least annually, audit at least a reasonable sample size of its provider directories for accuracy, retain documentation of such an audit to be made available to the Commissioner upon request, and based on the results of such an audit, verify the accuracy of the information or update the information, if applicable.
(2) The insurer shall notify any provider in its network that has not submitted claims to the insurer or otherwise communicated intent to continue participation in the insurer's network within a 12 month period. Such notice shall be accomplished in accordance with provisions of the contract entered into between the insurer and the provider regarding notice, if applicable. If the insurer does not receive a response from the provider within 30 days of such notification confirming that the information regarding the provider is current and accurate or, as an alternative, updating any information, the insurer shall remove the provider from the network; provided, however, that prior to removal, the insurer may use any other available information or means to determine if the provider is still participating in the insurer's network, including any means delineated in the contract entered into between the insurer and the provider.
(c) The insurer shall report to the Commissioner, in accordance with timeframes and requirements established by the Commissioner:
(1) The number of reports received pursuant to subsection (a) of this Code section, the timeliness of the insurer's response, and the corrective actions taken; and
(2) All auditing reports conducted by the insurer pursuant to subsection (b) of this Code section.
(d) In circumstances where the Commissioner finds that a covered person reasonably relied upon materially inaccurate information contained in an insurer's provider directory, the Commissioner may require the insurer to provide coverage for all covered health care services provided to the covered person and to reimburse the covered person for any amount that he or she would have paid, had the services been delivered by an in-network provider under the insurer's network plan; provided, however, that the Commissioner shall take into consideration that insurers are relying on health care providers to report changes to their information prior to requiring any reimbursement to a covered person. Prior to requiring reimbursement in these circumstances, the Commissioner shall conclude that the services received by the insurer were covered services under the covered person's network plan. In such circumstances, the fact that the services were rendered or delivered by a noncontracting or out-of-network provider shall not be used as a basis to deny reimbursement to the covered person.
(a) The insurer shall make available through an online provider directory, for each network plan, the following information, in a searchable format:
(1) For healthcare professionals:
(A) Name;
(B) Gender;
(C) Contact information;
(D) Participating office location or locations;
(E) Specialty, if applicable;
(F) Board certifications, if applicable;
(G) Medical group affiliations, if applicable;
(H) Participating facility affiliations, if applicable;
(I) Languages spoken other than English by the healthcare professional or clinical staff, if applicable;
(J) Tier; and
(K) Whether they are accepting new patients;
(2) For hospitals:
(A) Hospital name;
(B) Hospital type, such as acute, rehabilitation, children's, or cancer;
(C) Participating hospital location;
(D) Hospital accreditation status;
(E) Telephone number; and
(F) Health benefit plan surprise bill rating; and
(3) For facilities other than hospitals:
(A) Facility name;
(B) Facility type;
(C) Types of services performed;
(D) Participating facility location or locations; and
(E) Telephone number.
(b) Paragraphs (2) and (3) of subsection (a) of this Code section shall not apply to standalone dental plans.
(a) The insurer shall make available in print, upon request, the following provider directory information for the applicable network plan:
(1) For healthcare professionals:
(A) Name;
(B) Contact information;
(C) Participating office location or locations;
(D) Specialty, if applicable;
(E) Languages spoken other than English, if applicable; and
(F) Whether accepting new patients;
(2) For hospitals:
(A) Hospital name;
(B) Hospital type, such as acute, rehabilitation, children's, or cancer;
(C) Participating hospital location and telephone number; and
(D) Health benefit plan surprise bill rating; and
(3) For facilities other than hospitals:
(A) Facility name;
(B) Facility type;
(C) Types of services performed; and
(D) Participating facility location or locations and telephone number.
(b) The insurer shall include a disclosure in the print directory that the information in subsection (a) of this Code section and included in the directory is accurate as of the date of printing and that covered persons or prospective covered persons should consult the insurer's electronic provider directory on its website or call a specified customer service telephone number to obtain current provider directory information.
(c) Paragraphs (2) and (3) of subsection (a) of this Code section shall not apply to standalone dental plans.
This chapter shall not apply to the provision of health care services pursuant to a contract entered into by an insurer and the Department of Community Health for recipients of Medicaid or PeachCare for Kids and the state health benefit plan under Article 1 of Chapter 18 of Title 45.
(a) Each insurer that advertises or designates any hospital as in-network shall be required to disclose the relevant health benefit plan surprise bill rating within such advertisement, notwithstanding the type or form of such advertisement.
(b) If a health benefit plan surprise bill rating is less than four checkmarks, each insurer advertising a hospital as in-network shall describe which qualified hospital based specialty group types are not contracted with such health benefit plan.
(c) The Commissioner may promulgate rules and regulations which require insurers to provide explanatory footnotes to each health benefit plan surprise bill rating in such special circumstances as the Commissioner may determine to be appropriate.
(d) If an insurer processes a claim on a covered person from an out-of-network qualified hospital based specialty group provider at out-of-network rates, such insurer shall update the relevant health benefit plan surprise bill rating within 30 days to reflect any necessary reduction in such rating.
(e) The Commissioner may submit an annual report to the House Committee on Insurance and the Senate Insurance and Labor Committee beginning January 1, 2022. Such report may include such aggregate data as the Commissioner determines beneficial to share with such committees.
As used in this chapter, the term:
(1) “Affiliate” means an entity owned or controlled, either directly or through a parent or subsidiary entity, by a contracting entity that accesses the rates, terms, or conditions of health care services.
(2) “Contracting entity” means any person or entity that enters into direct contracts with health care providers for the delivery of health care services in the ordinary course of business, including a health care organization or hospital organization when leasing or renting the health care organization's or hospital organization's network to a third party.
(3) “Covered person” means an individual who is covered under a health insurance plan.
(4) “Health care services” means the examination or treatment of persons for the prevention of illness or the correction or treatment of any physical or mental condition resulting from illness, injury, or other human physical problem.
(5) “Health insurer” means an accident and sickness insurer, health care corporation, health maintenance organization, provider sponsored health care corporation, or any similar entity regulated by the Commissioner.
(6) “Provider network contract” means a contract between a contracting entity and a provider specifying the rights and responsibilities of the contracting entity and provider for the delivery of and payment for health care services to covered persons.
(7) “Rental preferred provider network” means a preferred provider network that contracts with a health insurer or other payor or with another preferred provider network to grant access to the terms and conditions of its contract with providers of health care services. Such contracts are often referred to as “renting” or “leasing” the network. The term “rental preferred provider network” does not refer to a proprietary network of a licensed insurer or to arrangements providing for access to the proprietary network of a licensed insurer by affiliates of the licensed insurer or by entities receiving administrative services from the licensed insurer or its affiliates.
(8) “Third party” means an organization that enters into a contract with a contracting entity or with another third party to gain access to a provider network contract.
(a) Any person who commences business as a rental preferred provider network shall register with the Commissioner within 30 days of commencing business in this state unless such person is licensed by the Commissioner as a health insurer. Each rental preferred provider network not licensed by the Commissioner on July 1, 2016, shall be required to register with the Commissioner no later than September 30, 2016, and shall be placed on an approved list maintained by the Commissioner.
(b) Registration shall consist of the submission of the following information:
(1) The official name of the rental preferred provider network, including any d/b/a designations used in this state;
(2) The mailing address and main telephone number for the rental preferred provider network's main headquarters; and
(3) The name and telephone number of the rental preferred provider network representative who shall serve as the primary contact with the department.
(c) The information required by this Code section shall be submitted in written or electronic format, as prescribed by the Commissioner by rule or regulation.
(d) The Commissioner may, pursuant to rule or regulation, collect a reasonable fee for the purpose of administering the registration process.
(e) The Commissioner shall maintain an approved list of rental preferred provider networks.
(a) A rental preferred provider network shall not:
(1) Knowingly access or utilize a network provider's contractual discount pursuant to a provider network contract without a contractual relationship with the network provider, rental preferred provider network, or third party; or
(2) Lease, rent, or otherwise grant to a third party access to a provider network contract unless:
(A) The third party is a payor or third-party administrator or another entity that administers or processes claims on behalf of the payor;
(B) The provider network contract states that the contracting entity may enter into an agreement with a third party allowing the third party to obtain the contracting entity's rights and responsibilities under the provider network contract as if the third party were the contracting entity;
(C) The provider network contract, and all agreements between a contracting entity and any third party, prohibits such third party from increasing the contractual discounts or otherwise reducing the compensation to a network provider to an amount below that which the network provider was entitled from the contracting entity for health care services at the time the third party was granted access to the provider network contract unless such third party becomes a contracting entity; and
(D) The third party accessing the provider network contract is contractually obligated to comply with all applicable terms, limitations, and conditions of the provider network contract.
(b) A contracting entity that grants access to a network provider's health care services and contractual discounts to any third party pursuant to a provider network contract shall maintain an Internet website, mobile communication device application, or other readily available mechanism, such as a toll-free telephone number, through which a network provider may obtain a listing, updated at least every 30 days, of the third parties to which the contracting entity or another third party has executed contracts to grant access to such network provider's health care services and contractual discounts pursuant to a provider network contract.
(c) All information made available to a network provider in accordance with the requirements of this chapter shall be confidential and shall not be disclosed to any person or entity not employed by the network provider or involved in the network provider's practice or the administration thereof without the prior written consent of the contracting entity; provided, however, that this shall not preclude a network provider from disclosing such information to an outside consultant or attorney for the purpose of assisting the network provider with any disputes with a contracting entity.
(d) Nothing contained in this chapter shall be construed to prohibit a contracting entity from requiring a network provider to execute a reasonable confidentiality agreement to ensure that confidential or proprietary information disclosed by the contracting entity is not used for any purpose other than the network provider's direct practice management or billing activities.
(a) A third party, having itself been granted access to a network provider's health care services and contractual discounts pursuant to a provider network contract, that subsequently grants access to another third party shall be obligated to comply with the rights and responsibilities imposed on contracting entities pursuant to this chapter.
(b) A third party that enters into a contract with another third party to access a network provider's health care services and contractual discounts pursuant to a provider network contract shall be obligated to comply with the rights and responsibilities imposed on third parties under this Code section.
This chapter shall not apply to:
(1) Provider network contracts for services provided to Medicaid, medicare, the state health benefit plan under Article 1 of Chapter 18 of Title 45, or State Children's Health Insurance Program (SCHIP) beneficiaries;
(2) Employers, church plans, or government plans receiving administrative services from a rental preferred provider network or its affiliates, or pharmacy benefits managers;
(3) Circumstances where access to the provider network contract is granted to an entity operating under the same brand licensee program as the contracting entity;
(4) The provision of any medical services for injuries covered under Chapter 9 of Title 34, relating to workers' compensation; or
(5) Self-funded, employer sponsored health insurance plans regulated under the Employee Retirement Income Security Act of 1974, as codified and amended at 29 U.S.C. Section 1001, et seq.
Any person or entity that is not duly licensed or that should be licensed by the department or that is not duly registered or that should be registered with the department pursuant to Code Section 33-20D-2 and acts as a rental preferred provider network, as defined in paragraph (7) of Code Section 33-20D-1, shall be subject to penalties set forth in subsection (g) of Code Section 33-2-24. The Commissioner shall have the authority, in addition to any other remedies and damages allowed by law, to seek to restrain or enjoin any person or entity, whether or not such person or entity is licensed or registered pursuant to this title, that is determined to be in violation of Code Section 33-20D-2 or 33-20D-3, and such person or entity shall be liable for attorney fees and litigation expenses incurred in the action to restrain or enjoin such violation.
This chapter shall be known and may be cited as the “Surprise Billing Consumer Protection Act.”
(a) This chapter shall apply to all insurers providing a healthcare plan that pays for the provision of healthcare services to covered persons.
(b) As used in this chapter, the term:
(1) “Balance bill” means the amount that a nonparticipating provider charges for services provided to a covered person. Such amount equals the difference between the amount paid or offered by the insurer and the amount of the nonparticipating provider's bill charge, but shall not include any amount for coinsurance, copayments, or deductibles due by the covered person.
(2) “Contracted amount” means the median in-network amount paid during the 2017 calendar year by an insurer for the emergency or nonemergency services provided by in-network providers engaged in the same or similar specialties and provided in the same or nearest geographical area. Such amount shall be annually adjusted by the department for inflation which may be based on the Consumer Price Index, and shall not include Medicare or Medicaid rates.
(3) “Covered person” means an individual who is insured under a healthcare plan.
(4) “Emergency medical provider” means any physician licensed by the Georgia Composite Medical Board who provides emergency medical services and any other healthcare provider licensed or otherwise authorized in this state to render emergency medical services.
(5) “Emergency medical services” means physical or mental health care services rendered for a medical or traumatic condition, sickness, or injury, including a mental health condition or substance use disorder, in which a person is exhibiting acute symptoms of sufficient severity, including, but not limited to, severe pain, regardless of the initial, interim, final, or other diagnoses that are given, that would lead a prudent layperson possessing an average knowledge of medicine and health to believe that his or her condition, sickness, or injury is of such a nature that failure to obtain immediate medical care could result in:
(A) Placing the patient's health in serious jeopardy;
(B) Serious impairment to bodily functions; or
(C) Serious dysfunction of any bodily organ or part.
“Emergency medical services” includes medical services rendered after such person is stabilized and as part of outpatient observation or an inpatient or outpatient stay with respect to the visit in which such services are furnished, unless each of the conditions of subdivision (a)(3)(C)(ii)(II) of the federal Public Health Service Act, 42 U.S.C. Section 300gg-111 are met.
(6) “Facility” means a hospital, an ambulatory surgical treatment center, birthing center, diagnostic and treatment center, hospice, or similar institution.
(7) “Geographic area” means a specific portion of this state which shall consist of one or more zip codes as defined by the Commissioner pursuant to department rule and regulation.
(8) “Healthcare plan” means any hospital or medical insurance policy or certificate, healthcare plan contract or certificate, qualified higher deductible health plan, health maintenance organization or other managed care subscriber contract, or state healthcare plan. This term shall not include limited benefit insurance policies or plans listed under paragraph (3) of Code Section 33-1-2, air ambulance insurance, or policies issued in accordance with Chapter 21A or 31 of this title or Chapter 9 of Title 34, relating to workers' compensation, Part A, B, C, or D of Title XVIII of the Social Security Act (Medicare), or any plan or program not described in this paragraph over which the Commissioner does not have regulatory authority. Notwithstanding paragraph (3) of Code Section 33-1-2 and any other provision of this title, for purposes of this chapter this term shall include stand-alone dental insurance and stand-alone vision insurance.
(9) “Healthcare provider” or “provider” means any physician, other individual, or facility other than a hospital licensed or otherwise authorized in this state to furnish healthcare services, including, but not limited to, any dentist, podiatrist, optometrist, psychologist, clinical social worker, advanced practice registered nurse, registered optician, licensed professional counselor, physical therapist, marriage and family therapist, chiropractor, athletic trainer qualified pursuant to Code Section 43-5-8, occupational therapist, speech-language pathologist, audiologist, dietitian, or physician assistant.
(10) “Healthcare services” means emergency or nonemergency medical services.
(11) “Insurer” means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the Commissioner, that contracts, offers to contract, or enters into an agreement to provide, deliver, arrange for, pay for, or reimburse any of the costs of healthcare services, including those of an accident and sickness insurance company, a health maintenance organization, a healthcare plan, a managed care plan, or any other entity providing a health insurance plan, a health benefit plan, or healthcare services.
(12) “Nonemergency medical services” means the examination or treatment of persons for the prevention of illness or the correction or treatment of any physical or mental condition resulting from an illness, injury, or other human physical problem which does not qualify as an emergency medical service and includes, but is not limited to:
(A) Hospital services which include the general and usual care, services, supplies, and equipment furnished by hospitals;
(B) Medical services which include the general and usual care and services rendered and administered by doctors of medicine, dentistry, optometry, and other providers; and
(C) Other medical services which, by way of illustration only and without limiting the scope of this chapter, include the provision of appliances and supplies; nursing care by a registered nurse; institutional services, including the general and usual care, services, supplies, and equipment furnished by healthcare institutions and agencies or entities other than hospitals; physiotherapy; drugs and medications; therapeutic services and equipment, including oxygen and the rental of oxygen equipment; hospital beds; iron lungs; orthopedic services and appliances, including wheelchairs, trusses, braces, crutches, and prosthetic devices, including artificial limbs and eyes; and any other appliance, supply, or service related to healthcare which does not qualify as an emergency medical service.
(13) “Out-of-network” refers to healthcare services provided to a covered person by providers or facilities who do not belong to the provider network in the healthcare plan.
(14) “Nonparticipating provider” means a healthcare provider who has not entered into a contract with a healthcare plan for the delivery of medical services.
(15) “Participating provider” means a healthcare provider that has entered into a contract with an insurer for the delivery of healthcare services to covered persons under a healthcare plan.
(16) “Resolution organization” means a qualified, independent, third-party claim dispute resolution entity selected by and contracted with the department.
(17) “State healthcare plan” means:
(A) The state employees' health insurance plan established pursuant to Article 1 of Chapter 18 of Title 45;
(B) The health insurance plan for public school teachers established pursuant to Subpart 2 of Part 6 of Article 17 of Chapter 2 of Title 20;
(C) The health insurance plan for public school employees established pursuant to Subpart 3 of Part 6 of Article 17 of Chapter 2 of Title 20; and
(D) The Regents Health Plan established pursuant to authority granted to the board pursuant to Code Sections 20-3-31, 20-3-51, and 31-2-4.
(18) “Surprise bill” means a bill resulting from an occurrence in which charges arise from a covered person receiving healthcare services from an out-of-network provider at an in-network facility.
(a) Nothing in this chapter shall be applicable to healthcare plans which are subject to the exclusive jurisdiction of the Employee Retirement Income Security Act of 1974, 29 U.S.C. Sec. 1001, et seq.
(b) This chapter shall be applicable only to healthcare plans and state healthcare plans as defined in this chapter.
(a) An insurer that provides any benefits to covered persons with respect to emergency medical services shall pay for such emergency medical services regardless of whether the healthcare provider or facility furnishing emergency medical services is a participating provider or facility with respect to emergency medical services, in accordance with this chapter:
(1) Without need for any prior authorization determination and without any retrospective payment denial for medically necessary services; and
(2) Regardless of whether the healthcare provider or facility furnishing emergency medical services is a participating provider or facility with respect to emergency medical services.
(b) In the event a covered person receives the provision of emergency medical services from a nonparticipating emergency medical provider, the nonparticipating provider shall collect or bill no more than such person's deductible, coinsurance, copayment, or other cost-sharing amount as determined by such person's policy directly and such insurer shall directly pay such provider the greater of:
(1) The verifiable contracted amount paid by all eligible insurers subject to the provisions of this chapter for the provision of the same or similar services as determined by the department;
(2) The most recent verifiable amount agreed to by the insurer and the nonparticipating emergency medical provider for the provision of the same services during such time as such provider was in-network with such insurer; or
(3) Such higher amount as the insurer may deem appropriate given the complexity and circumstances of the services provided.
Any amount that the insurer pays the nonparticipating provider under this subsection shall not be required to include any amount of coinsurance, copayment, or deductible owed by the covered person or already paid by such person.
(c) A healthcare plan shall not deny benefits for emergency medical services previously rendered based upon a covered person's failure to provide subsequent notification in accordance with plan provisions, where the covered person's medical condition prevented timely notification.
(d) For purposes of the covered person's financial responsibilities, the healthcare plan shall treat the emergency medical services received by the covered person from a nonparticipating provider or nonparticipating facility pursuant to this Code section as if such services were provided by a participating provider or participating facility, and shall include applying the covered person's cost-sharing for such services toward the covered person's deductible and maximum out-of-pocket limit applicable to services obtained from a participating provider or a participating facility under the healthcare plan.
(e) In the event a covered person receives emergency medical services from a nonparticipating facility, the nonparticipating facility shall bill the covered person no more than such covered person's deductible, coinsurance, copayment, or other cost-sharing amount as determined by such person's policy directly.
(f) All insurer payments made to providers pursuant to this Code section shall be in accord with Code Section 33-24-59.14. Such payments shall accompany notification to the provider from the insurer disclosing whether the healthcare plan is subject to the exclusive jurisdiction of the Employee Retirement Income Security Act of 1974, 29 U.S.C. Sec. 1001, et seq.
(a) In accordance with Code Section 33-20E-7 and this chapter, an insurer that provides any benefits to covered persons with respect to nonemergency medical services shall pay for such services in the event that such services resulted in a surprise bill regardless of whether the healthcare provider furnishing nonemergency medical services is a participating provider with respect to nonemergency medical services.
(b) In the event a covered person receives a surprise bill for the provision of nonemergency medical services from a nonparticipating medical provider, the nonparticipating provider shall collect or bill the covered person no more than such person's deductible, coinsurance, copayment, or other cost-sharing amount as determined by such person's policy directly and such insurer shall directly pay such provider the greater of:
(1) The verifiable contracted amount paid by all eligible insurers subject to the provisions of this chapter for the provision of the same or similar services as determined by the department;
(2) The most recent verifiable amount agreed to by the insurer and the nonparticipating provider for the provision of the same services during such time as such provider was in-network with such insurer; or
(3) Such higher amount as the insurer may deem appropriate given the complexity and circumstances of the services provided.
Any amount that the insurer pays the nonparticipating provider under this subsection shall not be required to include any amount of coinsurance, copayment, or deductible owed by the covered person or already paid by such person.
(c) For purposes of the covered person's financial responsibilities, the healthcare plan shall treat the nonemergency medical services received by the covered person from a nonparticipating provider pursuant to this Code section as if such services were provided by a participating provider, and shall include applying the covered person's cost-sharing for such services toward the covered person's deductible and maximum out-of-pocket limit applicable to services obtained from a participating provider under the healthcare plan.
(d) All insurer payments made to providers pursuant to this Code section shall be in accord with Code Section 33-24-59.14. Such payments shall accompany notification to the provider from the insurer disclosing whether the healthcare plan is subject to the exclusive jurisdiction of the Employee Retirement Income Security Act of 1974, 29 U.S.C. Sec. 1001, et seq.
(e) Notwithstanding any other law or regulation to the contrary, nothing in this Code section shall affect a covered person's financial responsibilities or a nonparticipating facility's rights with respect to nonemergency medical services received from a nonparticipating facility.
No healthcare plan shall deny or restrict the provision of covered benefits from a participating provider to a covered person solely because the covered person obtained treatment from a nonparticipating provider leading to a balance bill. Notice of such protection shall be provided in writing to the covered person by the insurer.
(a) Nothing in this chapter shall reduce a covered person's financial responsibilities in the event that such covered person chose to receive nonemergency medical services from an out-of-network provider. Such services shall not be considered a surprise bill for purposes of this chapter.
(b) The covered person's choice described in subsection (a) of this Code section must:
(1) Be documented through such covered person's written and oral consent in advance of the provision of such services; and
(2) Occur only after such person has been provided with an estimate of the potential charges.
(c) If during the provision of nonemergency medical services, a covered person requests that the attending provider refer such covered person to another provider for the immediate provision of additional nonemergency medical services, such referred provider shall be exempt from the requirements in subsection (b) of this Code section if the following requirements are satisfied:
(1) The referring provider advises the covered person that the referred provider may be a nonparticipating provider and may charge higher fees than a participating provider;
(2) The covered person orally and in writing acknowledges that he or she is aware that the referred provider may be a nonparticipating provider and may charge higher fees than a participating provider;
(3) The written acknowledgment referenced in paragraph (2) of this subsection shall be on a document separate from other documents provided by the referring provider and shall include language to be determined by the Commissioner through rule and regulation; and
(4) The referring provider records the satisfaction of the requirements in paragraphs (1), (2), and (3) of this subsection in the covered person's medical file.
(a) Subject to appropriation, the department shall provide for the maintenance of an all-payer health claims data base and maintain records of insurer payments which shall track such payments by a wide variety of healthcare services and by geographic areas of this state. Such appropriation must specifically reference the Surprise Billing Consumer Protection Act. The department shall update information in the all-payer health claims data base on no less than an annual basis and shall maintain such information on the department's website.
(b) In the event that the appropriation described in subsection (a) of this Code section is not made, the department shall update information from such other verifiable data as the Commissioner shall determine appropriate on no less than an annual basis and shall maintain such information on the department's website.
(a) If an out-of-network provider concludes that payment received from an insurer pursuant to Code Section 33-20E-4 or 33-20E-5 or if an out-of-network facility concludes that payment received from an insurer pursuant to Code Section 33-20E-4 is not sufficient given the complexity and circumstances of the services provided, the provider or facility may initiate a request for arbitration with the Commissioner. Such provider or facility shall submit such request within 60 days of receipt of such payment for the claim and concurrently provide the insurer with a copy of such request. Such payment shall be indicated by the insurer on the first page of the insurer's remittance to the out-of-network provider in a manner to be determined by the Commissioner through the promulgation of rules and regulations. Such rules and regulations shall specify when the time period to request arbitration commences.
(b) A request for arbitration may involve a single patient and a single type of healthcare service, a single patient and multiple types of healthcare services, multiple patients and a single type of healthcare service, or multiple substantially similar healthcare services in the same specialty on multiple patients.
(a) The Commissioner shall dismiss certain requests for arbitration if the disputed claim is:
(1) Related to a healthcare plan that is not regulated by the state;
(2) The basis for an action pending in state or federal court at the time of the request for arbitration;
(3) Subject to a binding claims resolution process entered into prior to July 1, 2021;
(4) Made against a healthcare plan subject to the exclusive jurisdiction of the Employee Retirement Income Security Act of 1974, 29 U.S.C. Sec. 1001, et seq.; or
(5) In accord with other circumstances as may be determined by department rule.
(b) The Commissioner may dismiss certain requests for arbitration in the following circumstances:
(1) The provider or facility has engaged in a pattern or practice of any of the following:
(A) Failing to respond to the department's requests for data under Code Section 33-20E-11.1;
(B) Failing to respond to the department's other inquires after filing requests for arbitration; or
(C) Failing to pay resolution organizations as required under Code Section 33-20E-16;
(2) The provider or facility failed to file its request for arbitration within 60 days of receipt of payment for the claim and concurrently provide the insurer with a copy of such request; or
(3) The provider or facility failed to explain in detail the reasons arbitration is needed. Such explanation shall include a representation as to whether the insurer's payment was in accord with the relevant provisions of Code Sections 33-20E-4 or 33-20E-5 if the party requesting arbitration is an out-of-network provider, and Code Section 33-20E-4 if the requesting party is out-of-network facility. If such payment was in such accord, the explanation shall provide in detail the complexity and circumstances of the services provided which necessitate additional payment.
Within 60 days of the insurer's receipt of the provider's or facility's request for arbitration, the insurer shall submit to the Commissioner all data necessary for the Commissioner to determine whether such insurer's payment to such provider or facility was in compliance with Code Section 33-20E-4 or 33-20E-5. The Commissioner shall not be required to make such a determination prior to referring the dispute to a resolution organization for arbitration. When an insurer fails to submit such data within such 60 day period, the Commissioner may assess penalties against such insurer in accord with Code Section 33-2-24 or declare a default judgment against such insurer.
The Commissioner may request from a provider or facility requesting arbitration such data as the Commissioner deems necessary to determine whether the insurer's payment to such provider or facility was in compliance with Code Section 33-20E-4 or 33-20E-5. The Commissioner shall not be required to make such determination prior to referring the dispute to a resolution organization for arbitration. If such provider or facility fails to submit such data within 60 days of such request, the Commissioner may fine such provider or facility up to $2,000.00 for each and every violation of the Commissioner's request for data or if such provider or facility knew or reasonably should have known that it was in violation of the Commissioner's request for data, the monetary penalty provided for in this Code section may be increased to an amount up to $5,000.00 for each and every act in violation.
The Commissioner shall promulgate rules implementing an arbitration process requiring the Commissioner to select one or more resolution organizations to arbitrate certain claim disputes between insurers and out-of-network providers or facilities. The Commissioner may promulgate such other rules as reasonably necessary to facilitate the arbitration process. Prior to proceeding with such arbitration, the Commissioner shall allow the parties 60 days from the date the Commissioner received the request for arbitration to negotiate a settlement. The parties shall timely notify the Commissioner of the result of such negotiation. If within 60 days of the date that the Commissioner received the request for arbitration, the parties have neither agreed upon a settlement nor agreed that more time is needed to negotiate a settlement, or both, or either party has failed to notify the Commissioner of such settlement or need for additional time to negotiate, the Commissioner shall within five days, refer the dispute to a resolution organization. The department shall contract with one or more resolution organizations by July 1, 2021, to review and consider claim disputes between insurers and out-of-network providers or facilities as such disputes are referred by the Commissioner.
Upon the Commissioner's referral of a dispute to a resolution organization, the parties shall have five days to select an arbitrator by mutual agreement. If the parties have not notified the resolution organization of their mutual selection before the fifth day, the resolution organization shall select an arbitrator from among its members. Any selected arbitrator shall be independent of the parties and shall not have a personal, professional, or financial conflict with any party to the arbitration. The arbitrator shall have experience or knowledge in healthcare billing and reimbursement rates. He or she shall not communicate ex parte with either party.
The parties shall have ten days after the selection of the arbitrator to submit in writing to the resolution organization each party's final offer and each party's argument in support of such offer. The parties' initial arguments shall be limited to written form and shall consist of no more than 20 pages per party. The parties may submit documents in support of their arguments. The arbitrator may require the parties to submit such additional written argument and documentation as the arbitrator determines necessary, but the arbitrator may require such additional filing no more than once. Such additional written argument shall be limited to no more than ten pages per party. The arbitrator may set filing times and extend such filing times as appropriate. Failure of either party to timely submit the supportive documentation described herein may result in a default against the party failing to make such timely submission.
Each party shall submit one proposed payment amount to the arbitrator. The arbitrator shall pick one of the two amounts submitted and shall reveal that amount in the arbitrator's final decision. The arbitrator may not modify such selected amount. In making such a decision, the arbitrator shall consider the complexity and circumstances of each case, including, but not limited to, the level of training, education, and experience of the relevant physicians or other individuals at the facility who are licensed or otherwise authorized in this state to furnish healthcare services and other factors as determined by the Commissioner through rule. The arbitrator's final decision shall be in writing and shall describe the basis for such decision, including citations to any documents relied upon. Notwithstanding Code Section 33-20E-14, such decision shall be made within 60 days of the Commissioner's referral. Any default or final decision issued by the arbitrator shall be binding upon the parties and is not appealable through the court system.
The party whose final offer amount is not selected by the arbitrator shall pay the amount of the verdict, the arbitrator's expenses and fees, and any other fees assessed by the resolution organization, directly to such resolution organization. In the event of default, the defaulting party shall also pay such moneys due directly to such organization. In the event that both parties default, the parties shall each be responsible for paying such organization one-half of all moneys due. Moneys due under this Code section shall be paid in full to the resolution organization within 15 days of arbitrator's final decision. Within three days of such organization's receipt of moneys due to the party whose final offer was selected, such moneys shall be distributed to such party.
Following the resolution of arbitration, the Commissioner may refer the decision of the arbitrator to the appropriate state agency or the governing entity with governing authority over such provider or facility if the Commissioner concludes that a provider or facility has either displayed a pattern of acting in violation of this chapter or has failed to comply with a lawful order of the Commissioner or the arbitrator. Such referral shall include a description of such violations and the Commissioner's recommendation for enforcement action. Such state agency or governing entity shall initiate an investigation regarding such referral within 30 days of receiving such referral and shall conclude the investigation within 90 days of receiving such referral.
Once a request for arbitration has been filed with the Commissioner by a provider or facility under this chapter, neither such provider nor such facility nor the insurer in such dispute shall file a lawsuit in court regarding the same out-of-network claim.
Each resolution organization contracted with by the department shall report to the department on a quarterly basis the results of all disputes referred to such organization as follows: the number of arbitrations filed, settled, arbitrated, defaulted, or dismissed during the previous calendar year and whether the arbitrators' decisions were in favor of the insurer or the provider or facility.
On or before July 1, 2022, and each July 1 thereafter, the Commissioner shall provide a written report to the House Committee on Insurance and the Senate Insurance and Labor Committee, or their successor committees, and shall post the report on the department's website summarizing the number of arbitrations filed, settled, arbitrated, defaulted, and dismissed during the previous calendar year; and a description of whether the arbitration decisions were in favor of the insurer or the provider or facility.
The arbitration conducted under this chapter shall be subject to neither Chapter 13 of Title 50, the “Georgia Administrative Procedure Act,” nor Chapter 11 of Title 9, the “Georgia Civil Practice Act.”
No nonparticipating provider shall report to any credit reporting agency any covered person who receives a surprise bill for the receipt of healthcare services from such provider and does not pay such provider any copay, coinsurance, deductible, or other cost-sharing amount beyond what such covered person would pay if such nonparticipating provider had been a participating provider.
Nothing in this chapter shall reduce a covered person's financial responsibilities with regard to ground ambulance transportation.
(a) The requirements of this Code section shall not apply to a health maintenance organization, as defined in Code Section 33-21-1, possessing a valid certificate of authority obtained in accordance with Code Section 33-21-2.
(b)(1) An insurer providing a network plan shall contract with and maintain a network of participating providers in sufficient number and appropriate type, including primary care and specialty care, pharmacies, clinical laboratories, and facilities, throughout such plan's service area to ensure covered persons have access to the full scope of benefits and services covered under such plan.
(2) An insurer providing coverage for mental health or substance use disorders as part of a network plan shall contract with and maintain a network of participating providers that specialize in mental health and substance use disorder services in sufficient number and appropriate type throughout such plan's service area to ensure covered persons have access to the full scope of mental health and substance use disorder benefits and services covered under such plan.
(c) The Commissioner shall determine and may further assess the adequacy and breadth of a network plan using appropriate qualitative and quantitative criteria, which may include but are not limited to federal rules and regulations for network plans promulgated annually by the Center for Consumer Information and Insurance Oversight in the Notice of Benefit and Payment Parameters issued to qualified health plans, the ability of the network to meet the needs of all covered persons, the availability of participating providers that are within a reasonable time and distance to covered persons and accepting patients, appointment wait times, and the availability of other healthcare service delivery system options.
(d) An insurer shall not deny preauthorization for healthcare services to be performed by a participating provider solely because the covered person's referral to such provider was made by a nonparticipating provider.
(e) An insurer shall not:
(1) Require prior authorization, medical review, or administrative clearance for a telehealth service that would not be required if such service were provided in person;
(2) Require demonstration that it is necessary to provide a service to a covered person through telehealth;
(3) Require a provider to be employed by another provider or agency in order to provide a telehealth service that would not be required if such service were provided in person;
(4) Restrict or deny coverage of a telehealth service based solely on the communication technology or application used to deliver such service;
(5) Require a provider to be part of a telehealth network;
(6) Require a covered person to utilize telehealth or telemedicine in lieu of a nonparticipating provider accessible for in-person consultation or contact; or
(7) Be required to pay a facility fee to a hospital for telehealth services unless the hospital is the originating site as defined in subsection (b) of Code Section 33-24-56.4.
(f) The Commissioner shall adopt rules and regulations to implement and administer this Code section.
(a)(1) An insurer shall monitor on an ongoing basis the ability, clinical capacity, and legal authority of its participating providers to furnish all contracted covered benefits to all covered persons under a network plan.
(2) Beginning January 1, 2025, and annually thereafter, in a manner and format as determined by the Commissioner, an insurer shall report to the Commissioner such quantitative data as necessary to demonstrate compliance with Code Section 33-20E-24.
(b) The Commissioner is authorized to conduct a data call, market conduct examination, or compliance audit to determine compliance with the provisions in Code Section 33-20E-24, as authorized by Code Section 33-2-11, and the insurer subject to such data call, market conduct examination, or compliance audit shall pay all the actual expenses incurred, in accord with Code Section 33-2-15.
(c)(1) When the Commissioner determines noncompliance with the provisions in Code Section 33-20E-24, the Commissioner shall notify the insurer of the determination and shall set forth the reasons for the determination. Prior to such determination, the Commissioner shall consider factors that might hinder an insurer's compliance, including, but not limited to, the availability of providers, the willingness of nonparticipating providers to enter into reasonable network contract agreements with an insurer, and good faith efforts by an insurer to enter into network contract agreements with such nonparticipating providers.
(2) The Commissioner may set forth proposed remedies that will render compliance in the judgment of the Commissioner, may order that healthcare services provided by nonparticipating providers be covered at an in-network level of benefits, and may impose any administrative penalties authorized by this title.
(d) Within 30 days of notification from the Commissioner, the insurer shall submit a response to the Commissioner that addresses all of the Commissioner's concerns.
(e) Within 30 days of the submission of the response, the Commissioner shall determine whether such response is acceptable and shall notify the insurer of the determination and shall set forth the reasons for the determination.
(f) If the response is deemed unacceptable to the Commissioner, the insurer shall have the right to request a hearing in accord with Code Section 33-2-17.
(a) For each and every act in violation of Code Section 33-20E-24, the Commissioner may impose a monetary penalty of up to $2,000.00, unless the insurer knew or reasonably should have known of the violation, in which case the monetary penalty imposed may be up to $5,000.00 for each and every act in violation.
(b) The Commissioner may take any action authorized, including, but not limited to, issuing an administrative order imposing monetary penalties, imposing a compliance plan, ordering the insurer to develop a compliance plan, or ordering the insurer to reprocess claims.
As used in this chapter, the term:
(1) “ERISA” means the Employee Retirement Income Security Act of 1974, 29 U.S.C. Section 1001, et seq.
(2) “Insurer” means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the Commissioner, that contracts, offers to contract, or enters into an agreement to provide, deliver, arrange for, pay for, or reimburse any of the costs of healthcare services, including those of an accident and sickness insurance company, a health maintenance organization, a healthcare plan, a managed care plan, or any other entity providing a health insurance plan, a health benefit plan, or healthcare services.
(3) “Self-funded healthcare plan” means an arrangement whereby an employer assumes the financial risk for providing healthcare benefits to its employees and such arrangement is subject to the exclusive jurisdiction of ERISA.
(a) Notwithstanding any provision of law in Chapter 20E of this title, the “Surprise Billing Consumer Protection Act,” a self-funded healthcare plan may elect on an annual basis to participate in and be bound by such Act.
(b) A self-funded healthcare plan that elects to participate in the Surprise Billing Consumer Protection Act shall provide notice to the Commissioner of its election decision on a form prescribed by the Commissioner. The completed form shall include an attestation that the self-funded healthcare plan has elected to participate in and be bound by the Surprise Billing Consumer Protection Act to the extent that insurers are similarly bound. Such form shall be posted on the Commissioner's website for use by self-funded healthcare plans choosing to opt in.
(c) A self-funded healthcare plan may elect to initiate its participation on either January 1 of any year or on the first day of the self-funded healthcare plan's plan year of any year.
(d) On its election form, the plan must indicate whether it chooses to affirmatively renew its election on an annual basis or whether it should be presumed to have renewed on an annual basis until the Commissioner receives advance notice from the plan that it is terminating its election as of either December 31 of a calendar year or the last day of its plan year. Notices under this subsection shall be submitted to the Commissioner at least 30 days in advance of the effective date of the election to initiate participation and 30 days in advance of the effective date of the termination of participation.
(e) Self-funded healthcare plans opting in shall develop processes to address employee notifications or other responsibilities under ERISA that may arise from electing to participate in the Surprise Billing Consumer Protection Act.
The department shall maintain on its website a list of all self-funded healthcare plans that have chosen to participate in and comply with the Surprise Billing Consumer Protection Act.
Nothing in this chapter shall be applicable to healthcare plans which are subject to the exclusive jurisdiction of ERISA, unless such plan elects to participate in and agrees to comply with the Surprise Billing Consumer Protection Act.
Notwithstanding any provision of law in the Surprise Billing Consumer Protection Act, in the event that a self-funded healthcare plan has chosen to participate in and comply with such Act, the Commissioner shall allow such participation. The Commissioner shall retain the authority, however, to remove or refuse to readmit such participant if the Commissioner determines that the self-funded healthcare plan is failing or previously failed to comply with the Surprise Billing Consumer Protection Act. Any self-funded healthcare plan shall have the opportunity to request a hearing pursuant to Code Section 33-2-17 prior to the effective date of such removal or denial.
As used in this chapter, the term:
(1) “Basic health care services” means health care services which an enrolled population might reasonably require in order to be maintained in good health, including as a minimum but not restricted to preventive care, emergency care, inpatient hospital and physician care, and outpatient medical services.
(2) “Enrollee” means an individual who has elected to contract for or participate in a health benefits plan for that individual or for that individual and that individual's eligible dependents.
(3) “Evidence of coverage” means any certificate, agreement, or contract issued to an enrollee setting out the coverage to which he is entitled.
(4) “Health benefits plan” means any arrangement whereby any person undertakes to provide, arrange for, pay for, or reimburse any part of the cost of any health care services, at least part of which consists of arranging for or the provision of health care services, as distinguished from an arrangement which provides only for indemnification against the cost of such services on a prepaid basis through insurance or otherwise.
(5) “Health care services” means any services included in the furnishing to any individual of medical or dental care or hospitalization or incident to the furnishing of such care or hospitalization, as well as the furnishing to any person of any and all other services for the purpose of preventing, alleviating, curing, or healing human illness or injury.
(6) “Health maintenance organization” means any person who undertakes to provide or arrange for one or more health benefits plans.
(7) “Insurer” means every insurer authorized under this title to issue contracts of accident and sickness insurance. Health care corporations and health maintenance organizations are included within such term.
(7.1) “Patient” means a person who seeks or receives health care services from a health maintenance organization.
(8) “Person” means any natural or artificial person including but not limited to individuals, partnerships, associations, trusts, or corporations.
(9) “Provider” means any physician, hospital, or other person who is licensed or otherwise authorized in this state to furnish health care services.
(a) Any domestic stock, mutual, or nonprofit corporation whose charter powers include the business of a health maintenance organization may apply to the Commissioner for and obtain a certificate of authority to establish and operate a health maintenance organization in compliance with this chapter. No person shall establish or operate a health maintenance organization in this state; sell, offer to sell, or solicit offers to purchase; or receive advance or periodic consideration in conjunction with a health maintenance organization without obtaining a certificate of authority under this chapter.
(b) Each application for a certificate of authority shall be verified by an officer or authorized representative of the applicant, shall be in a form prescribed by the Commissioner, and shall set forth or be accompanied by the following:
(1) A copy of the corporation's charter and all amendments to the charter;
(2) A copy of the bylaws, rules and regulations, or similar document, if any, regulating the conduct of the internal affairs of the applicant;
(3) A list of the names, addresses, and official positions of the persons who are to be responsible for the conduct of the affairs of the applicant, including all members of the board of directors, board of trustees, executive committee, or other governing board or committee, and the principal officers of the corporation;
(4) A copy of any contract made or to be made between any providers or persons listed in paragraph (3) of this subsection and the applicant;
(5) A statement describing in detail the health maintenance organization, its health benefits plan or plans, facilities, and personnel;
(6) A copy of the form of evidence of coverage to be issued to the enrollees;
(7) A copy of the form of the group contract, if any, which is to be issued to employers, unions, trustees, or other organizations;
(8) Financial statements showing the applicant's assets, liabilities, and sources of financial support. If the applicant's financial affairs are audited by independent certified public accountants, a copy of the applicant's most recent regular certified financial statement shall be deemed to satisfy this requirement unless the Commissioner directs that additional or more recent financial information is required for the proper administration of this chapter;
(9) A description of the proposed method of marketing the plan, a financial plan which includes a three-year projection of the initial operating results anticipated, and a statement as to the sources of working capital as well as any other sources of funding;
(10) A power of attorney duly executed by such applicant, if not domiciled in this state, appointing the Commissioner, his successors in office, and duly authorized deputies as the true and lawful attorney of the applicant in and for this state upon whom all lawful process in any legal action or proceeding against the health maintenance organization on a cause of action arising in this state may be served;
(11) A statement describing the geographic area or areas to be served;
(12) A description of the complaint procedures to be utilized as required under Code Section 33-21-9;
(13) A description of the procedures and programs to be implemented to meet the quality of health care requirements in subsection (b) of Code Section 33-21-3;
(14) A description of the mechanism by which enrollees will be afforded an opportunity to participate in matters of policy and operation under subsection (b) of Code Section 33-21-6; and
(15) Such other information as the Commissioner may require.
(c)(1) A health maintenance organization shall, unless otherwise provided for in this chapter, file a notice describing any modification of the operation set out in the information required by subsection (b) of this Code section. Such notice shall be filed with the Commissioner prior to the modification. If the Commissioner does not disapprove within 60 days of filing, such modification shall be deemed approved.
(2) The Commissioner may promulgate rules and regulations exempting from the filing requirements of paragraph (1) of subsection (b) of this Code section those items he deems unnecessary.
(a) Upon receipt of an application for issuance of a certificate of authority, the Commissioner of Insurance shall forthwith transmit copies of such application and accompanying documents to the commissioner of community health; provided, however, that if the applicant meets the standards of subsection (b.1) of this Code section the Commissioner shall not be required to transmit the application and accompanying documents to the commissioner of community health.
(b) The commissioner of community health shall determine whether the applicant for a certificate of authority, with respect to health care services to be furnished:
(1) Has demonstrated the willingness and potential ability to assure that such health care services will be provided in a manner to assure both availability and accessibility of adequate personnel and facilities and in a manner enhancing availability, accessibility, and continuity of service;
(2) Has arrangements, established in accordance with existing laws and regulations promulgated by the commissioner of community health, for an ongoing quality of health care assurance program concerning health care processes and outcomes;
(3) Has a procedure, established in accordance with regulations of the commissioner of community health, to develop, compile, evaluate, and report statistics relating to the cost of its operations, the pattern of utilization of its services, the availability and accessibility of its services, and such other matters as may be reasonably required by the commissioner of community health;
(4) Has arrangements, established in accordance with existing laws and regulations promulgated by the commissioner of community health, for coverage of out-of-area emergency services rendered to its enrollees; and
(5) Has arrangements to comply with the provisions of Code Section 33-20A-9.1, relating to nomination and reimbursement of providers which are not on that health maintenance organization's provider panel.
(b.1) An applicant that is compliant with or accredited by a nationally recognized accreditation agency or organization shall be deemed to be in compliance with subsection (b) of this Code section; and, upon submission of proof of compliance or accreditation to the Commissioner of Insurance, certification pursuant to subsection (c) of this Code section shall not be required. The Commissioner of Insurance shall be authorized to promulgate rules and regulations to determine which national accreditation agencies shall be used for purposes of this Code section.
(c) Within 90 days of receipt of the application for issuance of a certificate of authority, the commissioner of community health shall certify to the Commissioner of Insurance whether the proposed health maintenance organization meets the requirements of subsection (b) of this Code section. If the commissioner of community health certifies that the health maintenance organization does not meet the requirements, he or she shall specify in what respects it is deficient.
(d) The Commissioner of Insurance shall issue or deny a certificate of authority to any person filing an application pursuant to Code Section 33-21-2 within 90 days of receipt of the certification from the commissioner of community health or upon the applicant's presentation of proof to the Commissioner of Insurance of its compliance with or accreditation by a national accreditation agency or organization. Issuance of a certificate of authority shall be granted upon payment of the application fees prescribed in Code Sections 33-8-1 and 33-8-3 if the Commissioner of Insurance is satisfied that the following conditions are met:
(1) The persons responsible for the conduct of the affairs of the applicant are competent and trustworthy, possess good reputations, and have had appropriate administrative experience, training, or education in health care delivery systems or allied professions;
(2) The commissioner of community health certifies, in accordance with subsection (a) of this Code section, that the health maintenance organization's proposed plan of operation meets the requirements of subsection (b) of this Code section or the Commissioner of Insurance has received proof of the health maintenance organization's compliance with or accreditation by a nationally recognized accreditation agency or organization;
(3) The health benefits plan constitutes an appropriate mechanism whereby the health maintenance organization will effectively provide or arrange for the provision of basic health care services on a prepaid basis, through insurance or otherwise, except to the extent of reasonable requirements for copayments;
(4) The health maintenance organization is financially responsible and may reasonably be expected to meet its obligations to enrollees and prospective enrollees. In making this determination, the Commissioner of Insurance may consider:
(A) The financial soundness of the health benefits plan's arrangements for health care services and the schedule or charges used in connection with providing health care services;
(B) The adequacy of working capital;
(C) Any agreement with an insurer, a government, or any other organization for insuring the payment of the cost of health care services or the provision for automatic applicability of an alternative coverage in the event of discontinuance of the plan;
(D) Any agreement with providers for the provision of health care services; and
(E) Any deposit of cash or securities submitted in accordance with Code Section 33-21-10 as a guarantee that the obligations will be duly performed;
(5) The enrollees will be afforded an opportunity to participate in matters of policy and operation pursuant to Code Section 33-21-6;
(6) Nothing in the proposed method of operation, as shown by the information submitted pursuant to Code Section 33-21-2 or by independent investigation, is contrary to the public interest; and
(7) Any deficiencies, if applicable, certified by the commissioner of community health have been corrected.
(e) Before any health maintenance organization changes its address, the certificate of authority shall be returned to the Commissioner of Insurance who shall endorse the certificate of authority indicating the change.
Every health maintenance organization subject to this chapter shall pay to the Commissioner of Insurance the annual license fee provided in Code Section 33-8-3.
(a) The Commissioner of Insurance may suspend or revoke any certificate of authority issued to a health maintenance organization under this chapter if he finds that any of the following conditions exist:
(1) The health maintenance organization is operating significantly in contravention of its basic organizational document, its health benefits plan, or in a manner contrary to that described in and reasonably inferred from any other information submitted under Code Section 33-21-2, unless amendments to the submissions have been filed with and approved by the Commissioner of Insurance;
(2) The health maintenance organization issues evidence of coverage or uses a schedule of charges for health care services which do not comply with the requirements of Code Section 33-21-13;
(3) The health benefits plan does not provide or arrange for basic health care services;
(4) The health maintenance organization does not meet the requirements of Code Section 33-21-3 or is unable to fulfill its obligations to furnish health care services as required under its health benefits plan;
(5) The health maintenance organization is no longer financially responsible and may reasonably be expected to be unable to meet its obligations to enrollees or prospective enrollees;
(6) The health maintenance organization has failed to implement a mechanism affording the enrollees an opportunity to participate in matters of policy and operation under Code Section 33-21-6;
(7) The health maintenance organization has failed to implement the complaint system required by Code Section 33-21-9 in a manner to resolve valid complaints reasonably;
(8) The health maintenance organization, or any person on its behalf, has advertised or merchandised its services in an untrue, misrepresentative, misleading, deceptive, or unfair manner;
(9) The continued operation of the health maintenance organization would be hazardous to its enrollees; or
(10) The health maintenance organization has violated any provision of this chapter or of the rules and regulations of the Commissioner of Insurance or of the rules and regulations of the commissioner of community health; provided, however, that health maintenance organizations meeting the requirements of subsection (b.1) of Code Section 33-21-3 shall not be subject to the rules and regulations of the commissioner of community health.
(b) The Commissioner of Insurance may, without advance notice or a hearing thereon, suspend immediately the certificate of authority of any health maintenance organization as to which proceedings for receivership, conservatorship, rehabilitation, or other delinquency proceedings have been commenced in any state.
(c) When the certificate of authority of a health maintenance organization is suspended, the health maintenance organization shall not, during the period of the suspension, enroll any additional enrollees except newborn children or other newly acquired dependents of existing enrollees and shall not engage in any advertising or solicitation whatsoever.
(d) When the certificate of authority of a health maintenance organization is revoked, such organization shall proceed, immediately following the effective date of the order of revocation, to wind up its affairs and shall conduct no further business except as may be essential to the orderly conclusion of the affairs of such organization. It shall engage in no further advertising or solicitation whatsoever. The Commissioner of Insurance may, by written order, permit such further operation of the organization as he may find to be in the best interest of enrollees, to the end that enrollees will be afforded the greatest practical opportunity to obtain continuing health care coverage.
(a) The governing body of any health maintenance organization shall include providers and other individuals, provided that at least one-third of the members of the governing body shall be public members.
(b) The governing body shall establish a mechanism to afford the enrollees an opportunity to participate in matters of policy and operation through the establishment of advisory panels, by the use of advisory referendums on major policy decisions, or through the use of other mechanisms.
Any director, officer, or partner of a health maintenance organization who receives, collects, disburses, or invests funds in connection with the activities of the organization shall be responsible for the funds in a fiduciary relationship to the health maintenance organization.
(a) The powers of a health maintenance organization include, but are not limited to, the following:
(1) The purchase, lease, construction, renovation, operation, or maintenance of hospitals, medical facilities, or both, their ancillary equipment, and such property as may reasonably be required for the organization's principal office or for such other purposes as may be necessary in the transaction of the business of the organization;
(2) The making of loans to a medical group under contract with it in furtherance of its program or the making of loans to a corporation or corporations under its control for the purpose of acquiring or constructing medical facilities and hospitals or in furtherance of a program providing health care services to enrollees;
(3) The furnishing of health care services through providers which are under contract with or employed by the organization;
(4) The contracting with any person for the performance on its behalf of certain functions such as marketing and enrollment;
(5) The contracting with another insurer licensed in this state for the provision of insurance, indemnity, or reimbursement against the cost of health care services provided by the organization;
(6) The offering, in addition to basic health care services, of:
(A) Additional health care services;
(B) Indemnity benefits covering out-of-area or emergency services; and
(C) Indemnity benefits, in addition to those relating to out-of-area and emergency services, provided through insurers; and
(7) The extension of malpractice insurance to a medical group with which it has a mutually exclusive contract to provide medical services to the enrollees of the health maintenance organization; provided, however, that coverage only protects against liability arising from medical care provided to enrollees of the health maintenance organization who receive medical care at a facility under contract with or owned or operated by the health maintenance organization.
(b)(1) A health maintenance organization shall file notice, with adequate supporting information, with the Commissioner prior to the exercise of any power granted in paragraph (1) or (2) of subsection (a) of this Code section. The Commissioner shall disapprove the exercise of power if in his opinion it would substantially and adversely affect the financial soundness of the health maintenance organization and endanger its ability to meet its obligations. If the Commissioner does not disapprove within 90 days of the filing, it shall be deemed approved.
(2) The Commissioner may promulgate rules and regulations exempting from the filing requirement of paragraph (1) of this subsection those activities having a de minimis effect.
(a) Every health maintenance organization shall establish and maintain a complaint system which has been approved by the Commissioner of Insurance to provide reasonable procedures for the resolution of written complaints initiated by enrollees or providers concerning health care services.
(b) The health maintenance organization shall maintain records of written complaints concerning health care services for five years from the time the complaints are filed and shall submit to the Commissioner of Insurance a summary report at such times and in such format as the Commissioner of Insurance may require.
(c) The Commissioner of Insurance may examine the complaint system at any time.
(a) Every health maintenance organization shall be responsible for the assumption of full financial risk of providing basic health services to its members, except that the health maintenance organization may reinsure its risks with solvent reinsurers who qualify to transact reinsurance in this state under Code Section 33-7-14 and may enter into reinsurance treaties or agreements with such reinsurers in order to obtain reinsurance for:
(1) The cost of providing basic health services which exceeds in the aggregate $5,000.00 per member per year;
(2) The cost of providing basic health services to members when they are outside the health maintenance organization's service area; and
(3) Not more than 90 percent of the amount of which the health maintenance organization's costs for any fiscal year exceed 115 percent of its income for that fiscal year, provided that all reinsurance treaties and agreements entered into by health maintenance organizations shall under this Code section also be required to meet the same standards as would be required by this title for reinsurance treaties or agreements made by a property and casualty insurer as a ceding insurer.
(b) Each health maintenance organization shall deposit with the Commissioner cash or securities acceptable to the Commissioner in the amount of $100,000.00, provided that the Commissioner shall also have the authority to require such additional amounts of deposits as he may deem necessary to protect the enrollees of the health maintenance organization. The deposits shall be administered by the Commissioner pursuant to Chapter 12 of this title. The Commissioner shall also have the authority to waive, modify, or authorize accumulation and incremental adjustments of such deposits as he deems necessary to protect the enrollees of the health maintenance organization.
With the exception of investments made in accordance with paragraphs (1) and (2) of subsection (a) and subsection (b) of Code Section 33-21-8, the investable funds of a health maintenance organization shall be invested only in securities or other investments permitted by the laws of this state for the investment of assets constituting the legal reserves of life insurance companies or such other securities or investments as the Commissioner may permit. The investments shall be subject to the same terms, conditions, and limitations which apply to life insurance companies.
No employer, union, trade organization, or any other association shall force its members, either by payroll deduction or other means, to join a health maintenance organization.
(a) Every enrollee residing in this state is entitled to evidence of coverage under a health benefits plan. The health maintenance organization shall issue the evidence of coverage.
(b) No evidence of coverage or amendment to the evidence of coverage shall be issued or delivered to any person in this state until a copy of the form of the evidence of coverage or amendment thereto has been filed with and approved by the Commissioner.
(c) An evidence of coverage shall contain:
(1) No provisions or statements which are unjust, unfair, inequitable, misleading, or deceptive, which encourage misrepresentation, or which are untrue, misleading, or deceptive as defined in paragraphs (1) through (3) of subsection (a) of Code Section 33-21-26; and
(2) No provisions or statements which are in violation of Code Section 33-24-23 or paragraph (9) of subsection (a) of Code Section 33-29-2; and
(3) A disclosure to enrollees and prospective enrollees who inquire as individuals into the plan or plans offered by the health maintenance organization the information required by this paragraph. In the case of an employer negotiating for a health care plan or plans on behalf of his or her employees, sufficient copies of disclosure information shall be made available to employees upon request. Disclosure under this paragraph shall be readable, understandable, and on a standardized form containing information regarding all of the following for each plan it offers:
(A) The health care services or other benefits under the plan offered as well as limitations on services, kinds of services, benefits, or kinds of benefits to be provided;
(B) Rules regarding copayments, prior authorization, or review requirements including, but not limited to, preauthorization review, concurrent review, postservice review, or postpayment review that could result in the enrollee's being denied coverage or provision of a particular service;
(C) Potential liability for cost sharing for out of network services, including but not limited to providers, drugs, and devices or surgical procedures that are not on a list or a formulary;
(D) The financial obligations of the enrollee, including premiums, deductibles, copayments, and maximum limits on out-of-pocket expenses for items and services (both in and out of network);
(E) The number, mix, and distribution of participating providers. An enrollee or a prospective enrollee shall be entitled to a list of individual participating providers upon request;
(F) Enrollee rights and responsibilities, including an explanation of the grievance process provided under Chapter 20A of this title;
(G) An explanation of what constitutes an emergency situation and what constitutes emergency services, as defined in Chapter 20A of this title;
(H) The existence of any limited utilization incentive plans as defined in Chapter 20A of this title;
(I) The existence of restrictive formularies or prior approval requirements for prescription drugs. An enrollee or a prospective enrollee shall be entitled, upon request, to a description of specific drug and therapeutic class restrictions;
(J) The existence of limitations on choices of health care providers; and
(K) A summary of any agreements or contracts between the health maintenance organization and any provider in the same manner and subject to the same conditions as required for summaries of managed care plan contracts and agreements under division (1)(A)(xiii) of Code Section 33-20A-5.
(4) Any subsequent change may be evidenced in a separate document issued to the enrollee.
(d) A copy of the form of the evidence of coverage to be used in this state and any amendment thereto shall be subject to the filing and approval requirements of subsection (b) of this Code section unless it is subject to the jurisdiction of the Commissioner under the laws governing health insurance in which event the filing and approval provisions of such laws shall apply. To the extent, however, that the provisions do not apply to the requirements in subsection (c) of this Code section, the requirements in subsection (c) of this Code section shall be applicable.
(e)(1) Basic rates along with the method of computation of charges for enrollee coverage must be filed with and approved by the Commissioner prior to use.
(2) The basic rates and the method of computation of specific rate charges shall be established in accordance with actuarial principles for various categories of enrollees, provided that charges applicable to an enrollee shall not be individually determined based on the status of his health. Basic rates and charges shall not be excessive, inadequate, or unfairly discriminatory. A certification by a qualified actuary to the appropriateness of the basic rates, based on reasonable assumptions as to expected medical expenses, administrative expenses, and margins for contingencies, shall accompany the filing along with adequate supporting information.
(f) The Commissioner shall, within a reasonable period, approve any form if the requirements of subsections (a) through (e) of this Code section are met. It shall be unlawful to issue the form until approved. If the Commissioner disapproves the filing, he shall notify the filer. The Commissioner shall specify the reasons for his disapproval in the notice. At the expiration of 90 days the form or basic rate or method of computation of charges so filed shall be deemed approved unless prior to such expiration the filing has been approved or disapproved by the Commissioner.
(g) The Commissioner may require the submission of whatever relevant information he deems necessary in determining whether to approve or disapprove a filing made pursuant to this Code section.
Every health maintenance organization shall annually provide to its enrollees:
(1) A description of services and information as to where and how to secure them; and
(2) A clear and understandable description of the health maintenance organization's method for resolving enrollee complaints.
(a) Every health maintenance organization shall annually, on or before March 1, file with the Commissioner of Insurance, on forms to be designated by him and certified by at least two principal officers of said health maintenance organization, an annual statement as of December 31 of the preceding year and a copy of said report shall also be delivered to the commissioner of community health.
(b) Such report shall be on forms prescribed by the Commissioner of Insurance and shall include:
(1) A financial statement of the organization, including its balance sheet and receipts and disbursements for the preceding year certified by an independent public accountant;
(2) Any material changes in the information submitted pursuant to subsection (b) of Code Section 33-21-2;
(3) The number of persons enrolled during the year, the number of enrollees as of the end of the year, and the number of enrollments terminated during the year;
(4) A summary of information compiled pursuant to paragraph (3) of subsection (b) of Code Section 33-21-3 in such form as required by the commissioner of community health; and
(5) Any other information relating to the financial condition or performance of the health maintenance organization as is necessary to enable the Commissioner of Insurance and the commissioner of community health to carry out their duties under this chapter.
The same fees and taxes provided for in Chapter 8 of this title applicable to life insurers shall apply to and shall be imposed upon each health maintenance organization provided for in this chapter; and the organizations shall also be entitled to the same tax deductions, reductions, abatements, and credits that life insurers are entitled to receive.
(a) Whenever the Commissioner of Insurance shall deem it expedient, but not less than once every three years, he or his designee shall visit and examine the transactions, accounts, financial records, and documents of any health maintenance organization and of the providers with whom such organization has contracts, agreements, or other arrangements pursuant to its health benefits plan; and in connection with such examination the Commissioner of Insurance shall also have the authority to conduct an examination into the market conduct of the health maintenance organization.
(b) Whenever the commissioner of community health shall deem it expedient, but not less than once every five years, he or she or his or her designee shall visit and examine all matters relating to the quality of health care services of any health maintenance organization and providers with whom the organization has contracts, agreements, or other arrangements pursuant to its health benefits plan as often as he or she deems it necessary for the protection of the interests of the people of this state; provided, however, that health maintenance organizations meeting the requirements of subsection (b.1) of Code Section 33-21-3 shall not be subject to examination by the commissioner of community health.
(c) Every health maintenance organization, its officers, employees, representatives, and providers shall produce and make freely accessible to the Commissioner of Insurance or the commissioner of community health the accounts, records, documents, and files in its possession or control relating to the subject of the examination. The officers, employees, representatives, and providers shall facilitate such examination and aid the examiners as far as it is in their power in making the examination.
(d) The Commissioner or his or her designee shall make a full written report of each examination made by him or her containing only facts ascertained from the accounts, records, and documents examined and from the sworn testimony of witnesses.
(e) The report shall be certified by the Commissioner of Insurance or by the examiner in charge of the examination and, when so certified and after filing as provided in subsection (f) of this Code section, shall be admissible in evidence in any proceeding brought by the Commissioner against the health maintenance organization examined or any officer or agent of the health maintenance organization and shall be prima-facie evidence of the facts stated in such report.
(f) The Commissioner of Insurance shall furnish a copy of the proposed report to the health maintenance organization examined not less than 20 days prior to filing the report. If the health maintenance organization so requests in writing within such 20 day period or any longer period as the Commissioner may grant, the Commissioner shall grant a hearing with respect to the report and shall not file the report until after the hearing and such modifications have been made in the report as the Commissioner may deem proper.
(g) The Commissioner of Insurance may withhold from public inspection the report of any examination or investigation for so long as he deems it to be in the public interest or necessary to protect the health maintenance organization examined from unwarranted injury.
(h) After the report has been filed, the Commissioner of Insurance may publish the report or the results of such report in one or more newspapers published in this state if he should deem it to be in the public interest.
(i) The health maintenance organization so examined shall pay, at the direction of the Commissioner of Insurance, all the actual travel and living expenses connected with the examination. When the examination is made by an examiner who is not a regular employee of the Department of Insurance, the health maintenance organization examined shall pay the proper charges for the services of the examiner and his assistants in an amount approved by the Commissioner. A consolidated account for the examination shall be filed by the examiner with the Commissioner. No health maintenance organization or other entity shall pay and no examiner shall accept any additional emolument on account of any examination. When the examination is conducted in whole or in part by regular salaried employees of the department, payment for the services and proper expenses shall be made by the health maintenance organization examined to the Commissioner; and such payment shall be deposited with the Office of the State Treasurer.
(a) The Commissioner of Insurance shall adopt rules and regulations necessary for the implementation of this chapter with respect to all matters of organization, control of the matters relating to business, agents, examinations, and all other Code sections not exempted by this Code section.
(b) The commissioner of community health shall adopt rules and regulations for health maintenance organizations subject to his or her jurisdiction which are not inconsistent with this chapter and which are necessary to establish and control the standards of health care which a health maintenance organization shall maintain. Health maintenance organizations meeting the requirements of subsection (b.1) of Code Section 33-21-3 shall not be subject to the jurisdiction of the commissioner of community health.
Every health benefits plan of every health maintenance organization shall include provisions that:
(1) In the event a patient seeks emergency services and if necessary in the opinion of the health care provider responsible for the patient's emergency care and treatment and warranted by his or her evaluation, such emergency provider may initiate necessary intervention necessary to stabilize the condition of the patient without seeking or receiving prospective authorization by the health maintenance organization or health benefits plan. If in the opinion of the emergency health care provider a patient's condition has stabilized and the emergency health care provider certifies that the patient can be transported to another facility without suffering detrimental consequences or aggravating the patient's condition, the patient may be relocated to another facility which will provide continued care and treatment as necessary; and
(2) When a health maintenance organization uses a restrictive formulary for prescription drugs, such use shall include a written procedure whereby patients can obtain, without penalty and in a timely fashion, specific drugs and medications not included in the formulary when:
(A) The formulary's equivalent has been ineffective in the treatment of the patient's disease or condition; or
(B) The formulary's drug causes or is reasonably expected to cause adverse or harmful reactions in the patient.
The Commissioner of Insurance may, after notice and hearing, promulgate any reasonable rules and regulations which are necessary to provide for the licensing of agents. “Agent” means a person directly or indirectly associated with a health benefits plan who engages in solicitation or enrollment.
(a) Except as otherwise provided in this chapter, all hearings and proceedings held under this chapter shall be conducted in accordance with Chapter 2 of this title and the Commissioner of Insurance shall have all the powers granted to him in Chapter 2 of this title.
(b) The commissioner of community health, or his or her designated representative, shall be in attendance at the hearings and shall participate in the proceedings. The recommendation and findings of the commissioner of community health with respect to matters regarding health maintenance organizations under his or her jurisdiction relating to the quality of health care services provided in connection with any decision regarding denial, suspension, or revocation of a certificate of authority shall be conclusive and binding upon the Commissioner of Insurance. Health maintenance organizations meeting the requirements of subsection (b.1) of Code Section 33-21-3 shall not be subject to the jurisdiction of the commissioner of community health. After the hearing, or upon the failure of the health maintenance organization to appear at the hearing, the Commissioner of Insurance shall take action as is deemed advisable on written findings which shall be mailed to the health maintenance organization with a copy of the findings mailed to the commissioner of community health. The action of the Commissioner of Insurance and the recommendation and findings of the commissioner of community health shall be subject to review by the superior court having jurisdiction. The court may, in disposing of the issue before it, modify, affirm, or reverse the order of the Commissioner of Insurance in whole or in part.
(c) Chapter 13 of Title 50, the “Georgia Administrative Procedure Act,” shall apply to proceedings under this Code section to the extent that they are not in conflict with subsections (a) and (b) of this Code section.
All health maintenance organizations meeting the requirements of subsection (b.1) of Code Section 33-21-3 shall not be subject to regulation by the commissioner of community health. Upon the Commissioner's determination that a health maintenance organization no longer meets the requirements of subsection (b.1) of Code Section 33-21-3, the Commissioner shall immediately notify the commissioner of community health and such health maintenance organization shall be subject to regulation by the commissioner of community health until such time as it again meets the requirements of subsection (b.1) of Code Section 33-21-3 as determined by the Commissioner.
The commissioner of community health, in carrying out his obligations under subsection (b) of Code Section 33-21-3, paragraph (4) of subsection (a) of Code Section 33-21-5, and subsection (b) of Code Section 33-21-17, may contract with qualified persons to make recommendations concerning the determinations required to be made by him. Such recommendations may be accepted in full or in part by the commissioner of community health.
All applications, filings, and reports required under this chapter shall be treated as public documents.
(a) Any data or information pertaining to the diagnosis, treatment, or health of any enrollee or applicant obtained from the person or from any provider by any health maintenance organization shall be held in confidence and shall not be disclosed to any person except:
(1) To the extent that it may be necessary to carry out the purposes of this chapter;
(2) Upon the express consent of the enrollee or applicant;
(3) Pursuant to statute or court order for the production of evidence;
(4) The discovery of evidence; or
(5) In the event of claim or litigation between the person and the health maintenance organization wherein such data or information is pertinent.
(b) A health maintenance organization shall be entitled to claim any statutory privileges against such disclosure which the provider who furnished the information to the health maintenance organization is entitled to claim.
Any rehabilitation, liquidation, or conservation of a health maintenance organization shall be the rehabilitation, liquidation, or conservation of an insurance company and shall be conducted under the supervision of the Commissioner pursuant to the law governing the rehabilitation, liquidation, or conservation of insurance companies. The Commissioner may apply for an order directing him to rehabilitate, liquidate, or conserve a health maintenance organization upon any one or more grounds set forth in Chapter 37 of this title, relating to the rehabilitation, liquidation, or conservation of insurers or when in his opinion the continued operation of the health maintenance organization would be hazardous either to the enrollees or to the people of this state.
Notwithstanding any other law which may be inconsistent with this Code section, an insurer or a health care corporation licensed in this state may directly or through a subsidiary or affiliate organize and operate a health maintenance organization.
(a) No health maintenance organization or representative of a health maintenance organization may cause or knowingly permit the use of advertising which is untrue or misleading, solicitation which is untrue or misleading, or any form of evidence of coverage which is deceptive. For purposes of this Code section:
(1) A statement or item of information shall be deemed to be untrue if it does not conform to fact in any respect which is or may be significant to an enrollee of, or person considering enrollment in, a health benefits plan;
(2) A statement or item of information shall be deemed to be misleading, whether or not it may be literally untrue, if, in the total context in which the statement is made or the item of information is communicated, the statement or item of information may be reasonably understood by a reasonable person not possessing special knowledge regarding health care coverage as indicating any benefit or advantage or the absence of any exclusion, limitation, or disadvantage of possible significance to an enrollee of, or person considering enrollment in, a health benefits plan, if the benefit or advantage or absence of limitation, exclusion, or disadvantage does not in fact exist; and
(3) An evidence of coverage shall be deemed to be deceptive if the evidence of coverage taken as a whole, and with consideration given to typography and format, as well as language, shall be such as to cause a reasonable person not possessing special knowledge regarding health benefits plans and evidences of coverage for the health benefits plan to expect benefits, services, charges, or other advantages which the evidence of coverage does not provide or which the health benefits plan issuing the evidence of coverage does not regularly make available for enrollees covered under evidence of coverage.
(b) The provisions of Chapter 6 of this title applicable to insurers shall apply to health maintenance organizations in this chapter and, for the purpose of determining whether a violation of Chapter 6 of this title has occurred, an “enrollee” as defined in this chapter shall be deemed to be an insured or a policyholder as used in Chapter 6 of this title, whichever is applicable.
(c) An enrollee may not be canceled or nonrenewed except for the failure to pay the charge for such coverage or for such other reasons as may be promulgated by the Commissioner.
(a)(1) In lieu of suspension or revocation of a certificate of authority for any of the causes enumerated in Code Section 33-21-5, the Commissioner of Insurance may place a health maintenance organization on probation or may fine the health maintenance organization in accordance with Chapter 2 of this title when, in his judgment, he finds that the public interest would not be harmed by the continued operation of the health maintenance organization. The amount of any penalty shall be paid by the health maintenance organization to the Commissioner for use by the state. At any hearing conducted in accordance with this title, the Commissioner shall have authority to administer oaths to witnesses. Anyone testifying falsely, after having been administered the oath, shall be subject to the penalty of perjury.
(2) Any action of the Commissioner of Insurance taken pursuant to this Code section shall be subject to such review as may be provided in Chapter 2 of this title.
(b)(1) If the Commissioner of Insurance or the commissioner of community health shall, for any reason, have cause to believe that any violation of this chapter has occurred or is threatened, the Commissioner of Insurance or the commissioner of community health may give notice to the health maintenance organization and to the representatives or other persons who appear to be involved in the suspected violation to arrange a conference with the alleged violators or their authorized representatives for the purpose of attempting to ascertain the facts relating to the suspected violation and, in the event it appears that any violation has occurred or is threatened, to arrive at an adequate and effective means of correcting or preventing such violation.
(2) Proceedings under this subsection shall not be governed by any formal procedural requirements and may be conducted in such manner as the Commissioner of Insurance or the commissioner of community health may deem appropriate under the circumstances.
(c)(1) The Commissioner of Insurance may issue an order directing a health maintenance organization or a representative of a health maintenance organization to cease and desist from engaging in any act or practice in violation of this chapter.
(2) Within five days after service of the order of cease and desist, the respondent may request a hearing on the question of whether acts or practices in violation of this chapter have occurred. The hearings shall be conducted pursuant to Chapter 13 of Title 50, the “Georgia Administrative Procedure Act,” and judicial review shall be available as provided in Chapter 13 of Title 50.
(d) In the case of any violation of this chapter, if the Commissioner of Insurance elects not to issue a cease and desist order or in the event of noncompliance with a cease and desist order issued pursuant to this Code section, the Commissioner may institute a proceeding to obtain injunctive relief, or seeking other appropriate relief, in the superior court having jurisdiction of the parties.
(e) In addition to any other liability or punishment prescribed, any person who violates this chapter shall be guilty of a misdemeanor.
(a) Except as otherwise provided by law, all provisions of this title which are not in conflict with this chapter shall apply to health maintenance organizations and all other persons subject to this chapter, and specifically, the requirements and restrictions of Code Sections 33-20A-6, 33-20A-7, 33-20A-8, and 33-20A-9.1 shall apply to health maintenance organizations and all other persons subject to this chapter.
(b) Solicitation of enrollees by a health maintenance organization granted a certificate of authority or its representatives shall not be construed to violate any provision of law relating to solicitation or advertising by health professionals.
(c) Any health maintenance organization authorized under this chapter shall not be deemed to be practicing medicine and shall be exempt from the provision of Chapter 34 of Title 43, relating to the practice of medicine.
(a) It is the intent of the General Assembly to allow citizens to have the right to choose their own health care providers with as few mandates from government and business as possible. It is also the intent to allow these choices with no additional cost to any business in this state. With these intentions, and the recognition of necessary governmental involvement through various laws, the General Assembly enacts this Code section.
(b) As used in this Code section, the term:
(1) “Employer” means an employer, association, or other private group arrangement.
(2) “Enrollee” means any person entitled to receive health care services or reimbursement for such services pursuant to a contract with a health maintenance organization, whether the contract is with the person entitled to receive those services or reimbursement or the contract is with an employer of which such person is an employee or member.
(3) “Point-of-service option” means a delivery system that permits an enrollee of a health maintenance organization to receive services outside the provider panel of the health maintenance organization under the terms and conditions of the enrollee's contract with the health maintenance organization.
(4) “Provider” means a provider or a group of providers designated to provide health care services to the health maintenance organization's enrollees, as provider is defined in Code Section 33-21-1.
(5) “Provider panel” means those providers with which a health maintenance organization contracts to provide health care services to the health maintenance organization's enrollees.
(c) If the only type of insurance that an employer offers to eligible employees or individuals is health benefit plan coverage through a health maintenance organization, then the health maintenance organization with which such employer contracts to provide such coverage shall offer or make arrangements for the offering of a point-of-service option to such employer for the employer's eligible employees or individuals, and each such eligible employee or individual shall have the right to accept or reject such option.
(d) An employer may require an employee or individual who accepts the point-of-service option to be responsible for the payment of a premium over the amount of the premium for the coverage offered by the health maintenance organization or by an arrangement with another entity in conjunction with the health maintenance organization either directly to the health maintenance organization or other entity or by payroll deduction.
(e) A health maintenance organization may impose different cost-sharing provisions for the point-of-service option based on whether the service is provided through the provider panel of the health maintenance organization or outside the provider panel of the health maintenance organization.
(f) This Code section shall not apply to the Department of Community Health with regard to any and all health benefits that the department may provide pursuant to Article 7 of Chapter 4 of Title 49, the “Georgia Medical Assistance Act of 1977,” nor shall this Code section apply to Chapter 9 of Title 34, relating to workers' compensation.
(g) An employer may charge an employee or individual who accepts the point-of-service option a reasonable administrative fee for costs associated with the employer's reasonable administration of the point-of-service option.
This chapter shall be known and may be cited as the “Medicaid Care Management Organizations Act.”
As used in this chapter, the term:
(1) “Care management organization” means an entity that is organized for the purpose of providing or arranging health care, which has been granted a certificate of authority by the Commissioner of Insurance as a health maintenance organization pursuant to Chapter 21 of this title, and which has entered into a contract with the Department of Community Health to provide or arrange health care services on a prepaid, capitated basis to members.
(2) “Coordination of care” means early identification of members who have or may have special needs; assessment of a member's risk factors; development of a plan of care; referrals and assistance to ensure timely access to providers; actively linking the member to providers, medical services, and residential, social, and other support services where needed; monitoring; continuity of care; and follow-up and documentation, all as further described pursuant to the terms of the contracts between the Department of Community Health and the care management organizations.
(3) “Critical access hospital” means a hospital that meets the requirements of the federal Centers for Medicare and Medicaid Services to be designated as a critical access hospital and that is recognized by the Department of Community Health as a critical access hospital for purposes of Medicaid.
(4) “Emergency health care services” means physical or mental health care services that are provided for a condition of recent onset and sufficient severity, including, but not limited to, severe pain, regardless of the initial, interim, final, or other diagnoses that are given, that would lead a prudent layperson, possessing an average knowledge of medicine and health, to believe that his or her condition, sickness, or injury is of such a nature that failure to obtain immediate medical care could result in:
(A) Placing the patient's health in serious jeopardy;
(B) Serious impairment to bodily functions; or
(C) Serious dysfunction of any bodily organ or part.
(5) “Health care provider” or “provider” means any person, partnership, professional association, corporation, facility, or institution certified, licensed, or registered by the State of Georgia that has contracted with a care management organization to provide health care services to members.
(6) “Health care services” has the same meaning as in paragraph (5) of Code Section 33-21-1.
(7) “Health maintenance organization” means an entity which has been issued a certificate of authority by the Commissioner of Insurance pursuant to Chapter 21 of this title to establish and operate a health maintenance organization.
(8) “Hospital Statistical and Reimbursement Report” or “HS&R report” means a report created by a care management organization, using the same format that is used by the Department of Community Health in completing HS&R reports, that includes data related to an individual hospital, including aggregate statistics and reimbursement data for all Medicaid recipients who are covered by the care management organization and who received health care services at such hospital during a specific fiscal year, including data regarding services that were provided out of network. HS&R reports are utilized by the Department of Community Health for purposes of the Indigent Care Trust Fund's disproportionate share hospital survey and are also utilized by hospitals to claim payments under medicare's disproportionate share hospital program.
(9) “Medicaid” means the joint federal and state program of medical assistance established by Title XIX of the federal Social Security Act, which is administered in this state by the Department of Community Health pursuant to Article 7 of Chapter 4 of Title 49.
(10) “Member” means a Medicaid or PeachCare for Kids recipient who is currently enrolled in a care management organization plan.
(11) “PeachCare for Kids” means the State of Georgia's State Children's Health Insurance Program established pursuant to Title XXI of the federal Social Security Act, which is administered in this state by the Department of Community Health pursuant to Article 13 of Chapter 5 of Title 49.
(12) “Post-stabilization services” means covered services related to an emergency medical condition that are provided after a member is stabilized in order to maintain the stabilized condition or to improve or resolve the member's condition.
(13) “Responsible health organization” means the entity that a health care provider reasonably identifies to be responsible for providing or arranging health care services for a patient who is a Medicaid or PeachCare for Kids recipient after the provider has properly conducted an eligibility verification in accordance with the procedures of the Department of Community Health.
(a) A care management organization shall be required to obtain a certificate of authority as a health maintenance organization pursuant to Chapter 21 of this title prior to providing or arranging health care for members pursuant to a contract with the Department of Community Health. On and after the date of issuance of its certificate of authority as a health maintenance organization, a care management organization shall comply with all provisions relating to health maintenance organizations and all provisions relating to managed health care plans, with the exception of Code Section 33-20A-9.1.
(b) The Commissioner of Insurance shall not have the authority to approve, disapprove, or set rates paid by the Department of Community Health to a care management organization or paid by a care management organization to a health care provider.
(c) The Commissioner of Insurance shall not have the authority to approve, disapprove, or modify any plan offered by a care management organization or any contract between a care management organization and the Department of Community Health.
(d) Nothing in this chapter shall be interpreted as altering the authority of the commissioner of community health.
(a) In particular, but without limitation, a care management organization shall not:
(1) Deny or inappropriately reduce payment to a provider of emergency health care services for any evaluation, diagnostic testing, or treatment provided to a recipient of medical assistance for an emergency condition; or
(2) Make payment for emergency health care services contingent on the recipient or provider of emergency health care services providing any notification, either before or after receiving emergency health care services.
(b) In processing claims for emergency health care services, a care management organization shall consider, at the time that a claim is submitted, at least the following criteria:
(1) The age of the patient;
(2) The time and day of the week the patient presented for services;
(3) The severity and nature of the presenting symptoms;
(4) The patient's initial and final diagnosis; and
(5) Any other criteria prescribed by the Department of Community Health, including criteria specific to patients under 18 years of age.
A care management organization shall configure or program its automated claims processing system to consider at least the conditions and criteria described in this subsection for claims presented for emergency health care services. The Department of Community Health may develop and publish in print or electronically a list of additional standards to be used by care management organizations to maximize the identification and accurate payment of claims for emergency health care services.
(c) If a provider that has not entered into a contract with a care management organization provides emergency health care services or post-stabilization services to that care management organization's member, the care management organization shall reimburse the noncontracted provider for such emergency health care services and post-stabilization services at a rate equal to the rate paid by the Department of Community Health for Medicaid claims that it reimburses directly.
(a) A critical access hospital must provide notice to a care management organization and the Department of Community Health of any alleged breaches in its contract by such care management organization.
(b) If a critical access hospital satisfies the requirement of subsection (a) of this Code section, and if the Department of Community Health concludes, after notice and hearing, that a care management organization has substantively and repeatedly breached a term of its contract with a critical access hospital, the department is authorized to require the care management organization to pay damages to the critical access hospital in an amount not to exceed three times the amount owed. Notwithstanding the foregoing, nothing in this Code section shall be interpreted to limit the authority of the Department of Community Health to establish additional penalties or fines against a care management organization for failure to comply with the contract between a care management organization and the Department of Community Health.
(a) Each care management organization shall pay for health care services provided to a newborn infant who is born to a mother who is a member currently enrolled with that care management organization until such time as the newborn is finally discharged from all inpatient care to a home environment subject to approval by the federal Centers for Medicare and Medicaid Services. For a newborn infant whose mother is enrolled in a Medicaid program under which she receives Medicaid benefits directly from the Department of Community Health, the Department of Community Health shall pay for health care services provided to the newborn until such time as the newborn is finally discharged from all inpatient care to a home environment.
(b) In the event a newborn is disenrolled from a care management organization and re-enrolled into the Medicaid fee-for-service program conducted directly by the Department of Community Health, the care management organization shall ensure the coordination of care for that child until the child has been appropriately discharged from the hospital and placed in an appropriate care setting.
(a) In reviewing provider complaints or appeals related to denial of claims, a care management organization shall allow providers to consolidate complaints or appeals of multiple claims that involve the same or similar payment or coverage issues, regardless of the number of individual patients or payment claims included in the bundled complaint or appeal.
(b) Each care management organization shall allow a provider that has exhausted the care management organization's internal appeals process related to a denied or underpaid claim or group of claims bundled for appeal the option either to pursue the administrative review process described in subsection (e) of Code Section 49-4-153 or to select binding arbitration by a private arbitrator who is certified by a nationally recognized association that provides training and certification in alternative dispute resolution. If the care management organization and the provider are unable to agree on an association, the rules of the American Arbitration Association shall apply. The arbitrator shall have experience and expertise in the health care field and shall be selected according to the rules of his or her certifying association. Arbitration conducted pursuant to this Code section shall be binding on the parties. The arbitrator shall conduct a hearing and issue a final ruling within 90 days of being selected, unless the care management organization and the provider mutually agree to extend this deadline. All costs of arbitration, not including attorney's fees, shall be shared equally by the parties.
(c) For all claims that are initially denied or underpaid by a care management organization but eventually determined or agreed to have been owed by the care management organization to a provider of health care services, the care management organization shall pay, in addition to the amount determined to be owed, interest of 20 percent per annum, calculated from 15 days after the date the claim was submitted. A care management organization shall pay all interest required to be paid under this provision or Code Section 33-24-59.5 automatically and simultaneously whenever payment is made for the claim giving rise to the interest payment. All interest payments shall be accurately identified on the associated remittance advice submitted by the care management organization to the provider. A care management organization shall not be responsible for the penalty described in this subsection if the health care provider submits a claim containing a material omission or inaccuracy in any of the data elements required for a complete standard health care claim form as prescribed under 45 C.F.R. Part 162 for electronic claims, a CMS Form 1500 for nonelectronic claims, or any claim prescribed by the Department of Community Health.
(d) Each care management organization shall maintain a website that allows providers to submit, process, edit, rebill, and adjudicate claims electronically. To the extent a provider has the capability, each care management organization shall submit payments to providers electronically and submit remittance advices to providers electronically within one business day of when payment is made. To the extent that any of these functions involve covered transactions under 45 C.F.R. Section 162.900, et seq., then those transactions also shall be conducted in accordance with applicable federal requirements.
(e) Each care management organization shall post on its website a searchable list of all providers with which the care management organization has contracted. At a minimum, this list shall be searchable by provider name, specialty, and location. At a minimum, the list shall be updated once each month.
(f) The Department of Community Health shall require each care management organization to utilize the same timeframes and deadlines for submission, processing, payment, denial, adjudication, and appeal of Medicaid claims as the timeframes and deadlines that the Department of Community Health uses on claims it pays directly.
(g) No care management organization shall, as a condition of contracting with a provider, require that provider to participate or accept other plans or products offered by the care management organization unrelated to providing care to members. Any care management organization which violates this prohibition shall be subject to a penalty of $1,000.00 per violation. Such penalty shall be collected by the Department of Community Health. A care management organization shall not reduce the funding available for members as a result of payment of such penalties.
(h) No health care provider shall, as a condition of contracting with a care management organization, require that a care management organization contract with or not contract with another health care provider. Any health care provider which violates this subsection shall be subject to a penalty of $1,000.00 per violation. Such penalty shall be collected by the Department of Community Health. A health care provider shall not terminate an agreement with a care management organization as a result of payment of such penalties.
(a) Except as provided in subsection (b) of this Code section, no care management organization or agent of such care management organization shall deny any dentist from participating in the Medicaid and PeachCare for Kids dental program administered by such care management organization if:
(1) Such dentist has obtained a license to practice in this state and is an enrolled provider who has met all of the requirements of the Department of Community Health for participation in the Medicaid and PeachCare for Kids program; and
(2)(A) The licensed dentist will provide dental services to members pursuant to a state or federally funded educational loan forgiveness program that requires such services; provided, however, each care management organization shall be required to offer dentists wishing to participate through such loan forgiveness programs the same contract terms offered to other dentists in the service region who participate in the care management organization's Medicaid and PeachCare for Kids dental programs;
(B) The geographic area in which the dentist intends to practice has been designated as having a dental professional shortage as determined by the Department of Community Health, which may be based on the designation of the Health Resources and Services Administration of the United States Department of Health and Human Services; or
(C) Such care management organization fails to establish to the satisfaction of the Department of Community Health that a sufficient number of general dentists and specialists have contracted with the care management organization to provide covered dental services to members in the geographic region.
(b) A care management organization may decline to contract with a dentist who meets the requirements of subsection (a) of this Code section if such dentist has had his or her license to practice dentistry sanctioned in any manner or fails to meet the credentialing criteria established by the care management organization. Any dentist denied on this basis shall be entitled to a hearing before an administrative law judge as set forth in subsection (e) of Code Section 49-4-153.
(c) The Department of Community Health shall also provide a means for dentists to request an annual hearing to determine whether a condition described in subparagraph (B) or (C) of paragraph (2) of subsection (a) of this Code section exists. The department may compel the attendance of care management organizations or agents of care management organizations to attend such hearings. The department may request additional information as a result of the hearing, and it shall consider matters raised in the hearing when deciding whether a condition described in subparagraph (A) or (B) of paragraph (2) of subsection (a) of this Code section exists.
(a) If a provider submits a claim to a responsible health organization for services rendered within 72 hours after the provider verifies the eligibility of the patient with that responsible health organization, the responsible health organization shall reimburse the provider in an amount equal to the amount to which the provider would have been entitled if the patient had been enrolled as shown in the eligibility verification process. After resolving the provider's claim, if the responsible health organization made payment for a patient for whom it was not responsible, then the responsible health organization may pursue a cause of action against any person who was responsible for payment of the services at the time they were provided but may not recover any payment made to the provider.
(b) If a provider verifies the eligibility of a patient as set forth in subsection (a) of this Code section, and if a provider determines that a person other than the responsible health organization to which it has submitted a claim is responsible for Medicaid or PeachCare for Kids coverage of the patient at the time the service was rendered, the provider may submit the claim to the person that is responsible for Medicaid or PeachCare for Kids coverage and that person shall reimburse all medically necessary services, without application of any penalty for failure to file claims in a timely manner, for failure to obtain prior authorization, or for the provider not being a participating provider in the person's network, and the amount of reimbursement shall be that person's applicable rate for the service if the provider is under contract with that person or the rate paid by the Department of Community Health for the same type of claim that it pays directly if the provider is not under contract with that person.
(a) On and after May 13, 2008, the Department of Community Health shall include provisions in all new or renewal agreements with a care management organization, which require the care management organization to comply with all provisions of this chapter.
(b) On and after May 13, 2008, a care management organization shall not include any provisions in new or renewal agreements with providers entered into pursuant to the contract between the Department of Community Health and the care management organization, which are inconsistent with the provisions of this chapter.
Upon request by a hospital provider related to a specific fiscal year, a care management organization shall, within 30 days of the request, provide that hospital with an HS&R report for the requested fiscal year. Any care management organization which violates this Code section by not providing the requested report within 30 days shall be subject to a penalty of $1,000.00 per day, starting on the thirty-first day after the request and continuing until the report is provided. It is the intent of the General Assembly that such penalty be collected by the Department of Community Health and deposited into the Indigent Care Trust Fund created pursuant to Code Section 31-8-152. A care management organization shall not reduce the funding available for health care services for members as a result of payment of such penalties.
To the extent any provision in this chapter is inconsistent with applicable federal law, rule, or regulation, the applicable federal law, rule, or regulation shall govern.
(a) As used in this Code section, the term:
(1) “Addictive disease” has the same meaning as in Code Section 37-1-1.
(2) “Generally accepted standards of mental health or substance use disorder care” means evidence based independent standards of care and clinical practice that are generally recognized by health care providers practicing in relevant clinical specialties such as psychiatry, psychology, clinical sociology, addiction medicine and counseling, and behavioral health treatment. Valid, evidence based sources reflecting generally accepted standards of mental health or substance use disorder care may include peer reviewed scientific studies and medical literature, consensus guidelines and recommendations of nonprofit health care provider professional associations and specialty societies, and nationally recognized clinical practice guidelines, including, but not limited to, patient placement criteria and clinical practice guidelines; guidelines or recommendations of federal government agencies; and drug labeling approved by the United States Food and Drug Administration.
(3) “Medically necessary” means, with respect to the treatment of a mental health or substance use disorder, a service or product addressing the specific needs of that patient for the purpose of screening, preventing, diagnosing, managing or treating an illness, injury, condition, or its symptoms, including minimizing the progression of an illness, injury, condition, or its symptoms, in a manner that is:
(A) In accordance with the generally accepted standards of mental health or substance use disorder care;
(B) Clinically appropriate in terms of type, frequency, extent, site, and duration; and
(C) Not primarily for the economic benefit of the insurer, purchaser, or for the convenience of the patient, treating physician, or other health care provider.
(4) “Mental health or substance use disorder” means a mental illness or addictive disease.
(5) “Mental illness” has the same meaning as in Code Section 37-1-1.
(6) “Nonquantitative treatment limitation” or “NQTL” means limitations that are not expressed numerically, but otherwise limit the scope or duration of benefits for treatment. NQTLs include, but are not limited to, the following:
(A) Medical management standards limiting or excluding benefits based on whether the treatment is medically necessary or whether the treatment is experimental or investigative;
(B) Formulary design for prescription drugs;
(C) Standards for provider admission to participate in a network, including average time to obtain, verify, and assess the qualifications of a health practitioner for purposes of credentialing;
(D) Criteria utilized for determining usual, customary, and reasonable charges for out-of-network services, including the threshold percentile utilized and any industry software or other billing, charges, and claims tools utilized;
(E) Restrictions based on geographic location, facility type, provider specialty, and other criteria that limit the scope or duration of benefits for in-network and out-of-network services;
(F) Standards for providing access to out-of-network providers;
(G) Provider reimbursement rates, including rates of reimbursement for mental health or substance use services in primary care; provided, however, that any proprietary information collected shall not be subject to disclosure; and
(H) Such other limitation identified by the commissioner.
(7) “State health care entity” means any entity that provides or arranges health care for a state health plan on a prepaid, capitated, or fee for service basis to enrollees or recipients of Medicaid or PeachCare for Kids, including any insurer, care management organization, administrative services organization, utilization management organization, or other entity.
(8) “State health plan” means any health care benefits provided pursuant to Subpart 2 of Part 6 of Article 17 of Chapter 2 of Title 20, Subpart 3 of Part 6 of Article 17 of Chapter 2 of Title 20, Article 1 of Chapter 18 of Title 45, Article 7 of Chapter 4 of Title 49, or Article 13 of Chapter 5 of Title 49.
(b) Every state health care entity shall provide coverage for the treatment of mental health or substance use disorders in accordance with the Mental Health Parity and Addiction Equity Act of 2008, 42 U.S.C. Section 300gg-26, and its implementing and related regulations, which shall be at least as extensive and provide at least the same degree of coverage as that provided by the entity for the treatment of other types of physical illnesses. Such coverage shall also cover the spouse and the dependents of the insured if such insured's spouse and dependents are covered under such benefit plan, policy, or contract. Such coverage shall not contain any exclusions, reductions, or other limitations as to coverages, deductibles, or coinsurance provisions which apply to the treatment of mental health or substance use disorders unless such provisions apply generally to other similar benefits provided or paid for under the state health plan. Every such entity shall:
(1) Provide such coverage for children, adolescents, and adults;
(2) Apply the definitions of “generally accepted standards of mental health or substance use disorder care,” “medically necessary,” and “mental health or substance use disorder” contained in subsection (a) of this Code section in making any medical necessity, prior authorization, or utilization review determinations under such coverage;
(3) Ensure that any subcontractor or affiliate responsible for management of mental health and substance use disorder care on behalf of the state health care entity complies with the requirements of this Code section;
(4) Process hospital claims for emergency health care services for mental health or substance use disorders in accordance with this Code section regardless of whether a member is treated in an emergency department; and
(5) No later than January 1, 2023, and annually thereafter, submit a report to the commissioner of community health that contains the comparative analysis and other information required of insurers under the Mental Health Parity and Addiction Equity Act of 2008, 42 U.S.C. Section 300gg-26(a)(8)(A) and which delineates the comparative analysis and written processes and strategies used to apply benefits for children, adolescents, and adults. No later than January 1, 2024, and annually thereafter, the commissioner of community health shall publish on the Department of Community Health's website in a prominent location the reports submitted to the commissioner of community health pursuant to this paragraph.
(c) The commissioner of community health shall annually:
(1) Perform parity compliance reviews of all state health care entities to ensure compliance with mental health parity requirements, including, but not limited to, compliance with the Mental Health Parity and Addiction Equity Act of 2008, 42 U.S.C. Section 300gg-26. Such parity compliance reviews shall include a focus on the use of nonquantitative treatment limitations; and
(2) Publish on the Department of Community Health's website in a prominent location a status report of the parity compliance reviews performed pursuant to this subsection, including the results of the reviews and any corrective actions taken.
(d) No state health care entity shall implement any prohibition on same-day reimbursement for a patient who sees a mental health provider and a primary care provider in the same day.
(e) The commissioner of community health shall establish a process for accepting, evaluating, and responding to complaints from consumers and health care providers regarding suspected mental health parity violations. Such process shall be posted on the Department of Community Health's website in a prominent location and shall include information on the rights of consumers under Article 2 of Chapter 20A of Title 33, the “Patient's Right to Independent Review Act,” and rights of care management organizations under Code Section 49-4-153. To the extent practicable, the commissioner of community health shall undertake reasonable efforts to make culturally and linguistically sensitive materials available for consumers accessing the complaint process established pursuant to this subsection.
(f) No later than July 1, 2023, the Department of Community Health shall create a repository for tracking, analyzing, and reporting information resulting from complaints received from consumers and health care providers regarding suspected mental health parity violations. Such repository shall include complaints, department reviews, mitigation efforts, and outcomes, among other criteria established by the department.
(g) Beginning January 15, 2024, and no later than January 15 annually thereafter, the commissioner of community health shall submit a report to the administrator of the Georgia Data Analytic Center and the General Assembly with information regarding the previous year's complaints and all elements contained in the repository.
(h) Nothing contained in this Code section shall abrogate the protections afforded by federal conscience and antidiscrimination laws as further delineated in 45 C.F.R. Part 88 in effect as of June 30, 2022, all of which shall apply to patients, health care providers, and purchasers or recipients of state health plans.
(a) The intent of this Code section is to implement the state option in subdivision (j) of 42 C.F.R. Section 438.8.
(b) As used in this Code section, the term “medical loss ratio reporting year” or “MLR reporting year” shall have the same meaning as that term is defined in 42 C.F.R. Section 438.8.
(c) Beginning July 1, 2023, care management organizations shall comply with a minimum 85 percent medical loss ratio or such higher minimum percentage as may be set out in a contract between the department and a care management organization consistent with 42 C.F.R. Section 438.8. The ratio shall be calculated and reported for each MLR reporting year by each care management organization consistent with 42 C.F.R. Section 438.8.
(d)(1) Effective for contract rating periods beginning on and after July 1, 2023, each care management organization shall provide a remittance for an MLR reporting year if the ratio for that MLR reporting year does not meet the minimum MLR standard of 85 percent. The department shall determine the remittance amount on a plan-specific basis for each rating region of the plan and shall calculate the federal and nonfederal share amounts associated with each remittance.
(2) After the department returns the requisite federal share amounts associated with any remittance funds collected in any applicable fiscal year to the federal Centers for Medicare and Medicaid Services, the remaining amounts remitted by care management organizations pursuant to this section shall be transferred to the general fund.
(e) Except as otherwise required under this Code section, the requirements under this Code section shall not apply to a health care service plan under a subcontract with a care management organization to provide covered health care services to Medicaid and PeachCare for Kids members.
(f) The department shall post on its website the following information:
(1) The aggregate MLR of all care management organizations;
(2) The MLR of each care management organization; and
(3) Any required remittances owed by each care management organization.
(g) The department shall seek any federal approvals it deems necessary to implement this Code section.
This chapter shall be known and may be cited as the “Insurance Premium Finance Company Act.”
As used in this chapter, the term:
(1) “Insurance premium finance agreement” means an agreement by which an insured or prospective insured promises to pay to a premium finance company the amount advanced or to be advanced under the agreement to an insurer or to an insurance agent or insurance broker in payment of premiums on an insurance contract together with a service charge as authorized and limited by this chapter.
(2) “Insurance premium finance company” means a person engaged in the business of entering into insurance premium finance agreements.
(3) “Licensee” means an insurance premium finance company holding a license issued by the Commissioner under this chapter.
(a) No person shall engage in the business of financing insurance premiums in this state without first having obtained a license as a premium finance company from the Commissioner.
(b) The annual license fee shall be as provided in Code Section 33-8-1. Licenses may be renewed from year to year as of March 1 of each year upon payment of the fee as provided in Code Section 33-8-1. The fee for said license shall be paid to the Commissioner for use by the state.
(c) Before any licensee changes his or her address, he or she shall inform the Commissioner of the change in writing.
(d) Subject to the penalties of perjury, the person to whom the license or the renewal of the license may be issued shall file sworn answers to such interrogatories as the Commissioner may require. The Commissioner shall have authority at any time to require the applicant fully to disclose the identity of all stockholders, partners, officers, and employees, and he may in his discretion refuse to issue or renew a license in the name of any firm, partnership, or corporation if he is not satisfied that any officer, employee, stockholder, or partner thereof who may materially influence the applicant's conduct meets the standards of this chapter.
(e) Any person who shall engage in the business of financing insurance premiums in this state without obtaining a license as provided in this Code section shall, upon conviction, be subject to a fine of not more than $1,000.00.
(a) Upon the filing of an application and the payment of the license fee, the Commissioner shall make an investigation of each applicant and shall issue a license if he finds the applicant is qualified in accordance with this chapter. If the Commissioner does not so find, he shall within 30 days after he has received such application so notify the applicant and, at the request of the applicant, give the applicant a full hearing.
(b) The Commissioner shall issue or renew a license as may be applied for when he is satisfied that the person to be licensed:
(1) Is competent and trustworthy and intends to act in good faith in the capacity involved by the license for which application is made;
(2) Has a good business reputation and has had experience, training, or education so as to be qualified in the business for which the application for the license is made;
(3) If a corporation, is a corporation incorporated under the laws of this state or a foreign corporation authorized to transact business in this state; and
(4) Will contribute to and promote the convenience and advantage of the citizens of this state by providing a necessary additional market for the financing of insurance premiums.
No license shall be issued to any applicant for a license or renewal license under this chapter unless the applicant:
(1) Shall possess and thereafter maintain a minimum balance of at least $5,000.00 in his capital account as shown in his annual report to the Commissioner; provided, however, the Commissioner shall in his discretion require such higher amounts of capital as he deems necessary for the protection of the public; and
(2) Shall deposit with the Commissioner securities acceptable to the Commissioner in the amount of $25,000.00; or
(3) Shall file with the Commissioner a bond, to be approved by the Commissioner and made payable to the Commissioner or his successor in office, executed by the applicant as principal and by a corporate surety authorized to do business in this state in the penal sum of $25,000.00, conditioned that the licensee will conduct his business in accordance with this chapter and the laws of this state and that the licensee will properly account for all moneys collected in connection with this chapter and the laws of this state. The bond shall remain in full force and effect until the surety is released from liability by the Commissioner or until the bond is canceled by the surety and the bond shall not be canceled or terminated unless prior to the cancellation or termination 30 days' written notice is filed with the Commissioner.
(a) The Commissioner may revoke or suspend the license of any premium finance company when and if after investigation the Commissioner finds that:
(1) Any license issued to the company was obtained by fraud;
(2) There was any misrepresentation in the application for the license;
(3) The holder of the license has otherwise shown himself untrustworthy or incompetent to act as a premium finance company;
(4) The holder of such license has misappropriated, converted, illegally withheld, or refused to pay over upon proper demand any moneys belonging to an insurer or insured entrusted to the holder in its fiduciary capacity;
(5) The holder is found to be in an unsound condition or in such condition as to render the future transaction of business in this state hazardous to the public; or
(6) The company has violated any of the provisions of this chapter.
(b) Before the Commissioner shall revoke, suspend, or refuse to renew the license of any premium finance company, he shall give to the person an opportunity to be fully heard and to introduce evidence in his behalf.
(c) In lieu of revoking or suspending the license for any of the causes enumerated in subsection (a) of this Code section, the Commissioner shall have the authority after a hearing to place the premium finance company on probation for a period of time not to exceed one year and may subject such company to a penalty of not more than $1,000.00 for each offense when, in his judgment, he finds that the public interest would not be harmed by the continued operation of the company.
(d) The Commissioner shall also have the authority after a hearing to subject any person or entity who is acting as a premium finance company in this state without a license, as provided for by this chapter, to a penalty of not more than $1,000.00 for each violation of this chapter. The amount of any such penalty shall be paid by the company, person, or entity to the Commissioner for the use of the state.
(e) At any hearing provided by this Code section, the Commissioner or his designee shall have authority to administer oaths to witnesses. After having been administered the oath, anyone testifying falsely commits the offense of perjury.
(f) Any hearings provided for in this Code section shall be conducted in accordance with Chapter 2 of this title. Any action of the Commissioner in refusing to issue or renew a license or in assessing a monetary fine shall be subject to review as provided in Chapter 2 of this title.
(a) Every licensee shall maintain records of its premium finance transactions and the said records shall be open to examination and investigation by the Commissioner.
(b) Every licensee shall preserve its records of its premium finance transactions, including cards used in a card system, for at least three years after making the final entry in respect to any premium finance agreement. The preservation of records in photographic or electronic form shall constitute compliance with this requirement.
(c) The Commissioner may at any time require any licensee to bring such records as he may direct to the Commissioner's office for examination or, if he deems it necessary, the Commissioner or his duly authorized representative may conduct an examination of the records on the premises of the licensee. The expense of any on-the-premise examination shall be borne by the licensee, as provided in the case of examinations of insurers conducted pursuant to Code Section 33-2-15.
(a) A premium finance agreement shall:
(1) Be dated and signed by or on behalf of the insured, and the printed portion of the agreement shall be in approximately eight-point type and shall be readable by an individual with average eyesight;
(2) Contain the name and place of business of the insurance agent or insurance broker negotiating the related insurance contract, the name and residence or place of business of the insured as specified by him or her, the name and place of business of the premium finance company to which payments are to be made, a description of the insurance contracts involved, and the amount of the premium for the contracts; and
(3) Set forth the following items, where applicable:
(A) The total amount of the premiums;
(B) The amount of the down payment;
(C) The principal balance (the difference between subparagraphs (A) and (B) of this paragraph);
(D) The amount of the service charge, including the additional charge as provided in Code Section 33-22-9;
(E) The balance payable by the insured (the sum of subparagraphs (C) and (D) of this paragraph); and
(F) The number of payments required, the amount of each payment expressed in dollars, and the due date or period of payment.
(b) The items set out in paragraph (3) of subsection (a) of this Code section need not be stated in the sequence or order in which they appear in such paragraph, and additional items may be included to explain the computations made in determining the amount to be paid by the insured.
(c) The licensee or the insurance agent or insurance broker shall deliver to the insured or send by electronic means or mail to the insured at his or her address shown in the agreement a complete copy of the agreement.
(d) Whenever an insurance policy has been financed pursuant to this chapter, an additional premium to such policy or a renewal or extension of such policy may be financed with the same premium finance company without the execution of a new premium finance agreement. The premium finance company or the insurance agent or insurance broker shall deliver to the insured or send by electronic means or mail to the insured at his or her address shown in the agreement an addendum to the existing premium finance agreement, and such addendum shall contain the information required under subsection (a) of this Code section.
(a) As used in this Code section, the term:
(1) “Commercial insurance premium finance agreement” means any insurance premium finance agreement other than a consumer premium finance agreement.
(2) “Consumer insurance premium finance agreement” means an insurance premium finance agreement, as defined in Code Section 33-22-2, wherein the insurance contracts which are the subject of the premium finance agreement are for personal, family, or household purposes rather than business or professional purposes.
(b) A premium finance company shall not charge, contract for, receive, or collect a service charge other than as permitted by this chapter.
(c) The service charge shall be computed on the balance of the premiums due, after subtracting the down payment made by the insured in accordance with the premium finance agreement, from the effective date of the insurance coverage for which the premiums are being advanced, to and including the date when the final payment of the premium finance agreement is payable; provided, however, that service charges as specified in the premium finance agreement may continue to be charged until such agreement is paid in full.
(d) The service charge per consumer insurance premium finance agreement shall be a maximum of $12.00 per $100.00 per annum plus an additional charge which shall not exceed $20.00 per premium finance agreement, which additional charge need not be refunded upon prepayment. Any insured may prepay his or her premium finance agreement in full at any time before the due date of the final payment and in such event the unearned service charge shall be refunded in accordance with the Rule of 78 and shall represent at least as great a proportion of the service charge, if any, as the sum of the periodic balances after the month in which prepayment is made bears to the sum of all periodic balances under the schedule of payments in the agreement.
(e) The service charge for a commercial insurance premium finance agreement shall be properly agreed upon by the parties to the contract. The claim or defense of usury by such insureds who enter into such a commercial insurance premium finance agreement or their successors or anyone in their behalf shall not be valid if such agreement is a valid contract in all other respects.
(a) A premium finance agreement may provide for the payment by the insured of a delinquency charge ranging in amount from $1.50 to a maximum of 5 percent of the delinquent payment on any payment which is in default for a period of five days or more. If the default results in the cancellation of any insurance contract listed in the agreement, the agreement may provide for the payment by the insured of a cancellation charge of $15.00 in the case of a commercial insurance premium finance agreement or $5.00 in the case of a consumer insurance premium finance agreement.
(b) A premium finance agreement may provide for a returned check fee of $20.00 for each installment payment check returned by the financial institution as the result of insufficient funds.
No filing of the premium finance agreement shall be necessary to perfect the validity of the agreement as a secured transaction as against creditors, subsequent purchasers, pledgees, encumbrancers, successors, or assigns.
Any premium finance company which enters into a premium finance agreement under this chapter shall notify the insurer whose premiums are being financed of the existence of the agreement. A draft of the premium finance company made payable directly to the order of the insurer of the premium due such insurer for a policy or policies financed by such premium finance company shall constitute sufficient notice under this Code section. The insurer shall not be required to comply with Code Sections 33-22-13 and 33-22-14 until notification of the existence of the insurance premium finance agreement has been furnished to the insurer in accordance with this Code section.
Whenever a premium finance company executes a premium finance agreement relative to a personal or family-type policy of insurance, it shall deliver to the insured or send by electronic means or mail to the insured at his or her address shown in the agreement a copy of the agreement and a written notice which clearly discloses to the insured the existence of the power of attorney contained in such agreement. The written notice shall substantially comply with the following form:
“NOTICE
Your insurance policy premiums have been financed and are payable on a monthly payment basis. If you do not pay each payment on or before the date due or within 15 days of the date due, we have the right to CANCEL your insurance policy or policies which are financed under the premium finance agreement. To avoid cancellation of your policy or policies, MAKE YOUR PAYMENTS ON TIME.”
(a) When a premium finance agreement contains a power of attorney enabling the premium finance company to cancel any insurance contract or contracts listed in the agreement, the insurance contract or contracts shall not be canceled by the premium finance company unless the cancellation is effectuated in accordance with this Code section.
(b) Not less than ten days' written notice shall be delivered to the insured or sent by electronic means or mailed to the insured at his or her address shown in the agreement of the intent of the premium finance company to cancel the insurance contract unless the default is cured within such ten-day period. A copy of said notice shall also be sent to the insurance agent or insurance broker indicated on the premium finance agreement.
(c)(1) After expiration of such ten-day period, the premium finance company may thereafter in the name of the insured cancel such insurance contract or contracts by mailing or delivering to the insurer a notice of cancellation; and the insurance contract shall be canceled as if the notice of cancellation had been submitted by the insured, but without requiring the return of the insurance contract or contracts. The premium finance company, when mailing or delivering notice to the insurance company to cancel the policy, shall mail notice to the insured notifying him or her of the action taken. Such notice to the insured shall contain the date and time the policy is to be canceled, which date shall be after the date of mailing of such notice, and shall inform the insured that any payment received after the mailing or delivery of notice to the insurance company to cancel the policy will not reinstate the policy. The notice may contain information to the effect that the premium finance company will make a request to the insurance company to reinstate the policy. Language sufficiently clear and specific so that a person of average intelligence can understand the action being taken by the premium finance company shall be used. The notice to the insured required by this subsection shall be delivered as provided in subsection (d) of Code Section 33-24-14 or mailed to the last address of record of the insured and shall be dispatched by at least first-class mail and receiving the receipt provided by the United States Postal Service or such other evidence of mailing as prescribed or accepted by the United States Postal Service.
(2) The receipt of the notice of cancellation provided in paragraph (1) of this subsection by the insurer shall create a conclusive presumption that the premium finance company has fully complied with all the requirements of this Code section, that the insurer is entitled to rely on such presumption, and that the cancellation of the insurance contract or contracts is concurred in and authorized by the insured. No liability of any nature whatsoever shall be imposed upon the insurer as a result of the failure by the insured to receive the notice of the action taken required by paragraph (1) of this subsection or as a result of the failure of the insurance premium finance company to comply with any of the requirements of this Code section.
(d) All statutory, regulatory, and contractual restrictions providing that the insurance contract may not be canceled unless notice is given to a governmental agency, mortgagee, or other third party shall apply where cancellation is effected under this Code section. The insurer shall give the prescribed notice on behalf of itself or the insured to any governmental agency, mortgagee, or other third party on or before the second business day after the day it receives the notice of cancellation from the premium finance company and shall determine the effective date of cancellation taking into consideration the number of days required to complete the cancellation.
(a) Whenever an insurance policy is canceled and the premiums have been paid by an insurance premium finance company on behalf of the insured, if the insurer has been notified of the existence of the insurance premium finance agreement as required in Code Section 33-22-12, the insurer shall return whatever unearned premiums are due to the insurance premium finance company for the account of the insured. Whenever an insurer, after receiving notification of the existence of the insurance premium finance agreement, returns any unearned premium to anyone other than the insurance premium finance company named in the agreement, the insurer shall be directly responsible to such insurance premium finance company for any and all unearned premiums due as a result of the cancellation. The insurer shall furnish to the agent, agency, or broker placing the insurance a report setting forth an itemization of the unearned premiums under the policy.
(b)(1) In the event that the crediting of return premiums to the account of the insured results in a surplus over the amount due from the insured, the premium finance company shall refund the excess within ten working days of receipt of the return premium or tender of return premium to the insured via the agent, agency, or broker placing the insurance and shall furnish such agent, agency, or broker, upon a written request, a report setting forth an itemization of the unearned finance charge and other charges under the premium finance agreement; provided, however, there shall be no refund required when the excess due the insured is less than $5.00.
(2) Any insurance premium finance company failing to tender refunds or to furnish any report requested by the agent, agency, or broker as required in paragraph (1) of this subsection shall pay to the insured via the agent, agency, or broker a penalty equal to 25 percent of the amount of the refund and interest equal to 18 percent per annum until such time as the refund is made; provided, however, the maximum amount of such penalty and interest shall not exceed 50 percent of the amount of the refund due.
(3) Upon receipt of the refund from the insurance premium finance company, the agent, agency, or broker shall return any unearned premiums to the insured either in person or by depositing such refund in the mail within ten working days of receipt of the refund.
(4) Any agent, agency, or broker failing to tender any unearned premium as prescribed in paragraph (3) of this subsection shall be subject to the penalties prescribed in paragraph (3) of subsection (c) of Code Section 33-24-44.
(c) Failure to refund any surplus or return any unearned premium or to furnish any reports requested by the agent, agency, or broker under subsection (b) of this Code section shall not invalidate a notice of cancellation given in accordance with this chapter.
Any use or transmission of electronic records or electronic signatures for purposes of this chapter shall be subject to the provisions of Chapter 12 of Title 10, the “Uniform Electronic Transactions Act.”
The Commissioner may make and enforce such reasonable rules and regulations as may be necessary in making effective this chapter, but the rules and regulations shall not be contrary to nor inconsistent with this chapter.
This chapter shall not apply with respect to:
(1) Any insurance company authorized to do business in this state;
(2) Any bank, trust company, savings and loan association, credit union, or other lending institution authorized to transact business in this state that does not possess or acquire any right, title, or interest with respect to the insurance policy for which the premiums are financed other than in the proceeds of the insurance policy in the event of loss;
(3) The inclusion of a charge for insurance in connection with an installment sale in accordance with Article 1 of Chapter 1 of Title 10;
(4) The financing of insurance premiums in this state in accordance with Article 1 of Chapter 4 of Title 7 relating to rates of interest;
(5) Insurance premiums in connection with the kinds of business defined in Code Sections 33-7-4 (life insurance) and 33-7-2 (accident and sickness insurance) and for those persons licensed under Chapter 3 of Title 7 to write the insurance authorized in Chapter 3 of Title 7;
(6) Any insurance agent or agency as defined in Code Section 33-23-1 who only finances premiums on policies written by or through such agent or agency, unless such agent or agency wishes to charge, contract for, receive, or collect the service charges, delinquency charges, and other fees or charges permitted under this chapter; in which event such agent or agency shall be required to comply with all of the provisions of this chapter except for the provisions of paragraph (4) of subsection (b) of Code Section 33-22-4, relating to the necessity of showing convenience or advantage to the community in order to obtain a license; or
(7) A holder in due course of the receivables generated by a premium finance company but who is not otherwise acting as a premium finance company under the provisions of this chapter.
(a) As used in this article, the term:
(1) “Adjuster” means any individual who for a fee, commission, salary, or other compensation investigates, settles, or adjusts and reports to his or her employer or principal with respect to claims arising under insurance contracts on behalf of the insurer or the insured or a person who directly supervises or manages such individual. The term “adjuster” does not include:
(A) Individuals who adjust claims arising under contracts of life or marine insurance or annuities; or
(B) An agent or a salaried employee of an agent or a salaried employee of an insurer who adjusts or assists in adjusting losses under policies issued by such agent or insurer.
(2) “Agency” means a business entity which represents one or more insurers and is engaged in the business of selling, soliciting, or negotiating insurance. Agency also means a business entity insurance producer.
(3) “Agent” means an individual appointed or employed by an insurer who sells, solicits, or negotiates insurance. Agent also means an individual insurance producer.
(3.1) “Automated claims adjudication system” means a preprogrammed computer system designed for the collection, data entry, calculation, and final resolution of property insurance claims used only for portable electronics as defined in paragraph (1) of subsection (d) of Code Section 33-23-12 which:
(A) May only be utilized by a licensed independent adjuster, licensed agent, or supervised individuals operating pursuant to this paragraph;
(B) Shall comply with all claims payment requirements of the Georgia Insurance Code; and
(C) Shall be certified as compliant with this Code section by a licensed independent adjuster that is an officer of a business entity licensed under this chapter.
(4) “Business entity” means a corporation, association, partnership, sole proprietorship, limited liability company, limited liability partnership, or other legal entity.
(5) “Controlled business of a person” means property or casualty insurance for a person or a person's spouse; for any relative by blood or marriage within the second degree of kinship as defined by paragraph (5) of Code Section 53-4-2; for a person's employer or the firm of which a person is a member; for any officer, director, stockholder, or member of a person's employer or of any firm of which a person is a partner; for any spouse of the officer, director, employer, stockholder, or member of a person's firm; for a person's ward or employee; or for any person or in regard to any property under a person's control or supervision in any fiduciary capacity.
(6) “Counselor” means any individual who engages or advertises or holds himself or herself out as engaging in the business of counseling, advising, or rendering opinions as to the benefits promised under any contract of insurance issued or offered by any insurer or as to the terms, value, effect, advantages, or disadvantages under the contract of insurance, other than an actuary or consultant advising insurers. When receiving a fee, commission, or other compensation for this service, such individual shall not receive any compensation from any other source on or relating to the same transaction.
(7) “Home state” means Canada, the District of Columbia, and any state or territory of the United States in which an insurance producer or adjuster maintains his or her principal place of residence or principal place of business and is licensed to act as an insurance producer or adjuster.
(8) “Independent adjuster” means an adjuster representing the interest of the insurer who is not an employee of such insurer.
(9) “Insurance,” except where the type of insurance is specifically stated, means all kinds of insurance other than bail bonding by individual sureties.
(10) “Insurance producer” means a person required to be licensed under the laws of this state to sell, solicit, or negotiate insurance.
(10.1) “Limited subagent” means an individual licensed on behalf of a licensed agent pursuant to Code Section 33-23-12.
(11) “Negotiate” means the act of conferring directly with or offering advice directly to a purchaser or prospective purchaser of a particular contract of insurance concerning any of the substantive benefits, terms, or conditions of the contract, provided that the person engaged in that act either sells insurance or obtains insurance from insurers for purchasers.
(12) “Person” means an individual or business entity.
(13) “Public adjuster” means any person who solicits, advertises for, or otherwise agrees to represent only a person who is insured under a policy covering fire, windstorm, water damage, and other physical damage to real and personal property other than vehicles licensed for the road, and any such representation shall be limited to the settlement of a claim or claims under the policy for damages to real and personal property, including related loss of income and living expense losses but excluding claims arising out of any motor vehicle accident, and who, for compensation on behalf of an insured:
(A) Acts or aids, solely in relation to first-party claims arising under insurance contracts that insure the real or personal property of the insured, in negotiating for, or effecting the settlement of, a claim for loss or damage covered by an insurance contract;
(B) Advertises for employment as a public adjuster of insurance claims or solicits business or represents himself or herself to the public as a public adjuster of first-party claims for losses or damages arising out of policies of insurance that insure real or personal property; or
(C) Directly or indirectly solicits business, investigates or adjusts losses, or advises an insured about first-party claims for losses or damages arising out of policies of insurance that insure real or personal property for another person engaged in the business of adjusting losses or damages covered by an insurance policy.
(14) “Sell” means to exchange a contract of insurance by any means, for money or its equivalent, on behalf of an insurance company.
(15) “Solicit” means attempting to sell insurance or asking or urging a person to apply for a particular kind of insurance from a particular company.
(16) “Subagent” means any licensed agent, except as provided in Code Section 33-23-12, who acts for or on behalf of another licensed agent in the selling of, solicitation of, or negotiation for an insurance contract or annuity contract and who has on file with the Commissioner a certificate of authority from each agent with whom the subagent places insurance. Subagent also means subproducer. The term “subagent” shall not include:
(A) An agent who places insurance with or through another agent involving 12 or fewer policies or certificates of insurance in any one calendar year; or
(B) An agent who places surplus lines insurance with or through a surplus lines broker only with respect to such surplus lines insurance.
(17) “Surplus lines broker” means an individual licensed pursuant to Code Section 33-23-37.
(b) The definitions of agent, subagent, and counselor in subsection (a) of this Code section shall not be deemed to include:
(1) An attorney at law admitted to practice in this state, when handling the collections of premiums or advising clients as to insurance as a function incidental to the practice of law or who adjusts losses which are incidental to the practice of his or her profession;
(2) Any representative of ocean marine insurers;
(3) Any representative of farmers' mutual fire insurance companies as defined in Chapter 16 of this title;
(4) A salaried employee of a credit or character reporting firm or agency not engaged in the insurance business who may, however, report to an insurer;
(5) A person acting for or as a collection agency;
(6) A person who makes the salary deductions of premiums for employees or, under a group insurance plan, a person who serves the master policyholder of group insurance in administering the details of such insurance for the employees or debtors of the master policyholder or of a firm or corporation by which the person is employed and who does not receive insurance commissions for such service; provided, further, that an administration fee not exceeding 5 percent of the premiums collected paid by the insurer to the administration office shall not be construed to be an insurance commission;
(7) Persons exempted from licensure as provided in subsection (h) of Code Section 33-23-4; or
(8) An individual who collects claim information from, or furnishes claim information to, insureds or claimants, who conducts data entry, and who enters data into an automated claims adjudication system, provided that the individual is an employee of a licensed independent adjuster or its affiliate where no more than 25 such persons are under the supervision of one licensed independent adjustor or licensed agent.
(c) In addition to paragraphs (2) through (8) of subsection (b) of this Code section, the definitions of public adjuster, independent adjuster, and adjuster in subsection (a) of this Code section shall not be deemed to include an attorney admitted to practice law in this state.
As used in paragraph (6) of subsection (a) of Code Section 33-23-1, the definition of counselor, the term “transaction” refers to coverage or services in the same line or subline of insurance; provided, however, that additional ancillary services for commercial risks in excess of acquisition services shall be considered a separate transaction when such additional ancillary services are disclosed in writing to the insured and approved in advance by the insured. Additional ancillary services shall include, but not be limited to, the following: risk identification; loss measurement; gathering and analysis of loss information; verification of workers' compensation experience modifiers; setting of risk retention levels; development of retention financing plans; development of insurance specifications; negotiation with insurers regarding coverages, costs, and payment options; implementation of retained and transferred risk programs; monitoring of annual program; and insurance audit services.
(a) Each principal office and each branch office of an agency as defined in paragraph (2) of subsection (a) of Code Section 33-23-1 must obtain an agency license prior to commencement of operations and renew such license biennially and prior to December 31 by filing application forms prescribed by the Commissioner.
(b) An agency shall be subject to all penalties, fines, criminal sanctions, and other actions authorized for agents under this title.
(c) No person shall be an owner of an agency or, if the agency is a corporation, no person shall be an officer or director of such corporation or own 10 percent or more of the corporation if such person has had his or her license under this title refused, revoked, or suspended.
(a)(1) A person shall not sell, solicit, or negotiate insurance in this state for any class or classes of insurance unless such person is licensed for that line of authority in accordance with this article and applicable regulations.
(2) Any individual who sells, solicits, or negotiates insurance in this state shall be licensed as an agent.
(3) Any business entity that sells, solicits, or negotiates insurance in this state shall be licensed as an agency.
(4) Any individual defined as an adjuster under paragraph (1) of subsection (a) of Code Section 33-23-1 who for a fee, commission, salary, or other compensation investigates, settles, or adjusts claims arising under insurance contracts on behalf of the insurer or the insured shall be licensed as either an independent adjuster or a public adjuster.
(b) No insurer or agent doing business in this state shall pay, directly or indirectly, any commissions or any other valuable consideration to any person for services as an agent, subagent, or adjuster within this state, unless such person is duly licensed in accordance with this article.
(c) An insurer may pay a commission or other valuable consideration to a licensed insurance agency in which all employees, stockholders, directors, or officers who sell, solicit, or negotiate insurance contracts are qualified insurance agents, limited subagents, or counselors holding valid licenses as required by the laws of this state; and an agent, limited subagent, or counselor may share any commission or other valuable consideration with such a licensed insurance agency.
(d) No person other than a duly licensed adjuster, agent, limited subagent, or counselor shall pay or accept any commission or other valuable consideration except as provided in subsections (b) and (c) of this Code section.
(e) This Code section shall not prevent the payment or receipt of renewal or deferred commissions by any agency or a person on the grounds that the licensee has ceased to be an agent, limited subagent, or counselor nor prevent the receipt or payment of any commission by an individual who has been issued a temporary license pursuant to this chapter.
(f) Any individual who has been licensed as an agent for ten consecutive years or more and who does not perform any of the functions specified in paragraph (3) of subsection (a) of Code Section 33-23-1 other than receipt of renewal or deferred commissions shall be exempt from the requirement to maintain at least one certificate of authority; provided, however, that if such individual wishes to again perform any of the other functions specified in said paragraph, such individual must obtain approval from the Commissioner and comply with the requirements of this article and applicable rules and regulations, including without limitation the requirements for certificate of authority.
(g) Any person who willfully violates this Code section shall be guilty of a misdemeanor and, upon conviction thereof, shall be subject to punishment as provided in Code Section 17-10-3, relating to punishment for misdemeanors.
(h)(1) Nothing in this article shall be construed to require an insurer to obtain an insurance agent's license. As used in this Code section, the term “insurer” does not include an insurer's officers, directors, employees, subsidiaries, or affiliates.
(2) A license as an insurance agent shall not be required of the following:
(A) An officer, director, or employee of an insurer or of an insurance agent or agency, provided that the officer, director, or employee does not receive any commission on policies written or sold to insure risks residing, located, or to be performed in this state and:
(i) The officer, director, or employee's activities are executive, administrative, managerial, clerical, or a combination of these, and are only indirectly related to the sale, solicitation, or negotiation of insurance;
(ii) The officer, director, or employee's function relates to underwriting, loss control, inspection, or the processing, adjusting, investigating, or settling of a claim on a contract of insurance; or
(iii) The officer, director, or employee is acting in the capacity of a special agent or agency supervisor assisting insurance agents where the person's activities are limited to providing technical advice and assistance to licensed insurance producers and do not include the sale, solicitation, or negotiation of insurance;
(B) A person who meets the criteria set forth in paragraph (1), (4), or (6) of subsection (b) of Code Section 33-23-1;
(C) An employer or association or its officers, directors, or employees or the trustees of an employee trust plan to the extent that the employers, officers, employees, directors, or trustees are engaged in the administration or operation of a program of employee benefits for the employer's or association's own employees or the employees of its subsidiaries or affiliates, which program involves the use of insurance issued by an insurer, so long as the employers, associations, officers, directors, employees, or trustees are not in any manner compensated, directly or indirectly, by the company issuing the contracts;
(D) Employees of insurers or organizations employed by insurers who are engaging in the inspection, rating, or classification of risks or in the supervision of the training of insurance agents and who are not individually engaged in the sale, solicitation, or negotiation of insurance;
(E) A person whose activities in this state are limited to advertising without the intent to solicit insurance in this state through communications in printed publications or other forms of electronic mass media whose distribution is not limited to residents of the state, provided that the person does not sell, solicit, or negotiate insurance that would insure risks residing, located, or to be performed in this state;
(F) A person who is not a resident of this state who sells, solicits, or negotiates a contract of insurance for commercial property and casualty risks to an insured with risks located in more than one state insured under that contract, provided that the person is otherwise licensed as an insurance agent to sell, solicit, or negotiate insurance in the state where the insured maintains its principal place of business and the contract of insurance insures risks located in that state; or
(G) A salaried, full-time employee who counsels or advises his or her employer relative to the insurance interests of the employer or of the subsidiaries or business affiliates of the employer provided that the employee does not sell or solicit insurance or receive a commission.
(a) For the protection of the people of this state, the Commissioner shall not issue, continue, or permit to exist any license, except in compliance with this chapter and except as provided in Code Sections 33-23-3, 33-23-4, 33-23-12, 33-23-13, 33-23-14, 33-23-16, 33-23-17, 33-23-29, 33-23-29.1, and 33-23-37. The Commissioner shall not issue a license to any individual applicant for a license who does not meet or conform to qualifications or requirements set forth in paragraphs (1) through (7) of this subsection:
(1) The individual applicant shall be a resident of this state who shall reside and be present within this state for at least six months of every year or an individual whose principal place of business is within this state; provided, however, that in cities, towns, or trade areas, either unincorporated or composed of two or more incorporated cities or towns, located partly within and partly outside this state, requirements as to residence and principal place of business shall be deemed met if the residence or place of business is located in any part of the city, town, or trade area and if the other state in which the city, town, or trade area is located in part has established like requirements as to residence and place of business. The individual applying for an agent, adjuster, or counselor license shall be at least 18 years of age;
(2) If applying for an agent's license for property and casualty insurance, the applicant shall not use or intend to use such license for the purpose of obtaining a rebate or commission upon controlled business; and the applicant shall not in any calendar year effect controlled business that will aggregate as much as 25 percent of the volume of insurance effected by such applicant during such year, as measured by the comparative amounts of premiums;
(3) The individual applicant shall be of good character;
(4) The individual applicant shall pass any written examination required for the license by this article, provided that:
(A) An individual who applies for an insurance agent's license in this state who was previously licensed for the same lines of authority in another state shall not be required to complete any prelicensing education or examination. This exemption shall only be available if the individual is currently licensed in that state or if the application is received within 90 days of the cancellation of the applicant's previous license and if the prior state issues a certification that, at the time of cancellation, the applicant was in good standing in that state or the state's producer data base records maintained by the National Association of Insurance Commissioners, its affiliates, or subsidiaries indicate that the agent is or was licensed in good standing for the line of authority requested; and
(B) An individual licensed as an insurance agent in another state who moves to this state shall make application within 90 days of establishing legal residence to become a resident licensee pursuant to Code Section 33-23-8. No prelicensing education or examination shall be required of that individual to obtain a license for any line of authority previously held in the prior state except where the Commissioner determines otherwise by rule or regulation;
(5) If applying for a license as counselor, the applicant shall show that he or she either has had five years' experience as an agent, subagent, or adjuster or in some other phase of the insurance business or has sufficient teaching or educational qualifications or experience which, in the opinion of the Commissioner, has qualified the applicant to act as such counselor; and the applicant shall pass such examination as shall be required by the Commissioner unless such applicant is exempted by the Commissioner, based on the applicant's experience and qualifications and pursuant to a regulation adopted by the Commissioner;
(6) If applying for an agent's license, limited subagent's license, or adjuster's license, no applicant shall be qualified therefor or be so licensed unless he or she has successfully completed classroom courses in insurance satisfactory to the Commissioner at a school which has been approved by the Commissioner; and
(7) The Commissioner shall by rule or regulation establish criteria and procedures for the scope of prelicensing requirements and exemptions, if any, to the prelicensing or examination requirements.
(b) An individual who was licensed as an agent, counselor, limited subagent, surplus line broker, or adjuster at the time such individual was employed by the Commissioner and who while so employed was employed in responsible insurance duties as a full-time bona fide employee shall be permitted to reinstate his or her license upon termination of employment if written request is made within 90 days after the date of termination of employment with the Commissioner.
(c) Active licensees who apply for additional licenses and individuals who apply for the reinstatement of a license prior to six months from the license expiration date shall not be required to submit fingerprints pursuant to Code Section 33-23-5.1.
(d) Notwithstanding paragraph (1) of subsection (a) of this Code section, no resident of Canada may be licensed as an independent adjuster pursuant to this Code section or designate Georgia as his or her home state unless such person has successfully passed the adjuster examination and has complied with other applicable portions of this Code section.
(a) As used in this Code section, the term “conviction data” means a record of a finding or verdict of guilty or plea of guilty or nolo contendere with regard to any crime regardless of whether an appeal of the conviction has been sought.
(b) With respect to the requirements of paragraph (3) of subsection (a) of Code Section 33-23-5, the Commissioner shall be authorized to obtain conviction data with respect to an applicant as authorized in this Code section. The Commissioner shall submit to the Georgia Crime Information Center two complete sets of fingerprints of the applicant for appointment or employment, the required records search fees, and such other information as may be required. Upon receipt of such material, the Georgia Crime Information Center shall promptly forward one set of fingerprints to the Federal Bureau of Investigation for a search of bureau records and the preparation of an appropriate report concerning such records search and shall retain the other set and promptly conduct a search of its own records and all records to which the center has access. The Georgia Crime Information Center shall notify the Commissioner in writing of any derogatory finding, including, but not limited to, any conviction data regarding the fingerprint records check or if there is no such finding. All conviction data received by the Commissioner shall not be a public record, shall be privileged, and shall not be disclosed to any other person or agency except as provided in this Code section and except to any person or agency that otherwise has a legal right to inspect the employment file. All such records shall be maintained by the Commissioner pursuant to the laws regarding such records and the rules and regulations of the Federal Bureau of Investigation and the Georgia Crime Information Center, as applicable.
In addition to other applicable provisions of this chapter, an applicant for a public adjuster's license must have previously filed a bond as required by rule or regulation of the Commissioner.
In addition to other applicable provisions of this chapter, an applicant for a counselor's license must have previously filed a bond as required by rule or regulation by the Commissioner.
(a) An individual applicant for any license required by this chapter shall file with the Commissioner an application upon forms prescribed by the Commissioner.
(b) If the application is for an agent's or limited subagent's license, the application shall state the kinds of insurance proposed to be transacted. If applying as a limited subagent, the applicant shall be appointed as a limited subagent by a sponsoring agent prior to the issuance of such license.
(c) As to any application for a limited subagent's license or certificate of authority, the Commissioner shall require as part of the application a certificate of the sponsoring agent proposed to be represented. The certificate shall state, relative to the applicant's character, including criminal background, identity, residence, experience, and instruction as to the kinds of insurance to be transacted, that the sponsoring agent is satisfied that the applicant is trustworthy and qualified to act as its limited subagent and to hold himself or herself out in good faith to the general public as a limited subagent and the fact that the sponsoring agent desires that the applicant be licensed as a limited subagent to represent it in this state.
(d) Each applicant for an agency license shall file with the Commissioner the information required under Code Section 33-23-3.
(e) All such applications shall be accompanied by the appropriate fees in the respective amounts as provided by law.
The rules and regulations of the Commissioner shall designate textbooks, manuals, and other materials to be studied by the applicant in preparation for examinations in each classification designated by the Commissioner. The textbooks, manuals, or other materials may consist of matter available to applicants by purchase from the publisher or may consist of matter prepared at the direction of the Commissioner and distributed to applicants upon request therefor and payment of reasonable costs. When textbooks, manuals, or other materials shall have been designated by or prepared at the direction of the Commissioner, all examination questions shall be prepared from the contents of those textbooks, manuals, or other materials.
(a) Each individual applicant for a license as agent, limited subagent, counselor, adjuster, or surplus line broker shall submit to a personal examination in writing as to his or her competence to act in such capacity. The examination shall be prepared and given by the Commissioner or a designee of the Commissioner and shall be given and graded in a fair and impartial manner and without unfair discrimination as between individuals examined. Any required examination may be supplemented by an oral examination at the discretion of the Commissioner. The Commissioner shall provide by rule or regulation for a reasonable waiting period before giving a reexamination to an applicant who failed to pass a previous similar examination.
(b) The Commissioner shall by rule or regulation establish criteria and procedures for:
(1) The scope of any examination; and
(2) Exemptions, if any, to examinations, provided that the Commissioner shall not, under any circumstances, exempt himself or herself from any written examination requirements set forth in this Code section.
(c) An applicant for a license to act as an agent, limited subagent, surplus line broker, counselor, or adjuster who held a valid license to act as such which lapsed while the applicant was a member of any branch of the armed forces of the United States shall be granted a new license if application is made within a period of five years from the date of the expiration of the old license and proof satisfactory to the Commissioner is furnished that:
(1) The individual was a member of the armed forces of the United States at the time the previous license lapsed; and
(2) The individual's service in the armed forces of the United States was not terminated more than one year prior to the date of application for a new license.
(a) The Commissioner shall issue licenses applied for to persons qualified for the licenses in accordance with this article.
(b) The license shall state the name and address of the licensee, the date of issue, the general conditions relative to expiration or termination, the kind or kinds of insurance covered if not an insurance agency license, and the other conditions of licensing.
(c) Upon the request of a licensee under this chapter, the Commissioner shall provide a certificate of licensure which shall be suitable for display at the business premises of the licensee. The Commissioner shall provide by rule or regulation the application procedures for the certificate and the form and content of the certificate.
(d) The Commissioner shall have the authority to enter into agreements with persons for the purposes of providing licensing testing, administrative, record keeping, printing, mounting, and other services related to the administration of the Commissioner's duties under this article and to set appropriate charges by rule or regulation to cover the costs of such services which shall be in addition to the fees otherwise provided for in this title and may be paid directly to the providers of such services. The Commissioner may require applicants for licenses to pay such charges for licensing testing and for the cost of the printing and mounting of a certificate of licensure which is suitable for display directly to the provider of such services. The Commissioner may require insurers to pay such charges for licensing testing, administrative, record keeping, and other services provided for in this subsection directly to the provider of such services in an amount corresponding to the number of their authorized agents.
(a) Except as provided in subsection (b) of this Code section for credit insurance licenses, subsection (b.1) of this Code section, subsection (c) of this Code section for rental companies, subsection (d) of this Code section for portable electronics, and subsection (f) of this Code section for travel insurance, the Commissioner may provide by rule or regulation for licenses which are limited in scope to specific lines or sublines of insurance.
(b)(1) Licenses shall be issued to individuals for the purpose of writing credit insurance as provided in this subsection.
(2) Resident applicants must be sponsored by an insurer authorized to write credit insurance in this state, and the applicant must certify that he or she has read and understands the provisions of this title and regulations promulgated pursuant to this title which are pertinent to credit insurance in this state.
(3) Nonresident applicants must follow the appointment process set forth in subsection (g) of Code Section 33-23-16.
(4) No prelicensing education or prelicensing examination shall be required for issuance of such license, and the insurer shall certify that the licensee has completed a minimum of five hours of self-study in credit insurance subjects.
(5) The lines or sublines of insurance included in the scope of authority of credit insurance licenses issued under this Code section shall include, but not be limited to, the following:
(A) Credit life and credit accident and sickness insurance;
(B) Credit casualty insurance;
(C) Credit property insurance;
(D) Credit unemployment insurance;
(E) Accidental death and dismemberment insurance;
(F) Nonfiling or nonrecording insurance;
(G) Vendors' single interest insurance; and
(H) Any other lines or sublines of insurance which may become accepted as credit insurance by the insurance and lending industries unless otherwise disapproved by the Commissioner.
(b.1)(1) In lieu of requiring individual employees to obtain a limited credit insurance license pursuant to the provisions of subsection (b) of this Code section, any business entity that sells, solicits, or negotiates the lines or sublines of credit insurance pursuant to paragraph (5) of subsection (b) of this Code section may make application to the Commissioner for a limited credit insurance agency license so long as:
(A) The entity examines the character and fitness of each of its employees that sell, solicit, or negotiate credit insurance on its behalf to the satisfaction of the Commissioner, including but not limited to performing criminal background checks;
(B) The entity provides at least five hours of training in minimum basic insurance concepts and credit insurance subjects to its employees who sell, solicit, or negotiate credit insurance on its behalf prior to allowing these employees to sell, solicit, or negotiate such insurance. The Commissioner shall approve materials for this training course in a manner provided for by rules and regulations. The entity shall maintain records of compliance with this subparagraph and shall submit such records upon the Commissioner's request;
(C) The entity provides at least two hours of annual continuing education courses taught by such entity or an insurer to its employees who sell, solicit, or negotiate credit insurance on its behalf. The Commissioner shall approve materials for this training course by rules and regulations. Such entity shall maintain records of compliance with this subparagraph and shall submit such records upon the request of the Commissioner;
(D) The entity submits to the Commissioner along with its application for licensure a list of employees who sell, solicit, or negotiate credit insurance on behalf of the entity in a manner prescribed by the Commissioner. Such entity shall update such employee list in a manner prescribed by the Commissioner; and
(E) The entity submits to the Commissioner with its application for licensure a list of all physical locations where its employees sell, solicit, or negotiate credit insurance on its behalf. The entity shall update such list in a manner prescribed by the Commissioner.
(2) The entity shall make application to the Commissioner for a limited credit insurance agency license in such form or forms and providing such information as the Commissioner may prescribe and shall pay an initial license fee pursuant to Code Section 33-8-1 or as provided for by rules and regulations.
(3) The lines or sublines of insurance included in the scope of authority of limited credit insurance agency licenses issued under this subsection shall include such licenses as provided for in paragraph (5) of subsection (b) of this Code section.
(4) Any limited credit insurance agency license issued under this subsection shall also authorize any employee of such limited licensee to act individually on behalf and under the supervision of such limited licensee with respect to selling, soliciting, and negotiating the kinds of coverage specified in this subsection only and any such employee shall be authorized to receive related compensation, notwithstanding any other provision of law.
(5) In the event that any provision of this title is violated by a limited licensee or any employee selling, soliciting, or negotiating credit insurance on behalf of such limited licensee, the Commissioner may:
(A) Revoke, suspend, or place on probation the entity's limited credit insurance agency license issued under this subsection in accordance with the provisions of Code Sections 33-23-21 and 33-23-22, and the procedures for notice and the conduct of hearings pursuant to Chapter 2 of this title; or
(B) Impose such other penalties, including but not limited to suspending the transaction of insurance at specific locations where violations of this subsection have occurred as the Commissioner determines to be necessary or convenient to carry out the purposes of this subsection in accordance with the procedures for notice and the conduct of hearings set forth in Chapter 2 of this title.
(6) An appeal from any order or decision of the Commissioner made pursuant to this subsection shall be conducted pursuant to Chapter 2 of this title.
(7) Limited credit insurance agency licenses issued pursuant to this Code section shall renew biennially on December 31 of the applicable renewal year. The entity shall make application for renewal to the Commissioner for such licenses in such form or forms and containing such information required by the Commissioner and shall pay a renewal license fee pursuant to Code Section 33-8-1 and rules and regulations.
(c)(1) As used in this subsection, the term:
(A) “Limited licensee” means a person or entity authorized to sell certain coverages relating to the rental of vehicles pursuant to the provisions of this subsection.
(B) “Rental agreement” means any written agreement setting forth the terms and conditions governing the use of a vehicle provided by the rental company for rental or lease.
(C) “Rental company” means any person or entity in the business of providing primarily private passenger vehicles to the public under a rental agreement for a period not to exceed 90 days.
(D) “Rental period” means the term of the rental agreement.
(E) “Renter” means any person obtaining the use of a vehicle from a rental company under the terms of a rental agreement for a period not to exceed 90 days.
(F) “Vehicle” or “rental vehicle” means a motor vehicle of the private passenger type, including passenger vans, minivans, and sport utility vehicles, and of the cargo type, including cargo vans, pick-up trucks, and trucks with a gross vehicle weight of less than 26,000 pounds and which do not require the operator to possess a commercial driver's license.
(2) The Commissioner may issue to a rental company that has complied with the requirements of this subsection a limited license authorizing the limited licensee to offer or sell insurance through a licensed insurer in connection with the rental of vehicles.
(3) As a prerequisite for issuance of a limited license under this subsection, there shall be filed with the Commissioner an application for a limited license in such form or forms, and supplements thereto, and containing such information as the Commissioner may prescribe.
(4) In the event that any provision of this subsection is violated by a limited licensee, the Commissioner may:
(A) After notice and a hearing, revoke or suspend a limited license issued under this subsection in accordance with the provisions of Code Sections 33-23-21 and 33-23-22; or
(B) After notice and a hearing, impose such other penalties, including suspending the transaction of insurance at specific rental locations where violations of this subsection have occurred, as the Commissioner deems to be necessary or convenient to carry out the purposes of this subsection.
(5) The rental company licensed pursuant to paragraph (2) of this subsection may only offer or sell insurance through licensed insurers in connection with and incidental to the rental of vehicles, whether at the rental office or by preselection of coverage in an individual, master, corporate, or group rental agreement, in any of the following general categories:
(A) Personal accident insurance covering the risks of travel, including, but not limited to, accident and health insurance that provides coverage, as applicable, to renters and other rental vehicle occupants for accidental death or dismemberment and reimbursement for medical expenses resulting from an accident that occurs during the rental period;
(B) Liability insurance, which, at the exclusive option of the rental company, may include uninsured and underinsured motorist coverage, whether offered separately or in combination with other liability insurance, that provides coverage, as applicable, to renters and other authorized drivers of rental vehicles for liability arising from the operation of the rental vehicle;
(C) Personal effects insurance that provides coverage, as applicable, to renters and other rental vehicle occupants for the loss of, or damage to, personal effects that occurs during the rental period;
(D) Roadside assistance and emergency sickness protection programs; and
(E) Any other travel or vehicle related coverage that a rental company offers in connection with and incidental to the rental of vehicles.
(6) No insurance shall be offered by a limited licensee pursuant to this subsection unless:
(A) The rental period of the rental agreement does not exceed 90 consecutive days;
(B) At every rental location where rental agreements are executed, brochures or other written materials are readily available to the prospective renter that:
(i) Summarize clearly and correctly the material terms of coverage offered to renters, including the identity of the insurer;
(ii) Disclose that such policies offered by the rental company may provide a duplication of coverage already provided by a renter's personal automobile insurance policy, homeowner's insurance policy, personal liability insurance policy, or other source of coverage;
(iii) State that the purchase by the renter of the kinds of coverage specified in this subsection is not required in order to rent a vehicle; and
(iv) Describe the process for filing a claim in the event the renter elects to purchase coverage and in the event of a claim; and
(C) Evidence of coverage on the face of the rental agreement is disclosed to every renter who elects to purchase such coverage.
(7) Any limited license issued under this subsection shall also authorize any employee of the limited licensee to act individually on behalf and under the supervision of the limited licensee with respect to the kinds of coverage specified in this subsection.
(8) Each rental company licensed pursuant to this subsection shall provide a training program in which employees being trained by an instructor licensed under this article receive basic insurance instruction about the kinds of coverage specified in this subsection and offered for purchase by prospective renters of rental vehicles. Additionally, each rental company shall provide for such employees two hours of continuing education courses annually to be taught by an instructor licensed under this article. A rental company shall certify that, prior to offering such coverages, each employee has received such instruction.
(9) Notwithstanding any other provision of this subsection or any rule adopted by the Commissioner, a limited licensee pursuant to this subsection shall not be required to treat moneys collected from renters purchasing such insurance when renting vehicles as funds received in a fiduciary capacity, provided that the charges for coverage shall be itemized and be ancillary to a rental transaction. The sale of insurance not in conjunction with a rental transaction shall not be permitted.
(10) No limited licensee under this subsection shall advertise, represent, or otherwise hold itself or any of its employees out as licensed insurers, insurance agents, or insurance brokers.
(d)(1) As used in this subsection, the term:
(A) “Customer” means a person who purchases portable electronics or services.
(B) “Enrolled customer” means a customer who elects coverage under a portable electronics insurance policy issued to a vendor of portable electronics.
(C) “Location” means any physical location in this state or any website, call center site, or similar location directed to residents of this state.
(D) “Portable electronics” means handsets, pagers, personal digital assistants, portable computers, automatic answering devices, cellular telephones, batteries, and other similar devices and their accessories and includes services related to the use of such devices, including, but not limited to, individual customer access to a wireless network.
(E) “Portable electronics insurance” means insurance providing coverage for the repair or replacement of portable electronics which may provide coverage for portable electronics against any one or more of the following: loss, theft, inoperability due to mechanical failure, malfunction, damage, or other similar causes of loss. Such term shall not include a service contract or extended warranty providing coverage limited to the repair, replacement, or maintenance of property in cases of operational or structural failure due to a defect in materials, workmanship, accidental damage from handling power surges, or normal wear and tear.
(F) “Portable electronics transaction” means the sale or lease of portable electronics by a vendor to a customer or the sale of a service related to the use of portable electronics by a vendor to a customer.
(G) “Supervising entity” means a business entity that is a licensed insurer, or insurance producer that is authorized by a licensed insurer, to supervise the administration of a portable electronics insurance program.
(H) “Vendor” means a person in the business of engaging in portable electronics transactions directly or indirectly.
(2) The Commissioner may issue to a retail vendor of portable electronics that has complied with the requirements of this subsection a limited license authorizing the limited licensee to offer or sell portable electronics insurance policies.
(3) A limited license issued under this subsection shall authorize any employee or authorized representative of the vendor to sell or offer coverage under a policy of portable electronics insurance to customers at each location where the vendor engages in portable electronics transactions.
(4) The supervising entity shall maintain a registry of vendor locations that are authorized to sell or solicit portable electronics insurance coverage in this state. Upon request by the Commissioner and with ten days' notice to the supervising entity, the registry shall be open to inspection and examination by the Commissioner during regular business hours of the supervising entity.
(5) The sale of such insurance policies shall be limited to sales in connection with the sale of or provision of service for portable electronics by the retail vendor.
(6) At every location where portable electronics insurance is offered to customers, brochures or other written materials shall be made available to a prospective customer which:
(A) State that the enrollment by the customer in a portable electronics insurance program is not required in order to purchase or lease portable electronics or services;
(B) Summarize the material terms of the insurance coverage, including:
(i) The identity of the insurer;
(ii) The identity of the supervising entity;
(iii) The amount of any applicable deductible and how it is to be paid;
(iv) Benefits of the coverage; and
(v) Key terms and conditions of coverage such as whether portable electronics may be repaired or replaced with a similar make and model or with reconditioned or nonoriginal manufacturer parts or equipment;
(C) Summarize the process for filing a claim, including a description of how to return portable electronics and the maximum fee applicable in the event the customer fails to comply with any equipment return requirements; and
(D) State that an enrolled customer may cancel enrollment for coverage under a portable electronics insurance policy at any time and the person paying the premium shall receive a refund of any applicable unearned premium.
(7) Portable electronics insurance may be offered on a month-to-month or other periodic basis as a group or master commercial inland marine policy issued to a vendor of portable electronics for its enrolled customers. Coverage under portable electronics insurance shall be primary to any other insurance.
(8) Eligibility and underwriting standards for customers electing to enroll in coverage shall be established for each portable electronics insurance program.
(9) Notwithstanding any other provision of law, employees or authorized representatives of a vendor of portable electronics shall not be compensated based primarily on the number of customers enrolled for portable electronics insurance coverage but may receive compensation for activities under the limited license which are incidental to their overall compensation.
(10) The charges for portable electronics insurance coverage may be billed and collected by the vendor of portable electronics. Any charge to the enrolled customer for coverage that is not included in the cost associated with the purchase or lease of portable electronics or related services, shall be separately itemized on the enrolled customer's bill. If the portable electronics insurance coverage is included with the purchase or lease of portable electronics or related services, the vendor shall clearly and conspicuously disclose to the enrolled customer that the portable electronics insurance coverage is included with the portable electronics or related services. Vendors billing and collecting such charges shall not be required to maintain such funds in a segregated account, provided that the vendor is authorized by the insurer to hold such funds in an alternative manner and remits such amounts to the supervising entity within 60 days of receipt. All funds received by a vendor from an enrolled customer for the sale of portable electronics insurance shall be considered funds held in trust by the vendor in a fiduciary capacity for the benefit of the insurer. Vendors may receive compensation for billing and collection services.
(11) As a prerequisite for issuance of a limited license under this subsection, there shall be filed with the Commissioner an application for such limited license or licenses in a form and manner prescribed by the Commissioner. The application shall provide:
(A) The name, residence address, and other information required by the Commissioner of an employee or officer of the vendor that is designated by the applicant as the person responsible for the vendor's compliance with the requirements of this subsection;
(B) If the vendor derives more than 50 percent of its revenue from the sale of portable electronics insurance, the information required by subparagraph (A) of this paragraph for all officers, directors, and shareholders of record having beneficial ownership of 10 percent or more of any class of securities registered under the federal securities law; and
(C) The location of the applicant's home office.
(12) The employees and authorized representatives of vendors may sell or offer portable electronics insurance to customers and shall not be subject to licensure as an insurance producer under this Code section, provided that the supervising entity supervises the administration of a training program in which employees and authorized representatives of a vendor shall be trained and receive basic insurance instruction about the kind of coverage authorized in this subsection and offered for purchase by prospective purchasers. The training required by this subsection may be provided in electronic form. However, if provided in electronic form, the supervising entity shall implement a supplemental education program regarding the portable electronics insurance that is conducted and overseen by an instructor licensed under this article.
(13) No prelicensing examination shall be required for issuance of such license.
(14) If a vendor or its employee or authorized representative violates any provision of this subsection, the Commissioner may impose any of the following penalties:
(A) After notice and hearing, fines not to exceed $500.00 per violation or $5,000.00 in the aggregate for such conduct;
(B) After notice and hearing, other penalties that the Commissioner deems necessary and reasonable to carry out the purpose of this article, including:
(i) Suspending the privilege of transacting portable electronics insurance pursuant to this subsection at specific business locations where violations have occurred; and
(ii) Suspending or revoking the ability of individual employees or authorized representatives to act under the license;
(15) Notwithstanding any other provision of law:
(A) An insurer may terminate or otherwise change the terms and conditions of a policy of portable electronics insurance only upon providing the policyholder and enrolled customers with at least 60 days' notice;
(B) If the insurer changes the terms and conditions, then such insurer shall provide the vendor with a revised policy or endorsement and each enrolled customer with a revised certificate, endorsement, updated brochure, or other evidence indicating a change in the terms and conditions has occurred and a summary of such changes;
(C) Notwithstanding subparagraph (A) of this paragraph, an insurer may terminate an enrolled customer's enrollment under a portable electronics insurance policy upon 15 days' notice for discovery of fraud or material misrepresentation in obtaining coverage or in the presentation of a claim;
(D) Notwithstanding subparagraph (A) of this paragraph, an insurer may immediately terminate an enrolled customer's enrollment under a portable electronics insurance policy:
(i) For nonpayment of premium;
(ii) If the enrolled customer ceases to have an active service with the vendor of portable electronics; or
(iii) If the enrolled customer exhausts the aggregate limit of liability, if any, under the terms of the portable electronics insurance policy and the insurer sends notice of termination to the enrolled customer within 30 calendar days after exhaustion of the limit. However, if notice is not timely sent, enrollment shall continue notwithstanding the aggregate limit of liability until the insurer sends notice of termination to the enrolled customer; and
(E) When a portable electronics insurance policy is terminated by a policyholder, the vendor shall mail or deliver written notice to each enrolled customer advising the enrolled customer of the termination of the policy and the effective date of termination. The written notice shall be mailed or delivered to the enrolled customer at least 30 days prior to the termination.
(16) Whenever notice or correspondence with respect to a policy of portable electronics insurance is required pursuant to this subsection or is otherwise required by law, it shall be in writing and sent within the notice period, if any, specified within the statute or regulation requiring the notice or correspondence. Notwithstanding any other provision of law, notices and correspondence may be sent either by mail or by electronic means as set forth in this paragraph. If the notice or correspondence is mailed, it shall be sent to the vendor of portable electronics at the vendor's mailing address specified for such purpose and to its affected enrolled customers' last known mailing addresses on file with the insurer. The insurer or vendor of portable electronics, as the case may be, shall maintain proof of mailing in a form authorized or accepted by the United States Postal Service or other commercial mail delivery service. If the notice or correspondence is sent by electronic means, it shall be sent to the vendor of portable electronics at the vendor's email address specified for such purpose and to its affected enrolled customers' last known email address as provided by each enrolled customer to the insurer or vendor of portable electronics, as the case may be. For purposes of this paragraph, an enrolled customer's provision of an email address to the insurer or vendor of portable electronics, as the case may be, shall be deemed as consent to receive notices and correspondence by electronic means. The insurer or vendor of portable electronics, as the case may be, shall maintain proof that the notice or correspondence was sent.
(17) Notice or correspondence required by this subsection or otherwise required by law may be sent on behalf of an insurer or vendor, as the case may be, by the supervising entity appointed by the insurer.
(e)(1) As used in this subsection, the term:
(A) “Limited licensee” means an owner authorized to act as an agent of an insurance provider for purposes of selling certain insurance coverages for personal property maintained in self-service storage facilities pursuant to this subsection.
(B) “Occupant” means a person, his or her sublessee, successor, or assign entitled to the use of the storage space at a self-service storage facility under a rental agreement, to the exclusion of others.
(C) “Owner” means the owner, operator, lessor, or sublessor of a self-service storage facility, his or her agent, or any other person authorized by him or her to manage the self-service storage facility or to receive rent from an occupant under a rental agreement.
(D) “Personal property” means movable property not affixed to land and includes, but is not limited to, goods, wares, merchandise, motor vehicles, watercraft, and household items and furnishings.
(E) “Rental agreement” means any agreement or lease, written or oral, that establishes or modifies the terms, conditions, rules, or any other provisions concerning the use and occupancy of a self-service storage facility.
(F) “Self-service storage facility” means any real property designed and used for the purpose of renting or leasing individual storage space to occupants who are to have access to such for the purpose of storing and removing personal property. No occupant shall use a self-service storage facility for residential purposes. A self-service storage facility is not a warehouse within the meaning of Article 1 of Chapter 4 of Title 10, the “Georgia State Warehouse Act.” A self-service storage facility is not a safe-deposit box or vault maintained by banks, trust companies, or other financial entities.
(2) The Commissioner may issue to an owner that is in compliance with the requirements of this subsection a limited license authorizing the limited licensee to offer or sell insurance through a licensed insurer in connection with a self-service storage facility.
(3) A limited licensee shall be authorized to offer or sell insurance on behalf of a licensed insurer only in connection with a rental agreement and only for either an individual policy issued to an individual occupant or as a group policy for occupants for personal property insurance. A limited licensee shall only be authorized to provide to occupants insurance coverage for:
(A) The loss of or damage to personal property stored at a self-service storage facility where the loss or damage occurs at such self-service storage facility during the occupant's rental agreement; or
(B) Such other loss directly related to an occupant's rental agreement.
(4) No insurance shall be issued pursuant to this subsection unless the limited licensee provides to a prospective occupant written material that:
(A) Provides a summary of the terms of insurance coverage, including the identity of the insurer;
(B) Conspicuously discloses that the policy of insurance may provide a duplication of coverage already provided by an existing policy of insurance;
(C) Describes the process for filing a claim in the event the occupant elects to purchase coverage and experiences a covered loss;
(D) Provides information regarding the price, deductible, benefits, exclusions, conditions, and any other limitations of such policy;
(E) States that the limited licensee is not authorized to evaluate the adequacy of the occupant's existing insurance coverages, unless such limited licensee is otherwise licensed; and
(F) States that the occupant may cancel the insurance at any time, and any unearned premium will be refunded in accordance with applicable law.
(5) Notwithstanding any other provision of this subsection or any rule adopted by the Commissioner, a limited licensee licensed pursuant to this subsection shall not be required to treat moneys collected from occupants under rental agreements as funds received in a fiduciary capacity, provided that the charges for coverage shall be itemized and be ancillary to a rental agreement. The sale of insurance not in conjunction with a rental agreement shall not be permitted.
(6) Any limited license issued under this subsection shall also authorize any employee of the limited licensee to act individually on behalf and under the supervision of the limited licensee with respect to the kinds of coverage specified in this subsection.
(7) Each owner licensed pursuant to this subsection shall provide a training program in which employees and authorized representatives of such owner shall be trained by an instructor licensed pursuant to this article and receive basic insurance instruction about the kind of coverage authorized in this subsection and offered for purchase by prospective occupants.
(8) As a prerequisite for issuance of a limited license under this subsection, there shall be filed with the Commissioner an application for a limited license in such form or forms, and supplements thereto, and containing such information as the Commissioner may prescribe.
(9) In the event that any provision of this title is violated by a limited licensee, or an employee of a limited licensee, the limited licensee shall be subject to all penalties, fines, criminal sanctions, and other actions authorized by this title.
(10) No prelicensing examination shall be required for issuance of a limited license pursuant to this subsection.
(f)(1) As used in this subsection, the term:
(A) “Aggregator site” means a website that provides access to information regarding insurance products from more than one insurer, including product and insurer information, for use in comparison shopping.
(B) “Blanket travel insurance” means a policy of travel insurance issued to any eligible group providing coverage for specific classes of persons defined in the policy with coverage provided to all members of the eligible group without a separate charge to individual members of the eligible group.
(C) “Cancellation fee waiver” means a contractual agreement between a supplier of travel services and its customer to waive some or all of the nonrefundable cancellation fee provisions of the supplier's underlying travel contract with or without regard to the reason for the cancellation or form of reimbursement. Such term shall not be considered insurance.
(D) “Eligible group” means two or more persons that are engaged in a common enterprise or have an economic, educational, or social affinity or relationship, including but not limited to any of the following:
(i) Any entity engaged in the business of providing travel or travel services, including but not limited to:
(I) Tour operators, lodging providers, vacation property owners, hotels and resorts, travel clubs, travel agencies, property managers, or cultural exchange programs; or
(II) Common carriers or the operator, owner, or lessor of a means of transportation of passengers, including but not limited to airlines, cruise lines, railroads, steamship companies, and public bus carriers,
wherein, with regard to any particular travel or type of travel or travelers, all members or customers of the group share a common exposure to risk attendant to such travel;
(ii) Any college, school, or other institution of learning covering students, teachers, employees, or volunteers;
(iii) Any employer covering any group of employees, volunteers, contractors, board of directors, dependents, or guests;
(iv) Any sports team, camp, or sponsor thereof covering participants, members, campers, employees, officials, supervisors, or volunteers;
(v) Any religious, charitable, recreational, educational, or civic organization or branch thereof covering any group of members, participants, or volunteers;
(vi) Any financial institution or financial institution vendor, or any parent holding company, trustee, or agent of or designated by one or more financial institutions or financial institution vendors, including account holders, credit card holders, debtors, guarantors, or purchasers;
(vii) Any incorporated or unincorporated association, including labor unions, that has a common interest, a constitution, and bylaws and that is organized and maintained in good faith for purposes other than obtaining insurance for members or participants of such association in covering its members;
(viii) Any trust or the trustees of a fund established, created, or maintained for the benefit of and for covering members, employees, or customers, subject to the Commissioner permitting the use of a trust and the state's premium tax provisions provided in Code Section 33-8-4 for one or more associations meeting the requirements of division (vii) of this subparagraph;
(ix) Any entertainment production company covering any group of participants, volunteers, audience members, contestants, or workers;
(x) Any volunteer fire department, ambulance, rescue, police, court, first aid, civil defense, or other such volunteer group;
(xi) Any preschool, day-care institution for children or adults, or senior citizen club;
(xii) Any automobile or truck rental or leasing company covering a group of individuals who may become renters, lessees, or passengers as defined by their travel status on the rented or leased vehicles;
(xiii) The common carrier; the operator, owner, or lessor of a means of transportation; or the automobile or truck rental or leasing company that is the policyholder under a policy to which this subsection applies; and
(xiv) Any other group to which the Commissioner has determined that issuance of the policy would not be contrary to the public interest and in which the members are engaged in a common enterprise or have an economic, educational, or social affinity or relationship.
(E) “Fulfillment materials” means documentation sent to the purchaser of a travel protection plan confirming the purchase and providing the travel protection plan's coverage and assistance details.
(F) “Group travel insurance” means travel insurance issued to any eligible group.
(G) “Limited licensee” means a person or entity authorized to sell certain coverages related to travel pursuant to the provisions of this subsection.
(H) “Limited lines travel insurance producer” means a:
(i) Licensed managing general underwriter;
(ii) Licensed managing general agent or third-party administrator;
(iii) Licensed insurance producer, including a limited licensee; or
(iv) Travel administrator.
(I) “Offer and disseminate” means providing general information, including a description of the coverage and price, as well as processing the application and collecting premiums.
(J) “Primary certificate holder” means an individual or person that elects and purchases travel insurance under a group policy.
(K) “Travel administrator” means each person that directly or indirectly underwrites; collects charges, collateral, or premiums from; or adjusts or settles claims for residents of this state in connection with travel insurance; provided, however, that a person shall not be considered a travel administrator if such person's only actions that would otherwise cause it to be considered a travel administrator are among the following:
(i) An insurance producer selling insurance or engaged in administrative and claims related activities within the scope of the producer's license;
(ii) A travel retailer offering and disseminating travel insurance and registered under the license of a limited lines travel insurance producer in accordance with this subsection;
(iii) An individual adjusting or settling claims in the normal course of such individual's practice or employment as an attorney at law and who does not collect charges or premiums in connection with insurance coverage; or
(iv) A business entity that is affiliated with a licensed insurer while acting as a travel administrator for the direct and assumed insurance business of an affiliated insurer.
(L) “Travel assistance services” means:
(i) Noninsurance services for which the consumer is not indemnified based on a fortuitous event and the provision of the service does not result in the transfer or shifting of risk that would constitute the business of insurance;
(ii) Such term shall include, but not be limited to, security advisories; destination information; vaccination and immunization information services; travel reservation services; entertainment; activity and event planning; translation assistance; emergency messaging; international legal and medical referrals; medical case monitoring; coordination of transportation arrangements; emergency cash transfer assistance; medical prescription replacement assistance; passport and travel document replacement assistance; lost luggage assistance; concierge services; and any similar service that is furnished in connection with planned travel; and
(iii) Such term shall not include assistance services that are insurance or related to insurance.
(M) “Travel insurance” means insurance coverage for personal risks incident to planned travel, including:
(i) Interruption or cancellation of trip or event;
(ii) Loss of baggage or personal effects;
(iii) Damages to accommodations or rental vehicles;
(iv) Sickness, accident, disability, or death occurring during travel;
(v) Emergency evacuation;
(vi) Repatriation of remains; or
(vii) Any other contractual obligations to indemnify or pay a specified amount to the traveler upon determinable contingencies related to travel as approved by the Commissioner.
Travel insurance shall not include major medical plans which provide comprehensive medical protection for travelers with trips lasting six months or longer, including, but not limited to, those working or residing overseas as an expatriate, or any other product that requires a specific insurance producer license.
(N) “Travel protection plan” means any plan that provides for travel insurance, travel assistance services, or cancellation fee waivers.
(O) “Travel retailer” means a business entity that makes, arranges, or offers travel services and that may offer and disseminate travel insurance as a service to its customers on behalf of and under the direction of a limited lines travel insurance producer.
(2)(A) Notwithstanding any other provision of law, the Commissioner may issue to an individual or business entity that has complied with the requirements of this subsection a limited lines travel insurance producer license which authorizes the limited lines travel insurance producer to sell, solicit, or negotiate travel insurance through a licensed insurer.
(B) As a prerequisite for issuance of a limited license under this subsection, there shall be filed with the Commissioner an application for such limited license in a form and manner prescribed by the Commissioner.
(C) Notwithstanding any other provision of law, a travel retailer may offer and disseminate travel insurance under a limited lines travel insurance producer business entity license only if the following conditions are met:
(i) The limited lines travel insurance producer or travel retailer provides to purchasers of travel insurance:
(I) A description of the material terms or the actual material terms of the insurance coverage;
(II) A description of the process for filing a claim;
(III) A description of the review or cancellation process for the travel insurance policy; and
(IV) The identity and contact information of the insurer and limited lines travel insurance producer;
(ii) At the time of licensure, the limited lines travel insurance producer shall establish and maintain a register on a form prescribed by the Commissioner of each travel retailer that offers travel insurance on the limited lines travel insurance producer's behalf. The register shall be maintained and updated by the limited lines travel insurance producer and shall include the name, address, and contact information of the travel retailer and an officer or person who directs or controls the travel retailer's operations and the travel retailer's federal tax identification number. The limited lines travel insurance producer shall submit such register to the Insurance Department upon reasonable request. The limited lines travel insurance producer shall also certify that the travel retailer registered complies with 18 U.S.C. Section 1033. The grounds for the suspension and revocation and the penalties applicable to resident insurance providers shall be applicable to limited lines travel insurance producers and travel retailers;
(iii) The limited lines travel insurance producer shall designate one of its employees who is a licensed individual producer as the person responsible for the limited lines travel insurance producer's compliance with the travel insurance laws and rules and regulations of this state;
(iv) The employee designated as provided in division (iii) of this subparagraph, president, secretary, treasurer, and any other officer or person who directs or controls the limited lines travel insurance producer's insurance operations shall comply with the fingerprinting requirements applicable to insurance producers in the resident state of the limited lines travel insurance producer;
(v) The limited lines travel insurance producer shall pay all applicable insurance producer licensing fees as set forth in applicable state law;
(vi) The limited lines travel insurance producer shall require each employee or authorized representative of the travel retailer whose duties include offering and disseminating travel insurance to receive a program of instruction or training, which may be subject to review by the Commissioner. The training material shall, at a minimum, contain instructions on the types of insurance offered, ethical sales practices, and required disclosures to prospective customers; and
(vii) No prelicensing examination or continuing education shall be required for issuance of a limited license pursuant to this subsection.
(D) Any travel retailer offering or disseminating travel insurance shall make available to prospective purchasers brochures or other written materials that:
(i) Provide the identity and contact information of the insurer and the limited lines travel insurance producer;
(ii) Explain that the purchase of travel insurance is not required in order to purchase any other product or service from the travel retailer; and
(iii) Explain that an unlicensed travel retailer is permitted to provide general information about the insurance offered by the travel retailer, including a description of the coverage and price, but is not qualified or authorized to answer technical questions about the terms and conditions of the insurance offered by the travel retailer or to evaluate the adequacy of the customer's existing insurance coverage.
(E) A travel retailer employee or authorized representative that is not licensed as an insurance producer shall not:
(i) Evaluate or interpret the technical terms, benefits, and conditions of the offered travel insurance coverage;
(ii) Evaluate or provide advice concerning a prospective purchaser's existing insurance coverage; or
(iii) Hold itself out as a licensed insurer, licensed producer, or insurance expert.
(3) Notwithstanding any other provision of law, a travel retailer whose insurance related activities, and those of its employees or authorized representatives, are limited to offering and disseminating travel insurance on behalf of and under the direction of a limited lines travel insurance producer meeting the conditions stated in this subsection shall be authorized to do so and receive related compensation upon registration by the limited lines travel insurance producer as provided in subparagraph (C) of paragraph (2) of this subsection.
(4) As the insurer designee, the limited lines travel insurance producer shall be responsible for the acts of the travel retailer and authorized representative and shall use reasonable means to ensure compliance by the travel retailer with this subsection.
(5) The limited lines travel insurance producer and any travel retailer or authorized representative offering and disseminating travel insurance under the limited lines travel insurance producer's license shall be subject to the unfair trade practices provisions under Article 1 of Chapter 6 of this title and to the other provisions of this article relating to insurance producers.
(6)(A) The requirements of this subsection shall apply to travel insurance which covers any resident of this state; is sold, solicited, negotiated, or offered in this state; or for which policies and certificates are delivered or issued for delivery in this state; provided, however, that such requirements shall not apply to cancellation fee waivers and travel assistance services, except as expressly provided in this subsection.
(B) All other applicable provisions of the state's insurance laws shall continue to apply to travel insurance except that the specific provisions of this subsection shall supersede any general provisions of law that would otherwise be applicable to travel insurance.
(7) Any person licensed in a major line of authority as an insurance producer shall be authorized to sell, solicit, and negotiate travel insurance. A property and casualty insurance producer shall not be required to become appointed by an insurer in order to sell, solicit, or negotiate travel insurance.
(8)(A) Each travel insurer shall pay the tax levied by Code Section 33-8-4 with respect to travel insurance premiums paid by any of the following:
(i) An individual primary policyholder who is a resident of this state;
(ii) A primary certificate holder who is a resident of this state who elects coverage under a group travel insurance policy; or
(iii) A blanket travel insurance policyholder that is a resident in or has its principal place of business or the principal place of business of an affiliate or subsidiary that has purchased blanket travel insurance in this state for eligible blanket group members, subject to any apportionment rules which apply to the insurer across multiple taxing jurisdictions or that permits the insurer to allocate premiums on an apportioned basis in a reasonable and equitable manner in such jurisdictions.
(B) Each travel insurer shall:
(i) Document the state of residence or principal place of business of the policyholder or certificate holder, as described in subparagraph (A) of this paragraph; and
(ii) Report as premiums only the amount allocable to travel insurance and shall not report any amounts received for travel assistance services or cancellation fee waivers.
(9) A travel protection plan may be offered for one price for the combined features that the travel protection plan offers in this state if:
(A) The travel protection plan clearly discloses to the consumer at or prior to the time of purchase that it includes travel insurance, travel assistance services, and cancellation fee waivers, as applicable, and provides information and an opportunity at or prior to the time of purchase for the consumer to obtain additional information regarding the features and pricing of each; and
(B) The fulfillment materials:
(i) Describe and delineate the travel insurance, travel assistance services, and cancellation fee waivers in the travel protection plan; and
(ii) Include the travel insurance disclosures and the contact information for persons providing travel assistance services and cancellation fee waivers, as applicable.
(10)(A) Offering or selling a travel insurance policy that could never result in payment of any claims for any insured under the policy is considered an unfair trade practice under Chapter 6 of this title.
(B)(i) All documents provided to consumers prior to the purchase of travel insurance, including but not limited to sales materials, advertising materials, and marketing materials, shall be consistent with the travel insurance policy itself, which shall include but not be limited to respective forms, endorsements, policies, rate filings, and certificates of insurance.
(ii) For travel insurance policies or certificates that contain preexisting condition exclusions, information and an opportunity to learn more about the preexisting condition exclusions shall be provided at some point prior to the time of purchase and in the coverage's fulfillment materials.
(iii) The fulfillment materials and the information described in division (f)(2)(c)(i) of this Code section shall be provided to a policyholder or primary certificate holder as soon as practicable following the purchase of a travel protection plan. Unless the insured has either started a covered trip or filed a claim under the travel insurance coverage, a policyholder or primary certificate holder may cancel a policy or certificate for a full refund of the travel protection plan price from the date of purchase of a travel protection plan until at least:
(I) Fifteen days following the date of delivery of the travel protection plan's fulfillment materials by postal mail; or
(II) Ten days following the date of delivery of the travel protection plan's fulfillment materials by means other than postal mail.
For the purposes of this division, the term “delivery” means handing fulfillment materials to the policyholder or primary certificate holder or sending fulfillment materials by postal mail or electronically to the policyholder or primary certificate holder.
(iv) Each company shall disclose in the policy documentation and fulfillment materials whether the travel insurance is primary or secondary to other applicable coverage.
(v) If travel insurance is marketed directly to a consumer through an insurer's website or by others through an aggregator site, it shall not be considered an unfair trade practice or other violation of law if an accurate summary or short description of coverage is provided on the website, so long as the consumer has electronic access to the full provisions of the policy.
(C) A person offering, soliciting, or negotiating travel insurance or travel protection plans on an individual or group basis shall not do so by using negative option or opt out that would require a consumer to take an affirmative action to deselect coverage such as unchecking a box on an electronic form when the consumer purchases a trip.
(D) It shall be considered an unfair trade practice to market blanket travel insurance coverage as being free.
(E) If a consumer's destination jurisdiction requires insurance coverage, it shall not be considered an unfair trade practice to require such consumer to choose between the following options as a condition of purchasing a trip or travel package:
(i) Purchasing the coverage required by the destination jurisdiction through the travel retailer or limited lines travel insurance producer supplying the trip or travel package; or
(ii) Agreeing to obtain and provide proof of coverage that meets the destination jurisdiction's requirements prior to departure.
(11)(A) Notwithstanding any provision of this title to the contrary, a person shall not act or represent itself as a travel administrator for travel insurance in this state unless such person:
(i) Is a licensed property and casualty insurance producer in this state for activities permitted under such producer's license;
(ii) Holds a valid managing general agent (M.A.) license in this state; or
(iii) Holds a valid third-party administrator (TA) license in this state.
(B) A travel administrator and its employees shall be exempt from the licensing requirements provided in paragraph (4) of subsection (a) of Code Section 33-23-4, relating to adjuster licensing, for travel insurance that such travel administrator and its employees administer.
(C) An insurer is responsible for the acts of a travel administrator administering travel insurance underwritten by the insurer and ensuring that the travel administrator maintains all books and records relevant to the insurer to be made available by the travel administrator to the Commissioner upon request.
(12)(A) Notwithstanding any provision of this title to the contrary, travel insurance shall be classified and filed for purposes of rates and forms as marine and transportation insurance; provided, however, that travel insurance that provides coverage for sickness, accident, disability, or death occurring during travel, either exclusively or in conjunction with related coverages of emergency evacuation or repatriation of remains, or incidental limited property and casualty benefits, such as baggage or trip cancellation, may be filed by an authorized insurer under either an accident and health line of insurance or as marine and transportation insurance.
(B) Travel insurance may be in the form of an individual, group, or blanket policy.
(C) Eligibility and underwriting standards for travel insurance may be developed and provided based on travel protection plans designed for individual or identified marketing or distribution channels, provided that those standards also meet the state's underwriting standards for marine and transportation insurance.
(a) In the event of the death of an agent or limited subagent, including a temporary agent or limited subagent, or the inability to act as an agent or limited subagent by reason of service in the armed services of the United States, illness or other disability, or termination of appointment by the insurer, if there is no other individual connected with the agency who is licensed as an agent or limited subagent in regard to insurance of the classification transacted by the agent or limited subagent deceased or unable to act, the Commissioner may issue a temporary license as agent or limited subagent in regard to insurance of such classification to an employee of the agency, to a member of the family of said former agent or limited subagent, or to some associate or to a guardian, receiver, executor, or administrator for the purpose of continuing or winding up the business affairs of the agent, limited subagent, or agency. A temporary license shall be issued only to an applicant who has filed a sworn application upon forms prescribed by the Commissioner. The applicant shall not be required to meet the requirements as to examination, residence, and education required for licensing of agents or limited subagents other than temporary agents. If the Commissioner deems the applicant to be qualified for a temporary license, the Commissioner shall issue the license.
(b) A temporary license may be issued to an individual at the request of an insurer for the purposes of training such individual to act as an agent; provided, however, such individual must perform his or her duties under the supervision of an individual licensed under this article. The Commissioner may prescribe by rules or regulations such further restrictions on such temporary licenses as may be necessary for the protection of the public.
(c) A license issued pursuant to this Code section shall be effective for six months, renewable from time to time for renewal periods of three months in the discretion of the Commissioner; but in no event shall such renewal or any other temporary license of renewal with reference to the same matter extend to a time more than 15 months after the date of the first issuance of a temporary license in such matter.
(d) A temporary license issued pursuant to subsection (a) of this Code section shall authorize the negotiation of renewal policies, the receipt and collection of premiums, and such other acts as are necessary to the continuance of the particular insurance business of the agent or limited subagent. The license shall not authorize the holder thereof to sell, solicit, or negotiate new insurance accounts.
(e) As to any application for a temporary agent's license pursuant to subsection (b) of this Code section, the Commissioner shall require as part of the application a certificate of the insurer proposed to be represented. The certificate shall state, relative to the applicant's character, including criminal background, identity, residence, experience, and instruction as to the kinds of insurance to be transacted, that the insurer is satisfied that such applicant is trustworthy and qualified to act as its temporary agent and to hold himself or herself out in good faith to the general public as a temporary agent and the fact that the insurer desires that the applicant be licensed as a temporary agent to represent it in this state.
(a) The Commissioner shall have the authority to issue a probationary license to any applicant under this chapter.
(b) A probationary license may be issued for a period of not less than three months and not longer than 24 months and shall be subject to immediate revocation for cause at any time without a hearing.
(c) The Commissioner, at his or her discretion, shall prescribe the terms of probation, may extend the probationary period, or refuse to grant a license at the end of any probationary period.
The Commissioner may issue two or more licenses to one individual provided the individual meets all qualifications and conditions for each such license.
(a) Unless denied licensure pursuant to Code Section 33-23-21, a nonresident person shall receive a nonresident agent's license if:
(1) The person is currently licensed as a resident and in good standing in such person's home state;
(2) The person has submitted the proper request for licensure and has paid the fees required by Code Section 33-8-1;
(3) The person has submitted or transmitted to the Commissioner the application for licensure that the person submitted to such person's home state or, in lieu of the same, a completed uniform application or a form prescribed by the Commissioner by rule or regulation for licensure of nonresident agents; and
(4) The person's home state awards nonresident agent licenses to residents of this state on the same basis.
(b) The Commissioner may verify the agent's licensing status through the producer data base maintained by the National Association of Insurance Commissioners, its affiliates, or subsidiaries.
(c) A nonresident agent who moves from one state to another state or a resident agent who moves from this state to another state shall file a change of address and provide certification from the new resident home state within 30 days of the change in legal residence. No fee or application is required.
(d) Notwithstanding any other provision of this title, a person licensed as a surplus lines broker in such person's home state shall receive a nonresident surplus lines broker license pursuant to subsection (a) of this Code section. Except as to subsection (a) of this Code section, nothing in this Code section otherwise amends or supersedes any portion of this title.
(e) Notwithstanding any other provision of this title, a person licensed as a limited lines credit insurance or other type of limited lines agent in such person's home state shall receive a nonresident limited lines agent license pursuant to subsection (a) of this Code section granting the same scope of authority as granted under the license issued by the agent's home state. For the purposes of this subsection, limited lines insurance is any authority granted by the home state which restricts the authority of the license to less than the total authority prescribed in the associated major lines pursuant to applicable Georgia regulations.
(f) The Commissioner may by rule or regulation implement a renewal process and set expiration dates.
(g)(1) A nonresident individual agent shall not act as an agent of an insurer unless the agent becomes an appointed agent of that insurer as follows:
(A) To appoint an individual as its agent, the appointing insurer shall file, pursuant to Code Section 33-23-26, a notice of appointment within 15 days from the date of licensure or before the first insurance application is submitted. An insurer may also elect to appoint an agent to all or some insurers within the insurer's holding company system or group by the filing of a single appointment request;
(B) Upon receipt of the notice of appointment, the Commissioner shall verify within a reasonable time, not to exceed 30 days, that the insurance agent is eligible for appointment. If the insurance agent is determined to be ineligible for appointment, the Commissioner shall notify the insurer within five days of such determination; and
(C) An insurer shall pay an appointment fee, in the amount and method of payment set forth in Code Section 33-8-1, for each insurance agent appointed by the insurer.
(2) An insurer shall remit, in a manner prescribed by the Commissioner, a renewal appointment fee in the amount as provided for initial appointments set forth in Code Section 33-8-1.
(3) An agent who is not acting as an agent of an insurer is not required to become appointed.
(h) Applicants whose home state does not require a license to transact business may be licensed in this state, provided that the applicant takes the examination issued by the Commissioner where required pursuant to this chapter and the applicant submits written documentation from his or her resident state demonstrating the lack of licensing requirement and the state's reciprocity with residents from this state. If the resident state does not license independent adjusters, the independent adjuster shall designate as his or her home state any state in which the independent adjuster is licensed and in good standing.
An individual who is not a resident of this state may be registered to represent an authorized life insurer domiciled in this state, provided such individual only represents the insurer exclusively at a United States military installation located in a foreign country. The Commissioner may, upon request of the insurer on application forms prescribed by the department and upon payment of an annual registration fee of $25.00, issue a certificate of registration to the individual. An official of the insurer shall certify to the Commissioner that the applicant has the necessary training to hold himself or herself out as a foreign life or accident and sickness insurance representative; and the official of the insurer shall further certify on behalf of his or her insurer that it is willing to be bound by the acts of such applicant within the scope of his or her employment and that such applicant has not had his or her privileges to solicit on or enter any United States military installation revoked, suspended, or restricted in any manner. Such certificate shall expire as of December 31 succeeding the date of its issuance unless it is terminated at an earlier time in accordance with this chapter and Chapter 2 of this title.
(a) All resident agent, limited subagent, adjuster, and counselor licenses, with the exception of temporary or probationary licenses, shall be issued on a biennial basis and shall expire on the last day of the licensee's birth month.
(b) Resident agent, limited subagent, adjuster, and counselor licenses may be renewed upon receipt by the Commissioner of evidence of such continuing education as the Commissioner may establish by rule or regulation and payment of such fees as are provided by law.
(c) Renewal of the license on forms prescribed by rule or regulation must be made prior to the last day of the licensee's birth month and biennially thereafter.
(d) Continuing education requirements imposed by the Commissioner pursuant to this Code section shall not exceed 15 classroom hours for each licensed individual who has held a license for less than 20 years during the year. For those individuals who have held a license for 20 years or more, the requirement shall be no more than ten classroom hours during the year. However, the Commissioner may provide by rule or regulation for continuing education requirements on a biennial basis.
(e) Any individual who has been licensed as an agent for ten consecutive years or more and who does not perform any of the functions specified in paragraph (3) of subsection (a) of Code Section 33-23-1 other than receipt of renewal or deferred commissions shall be exempt from continuing education requirements; provided, however, that if such individual wishes to again perform any of the other functions specified in said paragraph, such individual must obtain approval from the Commissioner and comply with the requirements of this chapter, including without limitation the requirements for continuing education. The Commissioner may provide, by rule or regulation, for any other exemption to or reduction in continuing education required under this Code section.
(f) Every individual required to participate in a continuing education program pursuant to this Code section, or such individual's insurer, shall furnish the Commissioner such information as the Commissioner deems necessary to verify compliance with the continuing education requirements.
(g) The Commissioner by rule or regulation may establish the following:
(1) Staggered deadlines for the filing of forms for renewal of licenses and the corresponding required fees; and
(2) Penalties and procedures for licensees who fail to comply with subsection (c) of this Code section.
(a) An agent's license shall be placed on inactive status when the agent no longer has on file with the Commissioner a certificate of authority to represent at least one insurer licensed to do business in this state.
(b) When a license is placed on inactive status under this Code section, the agent shall be prohibited from selling, soliciting, or negotiating insurance.
(c) During the time a license is in inactive status under the provisions of this Code section, the licensee still shall be required to provide evidence of compliance with the continuing education requirements of Code Section 33-23-18.
(a) The suspension of the license of an agent or limited subagent or the placing of such license on inactive status shall not deprive such individual or the executors or administrators of such individual's estate of any right that may have been acquired by a contract made before such suspension or placement on inactive status to receive all or a portion of commissions upon contracts of insurance written before such suspension or placement on inactive status with reference to the periods of time during which such contracts are in effect, including renewal option periods provided in the contracts.
(b) In case of a sale of an agency upon a work-out basis, the seller without maintaining his or her license or the executors and administrators of the seller's estate may participate in the proceeds of premiums on insurance written by the purchaser of the agency when and as authorized to do so by the contract of sale of the agency; and this participation may be without limitation of time after the seller ceased to hold a license. An agent whose license has been suspended or placed in inactive status may, when the countersignature of a resident licensed agent is required pursuant to Code Section 33-3-26 and if authorized by the insurer, countersign certificates and endorsements necessary to continue coverage to the expiration date, including renewal option periods.
(c) Nothing in this article shall be construed to permit an agent or limited subagent whose license has been suspended or placed in inactive status to sell, solicit, or negotiate insurance other than as expressly permitted in subsections (a) and (b) of this Code section.
A license, other than a probationary license, may be refused or a license duly issued may be suspended or revoked by the Commissioner if the Commissioner finds that the applicant for or holder of the license:
(1) Has violated any provision of this title, of any other law or regulation of this state relating to insurance, or the law or regulation of any jurisdiction, including those of a military installation, relating to the transaction of insurance;
(2) Has misrepresented or concealed any material fact in any application for a license or on any form filed with the Commissioner;
(3) Has obtained or attempted to obtain the license by misrepresentation, concealment, or other fraud;
(4) Has misappropriated, converted to his or her own use, or illegally withheld money belonging to an insurer, insured, agent, agency, applicant, or a beneficiary;
(5) Has committed fraudulent or dishonest practices;
(6) Has materially misrepresented the terms and conditions of an insurance policy or contract;
(7) Has failed to pass an examination pursuant to this article, or cheated on any examination required for a license;
(8) Has failed to comply with or has violated any proper order, rule, or regulation, issued by the Commissioner, including any order issued by the Commissioner or the Commissioner's designated representative during the course of any administrative hearing proceeding;
(9) Is not in good faith carrying on business as an agent or subagent, but, on the contrary, is holding such license for the purpose of securing rebates or commissions or controlled business;
(10) Is not in good faith carrying on business as a licensee under this chapter;
(11) Has shown lack of trustworthiness or lack of competence to act as a licensee under this chapter;
(12) Has knowingly participated in the writing or issuance of substantial overinsurance of any property insurance risk;
(13) Has failed or refused, upon written demand, to pay over to any insurer, agent, agency, applicant, beneficiary, or insured any moneys which belong to such insurer, agent, agency, applicant, beneficiary, or insured;
(14) Has failed to provide documentation or records, or refused to appear:
(A) In compliance with Code Section 33-2-12 or 33-2-13;
(B) In response to a written demand by the Commissioner sent by registered or certified mail or statutory overnight delivery to the last known address of the licensee as shown in the records of the Commissioner; or
(C) In support of an application for license or renewal of license upon request by the department or as otherwise required by the application or renewal;
(15) Has been convicted of any felony or of any crime involving moral turpitude in the courts of this state or any other state, territory, or country or in the courts of the United States; as used in this paragraph and paragraph (16) of this subsection, the term “felony” shall include any offense which, if committed in this state, would be deemed a felony, without regard to its designation elsewhere; and, as used in this paragraph, the term “conviction” shall include a finding or verdict of guilty or a plea of guilty, regardless of whether an appeal of the conviction has been sought;
(16) Has been arrested, charged, and sentenced for the commission of any felony, or any crime involving moral turpitude, where:
(A) First offender treatment without adjudication of guilt pursuant to the charge was granted; or
(B) An adjudication of guilt or sentence was otherwise withheld or not entered on the charge.
The order entered pursuant to the provisions of Article 3 of Chapter 8 of Title 42, relating to probation of first offenders, or other first offender treatment shall be conclusive evidence of arrest and sentencing for such crime;
(17) Has failed to report to the Commissioner any criminal prosecution of the applicant or licensee taken in any jurisdiction. The report shall include a copy of the initial complaint filed, the order resulting from any hearing that has taken place, and any other relevant legal documents. Such report must be filed with the application or within 30 days of the date of arrest;
(18) Has had a license to practice a business or profession licensed under the laws of this state or any other state, territory, country, or the United States revoked, suspended, or annulled by any lawful licensing authority; had other disciplinary action taken against him or her by any such lawful licensing authority; was denied or refused a license by any such lawful licensing authority pursuant to disciplinary proceedings; or was refused the renewal of a license by any such lawful licensing authority pursuant to disciplinary proceedings;
(19) Has failed to notify the Commissioner within 60 days of any event referred to in paragraph (15), (16), or (18) of this Code section;
(20) Is not in compliance with an order for child support as defined by Code Section 19-6-28.1 or 19-11-9.3; for violations of this paragraph only, any hearing and appeal procedures conducted pursuant to such Code sections shall be the only such procedures required to suspend, deny, or revoke any license under this title;
(21) In relation to the licensee's ability to transact the business of insurance, has had a license, permit, authorization, registration, or privilege refused, revoked, suspended, limited, or restricted by any federal, state, county, municipality, territory, military, or other legal authority authorized to issue licenses, permits, authorizations, registrations, or privileges to conduct business within its respective jurisdiction; otherwise has failed to comply with the legal requirements related to the license, permit, authorization, registration, or privilege; or has had other disciplinary action taken against him or her by any such lawful authority; or
(22) Has failed to report to the department within 60 days of the action taken, any refusal, revocation, suspension, limitation, or restriction of any license, permit, authorization, registration, or privilege of any lawful authority referenced in paragraph (18) or (21) of this Code section.
The Commissioner shall not refuse to issue nor suspend or revoke a license of an applicant for or holder of a license because he or she is a borrower in default under the Georgia Higher Education Loan Program as determined by the Georgia Higher Education Assistance Corporation or has been certified by any entity of the federal government for nonpayment or default or breach of a repayment or service obligation under any federal educational loan, loan repayment, or service conditional scholarship program.
(a) Any license, other than a probationary license or inactive license as described in subsection (a) of Code Section 33-23-19, may be suspended or revoked as provided by Code Section 33-23-21 and subsection (b) of Code Section 33-23-19, and the Commissioner shall give notice of such action to the applicant for or holder of the license and any insurer or agent whom the applicant or licensee represents or who desires that the applicant or licensee be licensed. The procedure for conduct of hearings set forth in Chapter 2 of this title shall be followed in all cases except those cases pursuant to paragraph (20) of Code Section 33-23-21 which shall only require the hearings provided for in said paragraph.
(b) Appeal from any order or decision of the Commissioner made pursuant to this chapter shall be taken as provided in Chapter 2 of this title.
(a) No licensee or applicant whose license or application has been refused or revoked as provided by Code Sections 33-23-21 and 33-23-22 shall be entitled to file another application for a license as an agent, agency, limited subagent, surplus lines broker, counselor, or adjuster within five years from the effective date of the refusal, revocation, or, if judicial review of such refusal or revocation is sought, within five years from the date of the final court order or decree affirming such refusal or revocation.
(b) The application when filed may be refused by the Commissioner unless the applicant shows good cause why the refusal or revocation of the license shall not be deemed a bar to the issuance of a new license.
(c) Any surrender of a license under written consent order shall have the same effect as a revocation under subsections (a) and (b) of this Code section.
(d) At the Commissioner's discretion, an applicant whose application was refused under subsection (a) or (b) of this Code section may be permitted to file an application for a license; provided, however, that such application shall be filed no less than one year from the effective date of the refusal.
The permits of service representatives and licenses of licensees under this article shall not be transferable.
Every licensed agent, limited subagent, counselor, and adjuster shall have and maintain in this state or, if a nonresident licensee, in the state of domicile, a place of business accessible to the public. The place of business shall be that wherein the licensee principally conducts transactions pursuant to the license. The address of the place of business shall be maintained by the Commissioner. All resident and nonresident licensees shall promptly notify the Commissioner in writing within 30 days of any change in the business address.
(a) Each insurer authorized to transact insurance in this state shall obtain an agent's certificate of authority for each agent representing such insurer in the selling, soliciting, or negotiating of contracts of insurance in this state. For the purposes of this subsection, the insurer will be deemed to have obtained a certificate of authority for its designated agent immediately upon submission of the appointment request to the Commissioner; provided, however, that the initial certificate of authority for an applicant for licensure shall not become effective until the date such applicant is finally granted a license by the Commissioner.
(b) All agents' certificates of authority shall be renewed by the insurer in such form and manner as the Commissioner may prescribe by rule or regulation.
(c) The fee for each agent's certificate of authority or renewal thereof shall be as provided in Code Section 33-8-1.
(d) An insurer or authorized representative of the insurer that terminates the appointment, employment, contract, or other insurance business relationship with an agent shall notify the Commissioner within 30 days following the effective date of the termination, using a format prescribed by the Commissioner, if the reason for the termination is one of the reasons set forth in Code Section 33-23-21 or the insurer has knowledge that the agent was found to have engaged in any of the activities in Code Section 33-23-21 by a court, governmental body, or self-regulatory organization authorized by law. Upon the written request of the Commissioner, the insurer shall provide additional information, documents, records, or other data pertaining to the termination or activity of the agent.
(e) If an agent's certificate of authority is terminated, the insurer promptly shall give notice of said termination and the effective date of the termination to the Commissioner and to the agent where reasonably possible. The Commissioner may also require the insurer to demonstrate to the satisfaction of the Commissioner that the insurer has made a reasonable effort to give notice to the agent.
(f) An insurer or authorized representative of the insurer that terminates the appointment, employment, or contract with an agent for any reason not set forth in Code Section 33-23-21 shall notify the Commissioner within 30 days following the effective date of the termination, using a format prescribed by the Commissioner. Upon written request of the Commissioner, the insurer shall provide additional information, documents, records, and other data pertaining to such termination.
(g) The insurer or the authorized representative of the insurer shall promptly notify the Commissioner in a format acceptable to the Commissioner if, upon further review or investigation, the insurer discovers additional information that would have been reportable to the Commissioner in accordance with subsection (d) of this Code section had the insurer known of its existence.
(h) No certificate of authority shall be required for an agent who places surplus lines insurance with or through a surplus lines broker only with respect to such surplus lines insurance.
(i) As to any application for an agent's certificate of authority, the Commissioner shall require as part of the application a certificate of the insurer proposed to be represented. The certificate shall state, relative to the applicant's character, including criminal background, identity, residence, experience, and instruction as to the kinds of insurance to be transacted, that the insurer or sponsoring agent is satisfied that such applicant is trustworthy and qualified to act as its agent in this state.
(a) Each agent licensed in this state shall obtain a certificate of authority for each subagent representing such agent in this state.
(b) Each subagent's certificate of authority shall be renewed by the agent not more than once every three years in such form and manner as specified by the Commissioner by rule or regulation.
(c) Each agent shall also be required to inform the Commissioner of any termination of or change to any certificate of authority for each subagent in such form and manner as may be prescribed by the Commissioner by rule or regulation.
(d) The fee for each subagent's certificate of authority or renewal or duplicate thereof shall be as provided by law.
(e) The subagent's certificate shall be held by the agent and shall be returned to the Commissioner upon termination of the subagent's authority along with an explanation of the reason for such termination in such form and manner as the Commissioner may specify by rule or regulation.
(a) A subagent's certificate of authority shall not cover any kind of insurance for which the sponsoring agent and subagent are not licensed.
(b) A subagent or limited subagent shall not have power to bind an insurer.
(c) All business transacted by a subagent under such subagent's license or limited subagent shall be in the name of the agent by whom the subagent or limited subagent is employed; and the agent shall be responsible for all the acts or omissions of the subagent or limited subagent within the scope of his or her employment.
(d) A record of each transaction shall be maintained jointly by the agent and the subagent or limited subagent.
(a) On behalf of and as authorized by an insurer for which he or she is licensed as agent, an agent may from time to time act as an adjuster and investigate and report upon claims without being required to be licensed as an adjuster.
(b) No license by this state shall be required:
(1) Of a nonresident independent adjuster for the adjustment in this state of a single loss or of losses arising out of a catastrophe common to all such losses; or
(2) Of a nonresident adjuster who regularly adjusts in another state and who is licensed in such other state, if such state requires a license, to act as adjuster in this state for emergency insurance adjustment work for a period not exceeding 60 days and performed for an employer that is an insurance adjuster licensed by this state or that is a regular employer of one or more insurance adjusters licensed by this state, provided that such employer shall furnish to the Commissioner a notice in writing immediately upon the beginning of the emergency insurance adjustment work.
(c) An individual residing in another state may be licensed by the Commissioner as a nonresident adjuster under the following circumstances and in the following manner:
(1) Upon written application and payment of the required license fee and without requiring a written examination, the Commissioner shall issue a license to an individual to act as a nonresident adjuster if the individual is licensed in his or her home state as an adjuster;
(2) The required fee for the license shall be the fee provided by law or the sum which is charged as a license fee for nonresident adjusters by the state of the applicant's residence, whichever is greater; and
(3) Applicants whose home state does not require a license to transact business may be licensed in this state, provided that the applicant takes the examination issued by the Commissioner where required pursuant to this chapter and the applicant submits written documentation from such applicant's resident state demonstrating the lack of licensing requirements in such state and such state's reciprocity with residents of this state.
(d) The Commissioner shall issue a license to an individual to act as a nonresident adjuster if, by the laws of the state of the applicant's residence, residents of this state may be licensed as nonresident adjusters in the same manner.
(e) The Commissioner is authorized to enter into reciprocal agreements with the appropriate official of any other jurisdiction for the purpose of implementing this Code section.
(f) No resident of Canada may be licensed as a nonresident independent adjuster unless such person has obtained a resident or home state independent adjuster license.
(a) An individual residing in another state may be licensed by the Commissioner as a nonresident counselor under the following circumstances and in the following manner:
(1) Upon written application and payment of the required license fee and without requiring a written examination, the Commissioner shall issue a license to an individual to act as a nonresident counselor if the individual is licensed in his or her home state as a counselor;
(2) Applicants whose home state does not require a license to transact business as a counselor may be licensed in this state provided that the applicant takes the examination issued by the Commissioner where required pursuant to this chapter and the applicant submits written documentation from the applicant's resident home state demonstrating the lack of a licensing requirement and such state's reciprocity with residents of this state; and
(3) The required fee for the license shall be the fee provided by law or the sum which is charged as a license fee for nonresident counselors by the state of the applicant's residence, whichever is greater.
(b) The Commissioner shall issue a license to an individual to act as a nonresident counselor if, by the laws of the state of the applicant's residence, residents of this state may be licensed as nonresident counselors in the same manner.
(c) The Commissioner is authorized to enter into reciprocal agreements with the appropriate official of any other jurisdiction for the purpose of implementing this Code section.
An agent shall not sign in blank any policy to be issued outside of such agent's office. An agent shall not give power of attorney to or otherwise authorize anyone to sign the agent's name to policies unless the person so authorized is directly employed by the agent and no other person, and the person has no office files, equipment, or address in regard to the insurance business other than those in the office of the agent. Nothing in this Code section shall prohibit an agent from authorizing an insurer represented by such agent to reproduce mechanically or electronically such agent's signature on policies, certificates, endorsements, riders, or other insurance contract documents.
(a) A risk shall be deemed to have a situs in this state if the insurance is upon or in regard to property having a permanent situs in this state or movable property which is actually in this state or is principally used or kept in this state or on persons resident in this state.
(b) Each nonresident by obtaining a license in this state or by doing business in this state shall be deemed to have consented that any notice provided in this chapter and any summons, notice, or process in connection with any action or proceeding in any state or federal court in this state, which notice, summons, or process grows out of or is based upon any business or acts done or omitted to be done in this state, may be sufficiently served upon such nonresident by serving the same upon the Commissioner. Service shall be made by leaving with the office of the Commissioner a copy of the notice, summons, or process with a fee. The fee for such service shall be as provided by law. Such service shall be sufficient service upon the nonresident, provided that notice of the service and a copy of the notice, summons, or process shall be immediately sent by registered or certified mail or statutory overnight delivery by the plaintiff or by the Commissioner to the residence of the nonresident addressed to the nonresident. The nonresident's return receipt and the affidavit of compliance with the notice, summons, or process made by the plaintiff or the plaintiff's attorney or by the Commissioner shall be appended to the notice, summons, or process and filed with the case in the court where it is pending or filed with the Commissioner if in regard to a proceeding provided under this chapter. Venue of such an action shall be in the county of the residence of a plaintiff in the action, if the plaintiff resides in this state; otherwise venue shall be in Fulton County. The place of residence of a licensed nonresident placed on file by him or her with the Commissioner shall be deemed to be his or her place of residence until the nonresident places on file with the Commissioner a written notice stating another place of residence. As used in this subsection, the term “process” shall include a petition or complaint attached thereto.
Except when required in retaliation pursuant to Code Section 33-3-26, insurance contracts on risks or property located or having a situs in this state need not be countersigned by an agent duly licensed in accordance with Code Section 33-23-5; but, if a licensed nonresident agent participates in the effectuation of such contract and a countersignature is so required, the countersigning agent licensed in accordance with Code Section 33-23-5 shall be entitled to the same commission as allowed by the state of residence of the licensed nonresident but, in any event, to not more than 50 percent of the commission. Nothing contained in this Code section shall be construed to require a company to make additional compensation in the way of commissions or otherwise to a person who is paid on a salary basis.
(a) Every licensee under this chapter shall keep the Commissioner advised of:
(1) The office address of the licensee;
(2) The residence address of the licensee;
(3) The name and address of each insurer that the licensee represents directly or indirectly;
(4) The name and address of each agency of which the licensee is proprietor, partner, officer, director, or employee or which the licensee represents;
(5) Every trade name of such agency; and
(6) The names of all partners and members of any firm or association and the corporate name of any corporation owning or operating such agency as such information changes.
(b) Any change in the information required by subsection (a) of this Code section shall be transmitted to the Commissioner within 30 days of such change on forms prescribed by the Commissioner.
(c) The Commissioner shall prescribe by rule or regulation the form and manner by which such information will be transmitted.
(a) Every agent, limited subagent, counselor, and adjuster under this chapter shall keep at the address as shown on his or her license or at the insurer's regional or home office situated in this state a record of all transactions consummated under such license. The record shall be in organized form and shall include:
(1) In the case of an agent or limited subagent, a record of each insurance contract procured or issued together with the names of the insurers and insureds, the amount of premium paid or to be paid, and a statement of the subject of the insurance; and the names of any other licensees from whom business is accepted and of persons to whom commissions or allowances of any kind are promised or paid;
(2) In the case of an adjuster, a record of each investigation or adjustment undertaken or consummated and a statement of any fee, commission, or other compensation received or to be received by the adjuster on account of the investigation or adjustment; and
(3) Such other and additional information as may be customary or as may be reasonably required by the Commissioner.
(b) All records as to any particular transaction shall be kept for a term of five years beginning immediately after the completion of the transaction or the term of the contract, whichever is greater, provided that records of losses adjusted by an independent adjuster may be kept at the office of the insurer for whom the adjuster acted.
(c) In the case of agents or limited subagents, the maintaining of the records required by this Code section at the insurance agency licensed under this chapter for which agency the transaction was undertaken shall be deemed to comply with the requirements of subsection (a) of this Code section.
(a) An agent, limited subagent, or any other representative of an insurer or of any other person in the effectuation of an insurance contract shall report to the insurer or its agent the premium for the contract and the amount shall be shown in the contract. Each willful violation of this subsection shall constitute a misdemeanor.
(b) All funds representing premiums received or return premiums due the insured by any agent or subagent shall be accounted for in the licensee's fiduciary capacity, shall not be commingled with the licensee's personal funds, and shall be promptly accounted for and paid to the insurer, insured, or agent as entitled to such funds. Nothing contained in this Code section shall be deemed to require any agent or subagent to maintain a separate bank deposit for the funds of each principal, if the funds so held for each principal are reasonably ascertainable from the books of accounts and records of the agent or subagent.
(c) Any violation of this Code section shall constitute grounds or cause for action by the Commissioner, including, but not limited to, probation, suspension, or revocation of the license. Each and every act by a licensee shall also constitute grounds for fines and penalties, which amounts shall be set by rule or regulation of the Commissioner. Any willful violation of this Code section shall constitute a misdemeanor unless such amounts involved exceed $1,000.00, whereby such violation shall constitute a felony.
The Commissioner may upon his or her own motion and shall upon a written complaint signed by a citizen of this state and filed with the Commissioner inquire into any alleged illegal or improper conduct of any licensee or inquire into the question of whether a licensee is untrustworthy or not competent or not qualified to act as a licensee under this chapter. No finding or decision adverse to any person in regard to whom the inquiry is conducted shall be made by the Commissioner until after notice and hearing as provided in Chapter 2 of this title.
(a) Nothing in this chapter shall prevent the placing of surplus lines of insurance when authorized and permitted under this title.
(b) Any person, while licensed as a resident agent as to property, casualty, and surety insurance and who is deemed by the Commissioner to be competent and trustworthy, may be licensed as a surplus lines broker as follows:
(1) Application to the Commissioner for the license shall be on forms furnished by the Commissioner;
(2) The license fee shall be in an amount as provided in Code Section 33-8-1;
(3) Each license shall be issued on a biennial basis and shall expire on the last day of the licensee's birth month and may be renewed by filing an application and paying the prescribed fee in accordance with this Code section;
(4) Prior to the issuance of the license or any renewal of the license, the applicant shall file a bond with the Commissioner or his or her successor in office, for the benefit of any person injured by the violation of the conditions provided in this paragraph. The bond shall be executed by the applicant as principal and by a corporate surety authorized to do business in this state and shall be in the penal sum of $50,000.00, conditioned that the applicant will comply with the following:
(A) Place insurance only in compliance with Code Section 33-5-25;
(B) Remit promptly the taxes provided in Code Section 33-5-31;
(C) Account to any person requesting him or her to obtain insurance for funds or premiums collected in connection with such insurance; and
(D) Otherwise conduct business in accordance with this title.
The bond shall not be terminated unless prior to such termination 30 days' written notice is filed with the Commissioner; and
(5) Each applicant for a license to act as a surplus lines broker shall submit to a personal written examination to determine his or her competence, unless the applicant is licensed as a surplus lines broker in his or her home state.
(a) No agent or limited subagent shall place any insurance or receive any remuneration in regard to any insurance of a classification outside the scope of such agent's or limited subagent's license, nor shall the agent or limited subagent share a commission except with an agent licensed pursuant to this article; with an agency that has as its proprietor or as a partner in the agency or as an officer or employee of the agency one or more agents licensed in regard to insurance that is within the scope of his or her agency; or with an agent or agency having a residence or situs in another state and a license from such other state for the transaction of insurance in that state.
(b) Except as otherwise provided in this title, no person shall solicit or be instrumental in placing insurance upon any risk having a situs in this state except with an insurer admitted to do insurance business in this state.
(c) A violation of this Code section shall authorize, among other penalties, the revocation of the violator's license as an agent or subagent.
No insurer shall issue, make, write, place, or cause to be made, written, placed, or issued any contract of insurance, indemnity, or suretyship covering risks or property located or having a situs in this state or covering any liability created by or arising under the laws of this state, except through an agent or agents licensed pursuant to this article, except that bid bonds issued by any surety insurer in connection with any public or private building or construction project may be issued without regard to this Code section or as provided for in subparagraph (h)(2)(F) of Code Section 33-23-4.
Any contract of insurance issued by a person prohibited by this chapter from so issuing it shall not be rendered unenforceable by reason of the violation of this chapter, but all persons knowingly participating in the violation shall be subject to the provisions of Chapter 2 of this title.
Any person who in this state acts, purports to act, or holds himself or herself out as an agent, limited subagent, counselor, or adjuster or as an employee of an agent, limited subagent, counselor, or adjuster of or for an insurer that has not obtained from the Commissioner a certificate of authority then in effect to do business in this state as required by this article or who has not obtained a certificate of authority as required by this article and any person who in this state collects or forwards any premium or portion of the premium for or to the insurer shall pay a sum equal to the state, county, and municipal taxes and license fees required to be paid by the insurance companies legally doing business in this state. It is the Commissioner's duty to report violators of this Code section to the district attorney for the county in which the violations occurred. Violators of this Code section shall also be personally liable to the same extent as the insurer upon every contract of insurance made by the insurer with reference to a risk having a situs in this state, if the violator participated in the solicitation, negotiation, or making of the contract or in any endorsement to the contract, in any modification of the contract, or in the collection or forwarding of any premium or portion of the premium relating to such contract. This Code section shall have no application to a contract of insurance entered into in accordance with Chapter 5 of this title.
Any person who performs any of the acts or things specified in this chapter for any insurance company or agent of said company without such company's having first received a certificate of authority from the Commissioner as required by law shall be punished as for a misdemeanor and shall also pay a sum equal to the state, county, and municipal taxes and license fees required to be paid by insurance companies legally doing business in this state. It shall be the duty of the Commissioner to report any violation of this Code section to the district attorney or prosecuting attorney of the circuit or county which has jurisdiction.
(a) An adjuster licensed as both an independent and a public adjuster shall not represent both the insurer and the insured in the same transaction.
(b) An adjuster shall have authority under his or her license only to investigate, settle, or adjust and report to his or her principal upon claims arising under insurance contracts on behalf of insurers only if licensed as an independent adjuster or on behalf of insureds only if licensed as a public adjuster.
(c) No public adjuster, at any time, shall knowingly:
(1) Misrepresent to an insured that he or she is required to hire an independent or public adjuster to help the insured meet his or her obligations under his or her policy;
(2) Accept or agree to accept any money or other compensation from an attorney or any person acting on behalf of an attorney which the adjuster knows or should reasonably know is payment for the suggestion or advice by the adjuster to seek the services of the attorney or for the referral of any portion of a person's claim to the attorney;
(3) Hire or procure another to do any act prohibited by this subsection;
(4) Advertise or promise to pay or rebate all or any portion of any insurance deductible as an inducement to the sale of goods or services. As used in this paragraph, the term “promise to pay or rebate” includes:
(A) Granting any allowance or offering any discount against the fees to be charged, including, but not limited to, an allowance or discount in return for displaying a sign or other advertisement at the insured's premises; or
(B) Paying the insured or any person directly or indirectly associated with the claim any form of compensation, gift, prize, bonus, coupon, credit, referral fee, or other item of monetary value for any reason;
(5) Misrepresent to a claimant that he or she is an adjuster representing an insurer in any capacity, including acting as an employee of the insurer or as an independent adjuster, unless appointed by an insurer in writing to act on the insurer's behalf for that specific claim or purpose. A licensed public adjuster shall not charge a claimant a fee for adjusting a claim when he or she is appointed by the insurer for that specific claim or purpose and the appointment is accepted by the public adjuster;
(6) Solicit, or attempt to solicit, an insured during the progress of a loss-producing occurrence as defined in the insured's insurance contract;
(7) Have a direct or indirect financial interest in any aspect of a claim other than the salary, fee, commission, or other consideration established in a written contract with the insured which shall incorporate all of the conditions and provisions set out in Code Section 33-23-43.2;
(8) Charge to or collect from an insured any amount, other than reasonable compensation for services rendered based on time spent and expenses incurred, in any transaction where the insurer either pays or commits in writing to pay the policy limit or limits for all coverage under the insured's policy within three business days after the loss is reported to the insurer;
(9) Misrepresent to an insured or insurer that he or she is an attorney authorized by law to provide legal advice and services or that a policy covers a loss or losses outside the scope of the coverage provided by the insurance contract;
(10) Permit an unlicensed employee or representative of the adjuster to conduct business for which a license is required; or
(11) Hire or procure another to do any act prohibited by this subsection.
(d) For purposes of subsection (c) of this Code section, the term “public adjuster” shall include licensed public adjusters as defined by Code Section 33-23-1, persons representing themselves to be public adjusters who are not properly licensed by the Commissioner, and persons committing any act under paragraph (4) of subsection (c) of this Code section.
(e) Any person who violates any provision of subsection (c) of this Code section shall be guilty of a misdemeanor and such violation shall be grounds for suspension or revocation of licenses under this chapter.
(f) The Commissioner may adopt reasonable and necessary rules to implement this article, including but not limited to rules regarding:
(1) The qualifications for adjusters, in addition to those prescribed by this article, that are necessary to promote the public interest;
(2) The regulation of the conduct of adjusters, in accord with this article;
(3) The prescription of fees not prescribed elsewhere in this title that are necessary to cover the cost of filings or other administrative costs; and
(4) The regulation of advertisements and the definition of “advertisement” as the term is used in paragraph (4) of subsection (c) of this Code section.
(a) No person may act or hold himself or herself out to be a public adjuster in this state unless such person holds a public adjuster license issued by the Commissioner.
(b) A public adjuster license is not, however, required for:
(1) An attorney licensed to practice law in this state while acting for an insured concerning a loss under a policy; or
(2) A person licensed as a general property and casualty agent or personal lines property and casualty agent while acting for an insurer concerning a loss under a policy issued by that agent.
(a) No person may, directly or indirectly, act within this state as a public adjuster without, among other requirements, having first entered into a contract, in writing, on a form approved by the Commissioner, executed in duplicate by such person and the insured or the insured's duly authorized representative. A public adjuster shall not use any form of contract that is not approved by the Commissioner.
(b) Public adjusters shall ensure that all contracts for their services are in writing, prominently captioned and titled “Public Adjuster Contract,” and contain the following:
(1) Legible full name of the public adjuster signing the contract, as specified on the license issued by the department and attestation language that the public adjuster is fully bonded pursuant to state law;
(2) Permanent home state business address and contact information of the public adjuster, including email address;
(3) The public adjuster's department license number and a statement that the license is valid and in full force and effect as of the date the contract is signed;
(4) The insured's full name and street address;
(5) A description of the loss and its location, if applicable;
(6) A description of services to be provided to the insured;
(7) Signatures of the public adjuster and the insured;
(8) The date the contract was signed by the public adjuster, and the date the contract was signed by the insured;
(9) A statement of the fee, compensation, or other considerations that the public adjuster is to receive for services, including a listing of typical costs and expenses for which the public adjuster is to be reimbursed;
(10) A statement prominently captioned in a minimum 12 point font indicating that the public adjuster has no direct or indirect interest, including participation in activities that may be reasonably construed as a conflict of interest or as compensation by or interest in, any firm that performs any work in conjunction with the damages incident to any loss the public adjuster has been contracted to adjust, except for the compensation or fee from the insured for such public adjuster's services; and
(11) A prominently displayed notice in 12-point boldface type that states “ WE REPRESENT THE INSURED ONLY .”
(c) Public adjuster contracts may not contain a contract term that:
(1) Restricts an insured's right to initiate and maintain direct communications with his or her attorney, the insurer, the insurer's adjuster, the insurer's attorney, or any other person regarding settlement of the insured's claim;
(2) Vests the public adjuster with the right to initiate direct communications with the insured's insurer, the insurer's adjuster, or the insurer's attorney regarding settlement of the insured's claim without specific written authorization from the insured;
(3) Allows the public adjuster's percentage fee to be collected when money is due from an insurance company but not paid or that allows a public adjuster to collect the entire fee from the first check issued by an insurance company rather than as a percentage of each check issued by an insurance company;
(4) Requires the insured to authorize an insurance company to issue a check only in the name of the public adjuster;
(5) Precludes or restricts an insured from pursuing any civil remedies relating to his or her claim;
(6) Purports to allow the public adjuster to act in multiple capacities; or
(7) Identifies the public adjuster as also being a contractor, appraiser, or other position.
(d) All public adjuster contracts shall be construed to contain, by operation of law:
(1) A provision granting the insured a right to rescind the contract within three business days after the date the contract was signed, so long as the rescission is in writing and mailed or delivered to the public adjuster at the address stated in the contract within three business days. For purposes of this subsection, rescission of the contract shall be considered delivered or mailed if it is delivered by electronic transmittal to the email address or facsimile specified in the contract for such communications;
(2) A provision that if the insured exercises the right to rescind the contract, anything of value given by the insured under the contract shall be returned to the insured within 15 business days following the receipt by the public adjuster of the rescission notice; and
(3) A provision requiring that, prior to initiating any contact with the insured's insurer, the insurer's adjuster, or the insurer's attorney regarding settlement of the insured's claim, a public adjuster must provide the insurer a notification letter signed by the insured confirming that the insured has authorized the public adjuster to communicate directly with the insurer, the insurer's adjuster, or the insurer's attorney on behalf of the insured.
(e) All public adjuster contracts shall be executed in duplicate to provide an original contract to the public adjuster and an original contract to the insured. The public adjuster's original contract shall be available at all times for inspection without notice by the department.
(f) No public adjuster shall enter into a contract with an insured and collect a commission as provided by Code Section 33-23-43.3, without having the intent to actually perform services customarily provided by a public adjuster for the insured.
(a) Except as provided by subsection (b) of this Code section, an adjuster may receive a commission for service provided under this article consisting of an hourly fee, a flat rate, a percentage of the total amount paid by an insurer to resolve a claim, or another method of compensation. A public adjuster may not charge the insured an unreasonable fee, and the total commission received shall not exceed 33.3 percent of the amount of the insurance settlement of the claim.
(b) An adjuster shall not receive a commission consisting of a percentage of the total amount paid by an insurer to resolve a claim on a claim on which the insurer, not later than 72 hours after the date on which the loss is reported to the insurer, either pays or commits in writing to pay to the insured the policy limit of the insurance policy. A public adjuster is entitled to reasonable compensation from the insured for services provided by such adjuster on behalf of the insured, based on the time spent on a claim that is subject to this Code section and expenses incurred by such adjuster, until the claim is paid or the insured receives a written commitment to pay from the insurer.
(c) Except for the payment of a commission by the insured, all persons paying proceeds of a policy of insurance or making any payment affecting an insured's rights under a policy of insurance shall:
(1) Include the insured as a payee on the payment draft or check; and
(2) Require the written signature and endorsement of the insured on the payment draft or check.
(d) An adjuster shall not accept any payment that violates the provisions of this Code section.
(e) A public adjuster may sign or endorse a payment, draft, or check issued on behalf of an insured if authorized in writing by each insured payee, and only if such written endorsement meets the following criteria:
(1) The authorization limits the public adjuster to endorse the check or payment for deposit only into the public adjuster's escrow or trust account and such authorization states that the check or payment will be distributed in the percentages or amounts agreed upon in the public adjuster contract;
(2) The authorization requires that the insured be notified of the deposit of funds, and states that any distribution of such funds to the insured or the public adjuster will be accompanied by a detailed breakdown of the funds distributed; and
(3) The authorization form states that such authorization may be revoked at any time by the insured upon written notice of such revocation to the public adjuster.
(a) As a continuing condition of licensure, a public adjuster may, at the Commissioner's discretion, file proof of financial responsibility with respect to transactions with insureds under this chapter in an amount determined by the Commissioner by rule. The financial responsibility shall include the ability to pay sums that the public adjuster is obligated to pay under any judgment against such adjuster by an insured, based on an error, omission, fraud, negligent act, or unfair practice of such adjuster or any person for whose acts such adjuster is legally liable in the transaction of such adjuster's business under this Code section.
(b) In determining the amount of the financial responsibility requirement, the Commissioner shall consider the nature of the obligation, other financial security requirements under this Code section, and financial security requirements adopted for public adjusters in other states. In determining the types of financial responsibility required, the Commissioner may consider a surety bond or a professional liability policy or similar policy or contract of professional liability coverage acceptable to the Commissioner.
(c) The requirements of this Code section are in addition to the bond requirements of Code Section 33-23-6 and relevant rules and regulations promulgated by the Commissioner.
(a) A public adjuster shall keep a complete record in this state of each of such adjuster's transactions as a public adjuster. The records shall include each of the following:
(1) The name of the insured;
(2) The date, location, and amount of the loss;
(3) A copy of the contract between the public adjuster and the insured;
(4) The name of the insurer and the amount, expiration date, and number of each policy under which the loss is covered;
(5) An itemized statement of the recoveries by the insured from the sources known to the public adjuster;
(6) The total compensation received for the adjustment; and
(7) An itemized statement of disbursements made by the license holder from recoveries received on behalf of the insured.
(b) Records required to be kept under this Code section shall be:
(1) Maintained in this state for at least five years after the termination of a transaction with the insured; and
(2) Open to examination by the Commissioner.
(a) All funds received as claim proceeds by an adjuster acting as a public adjuster are received and held by such adjuster in a fiduciary capacity. Such adjuster shall not divert or misappropriate fiduciary funds received or held.
(b) An applicant for a license to act as a public adjuster shall, as part of the application, endorse an authorization for disclosure to the Commissioner of all financial records of any funds such adjuster holds and will hold as a fiduciary. The authorization continues in force and effect for as long as such adjuster continues to be licensed under this article.
(a) Each advertisement by an adjuster soliciting or advertising business shall display the adjuster's name and license number as they appear in the records of the Commissioner.
(b) No advertisement soliciting or advertising business may be used by an adjuster unless such solicitation or advertisement has been approved by the Commissioner.
(c) The following statements, made in any public adjuster's advertisement or solicitation, are considered deceptive or misleading:
(1) A statement or representation that invites an insured to submit a claim when such insured does not have covered damage to such insured's property;
(2) A statement or representation that invites an insured to submit a claim by offering monetary or other valuable inducement;
(3) A statement or representation that invites an insured to submit a claim by stating that there is “no risk” to the insured by submitting such claim; and
(4) A statement or representation, or use of a logo or shield, that implies or could mistakenly be construed to imply that the solicitation was issued or distributed by a governmental agency or is sanctioned or endorsed by a governmental agency.
(d) For purposes of this subsection, the term “written advertisement” includes only newspapers, magazines, flyers, and bulk mailers. The following disclaimer, which is not required to be printed on standard size business cards, shall be added in bold print and capital letters in typeface no smaller than the typeface of the body of the text to all written advertisements of a public adjuster:
“THIS IS A SOLICITATION FOR BUSINESS. IF YOU HAVE HAD A CLAIM FOR AN INSURED PROPERTY LOSS OR DAMAGE AND YOU ARE SATISFIED WITH THE PAYMENT BY YOUR INSURER, YOU MAY DISREGARD THIS ADVERTISEMENT”.
(a) An adjuster shall not solicit or attempt to solicit a client for employment during the progress of a loss-producing natural disaster occurrence. For purposes of this subsection, the term “natural disaster” means any natural disaster for which a state of emergency is proclaimed by the Governor.
(b) An adjuster shall not solicit or attempt to solicit business on a loss or a claim in person, by telephone, or in any other manner at any time except between the hours of 8:00 A.M. and 10:00 P.M. on a weekday or a Saturday and between noon and 10:00 P.M. on a Sunday. This subsection shall not prohibit an adjuster from accepting phone calls or personal visits during the prohibited hours from an insured on the insured's initiation.
(c) An adjuster shall not knowingly make any false report to the adjuster's employer or client and shall not divulge to any other person, except as the law may require, any information obtained except at the direction of the employer or the client for whom the information is obtained.
(d) An adjuster shall not permit an unlicensed employee or other representative of the adjuster to in any manner conduct business for which a license is required under this chapter.
(e) An agent shall not render services or perform acts that constitute the practice of law, including the giving of legal advice to any person, in his or her capacity as an adjuster.
(f) A public adjuster shall not solicit or attempt to solicit business, directly or indirectly, or act in any manner on a bodily injury loss covered by a life, health, or accident insurance policy or on any claim for which the client is not an insured under the insurance policy.
(g) An adjuster shall not:
(1) Participate directly or indirectly in the reconstruction, repair, or restoration of damaged property that is the subject of a claim adjusted by such adjuster;
(2) Engage in any other activities that may reasonably be construed as presenting a conflict of interest, including soliciting or accepting any remuneration from, having a financial interest in, or deriving any direct or indirect financial benefit from, any salvage firm, repair firm, construction firm, or other firm that obtains business in connection with any claim the adjuster has a contract or agreement to adjust;
(3) Without the knowledge and consent of the insured in writing, acquire an interest in salvaged property that is the subject of a claim adjusted by such adjuster;
(4) Represent an insured on a claim or charge a fee to an insured while representing the insurance carrier against which such claim is made;
(5) Directly or indirectly solicit employment for an attorney or enter into a contract with an insured for the primary purpose of referring an insured to an attorney without the intent to actually perform the services customarily provided by a licensed public adjuster. This Code section shall not be construed to prohibit an adjuster from recommending a particular attorney to an insured; or
(6) Act on behalf of an attorney during the course of a claim adjustment, through an insured signed attorney representation agreement or other means.
(h) An adjuster shall not engage in misrepresentation to solicit a contract or agreement to adjust a claim.
(i) An adjuster shall not:
(1) Advance money to any potential client or insured; or
(2) Pay, allow, or give, or offer to pay, allow, or give, directly or indirectly, to a person who is not a licensed public adjuster a fee, commission, or other valuable consideration for the referral of an insured to such adjuster for purposes of the insured entering into a contract with such adjuster or for any related purpose.
(j) An adjuster shall not use any letterhead, advertisement, or other printed matter, or use any other means, to represent that such adjuster is an instrumentality of the federal government, of a state, or of a political subdivision of a state.
(k) A contractor shall not act as a public adjuster or advertise to adjust claims for any property for which the contractor is providing or may provide contracting services, regardless of whether the contractor:
(1) Holds a license under this chapter; or
(2) Is authorized to act on behalf of the insured under a power of attorney or other agreement. However, a contractor may discuss or explain a bid for construction or repair of covered property with a residential property owner who has suffered loss or damage covered by a property insurance policy, or the insurer of such property, if the contractor is doing so for the usual and customary fees applicable to the work to be performed as stated in the contract between the contractor and the insured.
(l) A public adjuster shall not accept a fee, commission, or other valuable consideration of any nature, regardless of form or amount, in exchange for the referral by such adjuster of an insured to any third-party individual or firm, including an attorney, appraiser, umpire, construction company, contractor, or salvage company.
(m) No person who has had his or her license under this title refused or revoked shall be an owner, officer, or director of a business entity, association, or corporation if such entity, association, or corporation holds itself out as a public adjuster, a public adjusting firm, or otherwise represents itself or acts as an association of public adjusters or an association which offers public adjusting services.
(a) A public adjuster is obligated, under his or her license, to serve with objectivity and complete loyalty to the interest of his or her client alone and to render to the insured such information, counsel, and service within the public adjuster's knowledge, understanding, and opinion that will best serve the insured's insurance claim needs and interest.
(b) A public adjuster shall faithfully observe all of the terms and provisions of the public adjuster contract as prescribed in Code Section 33-23-43.2.
(a) The Commissioner may deny an application for a license or suspend or revoke a license issued to any public adjuster on the basis of:
(1) A violation of this article or of any rule adopted by the Commissioner under this article;
(2) A cause that constitutes grounds for denial of an original license;
(3) Misrepresentation or fraud in obtaining a license;
(4) The failure to pass a required license examination;
(5) The misappropriation or conversion of money required to be held in a fiduciary capacity;
(6) Material misrepresentation, with intent to deceive, of the terms of an insurance contract;
(7) Engaging in a fraudulent transaction;
(8) Demonstrating incompetence or untrustworthiness in the conduct of the license holder's affairs under the license, as determined by the Commissioner;
(9) Conviction of a felony by a final judgment in a court of competent jurisdiction; or
(10) Material misrepresentation, with intent to deceive, of the person's status as a public adjuster.
(b) If the department proposes to refuse to issue an original license under this article or to suspend, revoke, or refuse to renew a license under this article, the rejected applicant or affected licensee is entitled to a notice and hearing in accordance with Chapter 2 of this title.
(a) The Commissioner may establish rules and regulations with respect to:
(1) The classification of applicants according to the kinds of insurance to be effected by them if licensed;
(2) The scope, type, and conduct of written examinations to be given pursuant to this chapter and the times and places within this state for holding the examinations;
(3) Classification and scope of authority of any license authorized under this chapter; and
(4) Any other purpose required or necessary for the implementation or enforcement of this chapter.
(b) The Commissioner shall establish by rule or regulation a license for persons exempted under Code Section 33-23-18 that is distinct from other agent licenses.
(a) For purposes of this Code section, the term:
(1) “Affiliate” means a person that controls, is controlled by, or is under common control with the producer.
(2) “Compensation from an insurer or other third party” means payments, commissions, fees, awards, overrides, bonuses, contingent commissions, loans, stock options, gifts, prizes, or any other form of valuable consideration, whether or not payable pursuant to a written agreement, but shall not mean de minimis gifts of less than $45.00 in value.
(3) “Compensation from the customer” shall not include:
(A) Any fee or similar expense provided in subparagraph (C) of paragraph (6) of Code Section 33-6-5;
(B) Any amount or fee paid by or to the producer that does not exceed an amount established by the Commissioner; or
(C) A premium or fee billed by the producer solely on behalf of an insurer.
(4) “Documented acknowledgment” means the customer's written consent obtained prior to the customer's initial purchase of insurance. In the case of a purchase over the telephone or by electronic means for which written consent cannot reasonably be obtained, consent documented by the producer shall be acceptable.
(b)(1) Where any insurance producer licensed as counselor, as defined by this chapter, or any affiliate of such producer receives any compensation from or charges any other fee to the customer, neither that producer nor the affiliate shall accept or receive any compensation from an insurer or other third party for placement of insurance for that customer unless the producer has, prior to the customer's purchase of insurance:
(A) Obtained the customer's documented acknowledgment that such compensation will be received by the producer or affiliate; and
(B) Disclosed the amount of compensation from the insurer or other third party for that placement. If the amount of compensation is not known at the time of disclosure, the producer shall disclose in readable language the method for calculating such compensation and, if possible, a reasonable estimate of the amount.
(2) Notwithstanding paragraph (1) of this subsection, an insurance producer who is not licensed as a counselor, as defined in this chapter, may not accept or receive any compensation from the customer for placement of insurance.
(c) A person shall not be considered a customer for purposes of this Code section if the person is merely:
(1) A participant or beneficiary of an employee benefit plan; or
(2) Covered by a group or blanket insurance policy or group annuity contract sold, solicited, or negotiated by the insurance producer or affiliate.
(d) This Code section shall not apply to:
(1) A person licensed as an insurance producer who acts only as an intermediary between an insurer and the producer, such as a managing general agent, a sales manager, or a wholesale broker;
(2) A reinsurance intermediary;
(3) The renewal or any other continuation of the policy; or
(4) A producer whose sole compensation for the placement is derived from commissions, salaries, and other remuneration from the insurer.
(e) The Commissioner may promulgate rules and regulations as necessary to implement the provisions of this Code section.
(a) As used in this article, the term:
(1) “Administrator” means any business entity that, directly or indirectly, collects charges, fees, or premiums; adjusts or settles claims, including investigating or examining claims or receiving, disbursing, handling, or otherwise being responsible for claim funds; or provides underwriting or precertification and preauthorization of hospitalizations or medical treatments for residents of this state for or on behalf of any insurer, including business entities that act on behalf of a single or multiple employer self-insurance health plan or a self-insured municipality or other political subdivision. Licensure is also required for administrators who act on behalf of self-insured plans providing workers' compensation benefits pursuant to Chapter 9 of Title 34. For purposes of this article, each activity undertaken by the administrator on behalf of an insurer or the client of the administrator is considered a transaction and is subject to the provisions of this title.
(2) “Business entity” means a corporation, association, partnership, sole proprietorship, limited liability company, limited liability partnership, or other legal entity.
(3) “Standard financial quarter” means a three-month period ending on March 31, June 30, September 30, or December 31 of any calendar year.
(b) Notwithstanding the provisions of subsection (a) of this Code section, the following are exempt from licensure so long as such entities are acting directly through their officers and employees:
(1) An employer on behalf of its employees or the employees of one or more subsidiary or affiliated corporations of such employer;
(2) A union on behalf of its members;
(3) An insurance company licensed in this state or its affiliate unless the affiliate administrator is placing business with a nonaffiliate insurer not licensed in this state;
(4) An insurer which is not authorized to transact insurance in this state if such insurer is administering a policy lawfully issued by it in and pursuant to the laws of a state in which it is authorized to transact insurance;
(5) A life or accident and sickness insurance agent or broker licensed in this state whose activities are limited exclusively to the sale of insurance;
(6) A creditor on behalf of its debtors with respect to insurance covering a debt between the creditor and its debtors;
(7) A trust established in conformity with 29 U.S.C. Section 186 and its trustees, agents, and employees acting thereunder;
(8) A trust exempt from taxation under Section 501(a) of the Internal Revenue Code and its trustees and employees acting thereunder or a custodian and its agents and employees acting pursuant to a custodian account which meets the requirements of Section 401(f) of the Internal Revenue Code;
(9) A bank, credit union, or other financial institution which is subject to supervision or examination by federal or state banking authorities;
(10) A credit card issuing company which advances for and collects premiums or charges from its credit card holders who have authorized it to do so, provided that such company does not adjust or settle claims;
(11) A person who adjusts or settles claims in the normal course of his or her practice or employment as an attorney and who does not collect charges or premiums in connection with life or accident and sickness insurance coverage or annuities;
(12) An insurance company licensed in this state or its affiliate if such insurance company or its affiliate is solely administering limited benefit insurance. For the purpose of this paragraph, the term “limited benefit insurance” means accident or sickness insurance designed, advertised, and marketed to supplement major medical insurance and specifically shall include accident only, CHAMPUS supplement, disability income, fixed indemnity, long-term care, or specified disease insurance; or
(13) An association that administers workers' compensation claims solely on behalf of its members.
(c) A business entity claiming an exemption shall submit an exemption notice on a form provided by the Commissioner. This form must be signed by an officer of the company and submitted to the department by December 31 of the year prior to the year for which an exemption is to be claimed. Such exemption notice shall be updated in writing within 30 days if the basis for such exemption changes. An administrator claiming an exemption pursuant to paragraphs (3) and (4) of subsection (b) of this Code section shall be subject to the provisions of Code Sections 33-24-59.5 and 33-24-59.14.
(d) Obtaining a license as an administrator does not exempt the applicant from other licensing requirements under this title.
(e) Obtaining a license as an administrator subjects the applicant to the provisions of Code Sections 33-24-59.5 and 33-24-59.14.
(f) An administrator shall be subject to Code Sections 33-24-59.5 and 33-24-59.14 unless the administrator provides sufficient evidence that the self-insured health plan failed to properly fund the plan to allow the administrator to pay any outside claim.
(a) No business entity shall act as or hold itself out to be an administrator in this state, other than an adjuster licensed in this state for the kinds of business for which it is acting as an administrator, unless such business entity holds a license as an administrator issued by the Commissioner. The license shall be renewed on an annual basis and in such manner as the Commissioner may prescribe by rule or regulation. Failure to hold such license shall subject the administrator to the fines and other appropriate penalties as provided in Chapter 2 of this title.
(b) An application for an administrator's license or an application for renewal of such license shall be accompanied by a filing fee to be prescribed by rule or regulation of the Commissioner.
(c) A license may be refused or a license duly issued may be suspended or revoked or the renewal of such license refused by the Commissioner if the Commissioner finds that the applicant for or holder of the license:
(1) Has violated any provision of this title or of any other law of this state relating to insurance as defined in this chapter or relating to another type of insurance;
(2) Has intentionally misrepresented or concealed any material fact in the application for the license;
(3) Has obtained or attempted to obtain the license by misrepresentation, concealment, or other fraud;
(4) Has misappropriated, converted to his or her own use, or illegally withheld money belonging to an insurer or an insured or beneficiary;
(5) Has committed fraudulent or dishonest practices;
(6) Has materially misrepresented the terms and conditions of insurance policies or contracts;
(7) Has failed to comply with or has violated any proper order, rule, or regulation issued by the Commissioner;
(8) Is not in good faith carrying on business as an administrator;
(9) Has failed to obtain for initial licensure or retain for annual renewal an adequate net worth as prescribed by order, rule, or regulation of the Commissioner; or
(10) Has shown lack of trustworthiness or lack of competence to act as an administrator.
(d) If the Commissioner moves to suspend, revoke, or nonrenew a license for an administrator, the Commissioner shall provide notice of that action to the administrator and the administrator may invoke the right to an administrative hearing in accordance with Chapter 2 of this title.
(e) No licensee whose license has been revoked as prescribed under this Code section shall be entitled to file another application for a license within five years from the effective date of the revocation or, if judicial review of such revocation is sought, within five years from the date of final court order or decree affirming the revocation. The application when filed may be refused by the Commissioner unless the applicant shows good cause why the revocation of its license shall not be deemed a bar to the issuance of a new license.
(f) Appeal from any order or decision of the Commissioner made pursuant to this article shall be taken as provided in Chapter 2 of this title.
(g)(1) The Commissioner shall have the authority to issue a probationary license to any applicant under this article.
(2) A probationary license may be issued for a period of not less than three months and not longer than 12 months and shall be subject to immediate revocation for cause at any time without a hearing.
(3) The Commissioner, at his or her discretion, shall prescribe the terms of probation, may extend the probationary period, or refuse to grant a license at the end of any probationary period.
(h) The Commissioner may impose, by rule or regulation, additional reasonable qualifications necessary to obtain a license as an administrator.
(i) An administrator's license may not be sold or transferred to a nonaffiliated or otherwise unrelated party. An administrator may not contract or subcontract any of its negotiated services to any unlicensed business entity unless a special authorization is approved by the Commissioner prior to entering into a contracted or subcontracted arrangement.
(j) The Commissioner may, at his or her discretion, assess a penalty or a fine against any business entity acting as an administrator without a license for each transaction in violation of this article.
(k) A licensed administrator is not permitted to market or administer any insurance product not approved in Georgia or that is issued by a nonadmitted insurer or unauthorized multiple employer self-insured health plan.
(a) Every applicant for an administrator's license shall file with the application and shall thereafter maintain in force a bond in favor of the Commissioner executed by a corporate surety insurer authorized to transact insurance in this state. The terms and type of the bond, including, but not limited to, total aggregate liability on the bond, shall be established by the rule or regulation of the Commissioner.
(b) The bond shall remain in force until the surety is released from liability by the Commissioner or until the bond is canceled by the surety. Without prejudice to any liability accrued prior to cancellation, the surety may cancel the bond upon 30 days' advance notice, in writing, filed with the Commissioner.
(c) Every applicant for an administrator's license shall obtain and shall thereafter maintain in force errors and omissions coverage or other appropriate liability insurance, written by an insurer authorized to transact insurance in this state, in an amount of at least $100,000.00.
(d) The coverage required in subsection (c) of this Code section shall remain in force for a term of at least one year and shall contain language that includes that the insurer may cancel the insurance upon 60 days' advance notice filed with the Commissioner. Other terms and conditions relating to the errors and omissions policy may be imposed on the applicant as the Commissioner deems appropriate by rule or regulation.
(e) In the event a licensed administrator fails to renew, surrenders, or otherwise terminates its license, it must retain both the bond and the errors and omissions coverage for a period of not less than one year after the licensee has failed to renew, surrendered, or otherwise terminated its license.
Administrators shall be subject to market conduct and financial examinations by the Commissioner. Any cost involved with the examinations shall be borne by the administrator.
Requirements and procedures for written agreements, payments to administrators, maintenance of information, approval of advertising, underwriting provisions, premium collection, payment of claims, claim adjustment or settlement, notifications, and other matters involving administrators may be established by rule or regulation of the Commissioner.
The Commissioner may promulgate rules and regulations which are necessary to implement the provisions of this article and to ensure the safe and proper operation of administrators of this state.
The General Assembly finds that the provisions of the federal Patient Protection and Affordable Care Act may cause the formation of health insurance exchanges operating in Georgia under federal law and employing navigators or navigator entities whose role will be to direct individuals and companies to health insurance policies. The General Assembly further finds that licensing and regulation of such navigators or navigator entities to ensure that they are trained and knowledgeable in the subject matter of individual and group health insurance plans and insurance coverage is necessary to avoid substantial risk to the health, safety, and welfare of the residents of this state.
As used in this article, the term:
(1) “Exchange” means a state, federal, or partnership exchange or marketplace operating in Georgia pursuant to Section 1311 of the federal act.
(2) “Federal act” means the federal Patient Protection and Affordable Care Act (Public Law 111-148), as amended by the federal Health Care and Education Reconciliation Act of 2010 (Public Law 111-152), and regulations or guidance issued under those acts.
(3) “Navigator” means an individual, including assistors, application counselors, or other persons, authorized pursuant to the federal act to provide insurance advice and guidance to uninsured individuals and groups seeking health insurance coverage. For the purposes of this article, if an organization or business entity serves as a navigator, an individual performing navigator duties for that organization or business entity shall be considered to be acting in the capacity of a navigator.
(4) “Patient navigator” means an individual who offers assistance to patients, families, and caregivers to help overcome health care system barriers and to facilitate timely access to quality medical and psychosocial care as defined by the health care community he or she serves.
(a) No navigator shall provide advice, guidance, or other assistance with regard to health benefit plans as a navigator under the provisions of the federal act unless licensed in accordance with this article.
(b) The Commissioner shall not issue a license to any applicant who does not meet or conform to the following qualifications or requirements:
(1) The applicant shall establish to the satisfaction of the Commissioner that he or she has the background, experience, knowledge, and competency in the subject matter that will enable him or her to deliver accurate information and advice to individuals and groups in this state seeking to obtain health insurance coverage under the provisions of the federal act;
(2) The applicant shall have successfully completed not less than 35 hours of instruction in health benefit insurance, the exchange provisions of the federal act, the medical assistance program provided for by Article 7 of Chapter 4 of Title 49, and the PeachCare for Kids Program provided for by Article 13 of Chapter 5 of Title 49 satisfactory to the Commissioner through a training program approved by the Commissioner;
(3) The applicant shall pass such examination as shall be required by the Commissioner unless such applicant is exempted by the Commissioner based on the applicant's experience and qualifications and pursuant to regulations adopted by the Commissioner;
(4) An applicant shall be not less than 18 years of age and of good moral character and must submit in a form approved by the Commissioner such information, including without limitation criminal history and regulatory background information, as the Commissioner may require; and
(5) An applicant for a renewal license shall have completed continuing education classes approved by the Commissioner.
(a) Violation of any provision of this title or the federal act, including any act or omission that would be a ground for denial, suspension, or revocation of the license of an agent as defined in Article 1 of this chapter, shall be a ground for denial, suspension, or revocation of a license under this article.
(b) No navigators shall solicit any person or business that is currently insured under an existing health benefit plan.
(c) No navigator shall receive any commission, compensation, or anything of value from any insurer, health benefit plan, business, or consumer for providing advice or services specifically authorized to be provided as a navigator pursuant to the provisions of the federal act. Navigators shall be compensated for advice or services rendered pursuant to the provisions of the federal act only as provided for by the federal act.
(d) Navigators shall provide factually accurate information to uninsured persons and businesses regarding the availability of premium tax credits under Section 36B of the Internal Revenue Code of 1986 and cost-sharing reductions under Section 1402 of the federal act.
(e) Notwithstanding any other provision of law, licensing as a navigator pursuant to the provisions of this article shall not constitute licensing as an agent or administrator as defined in Articles 1 and 2 of this chapter. No person providing advice or services as a navigator under the provisions of the federal act shall be compensated for such advice or services as the holder of a license issued pursuant to Article 1 or 2 of this chapter; provided, however, that the provisions of this subsection shall not prohibit the holder of a license issued pursuant to such articles from being compensated for advice or services rendered as such a licensee and not as a navigator. Navigators licensed pursuant to the provisions of this article shall not, except as specifically authorized by the provisions of the federal act:
(1) Engage in any activities that would require licensing pursuant to the provisions of Article 1 or 2 of this chapter unless licensed thereunder;
(2) Provide advice concerning the benefits, terms, and features of a particular health benefit plan or offer advice about which health benefit plan is better or worse for a particular individual or business, except in the capacity of a licensee pursuant to the provisions of Article 1 or 2 of this chapter; or
(3) Recommend a particular health benefit plan or advise individuals or businesses about which health benefit plan to choose, except in the capacity of a licensee pursuant to the provisions of Article 1 or 2 of this chapter.
The Commissioner shall be authorized to adopt rules and regulations to effect the implementation of this article.
The provisions of this article shall not apply to patient navigators as defined in paragraph (4) of Code Section 33-23-201.
As used in this chapter, the term:
(1) “Policy” means the written contract of or written agreement for or effecting insurance. The term includes all clauses, riders, endorsements, and papers attached or issued and delivered for attachment to the contract or agreement and made a part of the contract or agreement.
(2) “Premium” means the consideration for insurance, by whatever name called. Any assessment or any membership, policy, survey, inspection, service, or similar fee or charge in consideration for an insurance contract is deemed part of the premium. The term “premium” shall not include any amount deposited and held for the account of the insured which is returnable upon cancellation of the insurance contract and upon which no commission has been paid.
(3) “Uniform Electronic Transactions Act” means Chapter 12 of Title 10.
This chapter applies to all insurance policies and to annuities and pure endowment contracts as defined in Code Section 33-28-1 except:
(1) Reinsurance;
(2) Policies or contracts not issued for delivery in this state or delivered in this state, except as provided in subsection (e) of Code Section 33-24-9;
(3) Ocean marine and foreign trade insurances; and
(4) Title insurance, except as to the following provisions:
(A) Code Section 33-24-5;
(B) Code Section 33-24-9;
(C) Code Section 33-24-10;
(D) Code Section 33-24-13;
(E) Code Section 33-24-16; and
(F) Code Section 33-24-19.
(a) An insurable interest, with reference to personal insurance, is an interest based upon a reasonable expectation of pecuniary advantage through the continued life, health, or bodily safety of another person and consequent loss by reason of such person's death or disability or a substantial interest engendered by love and affection in the case of individuals closely related by blood or by law.
(b) An individual has an unlimited insurable interest in his or her own life, health, and bodily safety and may lawfully take out a policy of insurance on his or her own life, health, or bodily safety and have the policy made payable to whomsoever such individual pleases, regardless of whether the beneficiary designated has an insurable interest.
(c) The trustee of a trust established by an individual settlor has an insurable interest in the life of that individual settlor and has the same insurable interest in the life of any other individual as does such individual settlor. The trustee of a trust has the same insurable interest in the life of any other individual as does any beneficiary of the trust with respect to proceeds of insurance on the life of such individual or any portion of such proceeds that are allocable to such beneficiary's interest in such trust. If multiple beneficiaries of a trust have an insurable interest in the life of the same individual, the trustee of such trust has the same aggregate insurable interest in such individual's life as such beneficiaries with respect to proceeds of insurance on the life of such individual or any portion of such proceeds that is allocable in the aggregate to such beneficiaries' interest in the trust.
(d) A corporation, foreign or domestic, has an insurable interest in the life of any individual:
(1) Holding at least 10 percent of the issued and outstanding shares of such corporation; or
(2) In whom the shareholders holding a majority of the issued and outstanding shares have an insurable interest, whether arising out of their status as shareholders of the corporation or otherwise,
and in the life or physical or mental ability of any of its directors, officers, or employees or the directors, officers, or employees of any of its subsidiaries or any other person whose death or physical or mental disability might cause financial loss to the corporation; or, pursuant to any contractual arrangement with any shareholder concerning the reacquisition of shares owned by him or her at the time of his or her death or disability, on the life or physical or mental ability of that shareholder for the purpose of carrying out such contractual arrangement; or, pursuant to any contract obligating the corporation as part of compensation arrangements or pursuant to a contract obligating the corporation as guarantor or surety, on the life of the principal obligor. The trustee of a trust established by a corporation for the sole benefit of the corporation has the same insurable interest in the life or physical or mental ability of any person as does the corporation. The trustee of a trust established by a corporation providing life, health, disability, retirement, or similar benefits to employees of the corporation or its affiliates and acting in a fiduciary capacity with respect to such employees, retired employees, or their dependents or beneficiaries has an insurable interest in the lives of employees for whom such benefits are to be provided. As used in this subsection, the term “employee” shall include any and all directors, officers, employees, or retired employees. The term “employee” shall include any former employee, but only for the purpose of replacing existing life insurance that will be surrendered in exchange for new life insurance in an amount not exceeding the insurance being surrendered.
(e) The insurable interest of a corporation or trustee which has been established pursuant to subsection (d) of this Code section shall be conveyed automatically to another corporation or to the trustee of a trust established by such other corporation for its sole benefit which has acquired by purchase, merger, or otherwise all or part of the first corporation's business. A corporation or the trustee of a trust established by such corporation for its sole benefit may exchange any policy of insurance issued to itself or to another corporation or the trustee of a trust established by such other corporation for its sole benefit from which the exchanging corporation has acquired by purchase, merger, or otherwise all or part of such other corporation's business for a new policy of insurance issued to itself without establishing a new insurable interest at the time of such exchange.
(f) A shareholder in a corporation has an insurable interest in the life of any other shareholder pursuant to any contractual arrangement between or among such shareholders concerning the purchase by surviving shareholders of shares owned by a deceased or disabled shareholder, for the purpose of carrying out such contractual arrangement.
(g) A partnership, limited liability company, business trust, or other business entity established under the laws of any state or of the United States shall have the same insurable interests as a corporation, as set forth in subsections (d) and (e) of this Code section, including, without limitation, insurable interests in such entity's partners, members, or holders of other equity ownership interests and in officers, directors, employees, and those of any subsidiaries of any such entity. The partners of a partnership, the owners of a limited liability company, and the owners of equity interests in any form of business entity have the same insurable interest in the lives of the other partners, members, or equity interest owners as do shareholders of corporations.
(h) An insurable interest must exist at the time the contract of personal insurance becomes effective but need not exist at the time the loss occurs.
(i) Any personal insurance contract procured or caused to be procured upon another individual is void unless the benefits under the contract are payable to the individual insured or such individual's personal representative or to a person having, at the time when the contract was made, an insurable interest in the individual insured. In the case of a void contract, the insurer shall not be liable on the contract but shall be liable to repay to the person or persons who have paid the premiums all premium payments without interest.
(j) A charitable institution as defined under Sections 501(c)(3), 501(c)(6), 501(c)(8), and 501(c)(9) of the Internal Revenue Code of 1986 shall have an insurable interest in the life of any donor.
(k) The insurable interests set forth in this Code section are not exclusive but are cumulative of and not in lieu of insurable interests existing in common law and not expressly set forth in this Code section.
(a) As used in this Code section, the term “insurable interest” means any actual, lawful, and substantial economic interest in the safety or preservation of the subject of the insurance free from loss, destruction, or pecuniary damage or impairment.
(b) No insurance contract on property or of any interest therein or arising therefrom shall be enforceable except for the benefit of persons having, at the time of the loss, an insurable interest in the things insured.
(a) Any person of competent legal capacity may contract for insurance.
(b) A minor not less than 15 years of age as determined at his nearest birthday may, notwithstanding his minority, contract for annuities, endowments, life insurance, and accident and sickness insurance on his own life or body or the life or body of any person in whom he has an insurable interest. A minor shall, notwithstanding his minority, be deemed competent to exercise all rights and powers with respect to or under any contract or policy for annuities, endowments, life insurance, and accident and sickness insurance on his own life or body or on the person of another as though of full legal age, and may surrender his interest in the annuities, endowments, life insurance, and accident and sickness insurance and give a valid discharge for any benefit accruing or money payable under the contract or policy. The minor shall not, by reason of his minority, be entitled to rescind, avoid, or repudiate the contract or to rescind, avoid, or repudiate any exercise of a right or privilege under the contract, except that the minor, not otherwise emancipated, shall not be bound by any unperformed agreement to pay, by promissory note or otherwise, any consideration or premium on any such contract or policy. Any contract or policy for annuities, endowments, life insurance, and accident and sickness insurance procured by or for a minor under this subsection shall be made payable either to the minor or his estate or to a person having an insurable interest in the life of such minor.
(c) A minor not less than 15 years of age as determined at his nearest birthday may, notwithstanding such minority, contract for insurance on other subjects of insurance in which he has an insurable interest. A minor shall be bound by any settlement made in connection with any insurance contract so issued. The minor shall not, by reason of his minority, be entitled to rescind, avoid, or repudiate the contract or to rescind, avoid, or repudiate any exercise of a right or privilege under the contract, except that a minor, not otherwise emancipated, shall not be bound by any unperformed agreement to pay, by promissory note or otherwise, any premium on any insurance contract.
(a) No life or accident and sickness insurance contract upon an individual, except a contract of group life insurance or of group or blanket accident and sickness insurance, shall be made or effectuated unless at the time of the making of the contract the individual insured, being of competent legal capacity to contract, applies for a life or accident and sickness insurance contract or consents in writing to the contract, except in the following cases:
(1) A spouse may effectuate insurance upon the other spouse;
(2) Any person having an insurable interest in the life of a minor or any person upon whom a minor is dependent for support and maintenance may effectuate insurance upon the life of or pertaining to the minor;
(3) An application for a family policy may be signed by either parent, by a stepparent, or by husband or wife;
(4) A publicly owned corporation may effectuate insurance upon its employees in whom it has an insurable interest;
(5) A corporation not described in paragraph (4) of this subsection may effectuate insurance upon its employees in whom it has an insurable interest, and a trustee of a trust established by a corporation providing life, health, disability, retirement, or similar benefits may effectuate insurance upon employees for whom such benefits are to be provided if the insurance contract or contracts held by such corporation or trustee cover at least two employees. For purposes of this paragraph, any employee of a group of corporations consisting of a parent corporation and its directly or indirectly owned subsidiaries shall be considered to be an employee of each corporation within that group; or
(6) A corporation described in paragraph (4) or (5) of this subsection or the trustee of a trust established by such corporation for its sole benefit may exchange any policy which was issued to itself on the life of an employee or retiree of the corporation, or which was issued to another corporation or the trustee of a trust established by such other corporation for its sole benefit on the life of an employee or retiree of such other corporation, and the exchanging corporation has acquired by purchase, merger, or otherwise all or part of such other corporation's business for a new policy of insurance on such individual's life issued to the exchanging corporation.
(b)(1) If a contract of life insurance is issued as authorized in paragraph (4) or (5) of subsection (a) of this Code section, the insurer shall be required to give written notice of such life insurance in accordance with paragraph (3) of this subsection and provide the employees an opportunity to refuse to participate. For all contracts of life insurance issued or delivered for issuance in this state pursuant to paragraph (4) or (5) of subsection (a) of this Code section, the written consent of each individual proposed to be insured shall be obtained prior to the issuance of a policy on such individual. Written consent shall include an acknowledgment that the corporation may maintain life insurance coverage on such individual after such individual's employment with the corporation has terminated.
(2) If a contract of life insurance is issued as authorized in paragraphs (1) or (2) of subsection (a) of this Code section, the insurer shall be required to give written notice of such life insurance in accordance with paragraph (3) of this subsection.
(3) At the time of the issuance or delivery of the contract of insurance, notice of the issuance of the policy shall be delivered to the insured in person or by depositing the notice in the United States mail, to be dispatched by at least first-class mail to the home, business, or other address of record of the insured. The insurer may obtain a receipt provided by the United States Postal Service as evidence of mailing such notice or obtain such other evidence of mailing as prescribed or accepted by the United States Postal Service. The insurer shall not be required to provide the notice set forth in this subsection with respect to any application for credit life insurance; any insured who is older than the age of majority and who has signed or otherwise acknowledged the application in writing; any application for insurance covering the life of a minor; or any application for a contract of life insurance with a face amount of less than $10,000.00.
(c) An insurer shall be entitled to rely upon all statements, declarations, and representations made by an applicant for insurance relative to the insurable interest which such applicant has in the insured; and no insurer shall incur any legal liability except as set forth in the policy, by virtue of any untrue statements, declarations, or representations so relied upon in good faith by the insurer.
(d) As used in paragraphs (4), (5), and (6) of subsection (a) of this Code section, the term “employee” shall include any and all directors, officers, employees, or retired employees. The term “employee” shall include any former employee, but only for the purpose of replacing existing life insurance that will be surrendered in exchange for new life insurance in an amount not exceeding the insurance being surrendered.
Notwithstanding the provisions of subsection (d) of Code Section 33-24-3, subsection (d) of Code Section 33-24-6, or paragraph (11) of Code Section 33-27-3 which relate to the replacement of existing life insurance, any new life insurance may exceed the insurance being surrendered:
(1) When an entity has a proper interest pursuant to subsection (d) or (e) of Code Section 33-24-3 and the authority to effectuate life insurance pursuant to the provisions of paragraph (4), (5), or (6) of subsection (a) of Code Section 33-24-6; and
(2)(A) To the extent application of the cash surrender value from the old insurance as a premium under the new life insurance contract requires a larger amount of insurance to qualify as life insurance or to be not treated as a modified endowment contract for federal income tax purposes;
(B) To otherwise comply with applicable federal law; or
(C) When, upon cessation of premium payments, a former employee or trustee elects under the policy to use the cash value available under the policy to restructure the term, face amount, or investment options under the policy, even though such restructuring may result in an increase in the amount of the insurance.
(a) All statements and descriptions in any application for an insurance policy or annuity contract or in negotiations for such, by or in behalf of the insured or annuitant, shall be deemed to be representations and not warranties.
(b) Misrepresentations, omissions, concealment of facts, and incorrect statements shall not prevent a recovery under the policy or contract unless:
(1) Fraudulent;
(2) Material either to the acceptance of the risk or to the hazard assumed by the insurer; or
(3) The insurer in good faith would either not have issued the policy or contract or would not have issued a policy or contract in as large an amount or at the premium rate as applied for or would not have provided coverage with respect to the hazard resulting in the loss if the true facts had been known to the insurer as required either by the application for the policy or contract or otherwise.
As to kinds of insurance other than life insurance, no application for insurance signed by or on behalf of the insured shall be admissible in evidence in any action between the insured and the insurer arising out of the policy applied for if the insurer, at expiration of 30 days after receipt by the insurer of written demand by or on behalf of the insured for a copy of the application, has failed to furnish to the insured a copy of the application reproduced by any legible means.
(a) No basic insurance policy or annuity contract form or application form where written application is required and is to be made a part of the policy or contract or printed rider or endorsement form or form of renewal certificate shall be delivered or issued for delivery in this state unless the form has been filed with and approved by the Commissioner. This subsection shall not apply to surety bonds or to specially rated inland marine risks nor to policies, riders, endorsements, or forms of unique character designed for and used with relation to insurance upon a particular subject or which related to the manner of distribution of benefits or to the reservation of rights and benefits under life or accident and sickness insurance policies and are used at the request of the individual policyholder, contract holder, or certificate holder.
(b) Every filing shall be made not less than 90 days in advance of any delivery. At the expiration of 90 days the form filed shall be deemed approved unless prior thereto it has been approved or disapproved by the Commissioner. Approval of any form by the Commissioner shall constitute a waiver of any unexpired portion of the waiting period. The Commissioner may extend by not more than an additional 90 days the period within which he may approve or disapprove any form by giving notice of the extension before expiration of the initial 90 day period. At the expiration of the period as so extended and in the absence of prior approval or disapproval, any form shall be deemed approved. The Commissioner may at any time, after notice and for cause shown, withdraw any approval after notice and hearing as provided in Code Sections 33-2-17 through 33-2-23 and 33-2-26 through 33-2-28.
(c) Any order of the Commissioner disapproving any form or withdrawing a previous approval shall state in reasonable detail the grounds for that action.
(d) The Commissioner may by order, in exceptional cases, exempt from the requirements of this Code section for so long as he deems proper any insurance document or form or type of insurance document or form as specified in the order to which, in his discretion, this Code section may not practicably be applied or the filing and approval of which are, in his discretion, not desirable or necessary for the protection of the public.
(e) This Code section shall apply also to any form used by domestic insurers for delivery in a jurisdiction outside this state, if the insurance supervisory official of that jurisdiction informs the Commissioner that the form is not subject to approval or disapproval by the official and upon the Commissioner's order requiring the form to be submitted to him for approval or disapproval. The standards applicable to forms for domestic use shall apply to such forms.
(f) Each filing made pursuant to this Code section shall be accompanied by a fee or fees as provided in Code Section 33-8-1.
The Commissioner shall disapprove any form filed under Code Section 33-24-9 or withdraw any previous approval of such form only:
(1) If it is in any respect in violation of or does not comply with this title;
(2) If it contains or incorporates by reference any inconsistent, ambiguous, or misleading clauses or exceptions and conditions which deceptively affect the risk purported to be assumed in the general coverage of the contract;
(3) If it has any title, heading, or other indication of its provisions which is misleading;
(4) If it is printed or otherwise reproduced in such manner as to render any provision of the form substantially illegible or not easily legible to persons of normal vision;
(5) If it contains provisions which are unfair or inequitable or contrary to the public policy of this state or would, because the provisions are unclear or deceptively worded, encourage misrepresentation; or
(6) If the benefits provided in any medicare supplement insurance policy described in Code Section 33-24-29 are unreasonable in relation to the premium charged.
The Commissioner is authorized to establish by rule or regulation a standard or uniform claim form to be supplied by insurers to their insureds for the purpose of filing claims under policies or contracts of accident and sickness insurance. The Commissioner shall file and maintain on file in the office of the Commissioner a true copy of the standard or uniform claim form designated as such and bearing the Commissioner's authenticating signature and the date of filing.
(a) The Commissioner may waive the required use of a particular provision in a particular insurance policy form or annuity or endowment contract form if the Commissioner finds such provision unnecessary for the protection of the insured or inconsistent with the purposes of the policy and if the policy is otherwise approved by the Commissioner.
(b) Unless otherwise provided in this title, no policy shall contain any provision inconsistent with or contradictory to any standard provision used or required to be used, but the Commissioner may approve any substitute provision which is not less favorable in any particular to the insured or beneficiary than the standard provisions or optional standard provisions otherwise required.
(c) In lieu of the standard provisions required by this title for contracts for particular kinds of insurance, substantially similar standard provisions required by the law of the domicile of a foreign or alien insurer may be used when approved by the Commissioner.
(a) Any insurance policy, rider, or endorsement issued and otherwise valid which contains any condition or provision not in compliance with the requirements of this title shall not be rendered invalid due to the noncomplying condition or provision but shall be construed and applied in accordance with such conditions and provisions as would have applied had the policy, rider, or endorsement been in full compliance with this title.
(b) Any insurance contract delivered or issued for delivery in this state covering a subject or subjects of insurance resident, located or to be performed in this state and which, pursuant to this title, the insurer may not lawfully insure under the contract shall be cancelable at any time by the insurer, any provisions of the contract to the contrary notwithstanding; and the insurer shall promptly cancel the contract in accordance with the Commissioner's request for cancellation. No illegality or cancellation shall be deemed to relieve the insurer of any liability incurred by it under the contract while in force or to prohibit the insurer from retaining the pro rata earned premium on the contract. This Code section shall not relieve the insurer from any penalty otherwise incurred by the insurer under this title on account of any violation.
Every insurance policy shall be executed in the name of and on behalf of the insurer by its officer, attorney in fact, employee, or representative duly authorized by the insurer. A facsimile signature of any executing individual may be used in lieu of an original signature.
(a)(1) Subject to the insurer's requirement as to payment of premiums, every policy shall be mailed or delivered to the insured or to the person entitled to the policy within a reasonable period of time after its issuance except where a condition required by the insurer has not been met by the insured.
(2) A policy required to be delivered under this subsection may be delivered by electronic transmittal in accordance with Chapter 12 of Title 10, the “Uniform Electronic Transactions Act,” or by electronic posting if that policy is posted electronically, provided that:
(A) The insured has agreed to accept delivery by electronic posting;
(B) The insurer makes the policy accessible as long as the policy is in force;
(C) After the expiration of the policy, the insurer archives its expired policies for a period of five years and makes them available upon request;
(D) The insurer provides the following information in or simultaneously with each declarations page provided at the time of issuance of the initial policy and any renewals of that policy:
(i) A description of the exact policy and endorsement forms purchased by the insured;
(ii) A method by which the insured may obtain, upon request and without charge, a paper copy of such insured's policy; and
(iii) The Internet address where the insured's policy and endorsement are posted; and
(E) The insurer provides notice, in the manner in which the insurer customarily communicates with the insured, of any changes to the forms or endorsements, the insured's right to obtain, upon request and without charge, a paper copy of such forms or endorsements, and the Internet address where such forms or endorsements are posted.
(b) In the event the original policy is delivered or is required to be delivered to or for deposit with any vendor, mortgagee, or pledgee of any motor vehicle or aircraft, in which policy any interest of the vendee, mortgagor, or pledgor in or with reference to the vehicle or aircraft is insured, a duplicate of the policy setting forth the name and address of the insurer, the insurance classification of the vehicle or aircraft, the type of coverage, the limits of liability, the premiums for the respective coverages, and the duration of the policy or memorandum of the policy containing the same information shall be delivered by the vendor, mortgagee, or pledgee to each vendee, mortgagor, or pledgor named in the policy or coming within the group of persons designated in the policy to be so included. If the policy does not provide coverage of legal liability for injury to persons or damage to the property of third parties, a statement of such fact shall be printed, written, or stamped conspicuously on the face of the duplicate policy or memorandum.
(c) The provisions of Chapter 12 of Title 10, the “Uniform Electronic Transactions Act,” apply to this title, and nothing in this Code section shall be construed to limit its applicability.
(d) In addition to any mailing which may be legally accomplished pursuant to Chapter 12 of Title 10, the “Uniform Electronic Transactions Act,” any other required mailing may be performed electronically if the following conditions are met:
(1) The Code section which requires a mailing specifically notes that mailing may be accomplished pursuant to this subsection;
(2) The insured agrees to receive mailings electronically by signing a statement which reads:
“I AGREE TO RECEIVE ALL MAILINGS AND COMMUNICATIONS ELECTRONICALLY. SUCH ELECTRONIC MAILING OR COMMUNICATIONS MAY EVEN INCLUDE CANCELLATION OR NONRENEWAL NOTICES”;
provided, however, that the Commissioner may approve the use of substantially similar language;
(3) If the statement in paragraph (2) of this subsection is physically signed by the insured, then the statement must be in a separate document and written in all capital letters in at least 12 point font, or on a substantially similar form approved by the Commissioner. If the statement is signed electronically, then it must be signed according to a procedure which has been approved by the Commissioner; provided, however, that the Commissioner shall approve a procedure for obtaining a signature only if that procedure is designed to ensure that the statement is not presented in a misleading or confusing manner;
(4) If the insurer becomes aware that the insured's email address at which such party has consented to receive notices or documents is no longer valid, the insurer shall send the notice or document as required by other applicable law;
(5) The insurer must retain a record pursuant to Chapter 12 of Title 10, the “Uniform Electronic Transactions Act,” of the mailing, including proof of the date of mailing and the address to which the mailing was sent. Such record must be retrievable for a period of five years after the date of such mailing and, if requested, must be transmitted to the Commissioner in a reasonable time;
(6) The insured may withdraw his or her consent to receive mailings electronically;
(7) All conditions have been met under Chapter 12 of Title 10, the “Uniform Electronic Transactions Act,” so that the mailing could be accomplished electronically, unless the law requiring the mailing imposes a specific type of delivery method;
(8) All conditions have been met under the federal Electronic Signatures in Global and National Commerce Act, 15 U.S.C. Section 7001, et seq. This Code section shall not modify, limit, or supersede Section 101(c) of such Act or authorize electronic delivery of any of the notices described in Section 103(b) of such Act; and
(9) No insurance company shall cancel, refuse to issue, or refuse to renew any policy because the applicant or insured refuses to agree to receive mailings electronically pursuant to this subsection.
(a) As used in this Code section, the term:
(1) “Health benefit plan” means a policy, contract, certificate, or agreement entered into, offered by, or issued by an insurer to provide, deliver, arrange for, pay for, or reimburse any of the costs of healthcare services, including a vision or dental benefit plan.
(2) “Plan sponsor” means a person, other than a regulated entity, who establishes, adopts, or maintains a health benefit plan that covers residents of this state, including a plan established, adopted, or maintained by an employer or jointly by an employer and one or more employee organizations, an association, a committee, a joint board of trustees, or any similar group of representatives who establish, adopt, or maintain a plan.
(b) The plan sponsor of a health benefit plan may, on behalf of a party enrolled in the plan, provide the consent to the mailing of all communications related to the plan by electronic means otherwise required by paragraph (2) of subsection (d) of Code Section 33-24-14 and to the electronic delivery of any health insurance identification card required by Code Section 33-24-57.1.
(c) Before consenting on behalf of a party, a plan sponsor must confirm that the party routinely uses electronic communications during the normal course of employment.
(d) Before providing delivery by electronic means, the insurer for the health benefit plan must:
(1) Provide the party an opportunity to opt out of delivery by electronic means; and
(2) Document that the remaining conditions under paragraphs (4) through (9) of subsection (d) of Code Section 33-24-14 are satisfied.
A policy of insurance or an annuity or endowment contract shall run from midday of the date of the policy or contract; and the time shall be calculated accordingly if the policy or contract is to be in force for a specified period of time unless the hour and minute of attachment of liability is specified.
Every insurance contract shall be construed according to the entirety of its terms and conditions as set forth in the policy and as amplified, extended, or modified by any rider, endorsement, or application made a part of the policy.
(a) The term “actual charge” or “actual fee,” when used in an individual or group specified disease insurance policy, shall mean the amount actually paid by or on behalf of an insured person and accepted as full payment by a health care provider or other designated person for the goods or services provided.
(b) The General Assembly finds and declares that the provisions of subsection (a) of this Code section are intended to clarify the correct interpretation of the defined terms for instances in which the particular insurance policy does not otherwise contain a definition.
A policy may be assignable or not assignable, as provided by its terms. Subject to its terms relating to assignability, any life or accident and sickness policy issued under the terms of which the beneficiary may be changed upon the sole request of the policy owner may be assigned either by pledge or by transfer of title by an assignment executed by the policy owner alone and delivered to the insurer, whether or not the pledgee or assignee is the insurer. Any assignment shall entitle the insurer to deal with the assignee as the owner or pledgee of the policy in accordance with the terms of the assignment until the insurer has received at its home office written notice of termination of the assignment or pledge or written notice by or on behalf of some other person claiming some interest in the policy in conflict with the assignment.
(a) The written instrument in which a contract of insurance is set forth is the policy.
(b) Every policy shall specify:
(1) The names of the parties to the contract;
(2) The subject of the insurance;
(3) The risks insured against;
(4) The time when the insurance under the policy takes effect and the period during which the insurance is to continue;
(5) The premium; and
(6) The conditions pertaining to the insurance.
(c) If under the policy the exact amount of premium is determinable only at stated intervals or termination of the contract, a statement of the basis and rates upon which the premium is to be determined and paid shall be included.
(d) Subsections (b) and (c) of this Code section shall not apply to surety contracts or to group insurance policies.
(e) All policies and annuity contracts issued by admitted insurers and the forms of the policies and annuity contracts filed with the Commissioner shall have printed thereon an appropriate designating letter or figure or combination of letters or figures or terms identifying the respective forms of policies or contracts. Whenever any change is made in any form, the designating letters, figures, or terms thereon shall be correspondingly changed.
(f) All policies and annuity contracts shall contain such standard or uniform provisions as are required by the applicable provisions of this title pertaining to contracts of particular kinds of insurance.
(g) A policy may contain additional provisions which are not inconsistent with this title and which are:
(1) Required to be inserted by the laws of the insurer's domicile;
(2) Necessary, on account of the manner in which the insurer is constituted or operated, in order to state the rights and obligations of the parties to the contract; or
(3) Desired by the insurer and neither prohibited by law nor in conflict with any provisions required to be included therein.
No policy shall contain any provisions purporting to make any portion of the charter, bylaws, or other constituent document of the insurer a part of the contract unless the portion is set forth in full in the policy. Any policy provision in violation of this Code section shall be invalid. This Code section shall not apply to the subscriber's agreement or power of attorney of a reciprocal insurer.
(a) As used in this Code section, the term:
(1) “Certificate” or “certificate of insurance” means any document or instrument, no matter how titled or described, which is prepared or issued by an insurer or insurance producer as evidence of property or casualty insurance coverage. “Certificate” or “certificate of insurance” shall not include a policy of insurance or insurance binder, including any policy of insurance which may be referred to as a certificate, or any insurance information card or identification card issued in conjunction with a motor vehicle insurance policy.
(2) “Certificate holder” means any person, other than a policyholder, that requests, obtains, or possesses a certificate of insurance.
(3) “Insurance producer” means a person required to be licensed under the laws of this state to sell, solicit, or negotiate insurance.
(4) “Insurer” means any person engaged as indemnitor, surety, or contractor who issues insurance as defined by Code Sections 33-7-3 and 33-7-6. Nothing in this Code section shall apply to or affect any offering of accident, sickness, or disability insurance by a fraternal benefit society, as provided under Code Section 33-15-60; health care plans, as provided under Chapter 20 of this title; health maintenance organizations, as provided under Chapter 21 of this title; any provisions of accident and sickness insurance policies generally, as provided under Code Sections 33-24-20 through 33-24-31; individual accident and sickness insurance, as provided under Chapter 29 of this title; or group or blanket accident and sickness insurance, as provided under Chapter 30 of this title.
(5) “Person” means any individual, partnership, corporation, association, or other legal entity, including any government or governmental subdivision or agency.
(6) “Policyholder” means a person who has contracted with a property or casualty insurer for insurance coverage.
(b) No person, wherever located, may prepare, issue, or request the issuance of a certificate of insurance unless the form has been filed with and approved by the Commissioner of Insurance. No person, wherever located, may alter or modify an approved certificate of insurance form.
(c) The Commissioner of Insurance shall disapprove a form filed under this Code section, or withdraw approval of a form, if the form:
(1) Is unjust, unfair, misleading, or deceptive, or violates public policy;
(2) Fails to comply with the requirements of subsection (d) of this Code section; or
(3) Violates any law, including any regulation adopted by the Commissioner of Insurance.
(d) Each certificate of insurance must contain the following or similar statement: “This certificate of insurance is issued as a matter of information only and confers no rights upon the certificate holder. This certificate does not amend, extend, or alter the coverage, terms, exclusions, and conditions afforded by the policies referenced herein.” However, the Commissioner of Insurance may approve a form filed under this Code section that does not state that the form is provided for information purposes only, if such form contains the following or similar statement: “This certificate of insurance does not amend, extend, or alter the coverage, terms, exclusions, and conditions afforded by the policies referenced herein.”
(e) Standard certificate of insurance forms promulgated by the Association for Cooperative Operations Research and Development or the Insurance Services Office are deemed approved by the Commissioner of Insurance and are not required to be filed if the forms otherwise comply with the requirements of this Code section.
(f) No person, wherever located, shall demand or request the issuance of a certificate of insurance from an insurer, insurance producer, or policyholder that contains any false or misleading information concerning the policy of insurance to which the certificate makes reference.
(g) No person, wherever located, may knowingly prepare or issue a certificate of insurance that contains any false or misleading information or that purports to affirmatively or negatively alter, amend, or extend the coverage provided by the policy of insurance to which the certificate makes reference.
(h) No person may prepare, issue, or request, either in addition to or in lieu of a certificate of insurance, an opinion letter or other document or correspondence that is inconsistent with this Code section.
(i) This Code section shall apply to all certificate holders, policyholders, insurers, insurance producers, and certificate of insurance forms issued as evidence of insurance coverages on property, operations, or risks located in this state, regardless of where the certificate holder, policyholder, insurer, or insurance producer is located.
(j) A certificate of insurance is not a policy of insurance and does not affirmatively or negatively amend, extend, or alter the coverage afforded by the policy to which the certificate of insurance makes reference. A certificate of insurance shall not confer to a certificate holder new or additional rights beyond what the referenced policy of insurance expressly provides.
(k) No certificate of insurance shall contain references to contracts, including construction or service contracts, other than the referenced contract of insurance. Notwithstanding any requirement, term, or condition of any contract or other document with respect to which a certificate of insurance may be issued or may pertain, the insurance afforded by the referenced policy of insurance is subject to all the terms, exclusions, and conditions of the policy itself.
(l) A certificate holder shall have a legal right to notice of cancellation, nonrenewal, or any material change, or any similar notice concerning a policy of insurance only if the person is named within the policy or any endorsement and the policy or endorsement requires notice to be provided. The terms and conditions of the notice, including the required timing of the notice, are governed by the policy of insurance and cannot be altered by a certificate of insurance.
(m) Any certificate of insurance or any other document or correspondence prepared, issued, or requested in violation of this Code section shall be null and void and of no force and effect.
(n) Any person who violates this Code section may be fined up to $5,000.00 per violation.
(o) The Commissioner of Insurance shall have the power to examine and investigate the activities of any person that the Commissioner reasonably believes has been or is engaged in an act or practice prohibited by this Code section. The Commissioner of Insurance shall have the power to enforce the provisions of this Code section and to impose any authorized penalty or remedy against any person who violates this Code section.
(p) The Commissioner of Insurance may adopt reasonable rules and regulations as are necessary or proper to carry out the provisions of this Code section.
(a) No individual policy of accident and sickness insurance offered for sale in this state, other than a policy of credit accident and sickness insurance which provides coverage for hospital or medical expenses on either an expense incurred basis or other than on an expense incurred basis, which, in addition to covering the insured, also provides coverage to the spouse of the insured may contain a provision for termination of coverage for a spouse covered under the policy solely as a result of a break in the marital relationship except by reason of the death of the insured or of an entry of a valid decree of divorce between the parties.
(b) Every policy which contains a provision for termination of coverage of the spouse upon death of the insured or divorce shall contain a provision to the effect that, upon the death of the insured or the entry of a valid decree of divorce between the insured parties, the surviving or divorced spouse shall be entitled to have issued to him or her, without evidence of insurability, upon application made to the company within 31 days following the entry of such decree and upon the payment of the appropriate premium, an individual or family policy of accident and sickness insurance then being issued by the insurer which provides coverage most nearly similar to the coverage contained in the policy which was terminated by reason of death or divorce or any other similar individual or family policy then being issued by the insurer which contains lesser coverage. Any and all probationary or waiting periods set forth in such an individual or family policy shall be considered as being met to the extent coverage was in force under the prior policy.
(c) This Code section shall also apply to blanket accident and sickness insurance policies and to policies issued by a fraternal benefit society, a health care corporation, a health maintenance organization, or any other similar entity.
(a) No group policy of accident and sickness insurance offered for sale in this state, other than a policy of credit accident and sickness insurance which provides coverage for hospital or medical expenses on either an expense incurred basis or otherwise, which, in addition to covering the insured, also provides coverage to the spouse of the insured, may contain a provision for termination of coverage for a spouse covered under the policy solely as a result of a break in the marital relationship except by reason of the death of the insured or of any entry of a valid decree of divorce between the parties.
(b) Every policy which contains a provision for termination of coverage of the spouse upon death of the insured or divorce shall contain a provision to the effect that, upon the death of the insured or the entry of a valid decree of divorce between the insured parties, the surviving or divorced spouse shall be entitled to have issued to him or her, without evidence of insurability, upon application made to the company within 31 days following the entry of such decree and upon the payment of the appropriate premium, an individual or family policy of accident and sickness insurance then being issued by the insurer which provides coverage most nearly similar to the coverage contained in the policy which was terminated by reason of death or divorce or any other similar individual or family policy then being issued by the insurer which contains lesser coverage. Any and all probationary or waiting periods set forth in an individual or family policy shall be considered as being met to the extent coverage was in force under the prior policy.
(c) This Code section shall also relate to blanket accident and sickness insurance policies and to policies issued by a fraternal benefit society, a health care corporation, a health maintenance organization, or any other similar entity.
(a) As used in this Code section, the term:
(1) “Assistance-eligible individual” shall have the same meaning as provided by Section 3001 of Title III of the federal American Recovery and Reinvestment Act of 2009, as amended.
(2) “Creditable coverage” under another health benefit plan means medical expense coverage with no greater than a 90 day gap in coverage under any of the following:
(A) Medicare or Medicaid;
(B) An employer based accident and sickness insurance or health benefit arrangement;
(C) An individual accident and sickness insurance policy, including coverage issued by a health maintenance organization, health care corporation, or fraternal benefit society;
(D) A spouse's benefits or coverage under medicare or Medicaid or an employer based health insurance or health benefit arrangement;
(E) A conversion policy;
(F) A franchise policy issued on an individual basis to a member of a true association as defined in subsection (b) of Code Section 33-30-1;
(G) A health plan formed pursuant to 10 U.S.C. Chapter 55;
(H) A health plan provided through the Indian Health Service or a tribal organization program or both;
(I) A state health benefits risk pool;
(J) A health plan formed pursuant to 5 U.S.C. Chapter 89;
(K) A public health plan; or
(L) A Peace Corps Act health benefit plan.
(3) “Eligible dependent” means a person who is entitled to medical benefits coverage under a group contract or group plan by reason of such person's dependency on or relationship to a group member.
(4) “Group contract or group plan” is synonymous with the term “contract or plan” and means:
(A) A group contract of the type issued by a health care plan established under Chapter 20 of this title;
(B) A group contract of the type issued by a health maintenance organization established under Chapter 21 of this title; or
(C) A group accident and sickness insurance policy or contract, as defined in Chapter 30 of this title.
(5) “Group member” means a person who has been a member of the group for at least six months and who is entitled to medical benefits coverage under a group contract or group plan and who is an insured, certificate holder, or subscriber under the contract or plan.
(6) “Insurer” means an insurance company, health care corporation, health care plan, or health maintenance organization.
(7) “Qualifying eligible individual” means:
(A) A Georgia domiciliary, for whom, as of the date on which the individual seeks coverage under this Code section, the aggregate of the periods of creditable coverage is 18 months or more; and
(B) Who is not eligible for coverage under any of the following:
(i) A group health plan, including continuation rights under this Code section or the federal Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA);
(ii) Part A or Part B of Title XVIII of the federal Social Security Act; 1or
(iii) The state plan under Title XIX of the federal Social Security Act 2 or any successor program.
(a.1) Any group member or qualifying eligible individual who is an assistance-eligible individual as provided by Section 3001 of Title III of the federal American Recovery and Reinvestment Act (P.L. 111-5), as amended, during the period permitted under such act whose coverage has been terminated and who has been continuously covered under the group contract or group plan, and under any contract or plan providing similar benefits that it replaces, for at least six months immediately prior to such termination, shall be entitled to have his or her coverage and the coverage of his or her eligible dependents continued under the contract or plan in accordance with paragraph (2) of subsection (c) of this Code section. Such coverage shall continue for the fractional policy month remaining, if any, at termination plus up to the maximum number of additional policy months specified in paragraph (2) of subsection (c) of this Code section upon payment of the premium to the insurer by cash, certified check, or money order, at the same rate for active group members set forth in the contract or plan, on a monthly basis in advance as such premium becomes due during this coverage period. An assistance-eligible individual who is in a transition period as defined in Section 3001 of Title III of the federal American Recovery and Reinvestment Act (P.L. 111-5), as amended, shall be treated for purposes of any continuation of coverage provision as having timely paid such premium if such individual was covered under the continuation of coverage to which such premium relates for the period immediately preceding such transition period, if such individual remains eligible for such continuation of coverage, and if such individual pays the amount of such premium not later than 30 days after the date of provision of notice regarding eligibility for extended continuation of coverage. For the period that the assistance-eligible individual is eligible for the premium reduction assistance as provided in Section 3001 of Title III of the federal American Recovery and Reinvestment Act (P.L. 111-5), as amended, such premium payment shall be calculated as 35 percent of the rate for active group members including any portion of the premium paid by a former employer or other person if such employer or other person no longer contributes premium payments for this coverage.
(a.2) The rights and benefits under this Code section attributable to Section 3001 of Title III of the federal American Recovery and Reinvestment Act (P.L. 111-5), as amended, shall expire when that Act expires. Any extension of such benefits shall require an Act of the Georgia General Assembly. Under no circumstances shall the extended benefits for assistance-eligible individuals become the responsibility of this state or any insurer after the expiration of the premium subsidy made available to individuals pursuant to Section 3001 of Title III of the federal American Recovery and Reinvestment Act (P.L. 111-5), as amended.
(b) Each group contract or group plan delivered or issued for delivery in this state, other than a group accident and sickness insurance policy, contract, or plan issued in connection with an extension of credit, which provides hospital, surgical, or major medical coverage, or any combination of these coverages, on an expense incurred or service basis, excluding contracts and plans which provide benefits for specific diseases or accidental injuries only, shall provide that members and qualifying eligible individuals whose insurance under the group contract or plan would otherwise terminate shall be entitled to continue their hospital, surgical, and major medical insurance coverage under that group contract or plan for themselves and their eligible dependents.
(c)(1) Any group member or qualifying eligible individual whose coverage has been terminated and who has been continuously covered under the group contract or group plan, and under any contract or plan providing similar benefits which it replaces, for at least six months immediately prior to such termination, shall be entitled to have his or her coverage and the coverage of his or her eligible dependents continued under the contract or plan. Such coverage must continue for the fractional policy month remaining, if any, at termination plus three additional policy months, upon payment of the premium by cash, certified check, or money order, at the option of the employer, to the policyholder or employer, at the same rate for active group members set forth in the contract or plan, on a monthly basis in advance as such premium becomes due during this coverage period. Such premium payment must include any portion of the premium paid by a former employer or other person if such employer or other person no longer contributes premium payments for this coverage. At the end of such period, the group member shall have the same conversion rights that were available on the date of termination of coverage in accordance with the conversion privileges contained in the group contract or group plan.
(2) Any group member or qualifying eligible individual who is an assistance-eligible individual has a right to elect continuation of his or her coverage and the coverage of his or her dependents at any time between May 5, 2009, and 60 days after receiving notice from the employer's insurer of the right to participate in state continuation benefits under this Code section in accordance with Section 3001 of Title III of the federal American Recovery and Reinvestment Act (P.L. 111-5), as amended, if:
(A) The individual was involuntarily terminated from employment or otherwise experienced a loss of coverage due to qualifying events specified in Section 3001 of Title III of the federal American Recovery and Reinvestment Act (P.L. 111-5), as amended;
(B) The individual was eligible for state continuation under this Code section at the time of termination;
(C) The individual continues to be eligible for state continuation benefits under this Code section, provided that the total period of continuous eligibility shall not exceed the number of policy months equal to the maximum premium reduction period specified in Section 3001 of Title III of the federal American Recovery and Reinvestment Act (P.L. 111-5), as amended, as measured from the month of the qualifying event making the individual an assistance-eligible individual; and
(D) The individual or the employer of the individual contacts the insurer and informs the insurer that the individual wants to take advantage of state continuation coverage under the provisions of Section 3001 of Title III of the federal American Recovery and Reinvestment Act (P.L. 111-5), as amended.
(3) In addition to the group policy under which the group member was insured, the group member and any qualifying eligible individual shall, to the extent that such plan is offered under the group plans offered by the company, also be offered the option of continuation coverage through a high deductible health plan, or its actuarial equivalent, that is eligible for use with a health savings account under the applicable provisions of Section 223 of the Internal Revenue Code. Such high deductible health plans shall have premiums consistent with the underlying group plan of coverage rated relative to the standard or manual rates for the benefits provided.
(d)(1) A group member shall not be entitled to have coverage continued if:
(A) Termination of coverage occurred because the employment of the group member was terminated for cause;
(B) Termination of coverage occurred because the group member failed to pay any required contribution; or
(C) Any discontinued group coverage is immediately replaced by similar group coverage including coverage under a health benefits plan as defined in the federal Employee Retirement Income Security Act of 1974, 29 U.S.C. Section 1001, et seq. Further, a group member shall not be entitled to have coverage continued if the group contract or group plan was terminated in its entirety or was terminated with respect to a class to which the group member belonged. This subsection shall not affect conversion rights available to a qualifying eligible individual under any contract or plan.
(2) A qualifying eligible individual shall not be entitled to have coverage continued if the most recent creditable coverage within the coverage period was terminated based on one of the following factors:
(A) Failure of the qualifying eligible individual to pay premiums or contributions in accordance with the terms of the health insurance coverage or failure of the issuer to receive timely premium payments;
(B) The qualifying eligible individual has performed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact under the terms of coverage; or
(C) Any discontinued group coverage is immediately replaced by similar group coverage, including coverage under a health benefits plan as defined in the federal Employee Retirement Income Security Act of 1974, 29 U.S.C. Section 1001, et seq. This subsection shall not affect conversion rights available to a group member under any contract or plan.
(e) If the group contract or group plan terminates while any group member or qualifying eligible individual is covered or whose coverage is being continued, the group administrator, as prescribed by the insurer, must notify each such group member or qualifying eligible individual that he or she must exercise his or her conversion rights within:
(1) Thirty days of such notice for group members who are not qualifying eligible individuals; or
(2) Sixty-three days of such notice for qualifying eligible individuals.
(f) Every group contract or group plan, other than a group accident and sickness insurance policy, contract, or plan issued in connection with an extension of credit, which provides hospital, surgical, or major medical expense insurance, or any combination of these coverages, on an expense incurred or service basis, excluding policies which provide benefits for specific diseases or for accidental injuries only, shall contain a conversion privilege provision.
(g) Eligibility for the converted policies or contracts shall be as follows:
(1) Any qualifying eligible individual whose insurance and its corresponding eligibility under the group policy, including any continuation available, elected, and exhausted under this Code section or the federal Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA), has been terminated for any reason, including failure of the employer to pay premiums to the insurer, other than fraud or failure of the qualifying eligible individual to pay a required premium contribution to the employer or, if so required, to the insurer directly and who has at least 18 months of creditable coverage immediately prior to termination shall be entitled, without evidence of insurability, to convert to individual or group based coverage covering such qualifying eligible individual and any eligible dependents who were covered under the qualifying eligible individual's coverage under the group contract or group plan. Such conversion coverage must be, at the option of the individual, retroactive to the date of termination of the group coverage or the date on which continuation or COBRA coverage ended, whichever is later. The insurer must offer qualifying eligible individuals at least two distinct conversion options from which to choose. One such choice of coverage shall be comparable to comprehensive health insurance coverage offered in the individual market in this state or comparable to a standard option of coverage available under the group or individual health insurance laws of this state. The other choice may be more limited in nature but must also qualify as creditable coverage. Each coverage shall be filed, together with applicable rates, for approval by the Commissioner. Such choices shall be known as the “Enhanced Conversion Options”;
(2) Premiums for the enhanced conversion options for all qualifying eligible individuals shall be determined in accordance with the following provisions:
(A) Solely for purposes of this subsection, the claims experience produced by all groups covered under comprehensive major medical or hospitalization accident and sickness insurance for each insurer shall be fully pooled to determine the group pool rate. Except to the extent that the claims experience of an individual group affects the overall experience of the group pool, the claims experience produced by any individual group of each insurer shall not be used in any manner for enhanced conversion policy rating purposes;
(B) Each insurer's group pool shall consist of each insurer's total claims experience produced by all groups in this state, regardless of the marketing mechanism or distribution system utilized in the sale of the group insurance from which the qualifying eligible individual is converting. The pool shall include the experience generated under any medical expense insurance coverage offered under separate group contracts and contracts issued to trusts, multiple employer trusts, or association groups or trusts, including trusts or arrangements providing group or group-type coverage issued to a trust or association or to any other group policyholder where such group or group-type contract provides coverage, primarily or incidentally, through contracts issued or issued for delivery in this state or provided by solicitation and sale to Georgia residents through an out-of-state multiple employer trust or arrangement; and any other group-type coverage which is determined to be a group shall also be included in the pool for enhanced conversion policy rating purposes; and
(C) Any other factors deemed relevant by the Commissioner may be considered in determination of each enhanced conversion policy pool rate so long as it does not have the effect of lessening the risk-spreading characteristic of the pooling requirement. Duration since issue and tier factors may not be considered in conversion policy rating. Notwithstanding subparagraph (A) of this paragraph, the total premium calculated for all enhanced conversion policies may deviate from the group pool rate by not more than plus or minus 50 percent based upon the experience generated under the pool of enhanced conversion policies so long as rates do not deviate for similarly situated individuals covered through the pool of enhanced conversion policies;
(3) Any group member who is not a qualifying eligible individual and whose insurance under the group policy has been terminated for any reason, including failure of the employer to pay premiums to the insurer, other than eligibility for medicare (reaching a limiting age for coverage under the group policy) or failure of the group member to pay a required premium contribution, and who has been continuously covered under the group contract or group plan, and under any contract or plan providing similar benefits which it replaces, for at least six months immediately prior to termination shall be entitled, without evidence of insurability, to convert to individual or group coverage covering such group member and any eligible dependents who were covered under the group member's coverage under the group contract or group plan. Such conversion coverage must be, at the option of the individual, retroactive to the date of termination of the group coverage or the date on which continuation or COBRA coverage ended, whichever is later. The premium of the basic converted policy shall be determined in accordance with the insurer's table of premium rates applicable to the age and classification of risks of each person to be covered under that policy and to the type and amount of coverage provided. This form of conversion coverage shall be known as the “Basic Conversion Option”; and
(4) Nothing in this Code section shall be construed to prevent an insurer from offering additional options to qualifying eligible individuals or group members.
(h) Each group certificate issued to each group member or qualifying eligible individual, in addition to setting forth any conversion rights, shall set forth the continuation right in a separate provision bearing its own caption. The provisions shall clearly set forth a full description of the continuation and conversion rights available, including all requirements, limitations, and exceptions, the premium required, and the time of payment of all premiums due during the period of continuation or conversion.
(i) This Code section shall not apply to limited benefit insurance policies. For the purposes of this Code section, the term “limited benefit insurance” means accident and sickness insurance designed, advertised, and marketed to supplement major medical insurance. The term limited benefit insurance includes accident only, CHAMPUS supplement, dental, disability income, fixed indemnity, long-term care, medicare supplement, specified disease, vision, and any other accident and sickness insurance other than basic hospital expense, basic medical-surgical expense, and comprehensive major medical insurance coverage.
(j) The Commissioner shall adopt such rules and regulations as he or she deems necessary for the administration of this Code section. Such rules and regulations may prescribe various conversion plans, including minimum conversion standards and minimum benefits, but not requiring benefits in excess of those provided under the group contract or group plan from which conversion is made, scope of coverage, preexisting limitations, optional coverages, reductions, notices to covered persons, and such other requirements as the Commissioner deems necessary for the protection of the citizens of this state.
(k)(1) Except as provided in paragraph (2) of this subsection, this Code section shall apply to all group plans and group contracts delivered or issued for delivery in this state on or after July 1, 2009, and to group plans and group contracts then in effect on the first anniversary date occurring on or after July 1, 2009.
(2) The provisions of paragraphs (1), (2), and (3) of subsection (c) of this Code section shall apply to all group plans and group contracts in effect on September 1, 2008.
(l) As soon as practicable, but no later than June 4, 2009, the Commissioner shall develop and direct insurers to issue notices for assistance-eligible individuals regarding availability of expanded eligibility and continuation coverage assistance to be sent to the last known addresses of such assistance-eligible individuals.
(m) Nothing in this Code section shall imply that individuals entitled to continuation coverage who are not assistance-eligible individuals shall receive benefits beyond the period of coverage provided in paragraph (1) of subsection (c) of this Code section or that assistance-eligible individuals are entitled to any continuation benefit period beyond what is provided by Section 3001 of Title III of the federal American Recovery and Reinvestment Act of 2009 or extensions to that Act which are enacted on and after May 5, 2009.
(n)(1) Upon the effective date whereupon guaranteed issue coverage is available pursuant to the federal Patient Protection and Affordable Care Act, an insurer shall not be required to offer conversion and enhanced conversion rights and coverage pursuant to this Code section.
(2) Each insurer may terminate, cancel, or nonrenew all existing conversion and enhanced conversion coverage as of the date on which guaranteed issue coverage is available pursuant to the federal Patient Protection and Affordable Care Act, provided that the insurer provides at least 90 days' notice prior to the discontinuance of the coverage to policyholders and to the Commissioner.
(3) An insurer may not terminate, cancel, or nonrenew any policy under this paragraph if, at the end of the 90 day cancellation period, the insured would not have at least 90 days of remaining open enrollment to obtain insurance coverage through an exchange created pursuant to the federal Patient Protection and Affordable Care Act.
1 42 U.S.C.A. § 1395 et seq.
2 42 U.S.C.A. § 1396 et seq.
(a) As used in this Code section, the term:
(1) “Group contract or group plan” is synonymous with the term “contract or plan” and means:
(A) A group contract of the type issued by a health care plan established under Chapter 20 of this title;
(B) A group contract of the type issued by a health maintenance organization established under Chapter 21 of this title; or
(C) A group accident and sickness insurance policy or contract, as defined in Chapter 30 of this title.
(2) “Group member” means a person who has been a member of the group for at least six months; who is entitled to medical benefits coverage under a group contract or group plan; and who is an insured, certificate holder, or subscriber under the contract or plan.
(3) “Insurer” means an insurance company, health care plan, or health maintenance organization.
(4) “Internal Revenue Code” means the federal Internal Revenue Code as defined in Code Section 48-1-2.
(5) “Plan administrator” means:
(A) The person designated as the plan administrator by the instrument under which the group contract or plan is operated; or
(B) If no plan administrator is designated, the plan sponsor.
(b)(1) A group contract or plan providing coverage for hospital or medical expenses, other than coverage limited to expenses from accidents or specific diseases, which is issued, delivered, issued for delivery, or renewed in this state to provide coverage for the employees of an employer subject to the provisions of Section 4980B of the Internal Revenue Code, shall contain a provision that a group member whose insurance under the contract or plan otherwise terminates after the expiration of the period of continuation of coverage for which the individual is eligible under Code Section 33-24-21.1 or Section 4980B of the Internal Revenue Code shall be entitled to continue coverage under that group contract or plan for himself or herself and his or her eligible dependents if the group member was 60 years of age or older as of the date on which the continuation of coverage afforded under Code Section 33-24-21.1 or Section 4980B of the Internal Revenue Code commences.
(2) A group member shall not be entitled to have coverage continued under paragraph (1) of this subsection if:
(A) Termination of employment is voluntary for other than health reasons;
(B) Termination of coverage occurred because the employment of a group member was terminated for reasons which would cause a forfeiture of unemployment compensation under Chapter 8 of Title 34, the “Employment Security Law”;
(C) Termination of coverage occurred because the group member failed to pay any required contribution;
(D) Any discontinued coverage is immediately replaced by similar group coverage; or
(E) The group contract or group plan was terminated in its entirety or was terminated with respect to a class to which the group member belonged.
This paragraph shall not affect conversion rights available to a group member under any contract or plan.
(c) A group contract or plan providing coverage for hospital or medical expenses, other than coverage limited to expenses from accidents or specific diseases which is issued, delivered, issued for delivery, or renewed in this state to provide coverage for the employees of an employer subject to the provisions of Section 4980B of the federal Internal Revenue Code, shall contain a provision that:
(1) The surviving spouse of a group member may continue coverage under the plan, at the death of the group member, with respect to the spouse and any dependent children whose coverage under the plan otherwise would terminate because of the death of the group member if the surviving spouse is 60 years of age or older at the time of the death; and
(2) The divorced spouse of a group member may continue coverage under the plan, upon dissolution of marriage with the group member, with respect to the divorced spouse and any dependent children whose coverage under the plan otherwise would terminate because of the dissolution of marriage, if the divorced spouse is 60 years of age or older at the time of the dissolution or legal separation.
(d) Each group certificate issued to each group member shall set forth the continuation right provided in subsections (b) and (c) of this Code section in a separate provision bearing its own caption. The provision shall clearly set forth a full description or the continuation right available, including all requirements, limitations, exceptions, the premium required or a brief statement concerning the method of calculation thereof, and the time of payment of all premiums due during the period of continuation.
(e) In the event and to the extent that this Code section is applicable, the election by the group member or divorced or surviving spouse to obtain continuation of coverage as provided under the provisions of Section 4980B of the Internal Revenue Code or under the provisions of Code Section 33-24-21.1 shall constitute election of continuation of coverage under this Code section without further action by the group member or surviving or divorced spouse. The provisions of Section 4980B of the Internal Revenue Code or of Code Section 33-24-21.1, whichever is applicable, regarding notice to a group member or a divorced or surviving spouse of the right to continue coverage shall apply to the continuation of coverage provided under this Code section.
(f) If an eligible group member or the divorced or surviving spouse elects continuation of coverage under subsection (b) or (c) of this Code section:
(1) The monthly premium for the continuation shall not be greater than 120 percent of the total of the amount that would be charged if the eligible group member or the divorced or surviving spouse were a current group member and the amount that the group policyholder would contribute toward the premium if the eligible group member or the divorced or surviving spouse were a current group member;
(2) The first premium for the continuation of coverage under this Code section shall be paid by the eligible group member or the divorced or surviving spouse on the first regular due date following the expiration of the eligible person's benefits under the provisions of Code Section 33-24-21.1 or Section 4980B of the Internal Revenue Code; and
(3) The right to continuation of coverage shall terminate upon the earliest of any of the following:
(A) The failure to pay premiums or required premium contributions, if applicable, when due, including any grace period allowed by the policy;
(B) The date that the group plan is terminated as to all group members, except that if a different group plan is made available to group members, the eligible group member or the divorced or surviving spouse shall be eligible for continuation of the same coverage under the new plan;
(C) The date on which the eligible group member or divorced or surviving spouse becomes insured under any other group health plan; or
(D) The date on which the eligible group member or the divorced or surviving spouse becomes eligible for federal medicare coverage.
(g) This Code section shall apply to any group contract or group plan which covers 20 or more employees and which is issued, delivered, issued for delivery, or renewed in this state on or after July 1, 1992, and to any group contract or group plan covering 20 or more employees then in effect on the first anniversary date occurring on or after July 1, 1992.
(a) All individual and group health insurance policies providing coverage on an expense incurred basis and individual and group service or indemnity type contracts issued by a nonprofit corporation which, under the terms of such policies, provide coverage for a family member of the insured or subscriber shall, as to the family members' coverage, also provide that the health insurance benefits applicable for children shall be payable with respect to a newly born child of the insured or subscriber from the moment of birth. A newly born child of the insured or subscriber shall include an adopted child. The coverage for the adopted child shall be effective from the date of the placement for adoption or final decree of adoption, whichever occurs first.
(b) The coverage for newly born children or adopted children shall consist of coverage of injury or sickness, including the necessary care and treatment of medically diagnosed congenital defects and birth abnormalities, but need not include benefits for routine well baby care.
(c) If payment of a specific premium or subscription fee is required to provide coverage for a child, the policy or contract may require that notification of birth of a newly born child or the date of the placement for adoption or final adoption of a child and payment of the required premium or fees must be furnished to the insurer or nonprofit service or indemnity corporation within 31 days after the date of birth, placement for adoption, or final decree of adoption, whichever is applicable, in order to have the coverage continue beyond the 31 day period.
(d) This Code section shall not apply to persons adopted as adults pursuant to the provisions of Code Section 19-8-21, relating to the adoption of adult persons.
Notwithstanding any other provisions in this title to the contrary, no group policy of accident and sickness insurance offered for sale in this state shall be issued or renewed by any insurer transacting business in this state, or health care plan under Chapter 20 of this title, which by the terms of the group policy excludes or reduces the benefits payable or services to be rendered to or on behalf of any insured by reason of the fact that benefits have been paid or are also payable under any blanket school accident policy regardless of who makes the premium contribution or any individually underwritten and individually issued contract or plan of insurance which provides exclusively for accident and sickness benefits and for which 100 percent of the premiums have been paid by the insured or a member of the insured's family, irrespective of the mode or channel of premium payment to the insurer or any discount received on such premium by virtue of the insured's membership in any organization or status as an employee. Any policy provision in violation of this Code section shall be void and unenforceable. Nothing in this Code section shall affect the practice of coordinating benefits between group policies issued pursuant to Chapter 30 of this title.
(a) For the purposes of this Code section, the term:
(1) “Complications of pregnancy” means the following:
(A) Conditions requiring hospital confinement when the pregnancy is not terminated and whose diagnoses are distinct from pregnancy but are adversely affected by pregnancy or are caused by pregnancy, such as acute nephritis, nephrosis, cardiac decompensation, missed abortion, pre-eclampsia, intrauterine fetal growth retardation, and similar medical and surgical conditions of comparable severity; but the term shall not include false labor, occasional spotting, physician prescribed rest during the period of pregnancy, morning sickness, hyperemesis gravidarum, and similar conditions associated with the management of a difficult pregnancy not constituting a nosologically distinct complication of pregnancy; and
(B) Ectopic pregnancy which is terminated.
(2) “Group policy or group contract” means a group or blanket accident and sickness insurance policy or contract as defined in Chapter 30 of this title, a group contract of the type issued by a health care plan established under Chapter 20 of this title, or any similar group benefit plan, policy, or contract.
(3) “Major medical coverage” means coverage which provides benefits of at least 75 percent of necessary, reasonable, and customary charges for medical care, including hospitalization in semiprivate accommodations, with maximum lifetime benefits of at least $100,000.00.
(b) Each group policy or group contract issued, delivered, issued for delivery, amended, or renewed in this state which provides major medical coverage and which includes maternity benefits shall include complications of pregnancy within such major medical coverage for all persons who have been covered by the policy or contract for a period of nine months or for a period of at least 30 days immediately prior to the date conception occurs or pregnancy commences. The same coverage for complications of pregnancy shall be provided for all family members and dependents with major medical coverage under the group policy or group contract.
(c) Group policies or group contracts subject to this Code section shall not contain any exclusions, reductions, or other limitations as to coverages, deductibles, or coinsurance provisions which apply to complications of pregnancy unless the provisions apply generally to all benefits provided or paid for under the group policies or group contracts.
(d) If fixed amounts for surgery are specified in any group policy or group contract subject to this Code section, the fixed amounts for surgical procedures involving complications of pregnancy shall be commensurate with other fixed amounts payable for procedures of comparable difficulty and severity.
(e) If any group policy or group contract subject to this Code section provides a fixed amount for maternity benefits, complications of pregnancy shall be treated the same as an illness rather than pregnancy and a person covered by the group policy or group contract shall be entitled to benefits otherwise provided by the group policy or group contract.
(f) Nothing contained in this Code section shall be deemed to prohibit an insurer or nonprofit corporation from issuing group policies or group contracts which contain provisions providing benefits greater than the minimum benefits required by this Code section or from issuing group policies or group contracts which contain provisions which are generally more favorable to the insured than those required by this Code section.
No group or blanket accident and sickness policy shall contain any provision purporting to exclude or reduce coverage provided an otherwise insurable person solely for the reason that the person is eligible for or receiving medical assistance as defined in Article 7 of Chapter 4 of Title 49. Any such provision appearing in a group or blanket accident and sickness insurance policy shall be null and void.
No group accident and sickness insurance policy, other than policies of disability income insurance and credit accident and sickness insurance and other than policies of qualified self-insurers, shall be issued in this state, which policy limits or restricts payment of benefits for any preexisting illness or condition not otherwise excluded from the group policy for a period in excess of 12 months following the date of the issuance of the certificate covering the insured person.
(a) A group policy or contract of disability income insurance shall not contain a definition of the term “preexisting condition” which is more restrictive than the following: preexisting condition means the existence of symptoms which would cause an ordinarily prudent person to seek diagnosis, care, or treatment, or a condition for which medical advice or treatment was recommended by or received from a provider of health care services, within 12 months preceding the effective date of coverage of the insured.
(b) Any group policy or contract of disability income insurance which limits, restricts, or excludes payment of benefits for preexisting conditions shall contain a notice as provided in this subsection. The notice shall be entitled “Preexisting Conditions Limitations or Exclusions,” shall appear as a separate paragraph of the policy or contract, shall appear in boldface type, and shall provide an appropriate definition or description of the term “preexisting condition” for the purposes of the policy.
(c) No policy or certificate of group disability income insurance shall be issued or delivered in this state which limits or excludes payment of benefits for a disability resulting from a preexisting condition if that disability occurs more than 24 months following the effective date of an insured's coverage under such policy.
(a) As used in this Code section, the term “psychologist” means any person who is:
(1) Duly licensed as a psychologist under Chapter 39 of Title 43, which provides for the licensure of psychologists, and has a doctoral degree from an accredited educational institution and a year of supervised experience in a setting approved by the State Board of Examiners of Psychologists;
(2) Required by Georgia law to meet continuing education requirements as a condition for renewal of licensing; and
(3) Required to adhere to the American Psychological Association's Ethical Standards of Psychologists (Revised 1977).
(b) Notwithstanding any provisions in policies or contracts which might be construed to the contrary, all individual, group, or blanket policies of accident and sickness insurance and individual or group service contracts which are issued, delivered, issued for delivery, amended, or renewed in this state and which provide coverage for services which are within the lawful scope of practice of a psychologist or chiropractor duly licensed to practice in this state shall be deemed to provide that any person covered under the policies or contracts shall be entitled to receive reimbursement for services under the policies or contracts regardless of whether they are rendered by a duly licensed doctor of medicine or by a duly licensed psychologist or chiropractor.
Notwithstanding any provisions in such policies or contracts which might be construed to the contrary, all individual and group or blanket policies of accident and sickness insurance and individual or group service contracts or by health care corporations, pursuant to Chapter 20 of this title, which policies are issued, delivered, issued for delivery, amended, or renewed in this state and which provide coverage for services which are within the lawful scope of practice of an optometrist duly licensed to practice in this state, shall be deemed to provide that any person covered under such policies or contracts shall be entitled to receive reimbursement for such services under such policies or contracts regardless of whether they are rendered by a duly licensed doctor of medicine or by a duly licensed optometrist.
Notwithstanding any provisions in policies or contracts which might be construed to the contrary, all individual, group, or blanket policies of accident and sickness insurance and individual or group service contracts or by health care corporations which are issued, delivered, issued for delivery, amended, or renewed in this state and which provide coverage for services which are within the lawful scope of practice of an athletic trainer qualified pursuant to Code Section 43-5-8 shall be deemed to provide that any person covered under such policies or contracts shall be entitled to receive reimbursement for services under such policies or contracts regardless of whether such services are rendered by a duly licensed doctor of medicine or by an athletic trainer qualified pursuant to Code Section 43-5-8. Nothing contained in this Code section shall require an insurer to offer such coverage.
(a) An individual hospital or medical expense insurance policy or hospital contract which provides that coverage of a dependent child shall terminate upon attainment of the limiting age for dependent children specified in the policy or contract shall also provide in substance that attainment of the limiting age shall not operate to terminate the coverage of the child while the child is and continues to be both incapable of self-sustaining employment by reason of developmental disability or physical disability as determined by the Department of Behavioral Health and Developmental Disabilities and chiefly dependent upon the policyholder or subscriber for support and maintenance, provided proof of incapacity and dependency is furnished to the insurer or hospital by the policyholder or subscriber within 31 days of the child's attainment of the limiting age and subsequently as may be required by the insurer or corporation but not more frequently than annually after the two-year period following the child's attainment of the limiting age.
(b) A group hospital or medical expense insurance policy or hospital contract which provides that coverage of a dependent child of an employee or other member of the covered group shall terminate upon attainment of the limiting age for dependent children specified in the policy or contract shall also provide in substance that attainment of such limiting age shall not operate to terminate the coverage of the child while the child is and continues to be both incapable of self-sustaining employment by reason of developmental disability or physical disability as determined by the Department of Behavioral Health and Developmental Disabilities and chiefly dependent upon the employee or member for support and maintenance, provided proof of incapacity and dependency is furnished to the insurer or hospital by the employee or member within 31 days of the child's attainment of the limiting age and subsequently as may be required by the insurer or corporation but not more frequently than annually after the two-year period following the child's attainment of the limiting age.
(c) This Code section shall apply equally to health insurance policies issued pursuant to Chapters 29 and 30 of this title, coverage by health maintenance organizations under Chapter 21 of this title, and health care plans under Chapter 20 of this title.
(a) As used in this Code section, the term:
(1) “Accident and sickness insurance benefit plan, policy, or contract” means:
(A) An individual accident and sickness insurance policy or contract, as defined in Chapter 29 of this title; or
(B) Any similar individual accident and sickness benefit plan, policy, or contract.
(2) “Addictive disease” has the same meaning as in Code Section 37-1-1.
(3) “Mental health or substance use disorder” means a mental illness or addictive disease.
(4) “Mental illness” has the same meaning as in Code Section 37-1-1.
(b) Every insurer authorized to issue accident and sickness insurance benefit plans, policies, or contracts shall be required to make available, either as a part of or as an optional endorsement to all such policies providing major medical insurance coverage which are issued, delivered, issued for delivery, or renewed coverage for the treatment of mental health or substance use disorders for children, adolescents, and adults, which coverage shall be at least as extensive and provide at least the same degree of coverage as that provided by the respective plan, policy, or contract for the treatment of other types of physical illnesses. Such an optional endorsement shall also provide that the coverage required to be made available pursuant to this Code section shall also cover the spouse and the dependents of the insured if such insured's spouse and dependents are covered under such benefit plan, policy, or contract.
(c) The optional endorsement required to be made available under subsection (b) of this Code section shall not contain any exclusions, reductions, or other limitations as to coverages, deductibles, or coinsurance provisions which apply to the treatment of mental health or substance use disorders unless such provisions apply generally to other similar benefits provided or paid for under the accident and sickness insurance benefit plan, policy, or contract.
(d) Nothing in this Code section shall be construed to prohibit an insurer, health care plan, health maintenance organization, or other person issuing any similar accident and sickness insurance benefit plan, policy, or contract from issuing or continuing to issue an accident and sickness insurance benefit plan, policy, or contract which provides benefits greater than the minimum benefits required to be made available under this Code section or from issuing any such plans, policies, or contracts which provide benefits which are generally more favorable to the insured than those required to be made available under this Code section.
(e) Nothing in this Code section shall be construed to prohibit the inclusion of coverage for the treatment of mental disorders that differs from the coverage provided in the same insurance plan, policy, or contract for physical illnesses if the policyholder does not purchase the optional coverage made available pursuant to this Code section.
(f) In the event that an insurer under this Code section is also subject to Code Section 33-1-27 and the federal Mental Health Parity Addiction Equity Act of 2008, 42 U.S.C. Section 300gg-26, then such Code section and federal act shall take precedence to the extent of any conflicting requirements contained in this Code section.
(a) As used in this Code section, the term:
(1) “Anesthetic” means an agent that produces insensibility to pain or touch. According to their action, such anesthetics are subdivided into the categories of general and local anesthetics.
(2) “Charges for facility services” means charges for such items as drugs and biologicals administered at the facility, trays, bandages, and casts which are furnished incidentally to a physician's services and which are commonly furnished in a physician's office.
(3) “General anesthetic” means an anesthetic that is complete and affects the entire body causing loss of consciousness when the anesthetic acts upon the brain. Such anesthetics are usually administered intravenously or through inhalation.
(4) “Licensed medical practitioner” means a medical practitioner who is currently licensed to practice medicine under Chapter 34 or 35 of Title 43 and who has agreed to submit to review by a Professional Standards Review Organization (PSRO) established, conditionally or otherwise, pursuant to Part B of Title XI of the Social Security Act (42 U.S.C. Section 1320c, et seq.), or by a medical care foundation or other recognized peer review organization, and who is approved to perform the covered procedures under a local anesthetic at an accredited hospital located within the area where the procedures are performed.
(5) “Local anesthetic” means an anesthetic affecting a local area only, the anesthetic operating upon the nerves or nerve tracts.
(6) “Medical emergency” means the sudden and unexpected onset of a condition with severe symptoms, requiring medical care which is secured immediately after the onset or within 72 hours after the onset of symptoms. The illness or condition as finally diagnosed must be one which normally would require immediate medical, not surgical, care. Sudden, unexpected, severe medical conditions or symptoms are those which are or which give evidence of being life threatening. Previously diagnosed chronic conditions in which subacute symptoms have existed over a period of time shall not be included in the definition of medical emergency unless symptoms suddenly become so severe as to require immediate medical aid. Provided they meet the requirements of this definition, conditions such as the following will qualify as medical emergencies: appendicitis, acute asthma, breathing difficulties or shortness of breath, severe bronchitis, severe onset of bursitis, severe chest pain, choking, coma, convulsions or seizures, cystitis, dermatitis or hives (resulting from internal or unknown causes), diabetic coma, severe diarrhea, drug reaction, epistaxis (nosebleed), fainting, severe fecal impaction, food poisoning, frostbite, acute attack of gall bladder, gastritis, acute gastrointestinal conditions, severe headache, suspected heart attack, hemorrhage, hysteria, insertion of catheter (for acute retention), insulin shock (overdose), kidney stone, maternity complications such as a suspected miscarriage (if policy covers maternity), sudden or severe onset of pain, pleurisy, pneumonitis, poisoning (including overdoses), pyelitis, pyelonephritis, shock, cerebral or cardiac spasms, spontaneous pneumothorax, severe stomach pains, strangulated hernia, stroke, sunstroke, swollen ring finger, tachycardia, thrombosis or phlebitis, unconsciousness, acute urinary retention, sudden onset of vision loss, or severe vomiting.
(7) “Professional fees” means charges for identifiable professional services rendered by a physician to a patient in person, which services contribute either to the diagnosis of the condition or the treatment of the patient.
(b) Every insurer authorized to issue accident and sickness benefit plans, policies, or contracts shall be required to make available, as an optional endorsement to all such policies that provide coverage for medical or surgical procedures which are required to be performed on an inpatient basis, an endorsement which provides at least the following coverages:
(1) Coverage which provides reimbursement for any covered surgical procedures performed on an outpatient basis when such procedures are performed by a licensed medical practitioner operating with the use of local anesthetic at a licensed outpatient surgical facility affiliated with a licensed hospital, at a licensed freestanding surgical facility, at a surgical facility operated by a health maintenance organization, or at the office of a licensed medical practitioner; and
(2) Coverage which provides reimbursement for medical or surgical procedures performed on an outpatient basis in the case of a medical emergency.
(c) All payments made under the coverages provided for in this Code section shall be made in accordance with the schedule of benefits contained in the policy, if applicable, or in accordance with the usual, customary, and reasonable professional fees and charges for facility services furnished in connection with such procedures.
(d) This Code section shall also apply to policies or contracts issued by a health care plan, a health maintenance organization, a fraternal benefit society, or any other similar entity.
(e) The requirements of this Code section with respect to a group or blanket accident and sickness insurance benefit plan, policy, or contract shall be satisfied if the coverage specified in paragraphs (1) and (2) of subsection (b) of this Code section is made available to the master policyholder of such plan, policy, or contract. Nothing in this Code section shall be construed to require the group insurer, health care plan, health maintenance organization, or master policyholder to provide or to make available such coverage to any certificate holder insured under such group policy, plan, or contract.
(f) Nothing in this Code section shall be construed to prohibit an insurer, health care plan, or other person issuing any similar accident and sickness insurance benefit plan, policy, or contract from issuing or continuing to issue an accident and sickness insurance benefit plan, policy, or contract which provides benefits greater than the minimum benefits required to be made available under this Code section or from issuing any such plans, policies, or contracts which provide benefits which are generally more favorable to the insured than those required to be made available under this Code section.
No policy of accident and sickness insurance, other than a policy of accident and sickness insurance issued in connection with an extension of credit, which is issued, delivered, or issued for delivery in this state by an insurer, health care plan, fraternal benefit society, or health maintenance organization authorized to transact insurance in this state and which provides specific benefits for the treatment of alcoholism or drug addiction, shall exclude the payment or reimbursement of such covered hospital or medical service benefits which would otherwise be payable to a hospital duly licensed in this state solely because such hospital specializes in the treatment of alcoholics or drug addicts and is operated primarily for the treatment of such persons.
(a) As used in this Code section, the term “general anesthesia” means the use of an anesthetic that is complete and affects the entire body, causing loss of consciousness when the anesthetic acts upon the brain. Such anesthetics are usually administered intravenously or through inhalation.
(b)(1) Any individual or group plan, policy, or contract for health care services which is issued, delivered, issued for delivery, or renewed in this state by a health care insurer, health maintenance organization, accident and sickness insurer, fraternal benefit society, health care plan, or any other person, firm, corporation, joint venture, or other similar business entity that pays for, purchases, or furnishes health care services to patients, insureds, or beneficiaries in this state shall be subject to the provisions of this Code section.
(2) Any entity listed in paragraph (1) of this subsection and located or domiciled outside of this state shall be subject to the provisions of this Code section if it receives, processes, adjudicates, pays, or denies any claim for health care services submitted by or on behalf of any patient, insured, or other beneficiary who resides or receives health care services in this state.
(c) Any entity that provides a health care services plan, policy, or contract subject to this Code section shall provide coverage for general anesthesia and associated hospital or ambulatory surgical facility charges in conjunction with dental care provided to a person insured or otherwise covered under such plan if such person is:
(1) Seven years of age or younger or is developmentally disabled;
(2) An individual for which a successful result cannot be expected from dental care provided under local anesthesia because of a neurological or other medically compromising condition of the insured; or
(3) An individual who has sustained extensive facial or dental trauma, unless otherwise covered by workers' compensation insurance.
(d) Any entity that provides a health care services plan, policy, or contract subject to this Code section may require prior authorization for general anesthesia and associated hospital or ambulatory surgical facility charges for dental care in the same manner that prior authorization is required for such benefits in connection with other covered medical care.
(e) Any entity that provides a health care services plan, policy, or contract subject to this Code section may restrict coverage under this Code section to include only procedures performed by:
(1) A fully accredited specialist in pediatric dentistry or other dentist fully accredited in a recognized dental specialty for which hospital or ambulatory surgical facility privileges are granted;
(2) A dentist who is certified by virtue of completion of an accredited program of postgraduate training to be granted hospital or ambulatory surgical facility privileges; or
(3) A dentist who has not yet satisfied certification requirements but has been granted hospital or ambulatory surgical facility privileges.
(f) This Code section shall not apply to limited benefit insurance policies as defined in paragraph (4) of subsection (e) of Code Section 33-30-12.
(a) As used in this Code section, the term:
(1) “Accident and sickness insurance benefit plan, policy, or contract” means:
(A) A group or blanket accident and sickness insurance policy or contract, as defined in Chapter 30 of this title;
(B) A group contract of the type issued by a health care plan established under Chapter 20 of this title;
(C) A group contract of the type issued by a health maintenance organization established under Chapter 21 of this title; or
(D) Any similar group accident and sickness benefit plan, policy, or contract.
(2) “Addictive disease” has the same meaning as in Code Section 37-1-1.
(3) “Mental health or substance use disorder” means a mental illness or addictive disease.
(4) “Mental illness” has the same meaning as in Code Section 37-1-1.
(b) This Code section shall apply only to accident and sickness insurance benefit plans, policies, or contracts, certificates evidencing coverage under a policy of insurance, or any other evidence of insurance issued by an insurer, delivered, or issued for delivery in this state, except for policies issued to an employer in another state which provide coverage for employees in this state who are employed by such employer policyholder, providing major medical benefits covering small groups as defined in subsection (a) of Code Section 33-30-12.
(c) Every insurer authorized to issue accident and sickness insurance benefit plans, policies, or contracts shall be required to make available, either as a part of or as an optional endorsement to all such policies providing major medical insurance coverage which are issued, delivered, issued for delivery, or renewed coverage for the treatment of mental health or substance use disorders for children, adolescents, and adults, which coverage shall be at least as extensive and provide at least the same degree of coverage and the same annual and lifetime dollar limits, but which may provide for different limits on the number of inpatient treatment days and outpatient treatment visits, as that provided by the respective plan, policy, or contract for the treatment of other types of physical illnesses. Such an optional endorsement shall also provide that the coverage required to be made available pursuant to this Code section shall also cover the spouse and the dependents of the insured if the insured's spouse and dependents are covered under such benefit plan, policy, or contract.
(d)(1) The optional endorsement required to be made available under subsection (c) of this Code section shall not contain any exclusions, reductions, or other limitations as to coverages which apply to the treatment of mental health or substance use disorders unless such provisions apply generally to other similar benefits provided or paid for under the accident and sickness insurance benefit plan, policy, or contract, except for any differing limits on inpatient treatment days and outpatient treatment visits as provided under subsection (c) of this Code section and as otherwise provided in paragraph (2) of this subsection.
(2) The optional endorsement required to be made available under subsection (c) of this Code section may contain deductibles or coinsurance provisions which apply to the treatment of mental health or substance use disorders, and such deductibles or coinsurance provisions need not apply generally to other similar benefits provided or paid for under the accident and sickness insurance benefit plan, policy, or contract; provided, however, that if a separate deductible applies to the treatment of mental disorders, it shall not exceed the deductible for medical or surgical coverages. A separate out-of-pocket limit may be applied to the treatment of mental disorders, which limit, in the case of an indemnity type plan, shall not exceed the maximum out-of-pocket limit for medical or surgical coverages and which, in the case of a health maintenance organization plan, shall not exceed the maximum out-of-pocket limit for medical or surgical coverages or the amount of $2,000.00 in 1998 and as annually adjusted thereafter according to the Consumer Price Index for health care, whichever is greater.
(e)(1) Nothing in this Code section shall be construed to prohibit an insurer, nonprofit corporation, health care plan, health maintenance organization, or other person issuing any similar accident and sickness insurance benefit plan, policy, or contract from issuing or continuing to issue an accident and sickness insurance benefit plan, policy, or contract which provides benefits greater than the minimum benefits required to be made available under this Code section or from issuing any such plans, policies, or contracts which provide benefits which are generally more favorable to the insured than those required to be made available under this Code section.
(2) Nothing in this Code section shall be construed to prohibit any person issuing an accident and sickness insurance benefit plan, policy, or contract from providing the coverage required to be made available under subsection (c) of this Code section through an indemnity plan with or without designating preferred providers of services or from arranging for or providing services instead of indemnifying against the cost of such services, without regard to whether such method of providing coverage for treatment of mental health or substance use disorders applies generally to other similar benefits provided or paid for under the accident and sickness insurance benefit plan, policy, or contract.
(f) The requirements of this Code section with respect to a group or blanket accident and sickness insurance benefit plan, policy, or contract shall be satisfied if the coverage specified in subsections (c) and (d) of this Code section is made available to the master policyholder of such plan, policy, or contract. Nothing in this Code section shall be construed to require the group insurer, nonprofit corporation, health care plan, health maintenance organization, or master policyholder to provide or make available such coverage to any insured under such group or blanket plan, policy, or contract.
(g) This Code section is neither enacted pursuant to nor intended to implement the provisions of any federal law.
(h) In the event that an insurer under this Code section is also subject to Code Section 33-1-27 and the federal Mental Health Parity Addiction Equity Act of 2008, 42 U.S.C. Section 300gg-26, then such Code section and federal act shall take precedence to the extent of any conflicting requirements contained in this Code section.
(a) As used in this Code section, the term:
(1) “Accident and sickness insurance benefit plan, policy, or contract” means:
(A) A group or blanket accident and sickness insurance policy or contract, as defined in Chapter 30 of this title;
(B) A group contract of the type issued by a health care plan established under Chapter 20 of this title;
(C) A group contract of the type issued by a health maintenance organization established under Chapter 21 of this title; or
(D) Any similar group accident and sickness benefit plan, policy, or contract.
(2) “Addictive disease” has the same meaning as in Code Section 37-1-1.
(3) “Mental health or substance use disorder” means a mental illness or addictive disease.
(4) “Mental illness” has the same meaning as in Code Section 37-1-1.
(b) This Code section shall apply only to accident and sickness insurance benefit plans, policies, or contracts, certificates evidencing coverage under a policy of insurance, or any other evidence of insurance issued by an insurer, delivered, or issued for delivery in this state, except for policies issued to an employer in another state which provide coverage for employees in this state who are employed by such employer policyholder, providing major medical benefits covering all groups except small groups as defined in subsection (a) of Code Section 33-30-12.
(c) Every insurer authorized to issue accident and sickness insurance benefit plans, policies, or contracts shall be required to make available, either as a part of or as an optional endorsement to all such policies providing major medical insurance coverage which are issued, delivered, issued for delivery, or renewed coverage for the treatment of mental health or substance use disorders for children, adolescents, and adults, which coverage shall be at least as extensive and provide at least the same degree of coverage and the same annual and lifetime dollar limits as that provided by the respective plan, policy, or contract for the treatment of other types of physical illnesses. Such an optional endorsement shall also provide that the coverage required to be made available pursuant to this Code section shall also cover the spouse and the dependents of the insured if the insured's spouse and dependents are covered under such benefit plan, policy, or contract.
(d)(1) The optional endorsement required to be made available under subsection (c) of this Code section shall not contain any exclusions, reductions, or other limitations as to coverages, including without limitation limits on the number of inpatient treatment days and outpatient treatment visits, which apply to the treatment of mental health or substance use disorders unless such provisions apply generally to other similar benefits provided or paid for under the accident and sickness insurance benefit plan, policy, or contract, except as otherwise provided in paragraph (2) of this subsection.
(2) The optional endorsement required to be made available under subsection (c) of this Code section may contain deductibles or coinsurance provisions which apply to the treatment of mental health or substance use disorders.
(e)(1) Nothing in this Code section shall be construed to prohibit an insurer, nonprofit corporation, health care plan, health maintenance organization, or other person issuing any similar accident and sickness insurance benefit plan, policy, or contract from issuing or continuing to issue an accident and sickness insurance benefit plan, policy, or contract which provides benefits greater than the minimum benefits required to be made available under this Code section or from issuing any such plans, policies, or contracts which provide benefits which are generally more favorable to the insured than those required to be made available under this Code section.
(2) Nothing in this Code section shall be construed to prohibit any person issuing an accident and sickness insurance benefit plan, policy, or contract from providing the coverage required to be made available under subsection (c) of this Code section through an indemnity plan with or without designating preferred providers of services or from arranging for or providing services instead of indemnifying against the cost of such services, without regard to whether such method of providing coverage for treatment of mental health or substance use disorders applies generally to other similar benefits provided or paid for under the accident and sickness insurance benefit plan, policy, or contract.
(f) The requirements of this Code section with respect to a group or blanket accident and sickness insurance benefit plan, policy, or contract shall be satisfied if the coverage specified in subsections (c) and (d) of this Code section is made available to the master policyholder of such plan, policy, or contract. Nothing in this Code section shall be construed to require the group insurer, nonprofit corporation, health care plan, health maintenance organization, or master policyholder to provide or make available such coverage to any insured under such group or blanket plan, policy, or contract.
(a) No policy of insurance issued or delivered in this state covering any loss, expense, or liability arising out of the ownership, maintenance, or use of an aircraft shall exclude or deny coverage because the aircraft is operated in violation of civil air regulations pursuant to federal, state, or local laws or ordinances.
(b) This Code section does not prohibit the use of specific exclusions or conditions in any such policy which relates to any of the following:
(1) Certification of an aircraft in a stated category by the Federal Aviation Administration;
(2) Certification of a pilot in a stated category by the Federal Aviation Administration;
(3) Establishing requirements for pilot experience; or
(4) Establishing limitations on the use of the aircraft.
(c) Any policy of insurance containing one, all, or any combination of the specific exclusions or conditions in the categories permitted in subsection (b) of this Code section shall include conspicuous notice advising the insured that the policy contains such exclusions or conditions and provide specific instructions as to what actions the insured shall undertake in order to protect and preserve his or her rights and coverages under the policy.
No policy of insurance issued or delivered in this state covering any loss, damage, expense, or liability shall exclude or deny coverage because the insured, members of the insured's family, or employees of the insured will keep or carry in a lawful manner firearms on the property or premises of the insured.
No group disability income policy which integrates benefits shall provide that the amount of any disability benefit actually being paid to the disabled person shall be reduced by changes in the level of social security benefits resulting either from changes in the federal Social Security Act 1 or due to cost-of-living adjustments provided in the federal Social Security Act, which become effective after the first day for which disability benefits become payable.
1 42 U.S.C.A. § 301 et seq.
(a) Two or more authorized insurers may jointly issue and shall be jointly and severally liable on an underwriters' policy bearing their names. Any one insurer may issue policies in the name of an underwriter's department and the policy shall plainly show the true name of the insurer.
(b) Two or more insurers may issue a combination policy which shall contain provisions substantially as follows:
(1) That the insurers executing the policy shall be severally liable for the full amount of any loss or damage according to the terms of the policy or for specified percentages or amounts of such loss or damage, aggregating the full amount of insurance under the policy; and
(2) That service of process or of any notice or proof of loss required by the policy upon any of the insurers executing the policy shall constitute service upon all insurers.
(c) Reserved.
(d) This Code section shall not apply to cosurety obligations.
(a) Binders or other contracts for temporary insurance may be made orally or in writing and shall be deemed to include all the usual terms of the policy as to which the binder was given together with any applicable endorsements that are designated in the binder, except as superseded by the clear and express terms of the binder.
(b) No binder shall be valid beyond the issuance of the policy with respect to which it was given or beyond 90 days from its effective date, whichever period is the shorter, provided that this subsection shall not apply to excess or surplus line insurance.
(c) If the policy has not been issued, a binder may be extended or renewed beyond 90 days with the written approval of the Commissioner or in accordance with such rules and regulations relative thereto as the Commissioner may promulgate.
(d) This Code section shall not apply to life or accident and sickness insurance.
Each and every county, county board of education, city, town, governmental unit, department, board, or bureau of this state or of the cities and towns of this state is authorized to make deductions periodically from the wages or salaries of its employees with which to pay the premium for life, accident and sickness, hospitalization, or annuity insurance, or any other kind of insurance, for the benefit of such employees upon a group insurance plan and to that end to enter into agreements with insurance companies whereby the kind of group insurance desired by the employees may be furnished to them and the premiums for the group insurance remitted periodically by the counties, boards, cities, towns, units, departments, or bureaus.
Participation in group insurance by employees shall be entirely voluntary on the part of each employee at all times. Any employee, upon any payday, may withdraw or retire from such group plan upon giving his employer written notice of his intention to do so and directing the discontinuance of deductions from his wages or salary in payment of the plan.
The insurance permitted under Code Sections 33-24-34 and 33-24-35 shall be in addition to and in no manner in lieu of Chapter 9 of Title 34.
Any insurance policy terminating by its terms at a specified expiration date and not otherwise renewable may be renewed or extended at the option of the insurer and upon a currently authorized policy form and at the premium rate then required for renewal or extension for a specific additional period or periods by certificate or by endorsement of the policy and without requiring the issuance of a new policy.
An insurer shall furnish, upon written request of any person claiming to have a loss under an insurance contract issued by the insurer, forms for proof of loss for completion by the person, but the insurer shall not, by reason of the requirement so to furnish forms, have any responsibility for or with reference to the completion of the proof or the manner of any completion or attempted completion. Failure or refusal to furnish the form upon written request or written notice of a loss shall constitute waiver of the right of the insurer to require proof of loss.
Without limitation of any right or defense of an insurer otherwise, none of the following acts by or on behalf of an insurer shall be deemed to constitute a waiver of any provision of a policy or of any defense of the insurer under the policy:
(1) Acknowledgment of the receipt of notice of loss or claim under the policy;
(2) Furnishing forms for reporting a loss or claim, for giving information relative to the loss or claim, or for making proof of loss or receiving or acknowledging receipt of any forms or proofs completed or uncompleted; or
(3) Investigating any loss or claim under any policy or engaging in negotiations looking toward a possible settlement of any loss or claim.
Whenever the proceeds of or payments under a life or accident and sickness insurance policy or annuity contract become payable in accordance with the terms of the policy or contract or the exercise of any right or privilege under the policy or contract and the insurer makes payment of the proceeds or payments in accordance with the terms of the policy or contract or in accordance with any written assignment of the policy or contract, the person then designated in the policy or contract or by the assignment as being entitled to the proceeds or payments, if legally competent, shall be entitled to receive the proceeds or payments and to give full acquittance for the proceeds or payments and the payments shall fully discharge the insurer from all claims under the policy or contract unless, before payment is made, the insurer has received at its home office written notice by or on behalf of some other person that the other person claims to be entitled to the payment or some interest in the policy or contract.
(a) In any instance where a claim arising out of a motor vehicle accident is covered by two or more insurance carriers, one such carrier may tender, and the claimant may accept, the limits of such policy; and, in the event of multiple claimants, the settling carrier may tender, and the claimants may accept, the limits of the policy pursuant to a written agreement between or among the claimants. Such claimant or claimants may execute a limited release applicable to the settling carrier and its insured based on injuries to such claimants including, without limitation, claims for loss of consortium or loss of services asserted by any person.
(b) The limited release provided for in subsection (a) of this Code section shall:
(1) Release the settling carrier from all liability from any claims of the claimant or claimants based on injuries to such claimant or claimants; and
(2) Release the insured tort-feasor covered by the policy of the settling carrier from all personal liability from any and all claims arising from the occurrence on which the claim is based except to the extent other insurance coverage is available which covers such claim or claims.
(c) No policy of uninsured or underinsured motorist coverage issued in this state shall prohibit any claimant from settling any claim with a liability carrier as provided in subsection (a) of this Code section or require the permission of the uninsured or underinsured motorist carrier to so settle any claim with the liability carrier.
(d) The limited release of the settling carrier provided for in subsection (a) of this Code section shall not:
(1) Bar a claimant's recovery against any other tort-feasor or under any other policy of insurance or release any other insurance carrier providing applicable coverage unless specifically provided for in such release;
(2) Be admissible in evidence before the trier of fact in the trial of a tort action, but the amount paid thereunder shall be admissible as provided by law as evidence of the offset against the liability of an uninsured motorist carrier and as evidence of the offset against any verdict of the trier of fact;
(3) Affect any duty the settling carrier owes to its insured under its policy including, without limitation, the duty to defend a subrogation claim brought against its insured; or
(4) Release the tort-feasor from personal liability to the extent that there is other insurance in effect which covers the said claim or claims, but only to the extent of such other insurance.
(e) The provisions of this Code section shall not be construed so as to interfere with the obligation of the insured to cooperate in his or her defense with the insurance carrier as provided in the policy of insurance.
(f) The provisions of this Code section shall not be construed to interfere with a claimant's right to pursue claims or an insurance company's obligation to pay claims based on a negligent or bad faith refusal to settle a claim or claims; provided, however, that the provisions of this subsection shall not be construed to create any new claim not otherwise provided by law.
(a) Upon the payment of $5,000.00 or more in settlement of any third-party liability claim, where the claimant is a natural person, the insurer or its representative shall provide written notice to the claimant at the same time payment is made by draft, check, or otherwise by such insurer or its representative, including the insurer's attorney, to the claimant's attorney or other representative of the claimant.
(b) Nothing in subsection (a) of this Code section shall:
(1) Create, or be construed to create, a cause of action for any person or entity, other than the Commissioner, against the insurer or its representative based upon a failure to serve such notice or the defective service of such notice;
(2) Establish, or be construed to establish, a defense for any party to any cause of action based upon a failure by the insurer or its representative to serve such notice or the defective service of such notice; or
(3) Invalidate or in any way affect the settlement for which the payment was made by the insurer.
Where the individual insured or the annuitant and the beneficiary designated in a life insurance policy or policy insuring against accidental death or in an annuity contract have died and there is not sufficient evidence that they have died otherwise than simultaneously, the proceeds of the policy or contract shall be distributed as if the insured or annuitant had survived the beneficiary unless otherwise specifically provided in the policy or contract. Payment made in accordance with this Code section shall fully discharge the insurer from all claims under the policy or contract unless, before payment is made, the insurer has received at its home office written notice by or on behalf of some other person that the person claims to be entitled to the payment or some interest in the policy or contract.
It shall be unlawful for any insurer to provide in a policy or contract of insurance that the face amount thereof or any loss or indemnity which may accrue thereunder shall be payable in anything other than legal tender of the United States to the beneficiary named in the policy or contract of insurance or to the legal representative of the insured; and any provision to the contrary shall be null and void, provided that this Code section shall not prevent property insurance policies from including an option to the insurer authorizing it to repair the damage incurred or paying the debtor the dollar amount thereof.
(a) Except as otherwise provided in this chapter, cancellation of a policy which by its terms and conditions may be canceled by the insurer or its agent duly authorized by the insurer to effect such cancellation shall be accomplished as prescribed in this Code section.
(b) Written notice stating the time when the cancellation will be effective, which shall not be less than 30 days from the date of mailing or delivery in person of such notice of cancellation or such other specific longer period as may be provided in the contract or by statute, shall be delivered as provided in subsection (d) of Code Section 33-24-14, in person, or by depositing the notice in the United States mail to be dispatched by at least first-class mail to the last address of record of the insured and of any lienholder, where applicable, and receiving the receipt provided by the United States Postal Service or such other evidence of mailing as prescribed or accepted by the United States Postal Service. For the purposes of this subsection, notice to the lienholder shall be considered delivered or mailed if, with the lienholder's consent, it is delivered by electronic transmittal or facsimile. Any irregularity in the notice to the lienholder shall not invalidate an otherwise valid cancellation as to the insured.
(c)(1) Any unearned premium which has been paid by the insured shall be refunded to the insured on a pro rata basis as provided in this Code section. If the return does not accompany notice of cancellation, then such return shall be made on or before the cancellation date either directly to the named insured or to the insured's agent of record. In the event the insurer elects to return such unearned premium to the insured via the insured's agent of record, such agent shall return the unearned premium to the insured either in person or by depositing such return in the mail within ten working days of receipt of the unearned premium, or within ten working days of notification from the insurer of the amount of return of unearned premium due, or on the effective date of cancellation, whichever is later. If the insured has an open account with the agent, such return of unearned premium may be applied to any outstanding balance and any remaining unearned premium shall be returned to the insured either in person or by depositing such return in the mail within ten working days of receipt of the unearned premium, or within ten working days of notification from the insurer of the amount of return of unearned premium due, or on the effective date of cancellation, whichever is later.
(2) Paragraph (1) of this subsection shall not apply if an audit or rate investigation is required or if the premiums are financed by a premium finance company. If an audit or rate investigation is required, then the refund of unearned premium shall be made within 30 days after the conclusion of the audit or rate investigation. If the premiums are financed by a premium finance company, any unearned premiums shall be tendered to the premium finance company within ten working days after cancellation.
(3) Any insurer or agent failing to return any unearned premium as prescribed in paragraphs (1) and (2) of this subsection shall pay to the insured a penalty equal to 25 percent of the amount of the return of the unearned premium and interest equal to 18 percent per annum until such time that proper return has been made, which penalty and interest must be paid at the time the return is made; provided, however, that the maximum amount of such penalty and interest shall not exceed 50 percent of the amount of the refund due. Failure to return any unearned premium shall not invalidate a notice of cancellation given in accordance with subsection (b) of this Code section.
(d) When a policy is canceled for failure of the named insured to discharge when due any of his obligations in connection with the payment of premiums for a policy or any installment of premiums due, whether payable directly to the insurer or indirectly to the agent, or when a policy that has been in effect for less than 60 days is canceled for any reason, the notice requirements of this Code section may be satisfied by delivering or mailing written notice to the named insured and any lienholder, where applicable, at least ten days prior to the effective date of cancellation in lieu of the number of days' notice otherwise required by this Code section. For the purposes of this subsection, notice to the lienholder shall be considered delivered or mailed if, with the lienholder's consent, it is delivered by electronic transmittal or facsimile. Any irregularity in the notice to the lienholder shall not invalidate an otherwise valid cancellation as to the insured.
(d.1) The notice requirements of this Code section shall not apply in any case where a binder or contract of insurance is void ab initio for failure of consideration.
(d.2) If the terms of a policy permit an audit and the insured fails to submit to or allow an audit for the current or most recently expired term, the insurer may, after two documented efforts to notify the policyholder and the policyholder's agent of potential cancellation, send via certified mail or statutory overnight delivery, return receipt requested, written notice to the named insured at least ten days prior to the effective date of cancellation in lieu of the number of days' notice otherwise required by law; provided, however, that no cancellation notice shall be mailed within 20 days of the first documented effort to notify the policyholder of potential cancellation.
(e) Notice to the insured shall not be required by this Code section when a policy is canceled by an insurance premium finance company under a power of attorney contained in an insurance premium finance agreement which has been filed with the insurer in accordance with the provisions of Chapter 22 of this title. However, the insurer shall comply with the provisions of subsection (d) of Code Section 33-22-13 pertaining to notice to a governmental agency, mortgagee, or other third party. Such notice shall be delivered in person or by depositing the notice in the United States mail to be dispatched by at least first-class mail to the last address of record of such governmental agency, mortgagee, or other third party and receiving the receipt provided by the United States Postal Service or such other evidence of mailing as prescribed or accepted by the United States Postal Service.
(f) Cancellation by the insured shall be accomplished in accordance with Code Section 33-24-44.1.
(g) Any unearned premium which has been paid by the insured may be refunded to the insured on other than a pro rata basis if:
(1) The cancellation results from failure of the insured to pay, when due, any premium to the insurer or any amount, when due, under a premium finance agreement;
(2) The policy contains language which specifies that a penalty may be charged on unearned premium; and
(3) The method of computing such penalty is filed with the Commissioner in accordance with Chapter 9 of this title.
(a) An insured may request cancellation of an existing insurance policy by returning the original policy to the insurer or by making a request for cancellation of an insurance policy to the insurer or its duly authorized agent orally, electronically, or in writing stating a future date on which the policy is to be canceled. In the event of oral cancellation the insurer shall within ten days provide such insured electronically or in writing, confirmation of such requested cancellation. The insurer or its duly authorized agent may require that the insured provide written, electronic, or other recorded verification of the request for cancellation prior to such cancellation taking effect. Such cancellation shall be accomplished in the following manner:
(1) If only the interest of the insured is affected, the policy shall be canceled on the later of the date the returned policy or request is received by the insurer or its duly authorized agent or the date specified in the request; provided, however, that upon receipt of a request for cancellation from an insured, an insurer may waive the future date requirement by confirming the date and time of cancellation to the insured and the insurer shall document in its policy file the request for cancellation along with the date of the requested cancellation;
(2) If by statute, regulation, or contract the insurance policy may not be canceled unless notice is given to a governmental agency, mortgagee, or other third party, the insurer shall mail or deliver such notice stating the date cancellation shall become effective, but such date shall not be less than ten days from the date of mailing or delivery of the notice.
(b) Notices required by this Code section shall be delivered as provided in subsection (d) of Code Section 33-24-14, in person, or by depositing the notice in the United States mail to be dispatched by at least first-class mail to the last address of record of the named insured, governmental agency, mortgagee, or other third party, where applicable, and receiving the receipt provided by the United States Postal Service or such other evidence of mailing as prescribed or accepted by the United States Postal Service.
(c) Where any notice is mailed or delivered in accordance with this Code section, the effective date of cancellation of the policy shall be the last effective date of any such notice.
(d) Notwithstanding the failure of the insurer to comply with the provisions of this Code section, cancellation shall be effective on the effective date of any replacement policy providing the same or similar coverage, which date shall not be prior to the date provided in subsection (a) of this Code section.
(e) Except as provided in Chapter 22 of this title, an insurance policy which by its terms may be canceled by the insured shall be canceled in accordance with this Code section.
(a) This Code section shall apply only to those portions of an automobile policy or a motorcycle policy which relate to bodily injury and property damage liability, personal injury protection, medical payments, physical damage, and uninsured motorists' coverage.
(b) As used in this Code section, the term:
(1) “Policy” means a policy, or policies issued by the same insurer, insuring a natural person as named insured or one or more related individuals resident of the same household and which provides bodily injury coverage and property damage liability coverage, personal injury protection, physical damage coverage, medical payments coverage, or uninsured motorists' protection coverage or any combination of coverages and under which the insured vehicles designated in the policy are of the following types only:
(A) Any motor vehicle of the private passenger, station wagon, or jeep type or a motorcycle that is not used as a public or livery conveyance for passengers nor rented to others; or
(B) Any other four-wheel motor vehicle with a load capacity of 1,500 pounds or less which is not used in the occupation or professional business of the insured; provided, however, that this Code section shall not apply to policies of automobile liability insurance issued under the Georgia Automobile Insurance Plan nor to any policy insuring an automobile which is one of more than four insured under a single policy nor to any policy covering garage, automobile sales agency, repair shop, service station, or public parking place operation hazards.
(2) “Reduction in coverage” shall mean a change made by the insurer which results in a removal of coverage, diminution in scope or less coverage, or the addition of an exclusion. Reduction in coverage shall not include any change, reduction, or elimination of coverage made at the request of the insured. The correction of typographical or scrivener's errors or the application of mandated legislative changes shall not be considered a reduction in coverage.
(3) “Renewal” means issuance and delivery by an insurer of a policy superseding at the end of the policy period a policy previously issued and delivered by the same insurer or issuance and delivery of a certificate or notice extending the term of a policy beyond its policy period or term or the extension of the term of a policy beyond its policy period or term pursuant to a provision for extending the policy by payment of a continuation premium; provided, however, that any policy with a policy period or term of less than six months shall, for the purpose of this Code section, be considered to have successive policy periods ending each six months following its original date of issue and, regardless of its wording, any interim termination by its terms or by refusal to accept premium shall be a cancellation subject to this Code section, except in case of termination under any of the circumstances specified in subsection (f) of this Code section; provided, further, that, for purposes of this Code section, any policy written for a term longer than one year or any policy with no fixed expiration date shall be considered as if written for successive policy periods or terms of one year and any termination by an insurer effective on an anniversary date of the policy shall be deemed a refusal to renew.
(c) No notice of cancellation of a policy issued for delivery in this state shall be mailed or delivered by an insurer or its agent duly authorized to effect such cancellation, except for one or more of the following reasons:
(1) The named insured failed to discharge when due any of his obligations in connection with the payment of premiums on such policy or any installment of premiums or the renewal of premiums, whether payable directly to the insurer or indirectly to the agent. Notwithstanding the provisions of subsection (d) of Code Section 33-24-44, such notice of cancellation issued to an insured, who is paying on a monthly basis, may be included with the bill issued to the insured, provided that the bill is mailed to the insured at least ten days prior to the due date;
(2) The issuance was obtained through a material misrepresentation;
(3) Any insured violated any of the terms and conditions of the policy;
(4) The named insured failed to disclose fully, if called for in the application, his record for the preceding 36 months of motor vehicle accidents and moving traffic violations;
(5) The named insured failed to disclose in his written application or in response to inquiry by his broker or by the insurer or its agent information necessary for the acceptance or proper rating of the risk;
(6) The named insured made a false or fraudulent claim or knowingly aided or abetted another in the presentation of such a claim;
(7) The named insured or any other operator either resident in the same household or who customarily operates an automobile insured under such policy:
(A) Has, within the 36 months prior to the notice of cancellation, had his driver's license under suspension or revocation;
(B) Is or becomes subject to epilepsy or heart attacks and the individual does not produce a certificate from a physician testifying to his unqualified ability to operate a motor vehicle;
(C) Has an accident record; a conviction record, criminal or traffic; or a physical, mental, or other condition which is such that his operation of an automobile might endanger the public safety;
(D) Has within a three-year period prior to the notice of cancellation been addicted to the use of narcotics or other drugs;
(E) Has been convicted or forfeited bail during the 36 months immediately preceding the notice of cancellation for:
(i) Any felony;
(ii) Criminal negligence resulting in death, homicide, or assault arising out of the operation of a motor vehicle;
(iii) Operating a motor vehicle while in an intoxicated condition or while under the influence of drugs;
(iv) Being intoxicated while in or about an automobile or while having custody of an automobile;
(v) Leaving the scene of an accident without stopping to report;
(vi) Theft or unlawful taking of a motor vehicle; or
(vii) Making false statements in an application for a driver's license; or
(F) Has been convicted of or forfeited bail for three or more violations, within the 36 months immediately preceding the notice of cancellation, of any law, ordinance, or regulation limiting the speed of motor vehicles or any of the provisions of the motor vehicle laws of any state, violation of which constitutes a misdemeanor, whether or not the violations were repetitions of the same offense or different offenses;
(8) The insured automobile:
(A) Is so mechanically defective that its operation might endanger public safety;
(B) Is used in carrying passengers for hire or compensation; provided, however, that the use of an automobile for a car pool shall not be considered use of an automobile for hire or compensation;
(C) Is used in the transportation of flammables or explosives;
(D) Is an authorized emergency vehicle; or
(E) Has changed in shape or condition during the policy period so as to increase substantially the risk.
(d) No notice of cancellation of a policy to which this Code section applies shall be effective unless mailed or delivered as prescribed in Code Section 33-24-44. The insurer shall provide the reason or reasons for such cancellation as required by Chapter 39 of this title.
(e)(1) No insurer shall refuse to renew a policy to which this Code section applies unless a written notice of nonrenewal is mailed or delivered in person to the named insured. Such notice stating the time when nonrenewal will be effective, which shall not be less than 30 days from the date of mailing or delivery of such notice of nonrenewal or such longer period as may be provided in the contract or by statute, shall be delivered as provided in subsection (d) of Code Section 33-24-14, in person, or by depositing the notice in the United States mail to be dispatched by at least first-class mail to the last address of record of the insured and of the lienholder, where applicable, and receiving the receipt provided by the United States Postal Service or such other evidence of mailing as prescribed or accepted by the United States Postal Service.
(2) The insurer shall specify in writing the reason or reasons for such nonrenewal as required by Chapter 39 of this title.
(3) No notice refusing the renewal of a policy issued for delivery in this state shall be mailed or delivered by an insurer or its agent duly authorized to effect such notice of nonrenewal for the following reasons:
(A) Lack of, lack of potential for, or failure to agree to a writing of supporting insurance business;
(B) A change in the insurer's eligibility rules or underwriting rules, provided that this subparagraph shall not apply to a change in such rules if the change applies uniformly within a specific class or territory and such change has been approved by the Commissioner under subparagraph (B) of paragraph (4) of this subsection;
(C) With respect to any driver or with respect to any automobile or its replacement, except when the replacement is such that together with other relevant underwriting or eligibility rules it would not have been insured as an original policy risk of the insurer, for two or fewer of the following within the preceding 36 month period:
(i) Accidents involving two or more motor vehicles in which the driver of the insured automobile under this subparagraph was not at fault;
(ii) Uninsured or underinsured motorist coverage claims;
(iii) Comprehensive coverage claims; and
(iv) Towing or road service coverage claims;
(D) Age, sex, location of residence address within the state, race, creed, national origin, ancestry, or marital status;
(E) Lawful occupation, provided that the insured automobile is not used in such occupation and provided, further, that such automobile would have been insured as an original policy risk of the insurer when such occupation is considered together with other relevant underwriting or eligibility rules of the insurer;
(F) Military service, provided that the named insured has no change of legal residence from this state;
(G) Number of years of driving experience of a named insured or of any other operator who is either a resident in the same household or customarily an operator of an automobile insured under such policy;
(H) Accidents or violations which occurred more than 36 months prior to the expiration date or anniversary date of the policy or solely for claims paid or payable pursuant to the policy during the preceding 36 month period which did not aggregate in an amount in excess of $750.00;
(I) One claim against the policy based on fault if such coverage has been in effect continuously for at least 36 preceding months;
(J) Notwithstanding subparagraph (I) of this paragraph, two claims against the policy based on fault if such coverage has been in effect continuously for at least 72 preceding months; and
(K) Factors not relating to the claims record, driving record, or driving ability of the named insured or of any other operator who is either a resident in the same household or customarily an operator of an automobile insured under such policy.
(4)(A) Notwithstanding paragraph (3) of this subsection, any reason set forth in subsection (c) of this Code section, relating to cancellation, shall also constitute a reason for nonrenewal.
(B) If the insurer demonstrates to the satisfaction of the Commissioner that renewal would violate the provisions of this title or would be hazardous to its policyholders or the public, subparagraph (B) or (K) of paragraph (3) shall not apply.
(5)(A) If the insurer complies with paragraph (1) of this subsection, no claim or action may be maintained with respect to a policy which is not renewed unless the named insured files a written notice with the insurer before the time at which nonrenewal becomes effective. The notice shall specify the manner in which the failure to renew is alleged to be unlawful under this subsection. In any subsequent action asserting a violation of this subsection, no violation of this subsection may be alleged other than the specific allegations contained in the notice filed by the named insured.
(B) In addition to other requirements, a notice of nonrenewal shall contain the provisions of subparagraph (A) of this paragraph, in substantially the form which follows:
“NOTICE
Code Section 33-24-45 of the Official Code of Georgia Annotated provides that this insurer must, upon request, furnish you with the reasons for the failure to renew this policy. If you wish to assert that the nonrenewal is unlawful, you must file a written notice with this insurer before the time at which the nonrenewal becomes effective. The notice must specify the manner in which the failure to renew is alleged to be unlawful.
If you do not file the written notice, you may not later assert a claim or action against this insurer based upon an unlawful nonrenewal.”
(6)(A) Notwithstanding paragraph (3) of this subsection, the termination of an agency relationship shall be valid as a reason for a failure to renew a policy. In such case, if the named insured wishes to retain the policy with the particular insurer, the insured shall locate another agent of the insurer and apply for the policy with another agent of the insurer before the time at which the nonrenewal becomes effective. Upon receipt of the application, the insurer shall treat the application as a renewal and not as an original writing. Nothing in this subparagraph shall abridge or supersede contractual rights of the terminated agency or the insurer, provided that these contractual rights do not adversely affect the privilege of the named insured to apply for renewal through another agent of the insurer.
(B) A notice of nonrenewal based upon the termination of an agency relationship shall contain the provisions of subparagraph (A) of this paragraph, in substantially the form which follows:
“NOTICE
Your policy has not been renewed because your present agent no longer represents this insurer. You have the option of procuring coverage through your present agent or retaining this policy by applying through another agent of this insurer.Code Section 33-24-45 of the Official Code of Georgia Annotated provides that if you will locate another agent of this insurer and apply for this policy before the time at which the nonrenewal becomes effective, this insurer will treat the application as a renewal and not as an application for a new policy.”
(f) Subsection (e) of this Code section shall not apply in case of:
(1) Nonpayment of premium for the expiring policy;
(2) Failure of the insured to pay the premium as required by the insurer for renewal;
(3) The insurer having manifested its willingness to renew by delivering a renewal policy, renewal certificate, or other evidence of renewal to the named insured or his or her representative or by offering to issue a renewal policy, certificate, or other evidence of renewal or having manifested such intention by any other means; or
(4) A reduction in coverage where an insurer provides a written notice of a reduction in coverage to the named insured or his or her representative no less than 30 days prior to the effective date of the proposed reduction in coverage; provided that such notice shall be in a separate document with the words “NOTICE OF REDUCTION IN COVERAGE” written in all capital letters in at least 12 point type. Such notice shall be delivered as provided in subsection (d) of Code Section 33-24-14, in person, or by depositing the notice in the United States mail to be dispatched by at least first-class mail to the last address of record of the insured and receiving the receipt provided by the United States Postal Service or such other evidence of mailing as prescribed or accepted by the United States Postal Service.
(g) Notwithstanding the failure of an insurer to comply with this Code section, termination of any coverage under the policy either by cancellation or nonrenewal shall be effective on the effective date of any other policy providing similar coverage on the same motor vehicle or any replacement of coverage.
(h) Renewal or continuation of a policy shall not constitute a waiver or estoppel with respect to ground for cancellation which existed before the effective date of the renewal or continuance.
(i) When a policy is canceled other than for nonpayment of premium or in the event of a refusal to renew or continue a policy, the insurer shall notify the named insured of his possible eligibility for insurance through the Georgia Automobile Insurance Plan. Such notice shall accompany or be included in the notice of cancellation or the notice of intent not to renew or not to continue the policy and shall state that such notice of availability of the Georgia Automobile Insurance Plan is given pursuant to this Code section.
(j) There shall be no liability on the part of and no cause of action of any nature shall arise against the Commissioner or his employees or against any insurer, its authorized representatives, its agents, its employees, or any firm, person, or corporation furnishing to the insurer information as to reasons for cancellation or nonrenewal for any statement made by any of them in any written notice of cancellation or nonrenewal or in any other communication, oral or written, specifying the reasons for cancellation or nonrenewal or providing information pertaining to the reasons for cancellation or nonrenewal or for statements made or evidence submitted at any formal or informal hearing conducted in connection with the reasons for cancellation or nonrenewal of the insured's policy.
(k) This Code section shall not apply to any policy which has been in effect less than 60 days at the time notice of cancellation is mailed or delivered by the insurer unless it is a renewal of a policy. Such policies shall be canceled in accordance with Code Section 33-24-44.
(l) Return of unearned premium, if any, due to cancellations as to which this Code section applies shall be processed in accordance with Code Section 33-24-44.
(m) Notice to the insured shall not be required by this Code section when a policy is canceled by an insurance premium finance company under a power of attorney contained in an insurance premium finance agreement if notification of the existence of the premium finance agreement has been given to the insurer in accordance with the provisions of Chapter 22 of this title. However, the insurer shall comply with the provisions of subsection (d) of Code Section 33-22-13 pertaining to notice to a governmental agency, mortgagee, or other third party. Such notice shall be delivered as provided in subsection (d) of Code Section 33-24-14, in person, or by depositing the notice in the United States mail to be dispatched by at least first-class mail to the last address of record of such governmental agency, mortgagee, or other third party and receiving the receipt provided by the United States Postal Service or such other evidence of mailing as prescribed or accepted by the United States Postal Service.
(n) Cancellation by the insured shall be accomplished as provided in Code Section 33-24-44.1.
(o) An insured may request a review by the Commissioner if the insured believes that his or her policy has been canceled or nonrenewed in violation of this Code section. Such request must be filed with the Commissioner within 15 days of receipt of a notice of cancellation or nonrenewal. A review of the cancellation or nonrenewal shall be conducted within 30 days of said request. The Commissioner shall notify the insured and the insurer of his or her decision within the 30 day period. During the pendency of such review, the policy shall continue in full force and effect and the Commissioner shall specify by rule or regulation the method of payment of premium due and the disposition of premium refunds, if any. The Commissioner shall either require that the policy be reinstated or renewed or may uphold the nonrenewal or cancellation. In the event the Commissioner determines that an insurer's cancellation or nonrenewal action constitutes an unfair act or practice, the Commissioner may take action as authorized by this title. Following the completion of any review provided by this subsection, an insured may request a hearing pursuant to Code Section 33-2-17, and nothing in this subsection shall be deemed to waive an insured's right to request such a hearing.
(a) This Code section shall apply only to policies of insurance against direct loss to residential real property and the contents thereof, as defined and limited in standard fire policies insuring natural persons as the named insured.
(b) As used in this Code section, the term:
(1) “Claim against a policy” means a contact with an insurer by the insured under the policy or an affected third party for the express purpose of seeking payment of proceeds under the terms of the policy in question. A report of loss or a question relating to coverage shall not independently establish a claim against a policy nor be considered as a claim under Article 2 of Chapter 6 of this title.
(2) “Nonrenewal” or “nonrenewed” means a refusal by an insurer or an affiliate of an insurer to renew. Failure of an insured to pay the premium as required of the insured for renewal, a change in policy terms, or a reduction in coverage after the insurer has manifested a willingness to renew by delivering a renewal policy, renewal certificate, or other evidence of renewal to the named insured or his or her representative or has offered to issue a renewal policy, certificate, or other evidence of renewal or has manifested such intention by any other means shall not be construed to be a nonrenewal.
(3) “Policies” means a policy insuring a natural person as named insured against direct loss to residential real property and the contents thereof, as defined and limited in standard fire policies as approved by the Commissioner.
(4) “Reduction in coverage” means a change made by the insurer which results in a removal of coverage, diminution in scope or less coverage, or the addition of an exclusion. Reduction in coverage shall not include any change, reduction, or elimination of coverage made at the request of the insured. The correction of typographical or scrivener's errors or the application of mandated legislative changes shall not be considered a reduction in coverage.
(5) “Renewal” means issuance and delivery by an insurer or an affiliate of such insurer of a policy superseding at the end of the policy period a policy previously issued and delivered by the same insurer or issuance and delivery of a certificate or notice extending the term of a policy beyond its policy period or term or the extension of the term of a policy beyond its policy period or term pursuant to a provision for extending the policy by payment of a continuation premium. Any policy with a policy period or term of less than six months shall, for the purposes of this Code section, be considered to have successive policy periods ending each six months following its original date of issue and, regardless of its wording, any interim termination by its terms or by refusal to accept premiums shall be a cancellation subject to this Code section. Any policy written for a term longer than one year or any policy with no fixed expiration date shall be considered as if written for successive policy periods or terms of one year and any termination by an insurer effective on an anniversary date of such policy shall be deemed a refusal to renew.
(c)(1) No notice of cancellation of a policy as to which this Code section applies shall be effective unless mailed or delivered as prescribed in Code Section 33-24-44. The insurer shall provide the reason or reasons for such cancellation as required by Chapter 39 of this title.
(2) After coverage under a policy to which this Code section applies has been in effect more than 60 days or after the effective date of a renewal policy to which this Code section applies, a notice of cancellation may be issued only for one or more of the following reasons:
(A) Nonpayment of premium;
(B) Discovery of fraud, concealment of material fact, or material misrepresentation made by or with the knowledge of the insured in obtaining the policy, continuing the policy, or presenting a claim under the policy;
(C) The occurrence of a change in the risk which substantially increases any hazard the policy insures against; or
(D) The insured violates any of the material terms or conditions of the policy.
(d)(1) No insurer shall refuse to renew a policy to which this Code section applies unless a written notice of nonrenewal is mailed or delivered in person to the named insured. Such notice stating the time when nonrenewal will be effective, which shall not be less than 30 days from the date of mailing or delivery of such notice of nonrenewal or such longer period as may be provided in the contract or by statute, shall be delivered as provided in subsection (d) of Code Section 33-24-14, in person, or by depositing the notice in the United States mail to be dispatched by at least first-class mail to the last address of record of the insured and of the lienholder, where applicable, and receiving the receipt provided by the United States Postal Service or such other evidence of mailing as prescribed or accepted by the United States Postal Service. The insurer shall provide the reason or reasons for nonrenewal as required by Chapter 39 of this title.
(2) An insurer shall provide a written notice of a reduction in coverage to the named insured no less than 30 days prior to the effective date of the proposed reduction in coverage; provided that such notice shall be in a separate document with the words “NOTICE OF REDUCTION IN COVERAGE” written in all capital letters in at least 12 point type. Such notice shall be delivered as provided in subsection (d) of Code Section 33-24-14, in person, or by depositing the notice in the United States mail to be dispatched by at least first-class mail to the last address of record of the insured and receiving the receipt provided by the United States Postal Service or such other evidence of mailing as prescribed or accepted by the United States Postal Service.
(e) When a policy is canceled other than for nonpayment of premium or in the event of a refusal to renew or continue a policy, the insurer shall notify the named insured of his possible eligibility for insurance through the Georgia Fair Access to Insurance Requirements Plan. The notice shall accompany or be included in the notice of cancellation or the notice of intent not to renew or not to continue the policy and shall state that such notice availability of the Georgia Fair Access to Insurance Requirements Plan is given pursuant to this Code section. Included in the notice shall be the address by which the Georgia Fair Access to Insurance Requirements Plan might be contacted in order to determine eligibility.
(f) There shall be no liability on the part of and no cause of action of any nature shall arise against the Commissioner or his employees or against any insurer, its authorized representatives, its agents, its employees, or any firm, person, or corporation furnishing to the insurer information as to reasons for cancellation or nonrenewal for any statement made by any of them and in written notice of cancellation or nonrenewal or in any other communication, oral or written, specifying the reasons for cancellation or nonrenewal or providing information pertaining thereto or for statements made or evidence submitted at any formal or informal hearing conducted in connection therewith.
(g) Return of unearned premium, if any, due to cancellations as to which this Code section applies shall be processed in accordance with Code Section 33-24-44.
(h) Notice to the insured shall not be required by this Code section when a policy is canceled by an insurance premium finance company under a power of attorney contained in an insurance premium finance agreement if notification of the existence of the premium finance agreement has been given to the insurer in accordance with the provisions of Chapter 22 of this title. However, the insurer shall comply with the provisions of subsection (d) of Code Section 33-22-13 pertaining to notice to a governmental agency, mortgagee, or other third party. Such notice shall be delivered as provided in subsection (d) of Code Section 33-24-14, in person, or by depositing the notice in the United States mail to be dispatched by at least first-class mail to the last address of record of such governmental agency, mortgagee, or other third party and receiving the receipt provided by the United States Postal Service or such other evidence of mailing as prescribed or accepted by the United States Postal Service.
(i) Cancellation by the insured shall be accomplished as provided in Code Section 33-24-44.1.
(j) No notice refusing the renewal of a policy issued for delivery in this state shall be mailed or delivered by an insurer or its agent duly authorized to effect such notice of nonrenewal for the following reasons:
(1) Lack of, lack of potential for, or failure to agree to a writing of supporting insurance business;
(2) A change in the insurer's eligibility rules or underwriting rules, provided that this paragraph shall not apply to a change in such rules if the change applies uniformly within a specific class or territory and such change has been approved by the Commissioner under subsection (k) of this Code section; and
(3) Two or fewer claims against the policy within the preceding 36 month period if such claims are not attributable to the negligent or intentional acts of the insured or of persons residing at the insured premises.
(k) If the insurer demonstrates to the satisfaction of the Commissioner that renewal would violate the provisions of this title or would be hazardous to its policyholders or the public, paragraph (2) of subsection (j) shall not apply.
(l)(1) If the insurer complies with subsection (d) of this Code section, no claim or action may be maintained with respect to a policy which is not renewed unless the named insured files a written notice with the insurer before the time at which nonrenewal becomes effective. The notice shall specify the manner in which the failure to renew is alleged to be unlawful under this subsection. In any subsequent action asserting a violation of subsection (c), (j), or (k) of this Code section, no violation may be alleged other than the specific allegations contained in the notice filed by the named insured.
(2) In addition to other requirements, a notice of nonrenewal shall contain the provisions of paragraph (1) of this subsection in substantially the form which follows:
“NOTICE
Code Section 33-24-46 of the Official Code of Georgia Annotated provides that this insurer must, upon request, furnish you with the reasons for the failure to renew this policy. If you wish to assert that the nonrenewal is unlawful, you must file a written notice with this insurer before the time at which the nonrenewal becomes effective. The notice must specify the manner in which the failure to renew is alleged to be unlawful.
If you do not file the written notice, you may not later assert a claim or action against this insurer based upon an unlawful nonrenewal.”
(m)(1) Notwithstanding subsection (j) of this Code section, the termination of an agency relationship shall be valid as a reason for a failure to renew a policy. In such case, if the named insured wishes to retain the policy with the particular insurer, the insured shall locate another agent of the insurer and apply for the policy with another agent of the insurer before the time at which the nonrenewal becomes effective. Upon receipt of the application, the insurer shall treat the application as a renewal and not as an original writing. Nothing in this paragraph shall abridge or supersede contractual rights of the terminated agency or the insurer, provided that these contractual rights do not adversely affect the privilege of the named insured to apply for renewal through another agent of the insurer.
(2) A notice of nonrenewal based upon the termination of an agency relationship shall contain the provisions of paragraph (1) of this subsection, in substantially the form which follows:
“NOTICE
Your policy has not been renewed because your present agent no longer represents this insurer. You have the option of procuring coverage through your present agent or retaining this policy by applying through another agent of this insurer.Code Section 33-24-46 of the Official Code of Georgia Annotated provides that if you will locate another agent of the insurer and apply for this policy before the time at which the nonrenewal becomes effective, this insurer will treat the application as a renewal and not as an application for a new policy.”
(a) Each insurer licensed to transact business in this state which issues or issues for delivery in this state policies or contracts of insurance insuring risks or residents in this state and insuring against liability for loss of, damage to, or injury to persons or property shall comply with the provisions of this Code section. This Code section shall not apply to personal automobile or personal property and casualty insurance policies. Cancellation of a policy for failure of the named insured to discharge when due any obligations in connection with the payment of premiums or cancellation for any reason of a policy that has been in effect for less than 60 days shall be governed by the provisions of Code Section 33-24-44.
(b) A notice of termination, including a notice of cancellation or nonrenewal, by the insurer or a notice of an increase in premiums, other than an increase in premiums due to a change in risk or exposure, including a change in experience modification or resulting from an audit of auditable coverages, which exceeds 15 percent of the current policy's premium, shall be delivered to the insured as provided in subsection (d) of Code Section 33-24-14, in person, or by depositing the notice in the United States mail, to be dispatched by at least first-class mail to the last address of record of the insured, at least 45 days prior to the termination date of such policy; provided, however, that a notice of cancellation or nonrenewal of a policy of workers' compensation insurance shall be controlled by the provisions of subsection (f) of this Code section. In those instances where an increase in premium exceeds 15 percent, the notice to the insured shall indicate the dollar amount of the increase. The insurer may obtain a receipt provided by the United States Postal Service as evidence of mailing such notice or such other evidence of mailing as prescribed or accepted by the United States Postal Service.
(c) The failure of an insurer to comply with the requirements of subsection (b) of this Code section shall entitle the policyholder to purchase, under the same premiums and policy terms and conditions, an additional 30 day period of insurance coverage beyond the termination date of such policy; provided, however, that the policyholder shall tender the premium amount, computed on a pro rata basis, to the insurer on or before the termination date. No provision of this Code section shall be construed as requiring the insurance coverage under a policy to be extended for more than 30 days from the termination date stated in such policy. An insurer shall not be subject to any other penalty for the failure to comply with the requirements of subsection (b) of this Code section unless the Commissioner finds, after a hearing, that such noncompliance by the insurer has occurred with such frequency as to indicate a general business practice by the insurer of noncompliance with subsection (b) of this Code section. There shall be no liability on the part of and no cause of action of any nature shall arise against the Commissioner or the Commissioner's employees or against any insurer, its authorized representatives, its agents, its employees, or any firm, person, or corporation furnishing to the insurer information as to reasons for cancellation or nonrenewal for any statement made by any of them and in written notice of cancellation or nonrenewal or in any other communication, oral or written, specifying the reasons for cancellation or nonrenewal or providing information pertaining thereto or for statements made or evidence submitted at any formal or informal hearing conducted in connection therewith.
(d) This Code section shall not apply to policies canceled in accordance with the provisions of Chapter 22 of this title.
(e) Cancellation by the insured shall be accomplished in accordance with Code Section 33-24-44.1.
(f) A notice of cancellation or nonrenewal of a policy of workers' compensation insurance shall be dispatched to the insured as provided in subsection (d) of Code Section 33-24-14 or by certified mail or statutory overnight delivery, return receipt requested, to the last address of record of the insured at least 75 days prior to the termination date of such policy. The workers' compensation insurer shall retain the receipt of mailing provided by the United States Postal Service as evidence of mailing unless such mailing was accomplished as provided in subsection (d) of Code Section 33-24-14.
(g) An insurer shall provide a written notice of a reduction in coverage to the named insured no less than 45 days prior to the effective date of the proposed reduction in coverage; provided that such notice shall be in a separate document with the words “NOTICE OF REDUCTION IN COVERAGE” written in all capital letters in at least 12 point type. Such notice shall be delivered to the insured as provided in subsection (d) of Code Section 33-24-14, in person, or by depositing the notice in the United States mail, to be dispatched by at least first-class mail to the last address of record of the insured. A reduction in coverage shall mean a change made by the insurer which results in a removal of coverage, diminution in scope or less coverage, or the addition of an exclusion. Reduction in coverage shall not include any change, reduction, or elimination of coverage made at the request of the insured. The correction of typographical or scrivener's errors or the application of mandated legislative changes shall not be considered a reduction in coverage.
(a) This Code section shall apply only to policies, contracts, or certificates of insurance insuring against loss resulting from sickness or from bodily injury or death by accident, or both, or any contract to furnish ambulance service in the future governed by the provisions of Chapters 15, 20, 21, 30, and 42 of this title.
(b) No insurer shall refuse to renew a policy to which this Code section applies unless a written notice of nonrenewal is mailed or delivered in person to the group policyholder. Such notice stating the time when nonrenewal will be effective, which shall not be less than 60 days from the date of mailing or delivery of such notice of nonrenewal or such longer period as may be provided in the contract or by statute, shall be delivered as provided in subsection (d) of Code Section 33-24-14 in person or by depositing the notice in the United States mail to be dispatched by at least first-class mail to the last address of record of the group policyholder and receiving the receipt provided by the United States Postal Service or such other evidence of mailing as prescribed or accepted by the United States Postal Service.
(c) Notice to the group policyholder shall not be required by this Code section when a group or blanket accident and sickness policy is canceled by an insurer for nonpayment of any premium at the expiration of the grace period as required by Code Section 33-30-4 or when the group policyholder has given any required written notice of termination to the insurer.
(d) Notice by the insurer to the group members shall be required by this Code section when a group or blanket accident and sickness policy is canceled or not renewed, within 14 days of the expiration of the grace period, by an insurer for nonpayment of any premium as required by Code Section 33-30-4. Such notice of cancellation shall be delivered to each group member affected either in person or by depositing the notice in the United States mail to be dispatched by at least first-class mail to the last address of record of the group member and receiving the receipt provided by the United States Postal Service, or such other evidence of mailing as prescribed or accepted by the United States Postal Service. Such notice shall be accompanied by a statement of the enrollee's continuation or conversion rights under Code Section 33-24-21.1 or 33-24-21.2 or any other applicable Code section. If such group or blanket accident or sickness policy is canceled or not renewed due to intentional nonpayment of premium by the group policyholder, the group policyholder shall have the duty to notify the enrollees of termination of coverage no later than 14 days after the expiration of the grace period provided in Code Section 33-30-4.
(e) A notice of termination of a policy to which subsection (b) of this Code section applies shall be mailed or delivered to the group policyholder and to each employer group or subgroup insured under the policy not less than 60 days prior to the effective date of the termination of the policy. A notice of termination shall be mailed or delivered in the same manner provided in subsection (b) of this Code section for a notice of nonrenewal.
Any surety insurance company or any other corporation or company that may do a surety insurance business, incorporated and organized under the laws of this state or of any other state or a foreign country for the purpose of transacting the business of surety insurance, which has complied with all requirements of law for license to transact business in this state, upon proper proof of compliance and upon production of evidence of solvency and credit satisfactory to the judge, head of the department, or other officer or officers authorized to approve and accept bonds, may be accepted as surety upon the bond of any person, company, or corporation required by law to execute bonds in lieu of any surety or sureties otherwise required by law. Any surety insurance company or other company doing a surety insurance business may be released from its liability on the bond on the same terms and conditions as are prescribed by law for the release of individuals, it being the purpose of this Code section to enable the companies and corporations doing a surety insurance business to become sureties on all bonds required by law to be taken with all the rights and subject to all the liabilities of individual sureties.
It shall be lawful for any party of whom a bond, undertaking, or other obligation is required to agree with his surety or sureties for the deposit of any or all moneys and assets for which he and his surety or sureties are or may be held responsible with a bank, savings bank, safe-deposit, or trust company authorized by law to do business as such or with such other depository as approved by the court or a judge of the court, if the deposit is otherwise proper, for the safekeeping of the moneys or assets. The agreement shall prevent the withdrawal of the moneys or assets or any part of the moneys or assets without the written consent of the surety or sureties or an order of the court or a judge of the court made on notice to the surety or sureties as the court or judge may direct; provided, however, that the agreement shall not in any manner release from or change the liability of the principal or sureties as established by the terms of the said bond.
(a) Any domestic or foreign insurance company, fidelity insurance company, or surety company which has qualified to transact business within this state may contract to become surety, in an amount not to exceed $1,000.00 each, for any guaranteed arrest bond certificates issued by an automobile club or association or by a trucking club or association by filing with the Commissioner a certificate thus to become surety.
(b) The certificate shall be in a form which shall be prescribed by the Commissioner and shall state:
(1) The name and address of the automobile club or clubs or automobile association or associations or of the trucking club or clubs or trucking association or associations issuing the guaranteed arrest bond certificates of which the company undertakes to be surety; and
(2) The unqualified obligations of the company undertaking to become surety to pay the fine or forfeiture, in an amount not to exceed $1,000.00, of any person who fails to make an appearance to answer to the charges for which said guaranteed arrest bond certificate is posted.
(c) Any guaranteed arrest bond certificate to which an insurance, fidelity insurance, or surety company has become surety, as provided for in this Code section, shall, when posted by the person whose signature appears thereon, be accepted, in lieu of cash bail or other bond in an amount not to exceed $1,000.00, as a bail bond to guarantee the appearance of the person in any court in this state, including all municipal courts in this state, at such time as may be required by the court when the person is arrested for violation of any motor vehicle law of this state, including, but not limited to, violations regarding the size, weight, or height of vehicles, improperly licensed vehicles, improper identification devices, safety infractions, and faulty equipment or pollution control devices, or any motor vehicle ordinance of any municipality in this state except for the offense of driving under the influence of intoxicating liquors or drugs or for any felony. Any guaranteed arrest bond certificates so posted as bail bond in any court in this state shall be subject to the forfeiture and enforcement provisions with respect to bail bonds in criminal cases as provided by law. Any guaranteed arrest bond certificate posted as a bail bond in any municipal court of this state shall be subject to the forfeiture and enforcement provisions of the charter or ordinance of the particular municipality pertaining to bail bonds.
(a) A municipal corporation, a county, or any other political subdivision of this state is authorized in its discretion to secure and provide insurance to cover liability for damages on account of bodily injury or death resulting from bodily injury to any person or for damage to property of any person, or for both arising by reason of ownership, maintenance, operation, or use of any motor vehicle by the municipal corporation, county, or any other political subdivision of this state under its management, control, or supervision, whether in a governmental undertaking or not, and to pay premiums for the insurance coverage.
(b) The sovereign immunity of local government entities for a loss arising out of claims for the negligent use of a covered motor vehicle is waived as provided in Code Section 36-92-2. Whenever a municipal corporation, a county, or any other political subdivision of this state shall purchase the insurance authorized by subsection (a) of this Code section to provide liability coverage for the negligence of any duly authorized officer, agent, servant, attorney, or employee in the performance of his or her official duties in an amount greater than the amount of immunity waived as in Code Section 36-92-2, its governmental immunity shall be waived to the extent of the amount of insurance so purchased. Neither the municipal corporation, county, or political subdivision of this state nor the insuring company shall plead governmental immunity as a defense; and the municipal corporation, county, or political subdivision of this state or the insuring company may make only those defenses which could be made if the insured were a private person.
(c) The municipal corporation, county, or any other political subdivision of this state shall be liable for damages in excess of the amount of immunity waived as provided in Code Section 36-92-2 which are sustained only while the insurance is in force and only to the extent of the limits or the coverage of the insurance policy.
(d) If a verdict rendered by the jury exceeds the limits of the applicable insurance, the court shall reduce the amount of said judgment or award to a sum equal to the applicable limits stated in the insurance policy but not less than the amount of immunity waived as provided in Code Section 36-92-2.
(e) Premiums on the insurance authorized by subsection (a) of this Code section shall be paid from the general funds of the municipal corporation, county, or political subdivision.
(a) For the purposes of this Code section, “direct response insurance business” means the solicitation, delivery, and servicing of group or individual life or accident and sickness insurance policies in this state, other than franchise insurance policies or other policies sold through a third party, travel life or accident insurance policies, or life or accident and sickness insurance policies sold or issued in connection with an extension of credit, under a general mode of business in which there is no face-to-face contact between the insured and an agent or other representative of the insurer.
(b) Any foreign or alien insurer who conducts a direct response insurance business in this state shall:
(1) Maintain a registered agent for service of process who is a resident of this state; and
(2) Maintain an office within this state, accept collect telephone calls from its direct response insurance policyholders, or provide toll free telephone service to such policyholders in order to provide information and assistance to such policyholders and their beneficiaries.
(c) Any insurer providing collect or toll free telephone service pursuant to this Code section shall notify its direct response insurance policyholders in writing of the applicable telephone number or numbers and of any subsequent changes in the telephone number or numbers within 90 days of such change.
(a) As used in this Code section, the term:
(1) “Capper,” “runner,” or “steerer” means a person who receives a pecuniary benefit from a practitioner or health care service provider, whether directly or indirectly, to solicit, procure, or attempt to procure a client, patient, or customer at the direction or request of, or in cooperation with, a practitioner or health care service provider whose purpose is to obtain benefits under a contract of insurance or to assert a claim against an insured or an insurer for providing services to the client, patient, or customer. Capper, runner, or steerer shall not include:
(A) Any insurance company or agent or employee thereof who provides referrals or recommendations to its insureds; or
(B) A practitioner or health care service provider who procures clients, patients, or customers through the use of public media or by referrals or recommendations from other practitioners or health care service providers.
(2) “Practitioner” means an attorney, health care professional, owner or partial owner of a health care practice or facility, or any person employed or acting on behalf of any of the individuals in this paragraph.
(3) “Public media” means telephone directories, professional directories, newspapers and other periodicals, radio and television, billboards, and mailed or electronically transmitted written communications that do not involve in-person contact with a specific prospective client, patient, or customer.
(b) Except as provided for in paragraph (5) of subsection (a) of Code Section 50-18-72, it is unlawful for any person in an individual capacity or in a capacity as a law enforcement officer, law enforcement records staff member, wrecker services staff member, emergency staff member, physician, hospital employee, or attorney to solicit, release, or sell any information relating to the parties of a motor vehicle collision for personal financial gain. This subsection shall not apply to mass public media advertisement and solicitation.
(c) It is unlawful for:
(1) Any person in an individual capacity or in a capacity as a public or private employee or any firm, corporation, partnership, or association to act as a capper, runner, or steerer for any practitioner or health care service provider. This paragraph shall not prohibit an attorney or health care provider from making a referral and receiving compensation as is permitted under applicable professional rules of conduct; and
(2) Any practitioner or health care service provider to compensate or give anything of value to a person acting as a capper, runner, or steerer. It is also unlawful for any capper, runner, or steerer to recommend or secure a practitioner's or health care service provider's employment by a client, patient, or customer if such practitioner or health care service provider obtains or intends to obtain benefits under a contract of insurance or asserts a claim against an insured or an insurer for providing services to the client, patient, or customer.
(d) Any natural person convicted of a violation of this Code section shall, on the first offense, be guilty of a misdemeanor and, upon conviction thereof, shall be punished by imprisonment of not less than 30 days and a fine not to exceed $1,000.00. Any natural person convicted of a second or subsequent violation of this Code section shall be guilty of a felony and, upon conviction thereof, shall be punished by imprisonment of not more than ten years and by a fine of not more than $100,000.00 per violation.
(a) Notwithstanding any provisions of Code Sections 33-1-3, 33-1-5, and 33-24-17 and Chapter 20 of this title or any other provisions of this title which might be construed to the contrary, whenever an accident and sickness insurance policy, subscriber contract, or self-insured health benefit plan, by whatever name called, which is issued or administered by a person licensed under this title provides that any of its benefits are payable to a participating or preferred provider of health care services licensed under the provisions of Chapter 4 of Title 26 or of Chapter 9, 11, 30, 34, 35, or 39 of Title 43 or of Chapter 11 of Title 31 for services rendered, the person licensed under this title shall be required to pay such benefits either directly to any similarly licensed nonparticipating or nonpreferred provider who has rendered such services, has a written assignment of benefits, and has caused written notice of such assignment to be given to the person licensed under this title or jointly to such nonparticipating or nonpreferred provider and to the insured, subscriber, or other covered person; provided, however, that in either case the person licensed under this title shall be required to send such benefit payments directly to the provider who has the written assignment. When payment is made directly to a provider of health care services as authorized by this Code section, the person licensed under this title shall give written notice of such payment to the insured, subscriber, or other covered person.
(b) Nothing contained in this Code section shall be deemed to prohibit the payment of different levels of benefits or from having differences in coinsurance percentages applicable to benefit levels for services provided by participating or preferred providers and nonparticipating or nonpreferred providers as otherwise authorized under the provisions of Code Sections 33-30-20 through 33-30-27.
(c) Payments made by a person licensed under this title under subsection (a) of this Code section to a nonparticipating or nonpreferred provider or jointly to the provider and the insured, subscriber, or other covered person shall discharge such person's obligation with respect to the amount so paid.
(d) The provisions of this Code section shall not apply to credit insurance, disability income insurance, or limited accident and sickness policies such as hospital indemnity policies, specified disease policies, limited accident policies, or similar limited policies.
(a) Any health insurer under this title, including a group health plan, as defined in Section 607(1) of the federal Employee Retirement Income Security Act of 1974, 1 is prohibited from considering the availability or eligibility for medical assistance in this or any other state under 42 U.S.C. 1396(a), Section 1902 of the Social Security Act, herein referred to as Medicaid, when considering eligibility for coverage or making payments under its plan for eligible enrollees, subscribers, policyholders, or certificate holders.
(b) To the extent that payment for covered expenses has been made under the state Medicaid program for health care items or services furnished to an individual, in any case where a third party has a legal liability to make payments, the state is considered to have acquired the rights of the individual to payment by any other party for those health care items or services.
(c) An insurer shall not deny enrollment of a child under the health plan of the child's parent on the ground that the child was born out of wedlock, is not claimed as a dependent on the parent's federal income tax return, or does not reside with the parent or in the insurer's service area.
(d) Where a child has health coverage under this title through an insurer of a noncustodial parent, the insurer shall:
(1) Provide such information to the custodial parent as may be necessary for the child to obtain benefits through that coverage;
(2) Permit the custodial parent or the provider, with the custodial parent's approval, to submit claims for covered services without the approval of the noncustodial parent; and
(3) Make payments on claims submitted in accordance with paragraph (2) of this subsection directly to the custodial parent, the provider, or the state Medicaid agency.
(e) Where a parent is required by a court or administrative order to provide health coverage for a child and the parent is eligible for family health coverage, the insurer shall be required:
(1) To permit the parent to enroll, under the family coverage, a child who is otherwise eligible for the coverage without regard to any enrollment season restrictions;
(2) If the parent is enrolled but fails to make application to obtain coverage for the child, to enroll the child under the family coverage upon application of the child's other parent, the state agency administering the Medicaid program, or the state agency administering 42 U.S.C. Sections 651 through 669, the child support enforcement program; and
(3) Not to disenroll or eliminate coverage of any child unless the insurer is provided satisfactory written evidence that:
(A) The court or administrative order is no longer in effect; or
(B) The child is or will be enrolled in comparable health coverage through another insurer which will take effect not later than the effective date of disenrollment.
(f) An insurer may not impose requirements on a state agency which has been assigned the rights of an individual eligible for medical assistance under Medicaid and covered for health benefits from the insurer that are different from requirements applicable to an agent or assignee of any other individual so covered.
(g) In any case in which a group health insurance plan provides coverage for dependent children of participants or beneficiaries, the plan shall provide benefits to dependent children placed with participants or beneficiaries for adoption under the same terms and conditions as apply to the natural, dependent children of the participants and beneficiaries, irrespective of whether the adoption has become final.
(h) A group health plan may not restrict coverage under the plan for any dependent child adopted by a participant or beneficiary, or placed with a participant or beneficiary for adoption, solely on the basis of a preexisting condition of the child at the time that the child would otherwise become eligible for coverage under the plan, if the adoption or placement for adoption occurs while the participant or beneficiary is eligible for coverage under the plan.
1 29 U.S.C.A. § 1167(1).
(a) It is the intent of the General Assembly to encourage health care cost containment while preserving the quality of care offered to citizens of this state. The General Assembly finds that there is an increasing number of health insurance benefit providers which require a referral from a primary care physician to a dermatologist as a condition of the payment of benefits to an insured patient. The General Assembly finds that such a requirement as it relates to dermatological services may block unfairly a patient's choice of direct access to providers of health care services and may not be in the public interest.
(b) As used in this Code section, the term:
(1) “Dermatological services” means services ordinarily and customarily rendered by a physician specializing in the practice of dermatology.
(2) “Health benefit policy” means any individual or group plan, policy, or contract for health care services issued, delivered, issued for delivery, or renewed in this state by a health care corporation, health maintenance organization, accident and sickness insurer, fraternal benefit society, or similar entity.
(c) No health benefit policy which is issued, delivered, issued for delivery, or renewed in this state shall require as a condition to the coverage of dermatological services that an enrollee, subscriber, or insured first obtain a referral from a primary care physician, as such term is defined by the group plan, policy, or contract for health care services.
(a) As used in this Code section, the term:
(1) “Benefit provider” means any insurer, health maintenance organization, health benefit plan, preferred provider organization, employee benefit plan, or other entity which provides for payment or reimbursement of health care expenses, health care services, disability payments, lost wage payments, or any other benefits under a policy of insurance or contract with an individual or group.
(2) “Injured party” means a person who alleges that he or she has been injured by the acts or omissions of a third party and who has received benefits from a benefit provider. This term also includes the personal representative of the estate of such person.
(b) In the event of recovery for personal injury from a third party by or on behalf of a person for whom any benefit provider has paid medical expenses or disability benefits, the benefit provider for the person injured may require reimbursement from the injured party of benefits it has paid on account of the injury, up to the amount allocated to those categories of damages in the settlement documents or judgment, if:
(1) The amount of the recovery exceeds the sum of all economic and noneconomic losses incurred as a result of the injury, exclusive of losses for which reimbursement may be sought under this Code section; and
(2) The amount of the reimbursement claim is reduced by the pro rata amount of the attorney's fees and expenses of litigation incurred by the injured party in bringing the claim.
(c) In the settlement of any claim for personal injury, under circumstances where it is claimed that the amount of the recovery does not exceed the sum of all economic and noneconomic losses incurred as a result of the injury, a benefit provider which has paid benefits to or on behalf of the injured person may seek a declaratory judgment pursuant to Code Section 9-4-2 as to what extent it may equitably share in said settlement. If the court determines said settlement does not fully and completely compensate the injured party, the benefit provider has no right of reimbursement.
(d) In the trial of any case for personal injury submitted to a court or jury, the trier of fact may allocate the amounts paid among the categories of damages actually sought by the plaintiff at trial, and it shall be conclusively presumed that such allocation by the trier of fact is reasonable.
(e) Subrogation for medical expenses and disability payments by a benefit provider against a person at fault for injury is prohibited and no defendant or liability insurance carrier shall include any insurer seeking reimbursement under subsection (b) of this Code section as a copayee on any check or draft in payment of a settlement or judgment.
(f) No benefit provider shall be entitled to reduce the amount for which it is liable under an insured party's coverage for liability, uninsured motorist, disability, medical payments, or other benefits as a setoff against any claim for reimbursement under subsection (b) of this Code section, nor shall any benefit provider be entitled to withhold or set off insurance benefits as a means of enforcing a claim for reimbursement. Nothing in this subsection shall be deemed to prohibit the coordination of benefits between or among benefit providers.
(g) When a recovery for personal injury is sought from a third party by or on behalf of a person for whom any benefit provider has paid medical expenses or disability benefits, the person asserting the claim for recovery against the third party shall provide notice of the existence of the claim, by certified mail or statutory overnight delivery unless some other form of notice is agreed to by the designated recipient of the notice, to any benefit provider which the person asserting the claim has reason to believe has paid benefits relating to the injury for which the injured party seeks a recovery. This notice shall be provided no later than ten days prior to the consummation of any settlement or commencement of any trial unless a shorter notice period is agreed to by the designated recipient of the notice and shall include a request for information regarding the existence of any claim by a benefit provider and an itemization of payments for which the benefit provider seeks reimbursement including the names of payees, the dates of service or payment or both, and the amounts thereof.
(h) If the notice required in subsection (g) of this Code section is provided, a claim for reimbursement under subsection (b) of this Code section is enforceable against an injured party only to the extent that such person has actual notice prior to the consummation of a settlement or commencement of trial, by certified mail or statutory overnight delivery or other form of notice if agreed to by the designated recipient of the notice, of the claim of the benefit provider for reimbursement including a specific itemization of payments for which the benefit provider seeks reimbursement, including the names of payees, the dates of service or payment or both, and the amounts thereof. Nothing contained in this subsection shall prohibit the supplementation of a claim prior to the consummation of a settlement or judgment, except that any supplemental claims shall be subject to the notice requirements contained in this subsection.
(i) If the notice required in subsection (g) of this Code section is not provided, then subsection (h) of this Code section shall not apply, and a claim for reimbursement under subsection (b) of this Code section is enforceable subject to the other provisions of this Code section.
(j) No benefit provider contracts or policies containing or incorporating provisions in conflict with this Code section may be issued in this state, and no policy or contract provisions for subrogation or reimbursement in conflict with this Code section may be enforced by a benefit provider with regard to claims or injuries.
(k) Any settlement which is subject to this Code section that contains a confidentiality provision as to any terms of the settlement which are necessary to a proceeding under this Code section shall be unenforceable as to the disclosure of such required information.
(l) This Code section shall not apply to the rights of the Department of Community Health to recover under Article 7 of Chapter 4 of Title 49, nor shall it affect the subrogation rights and obligations provided in Code Section 34-9-11.1.
(a) As used in this Code section, the term:
(1) “At risk for ovarian cancer” means:
(A) Having a family history:
(i) With one or more first or second-degree relatives with ovarian cancer;
(ii) Of clusters of women relatives with breast cancer;
(iii) Of nonpolyposis colorectal cancer; or
(B) Testing positive for BRCA1 or BRCA2 mutations.
(2) “Health benefit policy” means any individual or group plan, policy, or contract for health care services issued, delivered, issued for delivery, executed, or renewed in this state, including, but not limited to, those contracts executed by the state on behalf of state employees under Article 1 of Chapter 18 of Title 45, by an insurer.
(3) “Insurer” means an accident and sickness insurer, fraternal benefit society, health care corporation, health maintenance organization, preferred provider organization, provider sponsored health care corporation, managed care entity, or any similar entity authorized to issue contracts under this title or to provide health benefit policies.
(4) “Surveillance tests” means annual screening using:
(A) CA-125 serum tumor marker testing;
(B) Transvaginal ultrasound; and
(C) Pelvic examination.
(b) Every health benefit policy that is delivered, issued, issued for delivery, executed, or renewed in this state or approved for issuance or renewal in this state by the Commissioner shall provide coverage for surveillance tests for women age 35 and over at risk for ovarian cancer.
(c) The benefits provided in this Code section shall be subject to the same annual deductibles or coinsurance established for all other covered benefits within a given health benefit policy.
(d) A physician who assesses a patient for ovarian cancer and such patient is at risk for ovarian cancer is encouraged to advise such patient of the availability of surveillance tests in accordance with the practices of the profession generally under similar conditions and like surrounding circumstances.
(a) As used in this Code section, the term:
(1) “Health benefit policy” means any individual or group plan, policy, or contract for health care services issued, delivered, issued for delivery, executed, or renewed by an insurer in this state, including, but not limited to, those contracts executed by the Department of Community Health pursuant to paragraph (1) of subsection (d) of Code Section 31-2-4. The term “health benefit policy” does not include the following limited benefit insurance policies: accident only, CHAMPUS supplement, dental, disability income, fixed indemnity, long-term care, medicare supplement, specified disease, vision, and nonrenewable individual policies written for a period of less than six months.
(2) “Insurer” means any person, corporation, or other entity authorized to provide health benefit policies under this title.
(b) Every health benefit policy shall provide coverage for colorectal cancer screening, examinations, and laboratory tests in accordance with guidelines and recommendations established by the American Cancer Society, in consultation with the American College of Gastroenterology and the American College of Radiology, for the ages, family histories, and frequencies referenced in such guidelines and recommendations and deemed appropriate by the attending physician after conferring with the patient.
(c) The benefits provided in this Code section shall be subject to the same annual deductibles or coinsurance established for all other covered benefits within a given health benefit policy.
(a) This Code section shall be known and may be cited as the “Georgia Telehealth Act.”
(b) As used in this Code section, the term:
(1) “Distant site” means a site at which a health care provider legally allowed to practice in this state is located while providing health care services by means of telemedicine or telehealth, which may include the home of the health care provider.
(2) “Health benefit policy” means any individual or group plan, policy, or contract for health care services issued, delivered, issued for delivery, executed, or renewed in this state, including, but not limited to, any health insurance plan established under Article 1 of Chapter 18 of Title 45 or under Article 7 of Chapter 4 of Title 49.
(3) “Insurer” means an accident and sickness insurer, fraternal benefit society, hospital service corporation, medical service corporation, health care corporation, health maintenance organization, provider sponsored health care corporation, managed care entity, or any similar entity authorized to issue contracts under this title or to provide health benefit policies.
(3.1) “Interprofessional consultation” means an assessment and management service in which a patient's health care provider seeks treatment advice from a consulting provider with specific specialty expertise to assist the patient's health care provider in diagnosing or treating the patient.
(4) “Originating site” means a site at which a patient is located at the time health care services are provided to him or her by means of telemedicine or telehealth, which may include a patient's home, workplace, or school; provided, however, that notwithstanding any other provision of law, insurers and providers may agree to alternative siting arrangements deemed appropriate by the parties.
(5) “Store and forward transfer” means the transmission of a patient's medical information either to or from an originating site or to or from the provider at the distant site, but does not require the patient being present nor must it be in real time.
(6) “Telehealth” means the use of information and communications technologies, including, but not limited to, telephones, remote patient monitoring devices or other electronic means which support clinical health care, provider consultation, patient and professional health related education, public health, and health administration.
(7) “Telemedicine” means a form of telehealth which is the delivery of clinical health care services by means of real-time two-way audio, visual, or other telecommunications or electronic communications, including the application of secure video conferencing or store and forward transfer technology to provide or support health care delivery, which facilitate the assessment, diagnosis, consultation, treatment, education, care management, and self-management of a patient's health care by a health care provider practicing within his or her scope of practice as would be practiced in-person with a patient as prescribed by applicable federal and state laws, rules, and regulations, and legally allowed to practice in this state, while such patient is at an originating site and the health care provider is at a distant site. Such term includes audio-only telephone only when no other means of real-time two-way audio, visual, or other telecommunications or electronic communications are available to the patient due to lack of availability of such real-time two-way audio, visual, or other telecommunications or electronic communications, due to lack of adequate broadband access, or because the use of other means of real-time two-way audio, visual, or other telecommunications or electronic communications is infeasible, impractical, or otherwise not medically advisable, as determined by the health care provider providing telemedicine services to the patient or as determined by another health care provider with an existing relationship with the patient.
(c) It is the intent of the General Assembly to mitigate geographic discrimination in the delivery of health care by recognizing the application of and payment for covered medical care provided by means of telehealth, provided that such services are provided by a physician or by another health care practitioner or professional acting within the scope of practice of such health care practitioner or professional and in accordance with the provisions of Code Section 43-34-31.
(d) Each insurer proposing to issue a health benefit policy shall provide coverage for the cost of health care services provided through telehealth or telemedicine as directed through regulations promulgated by the department.
(e) An insurer shall not exclude a service for coverage solely because the service is provided through telemedicine services and is not provided through in-person consultation or contact between a health care provider and a patient for services appropriately provided through telemedicine services.
(f) No insurer shall require an in-person consultation or contact before a patient may receive telemedicine services from a health care provider, except for the purposes of initial installation, setup, or delivery of in-home telehealth devices or services, or as otherwise required by state or federal law, rule, or regulation.
(g) An insurer shall reimburse the treating provider or the consulting provider for the diagnosis, consultation, or treatment of the insured delivered through telemedicine services on the same basis and at least at the rate that the insurer is responsible for coverage for the provision of the same service through in-person consultation or contact; provided, however, that nothing in this subsection shall require (1) a health care provider or telemedicine company to accept more reimbursement than they are willing to charge or (2) an insurer to pay for a telemedicine service provided through an audio-only call for any service other than mental or behavioral health services. Payment for telemedicine interactions shall include reasonable compensation to the originating or distant site for the transmission cost incurred during the delivery of health care services; provided, however, that this shall not require the insurer to include payment for transmission costs if the originating or distant site is a home.
(h) If a treating provider obtains interprofessional consultation from a consulting provider for a patient for whom the treating provider conducted an examination through telemedicine services, an insurer shall not require the consulting provider to conduct, either in-person or through telemedicine services, an examination of such patient in order to receive reimbursement, unless such examination by the consulting provider would be required for the provision of the same services when the initial examination of the patient by the treating provider was conducted through in-person consultation or contact.
(i) No insurer shall impose any deductible or annual or lifetime dollar maximum on coverage for telemedicine services other than a deductible or annual or lifetime dollar maximum that applies in the aggregate to all items and services covered under the policy, or impose upon any person receiving benefits pursuant to this Code section any copayment, coinsurance, or deductible amounts, or any policy year, calendar year, lifetime, or other durational benefit limitation or maximum for benefits or services, that is not equally imposed upon all terms and services covered under the health benefit policy.
(j) No insurer shall require its insureds to use telemedicine services in lieu of in-person consultation or contact.
(k) On and after January 1, 2020, every health benefit policy that is issued, amended, or renewed shall include payment for services that are covered under such health benefit policy and are appropriately provided through telehealth in accordance with Code Section 43-34-31, this Code section, and generally accepted health care practices and standards prevailing in the applicable professional community at the time the services were provided.
(l) No insurer shall impose any type of utilization review on telemedicine services unless such type of utilization review is imposed when the same services are provided through in-person consultation or contact.
(m) No insurer shall restrict coverage of telehealth or telemedicine services to services provided by a particular vendor, or other third party, or services provided through a particular electronic communications technology platform; provided, however, that nothing in this Code section shall require an insurer to cover any telehealth or telemedicine services provided through an electronic communications technology platform that does not comply with applicable state and federal privacy laws.
(n) No insurer shall place any restrictions on prescribing medications through telemedicine that are more restrictive than what is required under applicable state and federal laws for prescribing medications through in-person consultation or contact.
(o) A health care provider shall maintain documentation of each health care service provided through telemedicine in a manner that is at least as extensive and thorough as when the health care service is provided through in-person consultation or contact and, upon request, make such documentation available in accordance with applicable state and federal law.
(p) Nothing in this Code section shall be construed to limit, alter, or expand the scope of practice, standard of care, prescriptive authority, or supervision requirements for health care providers or privacy rights, other than as provided in applicable federal law and state laws, rules, and regulations.
(a) As used in this Code section, the term:
(1) “Cost sharing requirements” includes co-payments, coinsurance, deductibles, and any other amounts paid by the covered person for a prescription dispensed by a licensed retail pharmacy.
(2) “Health benefit policy” means any individual or group plan, policy, or contract for health care services issued, delivered, issued for delivery, executed, or renewed by an insurer in this state. The term “health benefit policy” does not include the following limited benefit insurance policies: accident only, CHAMPUS supplement, dental, disability income, fixed indemnity, long-term care, Medicaid, medicare supplement, specified disease, vision, self-insured plans, and nonrenewable individual policies written for a period of less than six months.
(3) “Insurer” means any person, corporation, or other entity authorized to provide health benefit policies under this title.
(b) A health benefit policy that provides coverage for intravenously administered or injected chemotherapy for the treatment of cancer shall provide coverage for orally administered chemotherapy for the treatment of cancer on a basis no less favorable than the intravenously administered or injected chemotherapy regardless of the formulation or benefit category determination by the insurer.
(c) An insurer providing a health benefit policy and any participating entity through which the insurer offers health services shall not:
(1) Vary the terms of any health benefit policy, to avoid compliance with this Code section;
(2) Provide any incentive, including, but not limited to, a monetary incentive, or impose treatment limitations to encourage a covered person to accept less than the minimum protections available under this Code section;
(3) Penalize a health care practitioner or reduce or limit the compensation of a health care practitioner for recommending or providing services or care to a covered person as required under this Code section;
(4) Provide any incentive, including, but not limited to, a monetary incentive, to induce a health care practitioner to provide care or services that do not comply with this Code section; or
(5) Change the classification of any intravenously administered or injected chemotherapy treatment or increase the amount of cost sharing applicable to any intravenously administered or injected chemotherapy, in order to achieve compliance with this Code section.
(d) An insurer that limits the total amount paid by a covered person through all cost sharing requirements to no more than $200.00 per filled prescription for any orally administered chemotherapy shall be deemed to be in compliance with this Code section.
(a) As used in this Code section, the term:
(1) “Insurer” means an accident and sickness insurer, fraternal benefit society, health care corporation, health maintenance organization, or any similar entity and any self-insured health care plan not subject to the exclusive jurisdiction of the Employee Retirement Income Security Act of 1974, 29 U.S.C. Section 1001, et seq.
(2) “Policy” means any health care plan, subscriber contract, or accident and sickness plan, contract, or policy by whatever name called other than a disability income policy, a long-term care insurance policy, a medicare supplement policy, a health insurance policy written as a part of workers' compensation equivalent coverage, a specified disease policy, a credit insurance policy, a hospital indemnity policy, a limited accident policy, or other type of limited accident and sickness policy.
(b) Notwithstanding any provisions of this title which might be construed to the contrary, all individual basic hospital or medical expense, major medical, or comprehensive medical expense insurance policies issued, delivered, issued for delivery, or renewed in this state shall provide that once an individual has been accepted for coverage, his or her coverage cannot be terminated by the insurer due solely to his or her individual claims experience.
(c) The Commissioner shall promulgate appropriate procedures and guidelines by rules and regulations to implement the provisions of this Code section after notification and review of such regulation by the appropriate standing committees of the House of Representatives and Senate in accordance with the requirements of applicable law. Nothing in this Code section shall be construed to prohibit the Commissioner and any insurers with a desire to do so from mutually agreeing on procedures, rules, regulations, and guidelines and from implementing the provisions of this Code section on a voluntary basis before April 1, 1996.
(a) As used in this Code section, the term:
(1) “Dental insurer” means any person, firm, corporation, joint venture, or other similar business entity that offers dental health benefit plans in consideration of periodic payments.
(2) “Fully insured” means any health policy in which all benefits payable are guaranteed under a contract or policy on insurance issued by an insurer authorized to transact business in this state.
(3) “Health policy” means any health care plan, dental plan, subscriber contract, or other policy plan or contract by whatever name called, including without limitation any health benefit plan established pursuant to Article 1 of Chapter 18 of Title 45; other than a disability income policy, a long-term care insurance policy, a medicare supplement policy, a health insurance policy written as a part of workers' compensation equivalent coverage, a specified disease policy, a credit insurance policy, a hospital indemnity policy, a limited accident policy, or other type of limited accident and sickness policy.
(4) “Insurer” means a health care corporation, health maintenance organization, preferred provider organization, dental insurer, accident and sickness insurer, fraternal benefit society, health care corporation, health maintenance corporation, provider sponsored health care corporation, any similar entity authorized to issue contracts under this title, or the plan administrator of any health benefit plan established pursuant to Article 1 of Chapter 18 of Title 45.
(b) Each insurer writing a health policy in this state shall provide subscribers of such policies with an insurance identification card, which shall, at a minimum, contain the following preprinted, not handwritten, information:
(1) The subscriber's name and:
(A) The names of all other persons included under the subscriber's coverage; or
(B) If a separate card is issued for each person included under the subscriber's coverage, the name of the covered person for whom such card is issued may be listed in lieu of the information required by subparagraph (A) of this paragraph;
(2) The subscriber's identification number;
(3) The group number, if applicable;
(4) The effective date of coverage;
(5) The name of the subscriber's primary care physician, if applicable;
(6) The name of the subscriber's insurer, the name of the health plan, and the plan type or product name, if applicable;
(7) The address of the office where claims are to be filed;
(8) The insurer's contact phone numbers and the phone number for coverage confirmation and preauthorization, if applicable;
(9) The policy's requirements as to copayments, coinsurance payments, or deductibles, as applicable;
(10) Either the name of the primary hospital and of the laboratory and radiology services to be used or a toll-free or local telephone number for contacting the health plan and obtaining such information. Such a toll-free or local telephone number shall be available to health care providers and consumers to obtain eligibility and coverage information from at least 7:00 A.M. until 9:00 P.M. daily on Monday through Friday, whether staffed by a live person or via an automated phone-line basis; and
(11) If the subscriber's health policy is fully insured, a statement indicating that the subscriber's health policy is regulated by the Commissioner, except that this requirement shall not apply to any licensed group model health maintenance organization with the exclusive medical group contract.
(c) Any insurance identification card which contains the information required by subsection (b) of this Code section in preprinted form may, at the option of the insurer, additionally contain at least such information encoded on a magnetic strip or other electronic memory card.
(d) In addition to the information required by subsection (b) of this Code section, each insurance identification card provided under this Code section shall contain prescription drug coverage information, if applicable. Information provided pursuant to this subsection shall include:
(1) BIN number;
(2) Processor control number, if applicable; and
(3) Pharmacy help desk telephone number and names.
(e) So as to ensure that insurance identification cards issued under this Code section contain accurate and updated information, each insurer shall provide each subscriber with a new insurance identification card whenever any information required to be on the card is changed not later than 60 days after such change becomes effective. If the insurer issues annual renewal cards, it may issue a temporary sticker containing the new information in lieu of issuing a new card prior to the annual renewal date. Such sticker shall be so designed that it can be attached to the existing card.
(f) Insurance identification cards issued by any insurer under this Code section shall not use or display the insured's social security number for any purpose or in any manner on such card.
This Code section and Code Sections 33-24-58.1 and 33-24-58.2 shall be known and may be cited as the “Newborn Baby and Mother Protection Act.”
The General Assembly finds and declares that:
(1) Whereas, until recently health care insurers covered costs of hospital stays of a mother and a newborn until they were discharged by a physician after a consultation with the mother. Now many insurers are refusing payment for a hospital stay that extends beyond 24 hours after an uncomplicated vaginal delivery and 48 hours after a cesarean delivery;
(2) There is sufficient scientific data to question the safety and appropriateness of such early releases from the hospital following delivery, particularly as it relates to the detection of many problems which if undiagnosed may pose life-threatening and costly complications and may require a longer period of observation by skilled personnel;
(3) Guidelines developed by the American Academy of Pediatrics and the American College of Obstetricians and Gynecologists recommend as a minimum that mothers and infants meet certain medical criteria and conditions prior to discharge, and it is unlikely that these criteria and conditions can be met in less than 48 hours following a normal vaginal delivery and 96 hours following a cesarean delivery;
(4) The length of postdelivery inpatient stay should be a clinical decision made by a physician based on the unique characteristics of each mother and her infant, taking into consideration the health of the mother, the health and stability of the baby, the ability and confidence of the mother to care for her baby, the adequacy of support systems at home, and access to appropriate follow-up care; and
(5) Requiring insurers to cover minimum postdelivery inpatient stays will allow identification of early problems with the newborn, prevent disability through appropriate use of metabolic screening, and help ensure that the family is able and prepared to care for the baby at home.
(a) As used in this Code section, the term:
(1) “Attending provider” means:
(A) Pediatricians and other physicians attending the newborn; and
(B) Obstetricians, other physicians, and certified nurse midwives attending the mother.
(2) “Health benefit policy” means any individual or group plan, policy, or contract for health care services issued, delivered, issued for delivery, or renewed in this state, including those contracts executed by the state on behalf of indigents and on behalf of state employees under Article 1 of Chapter 18 of Title 45, by a health care corporation, health maintenance organization, preferred provider organization, accident and sickness insurer, fraternal benefit society, or other insurer or similar entity.
(3) “Insurer” means an accident and sickness insurer, fraternal benefit society, health care corporation, health maintenance organization, or any similar entity authorized to issue contracts under this title and also means any state program funded under Title XIX of the federal Social Security Act, 42 U.S.C.A. Section 1396, et seq., and any other publicly funded state health care program.
(b) Every health benefit policy that provides maternity benefits that is delivered, issued, executed, or renewed in this state or approved for issuance or renewal in this state by the Commissioner shall provide coverage for a minimum of 48 hours of inpatient care following a normal vaginal delivery and a minimum of 96 hours of inpatient care following a cesarean section for a mother and her newly born child in a licensed health care facility.
(c) Any decision to shorten the length of stay to less than that provided under subsection (b) of this Code section shall be made by the attending physician, the obstetrician, pediatrician, or certified nurse midwife after conferring with the mother.
(d) If a mother and newborn are discharged pursuant to subsection (c) of this Code section prior to the postpartum inpatient length of stay provided under subsection (b) of this Code section, coverage shall be provided for up to two follow-up visits, provided that the first such visit shall occur within 48 hours of discharge. Such visits shall be conducted by a physician, a physician assistant, or a registered professional nurse with experience and training in maternal and child health nursing. After conferring with the mother, the health care provider shall determine whether the initial visit will be conducted at home or at the office. Thereafter, he or she shall confer with the mother and determine whether a second visit is appropriate and where it shall be conducted. Services provided shall include, but not be limited to, physical assessment of the newborn, parent education, assistance and training in breast or bottle feeding, assessment of the home support system, and the performance of any medically necessary and appropriate clinical tests. Such services shall be consistent with protocols and guidelines developed by national pediatric, obstetric, and nursing professional organizations for these services.
(e) The Commissioner shall adopt rules and regulations necessary to implement the provisions of this Code section.
(f) Every insurer shall provide notice to policyholders regarding the coverage required by this Code section. The notice shall be in writing and prominently positioned in any of the following literature:
(1) The next mailing to the policyholder;
(2) The yearly informational packets sent to the policyholder; or
(3) Other literature.
In addition to such notice, the insurer shall also provide a notice to the expectant mother within 30 days following the date the insurer first learns that the expectant mother covered by maternity benefits of the health benefit policy is pregnant in substantially the following form:
“NOTICE
The Newborn Baby and Mother Protection Act (Code Section 33-24-58.2 of the O.C.G.A.) requires that health benefit policies which provide maternity benefits must provide coverage for a minimum of 48 hours of inpatient care following a normal vaginal delivery and a minimum of 96 hours of inpatient care following a cesarean section for a mother and her newborn child. The care must be provided in a licensed health care facility. A decision to shorten the length of stay may be made only by the attending health care provider after conferring with the mother. If the stay is shortened, coverage must be provided for up to two follow-up visits with specified health care providers with the first visit being within 48 hours after discharge. After conferring with the mother, the health care provider must determine whether the initial visit will be conducted at home or at the office and whether a second visit is appropriate. Specified services are required to be provided at such visits.”
(g) No insurer covered under this Code section shall deselect, terminate the services of, require additional utilization review, reduce capitation payment, or otherwise penalize an attending physician or other health care provider who orders care consistent with the provisions of this Code section. For purposes of this subsection, health care provider shall be defined to include the attending physician, certified nurse midwife, and hospital.
(a) The General Assembly finds and declares that the specialty of obstetrics and gynecology is devoted to health care of women throughout their lifetimes.
(b)(1) As used in this Code section, the term “health benefit policy” means any individual or group plan, policy, or contract for health care services issued, delivered, issued for delivery, or renewed in this state by a health care corporation, health maintenance organization, accident and sickness insurer, fraternal benefit society, or similar entity.
(2) Any accident and sickness policies, plans, or contracts which contain no provisions which require referrals from another physician for coverage of the services of an obstetrician or gynecologist shall not be required to give the notice required in subsection (d) of this Code section.
(c) No health benefit policy which is issued, delivered, issued for delivery, or renewed in this state shall require as a condition to the coverage of services of an obstetrician or gynecologist who is within the health benefit policy network of health care providers that an enrollee, subscriber, or insured first obtain a referral from another physician; provided, however, that the services covered by this subsection shall be limited to those services defined by the published recommendations of the Accreditation Council for Graduate Medical Education for training as an obstetrician or gynecologist, including, but not limited to, diagnosis, treatment, and referral.
(d) Each health benefit policy which is issued, delivered, issued for delivery, or renewed in this state shall disclose to enrollees, subscribers, or insureds, in clear, accurate language, such person's right to direct access to obstetricians and gynecologists as provided in this Code section. Such information shall be disclosed to each such person at the time of enrollment or otherwise first becoming an enrollee, subscriber, or insured, and at least annually thereafter.
(a) As used in this Code section, the term:
(1) “Accident and sickness insurance benefit plan, policy, or contract” means:
(A) An individual accident and sickness insurance policy or contract, as defined in Chapter 29 of this title;
(B) A group or blanket accident and sickness insurance policy or contract, as defined in Chapter 30 of this title;
(C) An individual or group contract of the type issued by a health care plan established under Chapter 20 of this title;
(D) An individual or group contract of the type issued by a health maintenance organization established under Chapter 21 of this title;
(E) An individual or group contract of the type issued by a fraternal benefit society; or
(F) Any similar individual or group accident and sickness benefit plan, policy, or contract.
(2) “Approved clinical trial program for treatment of children's cancer” means a Phase II and III prescription drug clinical trial program in this state, as approved by the federal Food and Drug Administration or the National Cancer Institute for the treatment of cancer that generally first manifests itself in children under the age of 19 and that:
(A)(i) Tests new therapies, regimens, or combinations thereof against standard therapies or regimens for the treatment of cancer in children;
(ii) Introduces a new therapy or regimen to treat recurrent cancer in children; or
(iii) Seeks to discover new therapies or regimens for the treatment of cancer in children which are more cost effective than standard therapies or regimens; and
(B) Has been certified by and utilizes the standards for acceptable protocols established by the:
(i) Pediatric Oncology Group;
(ii) Children's Cancer Group; or
(iii) Commissioner as he or she may otherwise define such term by rule and regulation after due notice, any required hearing, and compliance with any other requirements of applicable law, but only providing for such definition in a manner at least as restrictive as that established in this Code section.
(3) “Routine patient care costs” means those medically necessary costs of blood tests, X-rays, bone scans, magnetic resonance images, patient visits, hospital stays, or other similar costs generally incurred by the insured party in connection with the provision of goods, services, or benefits to dependent children under an approved clinical trial program for treatment of children's cancer which otherwise would be covered under the major medical accident and sickness insurance benefit plan, policy, or contract if such medically necessary costs were not incurred in connection with an approved clinical trial program for treatment of children's cancer. Routine patient care costs specifically shall not include the costs of any clinical trial therapies, regimens, or combinations thereof, any drugs or pharmaceuticals, any costs associated with the provision of any goods, services, or benefits to dependent children which generally are furnished without charge in connection with such an approved clinical trial program for treatment of children's cancer, any additional costs associated with the provision of any goods, services, or benefits which previously have been provided to the dependent child, paid for, or reimbursed, or any other similar costs. It is specifically the intent of this Code section not to relieve the sponsor of a clinical trial program of financial responsibility for accepted costs of such program.
(4) “State health plan” means any health insurance plan established for employees of the state under Article 1 of Chapter 18 of Title 45 or Chapter 4 of Title 49 to provide health care services to state employees and indigents.
(b) Any state health plan or any accident and sickness insurance benefit plan, policy, or contract, by whatever name called, that provides major medical coverage for dependent children and which is issued, delivered, issued for delivery, or renewed in this state shall provide coverage for routine patient care costs incurred in connection with the provision of goods, services, and benefits to such dependent children in connection with approved clinical trial programs for the treatment of children's cancer with respect to those dependent children who:
(1) Are covered dependents under a state health plan or under the major medical coverage of an accident and sickness insurance plan, policy, or contract;
(2) Have been diagnosed with cancer prior to their nineteenth birthday;
(3) Are enrolled in an approved clinical trial program for treatment of children's cancer; and
(4) Are not otherwise eligible for benefits, payments, or reimbursements from any other third party payors or other similar sources.
(c) For purposes of this Code section, any exclusions, reductions, or limitations as to coverages or any cost-sharing arrangements provided for in a state health plan or in an accident and sickness insurance benefit plan, policy, or contract which provides major medical coverage for dependent children and which applies to any benefits, payments, or reimbursements for routine patient care provided to dependent children in connection with generally recognized therapies or regimens for the treatment of children's cancer shall also apply to such benefits, payments, or reimbursements for any dependent child who is enrolled in an approved clinical trial program for treatment of children's cancer.
(d) Except as provided in subsections (b) and (c) of this Code section, nothing in this Code section shall be construed to:
(1) Prohibit a state health plan or an insurer, health care plan, health maintenance organization, fraternal benefit society, or other person from issuing or continuing to issue an accident and sickness insurance benefit plan, policy, or contract which has benefits that are greater than the minimum benefits required by this Code section or from issuing or continuing to issue any accident and sickness insurance plan, policy, or contract which provides benefits which are generally more favorable to the insured than those required by this Code section; or
(2) Change the contractual relations between any insurer, nonprofit corporation, health care plan, health maintenance organization, fraternal benefit society, or other similar person and their insureds or covered dependents by whatever name called.
<For applicability, see Laws 2023, Act 229, § 2.>
(a) Every individual major medical and group health insurance policy, group health insurance plan or policy, and any other form of managed or capitated care plans or policies shall provide coverage for medically necessary equipment, supplies, pharmacologic agents, and outpatient self-management training and education, including medical nutrition therapy, for individuals with insulin-dependent diabetes, insulin-using diabetes, gestational diabetes, and noninsulin-using diabetes who adhere to the prognosis and treatment regimen prescribed by a physician licensed to practice medicine pursuant to Title 43.
(b)(1) Diabetes outpatient self-management training and education as provided for in subsection (a) of this Code section shall be provided by a certified, registered, or licensed health care professional with expertise in diabetes.
(2) The Commissioner shall promulgate rules and regulations after consultation with the Department of Public Health which conform to the standards for diabetes outpatient self-management training and educational services established by the American Diabetes Association for purposes of this Code section.
(3) The Commissioner shall promulgate rules and regulations, relating to standards of diabetes care, after consultation with the Department of Public Health, the American Diabetes Association, and the National Institutes of Health. Such rules and regulations shall be adopted in accordance with the provisions of Code Section 33-2-9.
(c) The benefits provided in this Code section shall be subject to the same annual deductibles or coinsurance established for all other covered benefits within a given policy.
(d) Private third-party payors may not reduce or eliminate coverage due to the requirements of this Code section.
(e) Enforcement of the provisions of this Code section shall be performed by the Commissioner of Insurance.
(a) As used in this Code section, the term “health care insurer” means any insurer which issues, delivers, issues for delivery, or renews an individual or group plan, policy, or contract for health care services issued, delivered, issued for delivery, or renewed in this state by a health care corporation, health maintenance organization, preferred provider organization, accident and sickness insurer, fraternal benefit society, or other insurer or similar entity. It shall not, however, include a policy of insurance designed, advertised, and marketed to supplement basic health care coverage for hospital, medical-surgical, or major medical expenses so long as said supplemental insurance contract provides for payment directly to the insured.
(b) Any other provision of law to the contrary notwithstanding, if a covered person provides in writing to a health care provider, whether the health care provider is a preferred provider or not, that payment for health care services shall be made solely to the health care provider and be sent directly to the health care provider by the health care insurer, and the health care provider certifies to same upon filing a claim for the delivery of health care services, the health care insurer shall make payment solely to the health care provider and shall send said payment directly to the health care provider. This subsection shall not be construed to extend coverages or to require payment for services not otherwise covered.
(a) As used in this Code section, the term “insurer” means an accident and sickness insurer, fraternal benefit society, health care corporation, health maintenance organization, provider sponsored health care corporation, or the plan administrator of any health benefit plan established pursuant to Article 1 of Chapter 18 of Title 45 and includes any entity which administers or processes claims on behalf of any of the foregoing.
(b) Any medical information concerning a patient that was obtained by or released to an insurer from a pharmacy or pharmacist shall be confidential and privileged and may be released by such insurer to a third party for consideration only if such release is specifically authorized by such patient or a person otherwise authorized to act therefor. Any insurer possessing patient medical information which was obtained from a pharmacy or pharmacist shall not release such information to any third party for consideration without the explicit written consent of the patient or a person otherwise authorized to act therefor, which consent was obtained after written notice by the insurer to such patient or person otherwise authorized to act therefor of the purpose of such release, the party or parties to whom the information will be released, and any consideration paid or to be paid to the insurer for such information.
(c) The provisions of subsection (b) of this Code section shall not prohibit the release of medical information by an insurer to a third party for purposes of appropriate medical research without notice to or the written consent of a patient or person authorized to act therefor, provided that such release does not provide any information that identifies a patient, prescriber, pharmacy, or pharmacist, including without limitation any name, address, or telephone number of a patient, prescriber, pharmacy, or pharmacist. Information released in accordance with the provisions of this subsection may be used for appropriate medical research.
(d) Violation of this Code section by any insurer to which any license or certificate of authority has been issued under this title shall constitute an unfair trade practice punishable under Article 1 of Chapter 6 of this title.
(a) As used in this Code section, the term:
(1) “Benefits” means the coverages provided by a health benefit plan for financing or delivery of health care goods or services; but such term does not include capitated payment arrangements under managed care plans.
(2) “Health benefit plan” means any hospital or medical insurance policy or certificate, health care plan contract or certificate, qualified higher deductible health plan, health maintenance organization subscriber contract, any health benefit plan established pursuant to Article 1 of Chapter 18 of Title 45, or any dental or vision care plan or policy, or managed care plan or self-insured plan; but health benefit plan does not include policies issued in accordance with Chapter 31 of this title; disability income policies; or Chapter 9 of Title 34, relating to workers' compensation.
(3) “Insurer” means an accident and sickness insurer, fraternal benefit society, health care corporation, health maintenance organization, provider sponsored health care corporation, or any similar entity and any self-insured health benefit plan, which entity provides for the financing or delivery of health care services through a health benefit plan, the plan administrator of any health plan, or the plan administrator of any health benefit plan established pursuant to Article 1 of Chapter 18 of Title 45 or any other administrator as defined in paragraph (1) of subsection (a) of Code Section 33-23-100.
(b)(1) All benefits under a health benefit plan will be payable by the insurer which is obligated to finance or deliver health care services under that plan upon such insurer's receipt of written or electronic proof of loss or claim for payment for health care goods or services provided. The insurer shall within 15 working days for electronic claims or 30 calendar days for paper claims after such receipt mail or send electronically to the insured or other person claiming payments under the plan payment for such benefits or a letter or electronic notice which states the reasons the insurer may have for failing to pay the claim, either in whole or in part, and which also gives the person so notified a written itemization of any documents or other information needed to process the claim or any portions thereof which are not being paid. Where the insurer disputes a portion of the claim, any undisputed portion of the claim shall be paid by the insurer in accordance with this chapter. When all of the listed documents or other information needed to process the claim has been received by the insurer, the insurer shall then have 15 working days for electronic claims or 30 calendar days for paper claims within which to process and either mail payment for the claim or a letter or notice denying it, in whole or in part, giving the insured or other person claiming payments under the plan the insurer's reasons for such denial.
(2) Receipt of any proof, claim, or documentation by an entity which administers or processes claims on behalf of an insurer shall be deemed receipt of the same by the insurer for purposes of this Code section.
(c) Each insurer shall pay to the insured or other person claiming payments under the health benefit plan interest equal to 12 percent per annum on the proceeds or benefits due under the terms of such plan for failure to comply with subsection (b) of this Code section.
(d) An insurer may only be subject to an administrative penalty by the Commissioner as authorized by the insurance laws of this state when such insurer processes less than 95 percent of all claims in a standard financial quarter in compliance with paragraph (1) of subsection (b) of this Code section. Such penalty shall be assessed on data collected by the Commissioner.
(e) This Code section shall be applicable when an insurer is adjudicating claims for its fully insured business or its business as a third-party administrator.
(a) The General Assembly finds and declares that:
(1) Maternal and infant health are greatly improved when women have access to contraceptive supplies to prevent unintended pregnancies;
(2) Because many Americans hope to complete their families with two or three children, many women spend the majority of their reproductive lives trying to prevent pregnancy;
(3) Research has shown that 49 percent of all large group insurance plans do not routinely provide coverage for contraceptive drugs and devices. While virtually all health care plans cover prescription drugs generally, the absence of prescription contraceptive coverage is largely responsible for the fact that women spend 68 percent more in out-of-pocket expenses for health care than men; and
(4) Requiring insurance coverage for prescription drugs and devices for contraception is in the public interest in improving the health of mothers, children, and families and in providing for health insurance coverage which is fairer and more equitable.
(b) As used in this Code section, the term:
(1) “Health benefit policy” means any individual or group plan, policy, or contract for health care services issued, delivered, issued for delivery, or renewed in this state, including those contracts executed by the state on behalf of state employees under Article 1 of Chapter 18 of Title 45, by a health care corporation, health maintenance organization, preferred provider organization, accident and sickness insurer, fraternal benefit society, provider sponsored health care corporation, or other insurer or similar entity.
(2) “Insurer” means an accident and sickness insurer, fraternal benefit society, health care corporation, health maintenance organization, or any similar entity authorized to issue contracts under this title.
(c) Every health benefit policy that is delivered, issued, executed, or renewed in this state or approved for issuance or renewal in this state by the Commissioner which provides coverage for prescription drugs on an outpatient basis shall provide coverage for any prescribed drug or device approved by the United States Food and Drug Administration for use as a contraceptive. This Code section shall not apply to limited benefit policies described in paragraph (4) of subsection (e) of Code Section 33-30-12. Likewise, nothing contained in this Code section shall be construed to require any insurance company to provide coverage for abortion.
(d) No insurer shall impose upon any person receiving prescription contraceptive benefits pursuant to this Code section any:
(1) Copayment, coinsurance payment, or fee that is not equally imposed upon all individuals in the same benefit category, class, coinsurance level or copayment level, receiving benefits for prescription drugs; or
(2) Reduction in allowable reimbursement for prescription drug benefits.
(e) This Code section shall not be construed to:
(1) Require coverage for prescription coverage benefits in any contract, policy, or plan that does not otherwise provide coverage for prescription drugs; or
(2) Preclude the use of closed formularies; provided, however, that such formularies shall include oral, implant, and injectable contraceptive drugs, intrauterine devices, and prescription barrier methods.
(a) This Code section shall be known and may be cited as the “Morbid Obesity Anti-discrimination Act.”
(b) The General Assembly finds and declares that:
(1) Whereas many health care insurers cover the costs of treatment for patients diagnosed as morbidly obese by their physicians, many other insurers refuse to cover such costs;
(2) There is sufficient scientific data that implicate morbid obesity as the cause of many other medical problems and costly health complications, such as diabetes, hypertension, heart disease, and stroke. These data indirectly question the safety and appropriateness of the continued refusal of some insurers to cover the medically indicated treatment of the morbidly obese patient. The association of morbid obesity with the aforementioned devastating diseases refutes any claim of a purely cosmetic indication for the treatment of morbid obesity and clearly designates morbid obesity as a life-threatening disease;
(3) The cost of managing the complications of morbid obesity, largely due to inadequate treatment, far outweighs the cost of expeditious, effective medical treatment. Therefore, insurers who continue to refuse to pay for the primary treatment of morbid obesity are contributing to the high cost of management of secondary complications;
(4) Guidelines developed by the National Institute of Health, the American Society for Bariatric Surgery, the American Obesity Association, and Shape Up America and embraced by the American Medical Association and the American College of Surgeons recommend that patients who are morbidly obese receive responsible, affordable medical treatment for their obesity; and
(5) The diagnosis of morbid obesity should be a clinical decision made by a physician based on the guidelines set by the appropriate health and medical associations and organizations. The treatment modality should also be a clinical decision made by the physician based on set guidelines.
(c)(1) As used in this Code section, the term:
(A) “Health benefit policy” means any individual or group plan, policy, or contract for health care services issued, delivered, issued for delivery, or renewed in this state which provides major medical benefits, including those contracts executed by the state on behalf of indigents and on behalf of state employees under Article 1 of Chapter 18 of Title 45, by a health care corporation, health maintenance organization, preferred provider organization, accident and sickness insurer, fraternal benefit society, or other insurer or similar entity.
(B) “Health care providers” means those physicians and medical institutions that are specifically qualified to treat in a comprehensive manner the entire complex of illness and disease associated with morbid obesity.
(C) “Insurer” means an accident and sickness insurer, fraternal benefit society, health care corporation, health maintenance organization, or any similar entity authorized to issue contracts under this title and also means any state program funded under Title XIX of the federal Social Security Act, 42 U.S.C.A. Section 1396, et seq., and any other publicly funded state health care program.
(D) “Morbid obesity” means a weight which is at least 100 pounds over or twice the ideal weight for frame, age, height, and gender as specified in the 1983 Metropolitan Life Insurance tables. Morbid obesity also means a body mass index (BMI) equal to or greater than 35 kilograms per meter squared with comorbidity or coexisting medical conditions such as hypertension, cardiopulmonary conditions, sleep apnea, or diabetes or a BMI of 40 kilograms per meter squared without such comorbidity. BMI equals weight in kilograms divided by height in meters squared.
(2) Every health benefit policy that is delivered, issued, executed, or renewed in this state or approved for issuance or renewal in this state by the Commissioner which provides major medical benefits may offer coverage for the treatment of morbid obesity.
(d) The Commissioner of Insurance shall adopt rules and regulations necessary to implement the provisions of this Code section in collaboration with the Department of Public Health and in compliance with current guidelines established by professional medical organizations relating to the treatment of morbid obesity.
No individual major medical or group health insurance policy, group health insurance plan or policy, or any other form of managed or capitated health care plans or policies issued, delivered, issued for delivery, or renewed containing coverage for prescription drugs and pharmaceuticals shall deny or limit coverage for prescription inhalants required to enable persons to breathe when suffering from asthma or other life-threatening bronchial ailments based upon any restriction on the number of days before an inhaler refill may be obtained if, contrary to such restrictions, such inhalants have been ordered or prescribed by the treating physician.
(a) This Code section shall be known and may be cited as the “Registered Nurse First Assistant Consumer Act.”
(b) It is the intent of the General Assembly to:
(1) Encourage the continued use of registered nurse first assistants who meet the qualifications of this Code section as “assistants at surgery” by physicians and surgical facilities to provide quality, cost-effective surgical intervention to health care recipients in the state; and
(2) Establish policies within managed health care agencies, workers' compensation carriers, and all private insurance companies to provide for adequate and justifiable reimbursement for the registered nurse first assistant for services rendered.
(c) As used in this Code section, the term:
(1) “Health benefit policy” means any individual or group plan, policy, or contract for health care services issued, delivered, issued for delivery, or renewed in this state, including, but not limited to, those policies, plans, or contracts executed by the state on behalf of state employees under Article 1 of Chapter 18 of Title 45, by a health care corporation, health maintenance organization, preferred provider organization, accident and sickness insurer, fraternal benefit society, workers' compensation insurance carrier in accordance with Chapter 9 of Title 34, or other insurer or similar entity.
(2) “Insurer” means an accident and sickness insurer, fraternal benefit society, workers' compensation insurance carrier, health care corporation, health maintenance organization, managed care plan other than a dental plan, or any similar entity authorized to issue contracts under this title, but shall exclude any state program funded under Title XIX of the federal Social Security Act, 42 U.S.C.A. Section 1396, et seq., and any other publicly funded state health care program.
(3) “Perioperative nursing” means a practice of registered professional nursing in which the registered nurse provides preoperative, intraoperative, and postoperative nursing care to surgical patients.
(4) “Recognized educational curriculum program” means a program that:
(A) Addresses all content of the Association of perioperative Registered Nurses, Inc., Core Curriculum for the Registered Nurse First Assistant and the Certification Board of Perioperative Nurses; and
(B) Includes indicated didactic and clinical internship as required by the curriculum.
(5) “Registered nurse first assistant” means a person who:
(A)(i) Is licensed as a registered professional nurse in this state;
(ii) Is certified in perioperative nursing; and
(iii) Has successfully completed a registered nurse first assistant education program that meets the Association of perioperative Registered Nurses, Inc.'s education standard for the registered nurse first assistant; or
(B) Was holding the title of and practicing as a registered nurse first assistant as of January 1, 1993.
(d) Notwithstanding any provisions in policies or contracts which might be construed to the contrary, whenever any health benefit policy which is issued, executed, or renewed in this state provides that any of its benefits are payable to a surgical first assistant for services rendered, the insurer shall be required to directly reimburse any registered nurse first assistant who has rendered such services at the request of a physician and within the scope of a registered nurse first assistant's professional license. This Code section shall not apply to a registered nurse first assistant who is employed by the requesting physician or renders such services in the capacity as an employee of the hospital where services are rendered.
(a) As used in this Code section, the term:
(1) “Accident and sickness contract, policy, or benefit plan” shall have the same meaning as found in Code Section 33-24-59.1. Accident and sickness contract, policy, or benefit plan shall also include without limitation any health benefit plan established pursuant to Article 1 of Chapter 18 of Title 45. Accident and sickness contract, policy, or benefit plan shall not include limited benefit insurance policies designed, advertised, and marketed to supplement major medical insurance such as accident only, CHAMPUS supplement, dental, disability income, fixed indemnity, long-term care, medicare supplement, specified disease, vision, and any other type of accident and sickness insurance other than basic hospital expense, basic medical-surgical expense, or major medical insurance.
(2) “Applied behavior analysis” means the design, implementation, and evaluation of environmental modifications using behavioral stimuli and consequences to produce socially significant improvement in human behavior, including the use of direct observation, measurement, and functional analysis of the relationship between environment and behavior.
(3) “Autism spectrum disorder” means autism spectrum disorders as defined by the most recent edition of the Diagnostic and Statistical Manual of Mental Disorders.
(4) “Treatment of autism spectrum disorder” includes the following types of care prescribed, provided, or ordered for an individual diagnosed with an autism spectrum disorder:
(A) Habilitative or rehabilitative services, including applied behavior analysis or other professional or counseling services necessary to develop, maintain, and restore the functioning of an individual to the extent possible. To be eligible for coverage, applied behavior analysis shall be provided by a person professionally certified by a national board of behavior analysts or performed under the supervision of a person professionally certified by a national board of behavior analysts;
(B) Counseling services provided by a licensed psychiatrist, licensed psychologist, professional counselor, or clinical social worker; and
(C) Therapy services provided by a licensed or certified speech therapist, speech-language pathologist, occupational therapist, physical therapist, or marriage and family therapist.
(b) Accident and sickness contracts, policies, or benefit plans shall provide coverage for autism spectrum disorders for an individual covered under a policy or contract who is 20 years of age or under in accordance with the following:
(1) The policy or contract shall provide coverage for any assessments, evaluations, or tests by a licensed physician or licensed psychologist to diagnose whether an individual has an autism spectrum disorder;
(2) The policy or contract shall provide coverage for applied behavior analysis for the treatment of autism spectrum disorders when it is determined by the covering entity that the treatment is medically necessary health care according to established criteria. A licensed physician or licensed psychologist may be required to demonstrate ongoing medical necessity for coverage provided under this Code section at least annually;
(3) The policy or contract shall not include any limits on the number of visits;
(4) The policy or contract may limit coverage for applied behavior analysis to $35,000.00 per year. An insurer shall not apply payments for coverage unrelated to autism spectrum disorders to any maximum benefit established under this paragraph; and
(5) This subsection shall not be construed to require coverage for prescription drugs if prescription drug coverage is not provided by the policy or contract.
(c) Except as otherwise provided in this Code section, any policy or contract that provides coverage for services under this Code section may contain provisions for maximum benefits and coinsurance and reasonable limitations, deductibles, and exclusions to the extent that these provisions are not inconsistent with the requirements of this Code section.
(d) This Code section shall not be construed to affect any obligation to provide services to an individual with an autism spectrum disorder under an individualized family service plan, an individualized education plan as required by the federal Individuals with Disabilities Education Act, or an individualized service plan. This Code section also shall not be construed to limit benefits that are otherwise available to an individual under an accident and sickness contract, policy, or benefit plan.
(e)(1) An insurer, corporation, or health maintenance organization, or a governmental entity providing coverage for such treatment pursuant to this Code section, is exempt from providing coverage for behavioral health treatment required under this Code section and not covered by the insurer, corporation, health maintenance organization, or governmental entity providing coverage for such treatment pursuant to this Code section as of December 31, 2016, if:
(A) An actuary, affiliated with the insurer, corporation, or health maintenance organization, who is a member of the American Academy of Actuaries and meets the American Academy of Actuaries' professional qualification standards for rendering an actuarial opinion related to health insurance rate making, certifies in writing to the Commissioner that:
(i) Based on an analysis to be completed no more frequently than one time per year by each insurer, corporation, or health maintenance organization, or such governmental entity, for the most recent experience period of at least one year's duration, the costs associated with coverage of behavioral health treatment required under this Code section, and not covered as of December 31, 2016, exceeded 1 percent of the premiums charged over the experience period by the insurer, corporation, or health maintenance organization; and
(ii) Those costs solely would lead to an increase in average premiums charged of more than 1 percent for all insurance policies, subscription contracts, or health care plans commencing on inception or the next renewal date, based on the premium rating methodology and practices the insurer, corporation, or health maintenance organization, or such governmental entity, employs; and
(B) The Commissioner approves the certification of the actuary.
(2) An exemption allowed under paragraph (1) of this subsection shall apply for a one-year coverage period following inception or next renewal date of all insurance policies, subscription contracts, or health care plans issued or renewed during the one-year period following the date of the exemption, after which the insurer, corporation, or health maintenance organization, or such governmental entity, shall again provide coverage for behavioral health treatment required under this subsection.
(3) An insurer, corporation, or health maintenance organization, or such governmental entity, may claim an exemption for a subsequent year, but only if the conditions specified in this subsection again are met.
(4) Notwithstanding the exemption allowed under paragraph (1) of this subsection, an insurer, corporation, or health maintenance organization, or such governmental entity, may elect to continue to provide coverage for behavioral health treatment required under this subsection.
(f) Beginning January 1, 2016, to the extent that this Code section requires benefits that exceed the essential health benefits required under Section 1302(b) of the federal Patient Protection and Affordable Care Act, P.L. 111-148, the specific benefits that exceed the required essential health benefits shall not be required of a “qualified health plan” as defined in such Act when the qualified health plan is offered in this state through the exchange. Nothing in this subsection shall nullify the application of this Code section to plans offered outside the state's exchange.
(g) This Code section shall not apply to any accident and sickness contract, policy, or benefit plan offered by any employer with ten or fewer employees.
(h) Nothing in this Code section shall be construed to limit any coverage under any accident and sickness contract policy or benefit plan, including, but not limited to, speech therapy, occupational therapy, or physical therapy otherwise available under such plan.
(i) By June 15, 2019, and every June 15 thereafter, the department shall submit a report to the General Assembly regarding the implementation of the coverage required under this Code section. The report shall include, but shall not be limited to, the following:
(1) The total number of insureds diagnosed with autism spectrum disorder;
(2) The total cost of all claims paid out in the immediately preceding calendar year for coverage required by this Code section;
(3) The cost of such coverage per insured per month; and
(4) The average cost per insured for coverage of applied behavior analysis.
All health carriers and health benefit plans subject to the provisions of this Code section shall provide the department with all data requested by the department for inclusion in the annual report.
(a) As used in this Code section, the term:
(1) “Chronic and seriously debilitating” means diseases or conditions that cause significant long-term morbidity and that require ongoing treatment to maintain remission or prevent deterioration.
(2) “Health benefit policy” means any individual or group plan, policy, or contract for health care services issued, delivered, issued for delivery, executed, or renewed in this state, including, but not limited to, those contracts executed by the state on behalf of state employees under Article 1 of Chapter 18 of Title 45, by an insurer; provided, however, that “health benefit policy” shall not include the limited benefit policies as defined in paragraph (4) of subsection (e) of Code Section 33-30-12.
(3) “Insurer” means any person, corporation, or other entity authorized to provide health benefit policies under this title.
(4) “Life-threatening” means:
(A) Diseases or conditions where the likelihood of death is high unless the course of the disease is interrupted;
(B) Diseases or conditions with potentially fatal outcomes, where the end point of clinical intervention is survival; or
(C) The natural process of aging shall not be construed as a disease or condition for the purposes of this definition or this Code section.
(b) No health benefit policy issued, delivered, or renewed in this state that, as a provision of hospital, medical, or surgical services, directly or indirectly covers prescription drugs shall limit or exclude coverage for a drug on the basis that the drug is prescribed for a use that is different from the use for which that drug has been approved for marketing by the federal Food and Drug Administration, provided that all of the following conditions have been met and subject to the prior authorization process or other restrictions of the insurer:
(1) The drug has been approved by the federal Food and Drug Administration;
(2)(A) The drug is prescribed by a contracting licensed health care professional for the treatment of a life-threatening disease or condition;
(B) The drug is prescribed by a contracting licensed health care professional for the treatment of a chronic and seriously debilitating disease or condition, the drug is medically necessary to treat that disease or condition, and the drug is on the insurer's formulary or preferred drug list, if any; or
(C) The drug is prescribed by a contracting licensed health care professional to treat a disease or condition in a child where the drug has been approved by the federal Food and Drug Administration for similar conditions or diseases in adults and the drug is medically necessary to treat that disease or condition; and
(3) The drug has been recognized for treatment of that disease or condition or pediatric application by one of the following:
(A) The American Medical Association Drug Evaluations;
(B) The American Hospital Formulary Service Drug Information; or
(C) The United States Pharmacopoeia Dispensing Information, Volume 1, “Drug Information for the Health Care Professional”; or
(D) Two articles from major peer reviewed medical journals that present data supporting the proposed off-label use or uses as generally safe and effective unless there is clear and convincing contradictory evidence presented in a major peer reviewed medical journal.
(c) It shall be the responsibility of the contracting prescriber to submit to the insurer documentation supporting compliance with the requirements of subsection (b) of this Code section, if requested by the insurer.
(d) Any coverage required by this Code section shall also include medically necessary services associated with the administration of a drug subject to the conditions of the contract.
(e) The provisions of this Code section shall not be deemed to require coverage for any of the following:
(1) The treatment of a condition or disease that is excluded under the terms of the health benefit policy;
(2) An experimental drug not approved for indication by the federal Food and Drug Administration; or
(3) Drug treatment by a drug not listed on the health benefit plan formulary or preferred drug list.
(f) The benefits provided in this Code section shall be subject to the same annual deductibles or coinsurance established for all other covered benefits within a given health benefit policy.
(a) This Code section shall be known and may be cited as the “Patient Access to Eye Care Act.”
(b) As used in this Code section, the term:
(1) “Covered person” means an individual enrolled in a health benefit plan or an eligible dependent thereof.
(2) “Covered services” means those health care services which a health care insurer is obligated to pay for or provide to a covered person under a health benefit plan.
(3) “Eye care” means those health care services and materials related to the care of the eye and related structures and vision care services which a health care insurer is obligated to pay for or provide to covered persons under the health benefit plan.
(4) “Health benefit plan” means any public or private health plan, program, policy, or agreement implemented in this state which provides health benefits to covered persons, including but not limited to payment and reimbursement for health care services.
(5) “Health care insurer” means an entity, including but not limited to insurance companies, health care corporations, health maintenance organizations, and preferred provider organizations, authorized by the state to offer or provide health benefit plans, programs, policies, subscriber contracts, or any other agreements of a similar nature which compensate or indemnify health care providers for furnishing health care services.
(c) A health care insurer providing a health benefit plan which includes eye care benefits shall:
(1) Not set professional fees or reimbursement for the same eye care services as defined by established current procedural terminology codes in a manner that discriminates against an individual eye care provider or a class of eye care providers;
(2) Not preclude a covered person who seeks eye care from obtaining such service directly from a provider on the health benefit plan provider panel who is licensed to provide eye care;
(3) Not promote or recommend any class of providers to the detriment of any other class of providers for the same eye care service;
(4) Ensure that all eye care providers on a health benefit plan provider panel are included on any publicly accessible list of participating providers for the plan;
(5) Allow each eye care provider on a health benefit plan provider panel, without discrimination between classes of eye care providers, to furnish covered eye care services to covered persons to the extent permitted by such provider's licensure;
(6) Not require any eye care provider to hold hospital privileges or impose any other condition or restriction for initial admittance to a provider panel not necessary for the delivery of eye care upon such providers which would have the effect of excluding an individual eye care provider or class of eye care providers from participation on the health benefit plan; and
(7) Include optometrists and ophthalmologists on the health benefit plan provider panel in a manner that ensures plan enrollees timely access and geographic access.
(d) Nothing in this Code section shall preclude a covered person from receiving eye care or other covered services from the covered person's personal physician in accordance with the terms of the health benefit plan.
(e) A person adversely affected by a violation of this Code section by a health care insurer may bring an action in a court of competent jurisdiction for injunctive relief against such insurer and, upon prevailing, in addition to any injunctive relief that may be granted, shall recover from such insurer damages of not more than $100.00 and attorney's fees and costs.
(f) Nothing in this Code section requires a health benefit plan to include eye care benefits.
(g) The Commissioner is authorized to enforce this Code section and, in doing so, to exercise the powers granted to the Commissioner by Code Section 33-2-24 and any other provisions of this title.
(a) An insurer issuing life, comprehensive, major medical group, or individual health insurance benefit plans may, in keeping with federal requirements, offer wellness or health improvement programs, including voluntary wellness or health improvement programs that provide for rewards or incentives, including, but not limited to, merchandise, gift cards, debit cards, premium discounts, credits or rebates, contributions towards a member's health savings account, modifications to copayment, deductible, or coinsurance amounts, cash value, or any combination of these incentives, to encourage participation in such wellness or health improvement programs and to reward insureds for participation in such programs.
(b) The offering of such rewards or incentives to insureds under such wellness or health improvement programs shall not be considered an unfair trade practice under Code Section 33-6-4 if such programs are filed with the Commissioner and made a part of the life or health insurance master policy and certificates or the individual life or health insurance evidence of coverage as a policy amendment, endorsement, rider, or other form of policy material as agreed upon by the Commissioner. The Commissioner shall be authorized to develop an automatic or expedited approval process for review of such wellness or health improvement programs, including those programs already approved under the laws and regulations of other states.
(a) As used in this Code section, the term:
(1) “Administrator” shall have the same meaning as provided in Code Section 33-23-100.
(2) “Benefits” shall have the same meaning as provided in Code Section 33-24-59.5.
(3) “Facility” shall have the same meaning as provided in Code Section 33-20A-3.
(4) “Health benefit plan” shall have the same meaning as provided in Code Section 33-24-59.5.
(5) “Health care provider” shall have the same meaning as provided in Code Section 33-20A-3.
(6) “Insurer” means an accident and sickness insurer, fraternal benefit society, health care corporation, health maintenance organization, provider sponsored health care corporation, or any similar entity, which provides for the financing or delivery of health care services through a health benefit plan, the plan administrator of any health plan, or the plan administrator of any health benefit plan established pursuant to Article 1 of Chapter 18 of Title 45.
(b)(1) All benefits under a health benefit plan will be payable by the insurer or administrator which is obligated to finance or deliver health care services or process claims under that plan upon such insurer's or administrator's receipt of written or electronic proof of loss or claim for payment for health care goods or services provided. The insurer or administrator shall within 15 working days for electronic claims or 30 calendar days for paper claims after such receipt mail or send electronically to the facility or health care provider claiming payments under the plan payment for such benefits or a letter or notice which states the reasons the insurer or administrator may have for failing to pay the claim, either in whole or in part, and which also gives the facility or health care provider so notified a written itemization of any documents or other information needed to process the claim or any portions thereof which are not being paid. Where the insurer or administrator disputes a portion of the claim, any undisputed portion of the claim shall be paid by the insurer or administrator in accordance with this chapter. When all of the listed documents or other information needed to process the claim have been received by the insurer or administrator, the insurer or administrator shall then have 15 working days for electronic claims or 30 calendar days for paper claims within which to process and either mail payment for the claim or a letter or notice denying it, in whole or in part, giving the facility or health care provider claiming payments under the plan the insurer's or administrator's reasons for such denial.
(2) Receipt of any proof, claim, or documentation by an entity which administers or processes claims on behalf of an insurer shall be deemed receipt of the same by the insurer for purposes of this Code section.
(c) Each insurer or administrator shall pay to the facility or health care provider claiming payments under the health benefit plan interest equal to 12 percent per annum on the proceeds or benefits due under the terms of such plan for failure to comply with subsection (b) of this Code section.
(d) An insurer or administrator may only be subject to an administrative penalty by the Commissioner as authorized by the insurance laws of this state when such insurer or administrator processes less than 95 percent of all claims in a standard financial quarter in compliance with paragraph (1) of subsection (b) of this Code section. Such penalty shall be assessed on data collected by the Commissioner.
(e) This Code section shall be applicable when an insurer is adjudicating claims for its fully insured business or its business as a third-party administrator.
(f) This Code section shall not apply to limited benefit insurance policies. For the purpose of this subsection, the term “limited benefit insurance” means accident or sickness insurance designed, advertised, and marketed to supplement major medical insurance and specifically shall include accident only, CHAMPUS supplement, disability income, fixed indemnity, long-term care, or specified disease insurance.
(a) As used in this Code section:
(1) “Covered dental services” means dental care services for which a reimbursement is available under a covered person's dental benefit plan, or for which a reimbursement would be available but for the application of contractual limitations such as deductibles, copayments, coinsurance, waiting periods, annual or lifetime maximums, frequency limitations, alternative benefit payments, or any other limitation.
(2) “Covered person” means any subscriber, enrollee, member, beneficiary, or participant, or his or her dependent, for whom benefits are payable when that covered person receives dental care services rendered or authorized by a dentist licensed under Chapter 11 of Title 43.
(3) “Dental benefit plan” means any individual or group plan, policy, contract, or subscription agreement which includes or is for dental care services that is issued, delivered, issued for delivery, or renewed in this state whether by a health care insurer, health maintenance organization, preferred provider organization, accident and sickness insurer, fraternal benefit society, health care plan, or any other person, firm, corporation, joint venture, or other similar business entity that pays for, purchases, or furnishes dental care services to patients, insureds, beneficiaries, or covered dependents in this state.
(4) “Dental insurer” means any person, firm, corporation, joint venture, or other similar business entity that offers dental benefit plans in consideration of periodic payments.
(b) No contract between a dental insurer and a dentist shall require a dentist to accept an amount set by the dental insurer as payment for dental care services that are not covered dental services under the covered person's dental benefit plan.
(c) A dental insurer or other person or entity providing third-party administrator services shall not make available any providers in its dentist network to a plan that sets dental fees for any services except covered services.
(d) A dental insurer shall not draft, publish, disseminate, or circulate explanation of benefit forms that include language which directly or indirectly implies that a dentist may or should extend discounts to patients for noncovered dental services. Statements by a dental insurer which are prohibited by this Code section include but are not limited to, “Our members value the services you provide and we encourage you to continue extending the discount on noncovered services.”
(a) As used in this Code section, the term:
(1) “Health benefit policy” means any individual or group plan, policy, or contract for health care services issued, delivered, issued for delivery, executed, or renewed in this state, including, but not limited to, those contracts executed by the State of Georgia on behalf of state employees under Article 1 of Chapter 18 of Title 45, by an insurer.
(2) “Insurer” means an accident and sickness insurer, fraternal benefit society, health care corporation, health maintenance organization, preferred provider organization, provider sponsored health care corporation, managed care entity, or any similar entity authorized to issue contracts under this title or to provide health benefit policies.
(b) An insurer shall provide a parent of a child the right to inspect, review, or attain copies of health insurance records relating to his or her own child; provided, however, that if the parent making such request is not the named insured or owner of such policy, he or she shall provide the insurer a certified copy of his or her divorce decree, a parenting plan pursuant to Code Section 19-9-1, or other court document establishing that the parent may have access to such records.
(c) Health insurance records and information pertaining to the child shall not be withheld from the custodial parent or from the noncustodial parent unless a court order has specifically removed the right of the noncustodial parent to such information or unless parental rights have been terminated.
(d) In the absence of fraud or bad faith, the insurer shall not be subject to liability for furnishing information and records requested pursuant to subsection (b) of this Code section.
(a) No abortion coverage shall be provided by a qualified health plan offered within the State of Georgia through a state law, a federal law, or regulation or exchange created by the federal Patient Protection and Affordable Care Act (Public Law 111-148), as amended by the federal Health Care and Education Reconciliation Act of 2010 (Public Law 111-152), and regulations or guidance issued under those acts, except in the case of medical emergency.
(b) For the purposes of this Code section, the term “abortion” has the same meaning as provided in Code Section 31-9A-2.
(c) For the purposes of this Code section, the term “medical emergency” has the same meaning as provided in Code Section 31-9A-2.
(d) Nothing in this Code section shall be construed as creating or recognizing a right to an abortion.
(e) It is not the intention of this Code section to make lawful an abortion that is unlawful.
(a) As used in this Code section, the term:
(1) “Health benefit plan” means any hospital, health, or medical expense insurance policy, hospital or medical service contract, employee welfare benefit plan, contract or agreement with a health maintenance organization, subscriber contract or agreement, preferred provider organization, accident and sickness insurance benefit plan, or other insurance contract under any other name. The term shall include any health insurance plan established under Article 1 of Chapter 18 of Title 45 and under Chapter 4 of Title 49, the “Georgia Medical Assistance Act of 1977.”
(2) “Terminal condition” means any disease, illness, or health condition that a physician has diagnosed as expected to result in death in 24 months or less.
(3) “Treatment” does not include any medication or medical procedure, regardless of where actually prescribed, dispensed, or administered, which if prescribed, dispensed, or administered in this state would constitute assisted suicide in violation of Code Section 16-5-5.
(b) No health benefit plan shall restrict coverage for treatment of a terminal condition when such treatment has been prescribed by a physician as medically appropriate and such treatment has been agreed to by an insured patient or by a person to whom the insured patient has legally delegated such authority or to whom otherwise has the legal authority to consent on behalf of the insured patient. The health benefit plan shall not refuse to pay or otherwise reimburse for the treatment diagnosed under this subsection, including any drug or device, so long as such end of life care is consistent with best practices for the treatment of the terminal condition and such treatment is supported by peer reviewed medical literature.
(c) A denial or a refusal to pay for treatment prescribed under subsection (b) of this Code section shall be a violation of this Code section.
(d) A violation of this Code section shall be a per se violation of Chapter 6 of this title, and the penalties, procedures, and remedies applicable to violations of Chapter 6 of this title shall be applicable to a violation of this Code section.
No health benefit policy issued, delivered, or renewed in this state that, as a provision of hospital, medical, or surgical services, directly or indirectly covers the treatment and management of burns shall limit or exclude coverage for such treatment on the basis that the use of cryopreserved cadaver derived skin tissue is an experimental or investigational medical treatment.
(a) As used in this Code section, the term:
(1) “Health benefit plan” means any hospital, health, or medical expense insurance policy, hospital or medical service contract, employee welfare benefit plan, contract or agreement with a health maintenance organization, subscriber contract or agreement, preferred provider organization, accident and sickness insurance benefit plan, or other insurance contract under any other name. The term shall include any health insurance plan established under Article 1 of Chapter 18 of Title 45 and under Article 7 of Chapter 4 of Title 49, the “Georgia Medical Assistance Act of 1977.”
(2) “Stage four advanced, metastatic cancer” means cancer that has spread from the primary or original site of the cancer to nearby tissues, lymph nodes, or other areas or parts of the body.
(b) No health benefit plan issued, delivered, or renewed in this state that, as a provision of hospital, medical, or surgical services, directly or indirectly covers the treatment of stage four advanced, metastatic cancer shall limit or exclude coverage for a drug approved by the United States Food and Drug Administration by mandating that the insured shall first be required to fail to successfully respond to a different drug or drugs or prove a history of failure of such drug or drugs; provided, however, that the use of such drug or drugs is consistent with best practices for the treatment of stage four advanced, metastatic cancer and is supported by peer reviewed medical literature.
(a) This Code section shall be known and may be cited as the “Hearing Aid Coverage for Children Act.”
(b) The General Assembly finds and declares that:
(1) The language development of children with partial or total hearing loss may be impaired due to the hearing loss. Children learn the concept of spoken language through auditory stimuli, and the language skills of children who have hearing loss improve when they are provided with hearing aids and access to visual language upon the discovery of hearing loss; and
(2) Providing hearing aids to children with hearing loss will reduce the costs borne by this state, including special education, alternative treatments that would otherwise be necessary if a hearing aid were not provided, and other costs associated with such hearing loss.
(c) As used in this Code section, the term:
(1) “Health benefit policy” means any individual or group plan, policy, or contract for health care services issued, delivered, issued for delivery, or renewed in this state which provides major medical benefits, including those contracts executed by the State of Georgia on behalf of indigents and on behalf of state employees under Article 1 of Chapter 18 of Title 45, by a health care corporation, health maintenance organization, preferred provider organization, accident and sickness insurer, fraternal benefit society, hospital service corporation, medical service corporation, or any similar entity and any self-insured health care plan not subject to the exclusive jurisdiction of the Employee Retirement Income Security Act of 1974, 29 U.S.C. Section 1001, et seq.
(2) “Hearing aid” means any nonexperimental and wearable instrument or device offered to aid or compensate for impaired human hearing that is worn in or on the body. The term “hearing aid” includes any parts, ear molds, repair parts, and replacement parts of such instrument or device, including, but not limited to, nonimplanted bone anchored hearing aids, nonimplanted bone conduction hearing aids, and frequency modulation systems. Personal sound amplification products shall not qualify as hearing aids.
(d) Every health benefit policy that is delivered, issued, executed, or renewed in this state or approved for issuance or renewal in this state by the Commissioner on or after January 1, 2018, shall provide coverage for the billed charges of one hearing aid per hearing impaired ear not to exceed $3,000.00 per hearing aid for covered individuals 18 years of age or under. Such coverage shall provide the replacement for one hearing aid per hearing impaired ear every 48 months for covered individuals. The parent or guardian of such individual is responsible for billed charges in excess of such benefits. This subsection shall not prohibit an entity subject to this Code section from providing coverage that is greater or more favorable to an insured or enrolled individual than the coverage required under this Code section.
(e) In the event that a hearing aid or aids cannot adequately meet the needs of the covered individual and the hearing aid or aids cannot be adequately repaired or adjusted, the hearing aid or aids shall be replaced. Coverage for the replacement shall be offered within two months from the date it is determined that the hearing aid or aids cannot be repaired or adjusted.
(f) The coverage provided by this Code section shall include the following:
(1) Medically necessary services and supplies, including the initial hearing aid evaluation, fitting, dispensing, programming, servicing, repairs, follow-up maintenance, adjustments, ear molds, ear mold impressions, auditory training, and probe microphone measurements to ensure appropriate gain and output, as well as verifying benefit from the system selected according to accepted professional standards. Such services shall be covered on a continuous basis, as needed, during each 48 month coverage period not to exceed $3,000.00 per hearing impaired ear or for the duration of the hearing aid warranty, whichever time period is longer;
(2) An option for the covered individual to choose a higher priced hearing aid or aids and to pay the difference between the price of the hearing aid or aids and the benefit amount as referenced in subsection (d) of this Code section, without financial or contractual penalty to the insured or to the provider of the hearing aid; and
(3) An option for the covered individual to purchase his or her hearing aid or aids through any licensed audiologist or licensed hearing aid dealer or dispenser in this state.
(g) A health benefit policy shall not deny or refuse coverage of, refuse to contract with, or refuse to renew or reissue or otherwise terminate or restrict coverage of a covered individual solely because he or she is or has been previously diagnosed with hearing loss.
(h) The benefits covered under this Code section shall be subject to the same annual deductible, coinsurance or copayment, or utilization review applicable to other similar covered benefits under the health benefit policy.
(i) An insurer, corporation, health maintenance organization, or governmental entity providing coverage for a hearing aid or aids pursuant to this Code section is exempt from providing coverage for children's hearing aids required under this Code section and not covered by the insurer, corporation, health maintenance organization, or governmental entity providing coverage for such treatment pursuant to this Code section as of January 1, 2019, if:
(1) An actuary affiliated with the insurer, corporation, health maintenance organization, or governmental entity who is a member of the American Academy of Actuaries and who meets the American Academy of Actuaries' professional qualification standards for rendering an actuarial opinion related to health insurance rate making certifies in writing to the Commissioner that:
(A) Based on an analysis to be completed no more frequently than one time per year by each insurer, corporation, health maintenance organization, or governmental entity for the most recent experience period of at least one year's duration, the costs associated with coverage of children's hearing aids required under this Code section, and not covered as of January 1, 2019, exceeded 1 percent of the premiums charged over the experience period by the insurer, corporation, or health maintenance organization; and
(B) Such costs solely would lead to an insurance in average premiums charged of more than 1 percent for all insurance policies, subscription contracts, or health care plans commencing on inception or the next renewal date, based on the premium rating methodology and practices the insurer, corporation, health maintenance organization, or governmental entity employs; and
(2) The Commissioner approves the certification of the actuary.
(j) Beginning January 1, 2018, to the extent that this Code section requires benefits that exceed the essential health benefits required under Section 1302(b) of the federal Patient Protection and Affordable Care Act, P. L. 111-148, the specific benefits that exceed the required essential health benefits shall not be required of a qualified health plan as defined in such act when the qualified health plan is offered in this state through the exchange. Nothing in this subsection shall nullify the application of this Code section to plans offered outside the state's exchange.
(k) This Code section shall not apply to any accident and sickness contract, policy, or benefit plan offered by any employer with ten or fewer employees.
(a) As used in this Code section, the term “prescription drug program” means any individual or group plan, policy, or contract for prescription drug services issued, delivered, issued for delivery, executed, or renewed by an insurer in this state on or after July 1, 2017.
(b) A prescription drug program providing prescription drug coverage in this state shall permit and apply a prorated daily cost-sharing rate to prescriptions that are dispensed by a pharmacy for less than a 30 day supply if the prescriber or pharmacist indicates the fill or refill could be in the best interest of the insured patient or is for the purpose of synchronizing the insured patient's medications.
(c) No prescription drug program providing prescription drug coverage shall deny coverage for the dispensing of any drug prescribed for the treatment of an illness that is made in accordance with a plan among the insured, a practitioner, and a pharmacist to synchronize the refilling of multiple prescriptions for the insured.
(d) No prescription drug program providing prescription drug coverage shall use payment structures incorporating prorated dispensing fees determined by calculation of the days' supply of medication dispensed. Dispensing fees shall be determined exclusively on the total number of prescriptions dispensed.
(a) As used in this Code section, the term:
(1) “Agent” shall have the same meaning as in Code Section 33-23-1.
(2) “Carrier” means any entity licensed to provide health insurance in this state and which is subject to state insurance regulation.
(3) “Health benefit plan” means any hospital or medical insurance policy or certificate, health care plan contract or certificate, qualified higher deductible health plan, or health maintenance organization subscriber contract. Health benefit plan does not include policies issued in accordance with Chapter 31 of this title; disability income policies; policies issued in accordance with Code Section 34-9-14 or 34-9-122.1; limited accident and sickness insurance policies such as credit, dental, vision, medicare supplement, long-term care, hospital indemnity, or specified disease insurance; coverage issued as a supplement to liability insurance; workers' compensation or similar insurance; or automobile medical payment insurance.
(4) “Premium” means the consideration paid in exchange for coverage under a health benefit plan.
(b) Any carrier that issues a health benefit plan in this state through an agent shall pay a commission to such agent. Such carrier shall file with the department its proposed commission rates relevant to all such agents. The commission paid to such agents shall be consistent with the amount proposed in the rates filed with the department, as required by the Commissioner. Such commission shall be structured to compensate the agent for the first term and for each renewal term thereafter, so long as such agent reviews coverage and provides ongoing customer service for such plan; provided, however, that no such first term compensation to such agent shall be required for any individual health benefit plan sold during a special enrollment period. Notwithstanding the above, any carrier that does not provide such first term commission during a special enrollment period shall, upon policy renewal, provide the agent with the renewal commission and any first term commission that was not paid because such policy was sold during a special enrollment period. Nothing in this Code section is intended or shall be construed to require a carrier to pay a commission to an agent who is employed by such carrier.
(c) The Commissioner shall adopt such rules and regulations he or she deems necessary for the administration of this Code section.
(a) As used in this chapter, the term:
(1) “Care management organization” means an entity that is organized for the purpose of providing or arranging health care, which has been granted a certificate of authority by the Commissioner as a health maintenance organization pursuant to Chapter 21 of this title, and which has entered into a contract with the Department of Community Health to provide or arrange health care services on a prepaid, capitated basis to members.
(2) “Credit card payment” means a type of electronic funds transfer in which a health insurance plan or health insurer or its contracted vendor issues a single-use series of numbers associated with the payment of health care services performed by a health care provider and chargeable to a predetermined dollar amount, whereby the health care provider is responsible for processing the payment by a credit card terminal or Internet portal. Such term shall include virtual or online credit card payments, whereby no physical credit card is presented to the health care provider and the single-use credit card expires upon payment processing.
(3) “Electronic funds transfer” means an electronic funds transfer through the federal Health Insurance Portability and Accountability Act of 1996, P.L. 104-191, standard automated clearing-house network.
(4) “Health care provider” means any physician, dentist, podiatrist, pharmacist, optometrist, psychologist, registered optician, licensed professional counselor, physical therapist, chiropractor, hospital, or other entity or person that is licensed or otherwise authorized in this state to furnish health care services.
(5) “Health care services” means the examination or treatment of persons for the prevention of illness or the correction or treatment of any physical or mental condition resulting from illness, injury, or other human physical problem and includes, but is not limited to:
(A) Hospital services which include the general and usual services and care, supplies, and equipment furnished by hospitals;
(B) Medical services which include the general and usual services and care rendered and administered by doctors of medicine, doctors of dental surgery, and doctors of podiatry; and
(C) Other health care services which include appliances and supplies; nursing care by a registered nurse or a licensed practical nurse; care furnished by such other licensed practitioners; institutional services including the general and usual care, services, supplies, and equipment furnished by health care institutions and agencies or entities other than hospitals; physiotherapy; ambulance services; drugs and medications; therapeutic services and equipment including oxygen and the rental of oxygen equipment; hospital beds; iron lungs; orthopedic services and appliances including wheelchairs, trusses, braces, crutches, and prosthetic devices including artificial limbs and eyes; and any other appliance, supply, or service related to health care.
(6) “Health insurance plan” means any hospital or medical insurance policy or certificate; health plan contract or certificate; qualified higher deductible health plan; health maintenance organization subscriber contract; any contract providing benefits for dental care whether such contract is pursuant to a medical insurance policy or certificate; stand-alone dental plan, health maintenance provider contract, managed health care plan, self-insured plan, or otherwise; or any health insurance plan established pursuant to Article 1 of Chapter 18 of Title 45.
(7) “Health insurer” means any entity or person engaged as an indemnitor, surety, or contractor that issues insurance, annuity or endowment contracts, subscriber certificates, or other contracts of insurance by whatever name called. Health care plans under Chapter 20A of this title and health maintenance organizations are health insurers within the meaning of this chapter.
(b) Any health insurance plan issued, amended, or renewed on or after January 1, 2019, between a health insurer or its contracted vendor or a care management organization and a health care provider for the provision of health care services to a plan enrollee shall not contain restrictions on methods of payment from the health insurer or its vendor or the care management organization to the health care provider in which the only acceptable payment method is a credit card payment.
(c) If initiating or changing payments to a health care provider using electronic funds transfer payments, including virtual credit card payments, a health insurance plan, health insurer or its contracted vendor, or care management organization shall:
(1) Notify the health care provider if any fees are associated with a particular payment method; and
(2) Advise the provider of the available methods of payment and provide clear instructions to the health care provider as to how to select an alternative payment method.
(d) The provisions of this Code section shall not be waived by contract, and any contractual clause in conflict with the provisions of this Code section or that purport to waive any requirements of this Code section are void.
(e) Violations of this Code section shall be subject to enforcement by the Commissioner.
(a) As used in this Code section, the term:
(1) “Health benefit plan” means any hospital, health, or medical expense insurance policy; hospital or medical service contract; employee welfare benefit plan; contract or agreement with a health maintenance organization; subscriber contract or agreement; contract or agreement with a preferred provider organization; accident and sickness insurance benefit plan; or other insurance contract under any other name. The term shall include any health insurance plan established under Article 1 of Chapter 18 of Title 45, the “State Employees' Health Insurance Plan and Post-employment Health Benefit Fund.”
(2) “Practitioner” means a physician, dentist, podiatrist, or optometrist and shall include any other person licensed under the laws of this state to use, mix, prepare, dispense, prescribe, and administer drugs in connection with medical treatment for individuals to the extent provided by the laws of this state.
(3) “Step therapy exception” means that a step therapy protocol should be overridden in favor of immediate coverage of the practitioner's selected prescription drug, provided that the drug is covered under the health benefit plan.
(4) “Step therapy protocol” means an evidence based and updated protocol or program that establishes the specific sequence in which prescription drugs for a specified medical condition are deemed medically appropriate for a particular patient, including self-administered and physician-administered drugs, and are covered by an insurer or health benefit plan.
(b) A step therapy exception shall be granted by a health benefit plan if the prescribing provider's submitted justification and supporting clinical documentation, if needed, is completed and determined to support such provider's statement that:
(1) The required prescription drug is contraindicated or will cause an adverse reaction or physical or mental harm to the patient;
(2) The required prescription drug is expected to be ineffective based on the known clinical condition of the patient and the known characteristics of the prescription drug regimen;
(3) The patient has tried the required prescription drug or another prescription drug in the same pharmacological class or with the same mechanism of action as the required drug while on their current or immediately preceding health plan and such drug was discontinued due to lack of efficacy, diminished effect, or an adverse event; or
(4) The patient is currently receiving a positive therapeutic outcome on a prescription drug for the medical condition under consideration if, while on their current or immediately preceding health plan, the patient received coverage for the prescription drug and the practitioner gives documentation in accordance with this subsection that the change in prescription drug required by the step therapy protocol is expected to be ineffective or cause harm to the patient based on the known characteristics of the patient and the known characteristics of the required prescription drug.
(c) Drug samples shall not be considered trial and failure of a preferred prescription drug in lieu of trying the step therapy required prescription drug.
(d) A health benefit plan shall grant or deny a step therapy exception or appeal of a step therapy exception within:
(1) Twenty-four hours in an urgent health care situation; and
(2) Two business days from the date such request or appeal is submitted in a nonurgent health care situation.
If the health benefit plan fails to respond in accordance with the established time frame, such step therapy exception or an appeal shall be deemed approved.
(e) Upon the granting of a step therapy exception, the health benefit plan shall immediately authorize coverage for the prescription drug prescribed by the patient's practitioner, provided that the drug is covered under the health benefit plan. Any step therapy exception denial shall be eligible for a physician's or a patient's appeal in accordance with the health benefit plan's existing appeal procedures.
(f) This Code section shall not be construed to prevent:
(1) A health benefit plan from requiring a patient to try an AB-rated generic equivalent prior to providing coverage for the equivalent-branded prescription drug;
(2) A health benefit plan from requiring a patient to try an interchangeable biological product prior to providing coverage for the biological product; or
(3) A practitioner from prescribing a prescription drug that is determined by such practitioner to be medically necessary.
(g) This Code section shall not be construed to impact a health benefit plan's ability to substitute a generic drug for a brand name drug.
(h) This Code section shall not apply to the provision of health care services pursuant to a contract entered into by an insurer and the Department of Community Health for recipients of Medicaid or PeachCare for Kids.
(i) This Code section shall apply only to health benefit plans delivered, issued for delivery, or renewed on or after January 1, 2020.
(a) As used in this Code section, the term:
(1) “Preventive services” means screening tests, counseling, and preventive medicines, or treatments provided or conducted to prevent medical illness or condition prior to symptoms or physical manifestations of such medical illness or condition.
(2) “Short-term health benefit policy or certificate” means any individual or group plan, policy, or contract for health care services for a coverage period of less than one year issued, delivered, issued for delivery, or renewed in this state which provides major medical benefits by a health care corporation, health maintenance organization, preferred provider organization, accident and sickness insurer, fraternal benefit society, or any similar entity and any self-insured plan not subject to the exclusive jurisdiction of the Employee Retirement Income Security Act of 1974, 29 U.S.C. Section 1101, et seq.
(b) No short-term health benefit policy or certificate shall contain a provision defining “preexisting condition” which is more restrictive than the following:
(1) Preexisting condition means the existence of symptoms which would cause an ordinary prudent person to seek diagnosis, care, or treatment; or
(2) A condition for which medical advice or treatment was recommended by or received from a provider of health care services, within six months preceding the effective date of coverage of an insured person. The condition at issue must be the ultimate condition for which medical advice or treatment was recommended by or received from a provider of health care services and excludes any preventive services.
(a) This Code section shall be known and may be cited as the “Georgia Right to Shop Act.”
(b) As used in this Code section, the term:
(1) “Covered person” means an individual who is covered under a health benefit policy.
(2) “Emergency services” means those physical or mental health care services that are provided for a condition of recent onset and sufficient severity, including, but not limited to, severe pain, regardless of the initial, interim, final, or other diagnoses that are given, that would lead a prudent layperson, possessing an average knowledge of medicine and health, to believe that his or her condition, sickness, or injury is of such a nature that failure to obtain immediate medical care could result in:
(A) Placing the patient's health in serious jeopardy;
(B) Serious impairment to bodily functions; or
(C) Serious dysfunction of any bodily organ or part.
(3) “Health benefit policy” or “policy” means any individual or group plan, policy, or contract for health care services issued, delivered, issued for delivery, executed, or renewed in this state, including, but not limited to, those contracts executed by the state on behalf of state employees under Article 1 of Chapter 18 of Title 45, by an insurer.
(4) “Health care provider” or “provider” means any physician, dentist, podiatrist, pharmacist, optometrist, psychologist, clinical social worker, advanced practice nurse, registered optician, licensed professional counselor, physical therapist, marriage and family therapist, chiropractor, athletic trainer qualified pursuant to Code Section 43-5-8, occupational therapist, speech language pathologist, audiologist, dietitian, or physician assistant.
(5) “Health care service” means:
(A) Physical and occupational therapy services;
(B) Obstetrical and gynecological services;
(C) Radiology and imaging services;
(D) Laboratory services;
(E) Infusion therapy;
(F) Inpatient or outpatient surgical procedures;
(G) Outpatient nonsurgical diagnostic tests or procedures; and
(H) Any services designated by the Commissioner as shoppable by health care consumers.
(6) “Hierarchical Condition Category Methodology” means a coding system designed by the Centers for Medicare and Medicaid Services to estimate future health care costs for patients.
(7) “Insurer” means an accident and sickness insurer, fraternal benefit society, hospital service corporation, medical service corporation, health care corporation, health maintenance organization, preferred provider organization, provider sponsored health care corporation, managed care entity, or any similar entity authorized to issue contracts under this title or to provide health benefit policies.
(c) Each insurer shall make available on its publicly accessible website an interactive mechanism whereby any member of the public may:
(1) For each health benefit policy offered, compare the payment amounts accepted by in-network providers from such insurer for the provision of a particular health care service within the previous year;
(2) For each health benefit policy offered, obtain an estimate of the average amount accepted by in-network providers from such insurer for the provision of a particular health care service within the previous year;
(3) For each health benefit policy offered, obtain an estimate of the out-of-pocket costs that such covered person would owe his or her provider following the provision of a particular health care service;
(4) Compare quality metrics applicable to in-network providers for major diagnostic categories with adjustments by risk and severity based upon the Hierarchical Condition Category Methodology or a nationally recognized health care quality reporting standard designated by the Commissioner. Metrics shall be based on reasonably universal and uniform data bases with sufficient claim volume. If applicable to the provider, quality metrics shall include, but not be limited to:
(A) Risk adjusted and absolute hospital readmission rates;
(B) Risk adjusted and absolute hospitalization rates;
(C) Admission volume;
(D) Utilization volume;
(E) Risk adjusted rates of adverse events; and
(F) Risk adjusted and absolute relative total cost of care.
The Commissioner shall promulgate rules and regulations which define the following terms: risk adjusted hospital readmission rates, absolute hospital readmission rates, risk adjusted hospitalization rates, absolute hospitalization rates, admission volume, utilization volume, risk adjusted rates of adverse events, risk adjusted total cost of care, and absolute relative total cost of care. Such terms shall be defined in accordance with federal law or regulation or as otherwise determined necessary by the Commissioner; and
(5) Access any all-payer health claims data base which may be maintained by the department.
(d) An insurer shall provide notification on its website that the actual amount that a covered person will be responsible to pay following the receipt of a particular health care service may vary due to unforseen costs that arise during the provision of such service.
(e) Each estimate of out-of-pocket costs provided pursuant to paragraph (3) of subsection (c) of this Code section shall provide the following:
(1) The out-of-pocket costs a covered person may owe if he or she has exceeded his or her deductible; and
(2) The out-of-pocket costs a covered person may owe if he or she has not exceeded his or her deductible.
(f) An insurer may contract with a third party to satisfy part or all of the requirements of this Code section.
(g) Nothing in this Code section shall prohibit an insurer from charging a covered person cost sharing beyond that included in the estimate provided pursuant to paragraph (3) of subsection (c) of this Code section if such additional cost sharing resulted from the unforseen provision of additional health care services and the cost-sharing requirements of such unforseen health care services were disclosed in such covered person's policy or certificate of insurance.
(h) The requirements of this Code section, with the exception of paragraph (4) of subsection (c) of this Code section, shall not apply to any health maintenance organization health benefits plan as defined in paragraph (4) of Code Section 33-21-1.
(i) This Code section shall become effective on January 1, 2022.
(a) As used in this Code section, the term “health care insurer” means an insurer, a fraternal benefit society, a health care plan, or a health maintenance organization authorized under this title to sell accident and sickness insurance policies, subscriber certificates, or other contracts of insurance by whatever name called.
(b) Every health care insurer licensed in this state that provides prescription medication coverage as part of a policy or contract shall waive time restrictions on prescription medication refills, which includes the suspension of electronic “refill too soon” limitations, to enable insureds or subscribers to refill prescriptions in advance and shall authorize payment to pharmacies for a 30 day supply of any prescription medication, regardless of the date upon which the prescription had most recently been filled by a pharmacist, when the following conditions occur:
(1) The person seeking the prescription medication refill resides in a county or other area of this state that:
(A) Is declared to be under a state of emergency by executive order of the Governor; or
(B) Is under a hurricane warning issued by the National Weather Service; and
(2) The prescription medication has refills remaining and a refill is requested within 30 days after the origination date of the conditions described in paragraph (1) of this subsection or until such conditions are terminated by the issuing authority or no longer exist.
(c) The Commissioner may by directive as authorized in Code Section 33-2-10 extend the time restriction waiver on prescription medication refills described in subsection (b) of this Code section for 15 or 30 day increments and until such time as he or she determines such extensions are no longer necessary.
(d) Nothing in this Code section shall exempt any insured or subscriber from compliance with all other terms of the policy or contract providing prescription medication coverage.
(a) As used in this Code section, the term “health benefit plan” means any hospital, health, or medical expense insurance policy, hospital or medical service contract, employee welfare benefit plan, contract or agreement with a health maintenance organization, subscriber contract or agreement, preferred provider organization, accident and sickness insurance benefit plan, or other insurance contract under any other name. The term shall include any health insurance plan established under Article 1 of Chapter 18 of Title 45.
(b) In all health benefit plans issued, delivered, or renewed in this state, copayments shall be reasonable in relation to the covered benefits to which they apply, shall serve as an incentive rather than a barrier to access appropriate care, and shall not work so as to unfairly deny necessary healthcare services.
(a) As used in this Code section, the term:
(1) “Attending health care provider” means the attending physician and any other person administering health care services at the time of reference who is licensed, certified, or otherwise authorized or permitted by law to administer health care services in the ordinary course of business or the practice of a profession, including any person employed by or acting for any such authorized person.
(2) “Covered person” means a policyholder, subscriber, enrollee, member, or individual covered by a health benefit plan.
(3) “Health benefit plan” means a policy, contract, certificate, or agreement entered into, offered, or issued by a health insurance issuer to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services. Such term shall not include a plan providing coverage for only excepted benefits as specified in Section 2791(c) of the federal Public Health Service Act, 42 U.S.C.A. Section 300gg-91(c) and short-term policies that have a term of less than 12 months.
(4) “Health insurance issuer” means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the Commissioner, that contracts or offers to contract to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services, including through a health benefit plan as defined in this subsection, and shall include a sickness and accident insurance company, a health maintenance organization, a preferred provider organization, or any similar entity, or any other entity providing a plan of health insurance or health benefits.
(b) A health insurance issuer that provides coverage for anatomical gifts, organ transplants, or related treatment and services shall not:
(1) Deny coverage to a covered person solely on the basis of the individual's disability;
(2) Deny to a patient eligibility, or continued eligibility, to enroll or to renew coverage under the terms of a health benefit plan, solely for the purpose of avoiding the requirements of this subsection;
(3) Penalize or otherwise reduce or limit the reimbursement of an attending health care provider, or provide monetary or nonmonetary incentives to such a provider, to induce such provider to provide care to a covered person in a manner inconsistent with this Code section; or
(4) Reduce or limit coverage benefits to a patient for the medical or other health care services related to organ transplantation performed pursuant to this Code section as determined in consultation with the attending health care provider and patient.
(c) In the case of a health benefit plan maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers, any plan amendment made pursuant to a collective bargaining agreement relating to the plan which amends the plan solely to conform to any requirement imposed pursuant to this Code section shall not be treated as a termination of the collective bargaining agreement.
(d) Nothing in this Code section shall be deemed to require a health insurance issuer to provide coverage for a medically inappropriate organ transplant.
(a) For purposes of this Code section, the term “customer” means a policyholder, potential policyholder, certificate holder, potential certificate holder, insured, potential insured, or applicant.
(b) The following shall not be construed as an unfair trade practice under subsection (b) of Code Section 33-6-4 or an unlawful inducement under subsection (c) of Code Section 33-9-36:
(1) An insurer or insurance producer, by or through employees, affiliates, or third-party representatives, may offer or provide a value-added product or service to a customer at no or reduced cost when such product or service is not specified in the policy of insurance when:
(A) The value-added product or service relates to the insurance coverage;
(B) The value-added product or service is offered in a manner that is not unfairly discriminatory, and the availability of the value-added product or service is based on documented objective criteria that is maintained by the insurer or insurance producer and produced upon request by the Commissioner;
(C) The cost to the insurer or insurance producer for offering or providing the value-added product or service is reasonable in comparison to the premiums or insurance coverage for the policy class; and
(D) The value-added product or service is primarily designed to:
(i) Provide loss mitigation or loss control;
(ii) Reduce claim costs or claim settlement costs;
(iii) Provide education about liability risks or risk of loss to persons or property;
(iv) Monitor or assess risk, identify sources of risk, or develop strategies for eliminating or reducing risk;
(v) Enhance the health of a customer;
(vi) Enhance the financial wellness of a customer through items such as education or financial planning services;
(vii) Provide post-loss services;
(viii) Incentivize behavioral changes to improve the health or reduce the risk of death or disability of a customer; or
(ix) Assist in the administration of employee or retiree benefit insurance coverage; and
(2) When an insurer or insurance producer does not have sufficient evidence but has a good-faith belief that the value-added product or service meets the criteria in subparagraph (D) of paragraph (1) of this Code section, the insurer or insurance producer may offer or provide a value-added product or service in a manner that is not unfairly discriminatory as part of a pilot program for no more than one year. An insurer or insurance producer must notify the Commissioner prior to implementing the pilot program and may proceed with such program unless the Commissioner objects in writing within 21 days of notice.
(a) As used in this Code section, the term:
(1) “Breast magnetic resonance imaging” or “breast MRI” means a diagnostic and screening tool, including standard and abbreviated breast MRI, that uses radio waves and magnets to produce detailed images of structures within the breast.
(2) “Breast ultrasound” means a noninvasive diagnostic and screening tool that uses high-frequency sound waves and their echoes to produce detailed images of structures within the breast.
(3) “Cost-sharing requirement” means a deductible, coinsurance, or copayment and any maximum limitation on the application of such a deductible, coinsurance, copayment, or similar out-of-pocket expense.
(4) “Diagnostic breast examination” means a medically necessary and clinically appropriate examination of the breast, including such examination using breast MRI, breast ultrasound, or mammogram, that is:
(A) Used to evaluate an abnormality seen or suspected from a screening examination for breast cancer; or
(B) Used to evaluate an abnormality detected by another means of examination.
(5) “Health benefit policy” means any individual or group plan, policy, or contract for health care services issued, delivered, issued for delivery, executed, or renewed by an insurer in this state.
(6) “Insurer” means any person, corporation, or other entity authorized to provide health benefit policies under this title.
(7) “Mammogram” means a diagnostic or screening mammography exam using a low-dose X-ray to produce an image of the breast.
(8) “Supplemental breast screening examination” means a medically necessary and clinically appropriate examination of the breast, including such examination using breast MRI, breast ultrasound, or mammogram, that is:
(A) Used to screen for breast cancer when there is no abnormality seen or suspected in the breast; or
(B) Based on personal or family medical history or additional factors that may increase the individual's risk of breast cancer.
(b) A health benefit policy that provides coverage for diagnostic examinations for breast cancer shall include provisions that ensure that the cost-sharing requirements applicable to diagnostic and supplemental breast screening examinations are no less favorable than the cost-sharing requirements applicable to screening mammography for breast cancer.
(c) Nothing in this Code section shall be construed to preclude existing utilization review provided under Chapter 46 of this title.
(d) If under federal law application of subsection (b) of this Code section would result in Health Savings Account ineligibility under Section 223 of the Internal Revenue Code, such cost-sharing requirement shall apply only for Health Savings Account qualified High Deductible Health Plans with respect to the deductible of such plan after the enrollee has satisfied the minimum deductible under Section 223 of the Internal Revenue Code, except with respect to items or services that are preventive care pursuant to Section 223(c)(2)(C) of the Internal Revenue Code, in which case the requirements of subsection (b) of this Code section shall apply regardless of whether the minimum deductible under Section 223 of the Internal Revenue Code has been satisfied.
(e) The Commissioner shall promulgate rules and regulations necessary to implement the provisions of this Code section in accordance with current guidelines established by professional medical organizations such as the National Comprehensive Cancer Network.
(a) As used in this Code section, the term:
(1) “Biomarker” means a characteristic that is objectively measured and evaluated as an indicator of normal biological processes, pathogenic processes, or pharmacologic responses to a specific therapeutic intervention. Such term includes, but is not limited to, gene mutations, protein expression, known gene-drug interactions for medications, and characteristics of genes.
(2) “Biomarker testing” means the analysis of a patient's tissue, blood, or other biospecimen for the presence of a biomarker. Such term includes, but is not limited to, single-analyte tests, multiplex panel tests, whole genome sequencing, protein expression, whole exome, and whole transcriptome.
(3) “Consensus statements” means statements developed by an independent, multidisciplinary panel of experts utilizing a transparent methodology and reporting structure and with a conflict-of-interest policy. Such statements are aimed at specific clinical circumstances and base the statements on the best available evidence for the purpose of optimizing the outcomes of clinical care.
(4) “Health benefit policy” means any individual or group plan, policy, or contract for healthcare services issued, delivered, issued for delivery, or renewed in this state which provides major medical benefits, including those contracts executed by the State of Georgia on behalf of state employees under Article 1 of Chapter 18 of Title 45, by a health care corporation, health maintenance organization, preferred provider organization, accident and sickness insurer, fraternal benefit society, hospital service corporation, medical service corporation, or other insurer or similar entity.
(5) “Nationally recognized clinical practice guidelines” means evidence based clinical practice guidelines developed by independent organizations or medical professional societies utilizing a transparent methodology and reporting structure and with a conflict-of-interest policy. Such guidelines establish standards of care informed by a systematic review of evidence and an assessment of the benefits and risks of alternative care options and include recommendations intended to optimize patient care.
(b) All health benefit policies renewed or issued on or after July 1, 2023, shall include coverage for biomarker testing as provided in this Code section.
(c) Biomarker testing shall be covered for the purposes of diagnosis, treatment, appropriate management, or ongoing monitoring of an enrollee's disease or condition when the testing is supported by medical and scientific evidence, including, but not limited to:
(1) A labeled indication for a test that has been approved or cleared by the United States Food and Drug Administration (FDA);
(2) An indicated test for an FDA approved drug;
(3) A national coverage determination made by the federal Centers for Medicare and Medicaid Services or a local coverage determination made by a medicare administrative contractor;
(4) Nationally recognized clinical practice guidelines and consensus statements; or
(5) Warnings and precautions on FDA approved drugs.
(d) Health benefit policies shall ensure biomarker testing coverage is provided in a manner that limits disruptions in care, including the need for multiple biopsies or biospecimen samples.
(e) The insurer or similar entity subject to this Code section shall approve or deny a prior authorization request and notify the enrollee and the enrollee's healthcare provider within seven calendar days for nonurgent requests or within 72 hours for urgent requests. If the insurer or similar entity fails to respond in accordance with such time frames, such request shall be deemed approved.
(f) Enrollees, healthcare providers, and testing service providers shall have access to a clear, readily accessible, and convenient process to request an exception to a coverage policy or an adverse utilization review determination under a health benefit policy, including, but not limited to, the rights of consumers under Article 2 of Chapter 20A of Title 33, the “Patient's Right to Independent Review Act.” Such process shall be made readily accessible on the insurer's or similar entity's website.
This article shall be known and may be cited as the “Assessment of Proposed Accident and Sickness Insurance Coverage Act.”
It is the intent of the General Assembly to encourage health care cost containment while preserving the quality of care offered to citizens of this state. The General Assembly finds that there is an increasing number of proposals which mandate that certain health insurance benefits be provided by insurers as components of individual and group accident and sickness insurance policies. The General Assembly further finds that many of these health insurance benefits provide beneficial social and health consequences which may be in the public interest. However, the General Assembly also recognizes that most mandated health insurance benefits contribute to the increasing cost of accident and sickness insurance premiums. Therefore, it is the intent of the General Assembly to conduct a systematic review of proposed mandated or mandatorily offered health insurance benefits and to establish guidelines for such a review. This review will assist the General Assembly in determining whether mandating a certain health insurance benefit is in the public interest.
As used in this article, the term “health insurance benefit bill” means any legislative proposal which either mandates the inclusion of certain benefits, coverages, or reimbursements for covered health care services in accident and sickness insurance policies or provides for the mandatory offering of such benefits, coverages, or reimbursements in accident and sickness insurance policies.
(a) Every health insurance benefit bill, to be determined by the presiding officer of the House of Representatives or the Senate, shall be subject to review by the General Assembly prior to enactment as provided in this article. The Clerk of the House or the Secretary of the Senate shall deliver such bill or bills to the Commissioner of Insurance within five days after such legislation has been read for the first time.
(b) The Commissioner of Insurance shall issue a report on each health insurance benefit bill which assesses, if possible, the financial effects of the health insurance benefit proposed in such bill. The Commissioner, upon completion of said report, shall deliver a copy thereof to the Governor and to the presiding officer of both houses of the General Assembly.
The report required under Code Section 33-24-63 for assessing the impact of a health insurance benefit bill shall address the financial impact of such legislation by obtaining, at the minimum and to the extent that the information is available, the following:
(1) To what extent will the benefit increase or decrease the cost of the treatment or service;
(2) To what extent will the benefit increase the appropriate uses of the treatment or service;
(3) To what extent will the benefit be a substitute for a more expensive treatment or service;
(4) To what extent will the benefit increase or decrease the administrative expense of insurers or premium of the policyholders; and
(5) The impact of this coverage on the total cost of insurance premiums or health care to health insurance policyholders, including the impact of all indirect costs, which are costs other than premiums and administrative costs, on the question of benefit costs and benefits of coverage.
The Commissioner of Insurance, upon receiving a certified copy from the Clerk of the House or the Secretary of the Senate of the bill or bills as provided in Code Section 33-24-63, may in his discretion convene a public hearing within ten calendar days after receipt in order to obtain any information necessary to allow the Commissioner a basis upon which to prepare the report required by this article. If the Commissioner convenes a public hearing, he shall give such notice as is reasonable under the circumstances and, in all other respects, shall conduct such hearing in accordance with Chapter 2 of this title.
(a) The Commissioner shall compile all evidence, testimony, and information necessary to prepare the report required by Code Section 33-24-63. The Commissioner may include in this report studies, reviews, or evaluations of similar legislation completed by other states or any department of the government of the United States of America and any evaluations performed by the staff of the Department of Insurance.
(b) Within 20 days of the date of receipt of the health insurance benefit bill, the Commissioner shall issue the report required in Code Section 33-24-63. If a public hearing was conducted, the report shall contain a concise statement of the information revealed at the public hearing and may include copies of any document or documents presented at the public hearing and any other information deemed necessary by the Commissioner.
The Commissioner shall promulgate all rules and regulations necessary or appropriate to the administration and enforcement of this article.
This article shall be known and may be cited as the “Breast Cancer Patient Care Act.”
The General Assembly finds and declares that:
(1) Whereas, until recently health care insurers covered costs of hospital stays of a patient who had undergone a mastectomy or lymph node dissection until that patient was discharged by a physician. Now some insurers are making mastectomies and lymph node dissections an outpatient procedure and refusing to pay for any hospital inpatient care following the procedure;
(2) There is sufficient scientific data to question the safety and appropriateness of such treatment of breast cancer patients; and
(3) The length of postmastectomy or postlymph node dissection inpatient stay should be a clinical decision made by a physician in agreement with the patient based on the unique characteristics of the patient and the surgery involved.
(a) As used in this Code section, the term:
(1) “Attending physician” means any surgeon or other physician attending the breast cancer patient.
(2) “Health benefit policy” means any individual or group plan, policy, or contract for health care services issued, delivered, issued for delivery, or renewed in this state, including, but not limited to, those contracts executed by the state on behalf of indigents and on behalf of state employees under Article 1 of Chapter 18 of Title 45, by a health care corporation, health maintenance organization, preferred provider organization, accident and sickness insurer, fraternal benefit society, or other insurer or similar entity; except that such term does not include any policy of limited benefit insurance as defined in paragraph (4) of subsection (e) of Code Section 33-30-12.
(3) “Insurer” means an accident and sickness insurer, fraternal benefit society, health care corporation, health maintenance organization, managed care plan other than a dental plan, or any similar entity authorized to issue contracts under this title and also means any state program funded under Title XIX of the federal Social Security Act, 42 U.S.C.A. Section 1396, et seq., and any other publicly funded state health care program.
(4) “Lymph node dissection” means the removal of a part of the lymph node system under the arm using general anesthesia as part of a diagnostic process that is used to evaluate the spread of cancer and to determine the need for further treatment.
(5) “Mastectomy” means surgical removal of one or both breasts.
(b) Every health benefit policy that provides surgical benefits for mastectomies that is delivered, issued, executed, or renewed in this state or approved for issuance or renewal in this state by the Commissioner shall provide coverage in a licensed health care facility for inpatient care following a mastectomy or lymph node dissection until the completion of the appropriate period of stay for such inpatient care as determined by the attending physician in consultation with the patient. Coverage shall also be provided for such number of follow-up visits as determined to be appropriate by the attending physician after consultation with the patient. Such follow-up visits shall be conducted by a physician, a physician assistant, or a registered professional nurse with experience and training in postsurgical care. In consultation with the patient, such attending physician, physician assistant, or registered professional nurse shall determine whether any follow-up visit or visits will be conducted at home or at the office.
(c) Every insurer shall provide notice to policyholders regarding the coverage required by this Code section. The notice shall be in writing and prominently positioned in any of the following literature:
(1) A mailing to the policyholder;
(2) The yearly informational packets sent to the policyholder; or
(3) Other mailed literature.
(d) No insurer covered under this Code section shall deselect, terminate the services of, require additional utilization review, reduce capitation payment, or otherwise penalize an attending physician or other health care provider who orders care consistent with the provisions of this Code section. For purposes of this subsection, health care provider shall include the attending physician and hospital.
As used in this article, the term:
(1) “Adverse action” shall mean a denial or cancellation of, an increase in any charge for, or a reduction or other adverse or unfavorable change in the terms of coverage or amount of any insurance, existing or applied for, in connection with the underwriting of personal insurance.
(2) “Affiliate” shall mean any company that controls, is controlled by, or is under common control with another company.
(3) “Applicant” shall mean an individual who has applied to be covered by a personal insurance policy with an insurer.
(4) “Consumer” shall mean an insured whose credit information is used or whose insurance score is calculated in the underwriting or rating of a personal insurance policy or an applicant for such a policy.
(5) “Consumer reporting agency” shall mean any person that, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties.
(6) “Credit information” shall mean any credit related information derived from a credit report or found on a credit report utilized by an insurer or used by an insurer to calculate an insurance score for personal insurance. Information that is not credit related shall not be considered credit information, regardless of whether it is contained in a credit report or in an application, or is used to calculate an insurance score.
(7) “Credit report” shall mean any written, oral, or other communication of information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, or credit capacity which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor to determine personal insurance premiums, eligibility for coverage, or tier placement.
(8) “Insurance score” shall mean a number or rating that is derived from an algorithm, computer application, model, or other process that is based in whole or in part on credit information for the purposes of predicting the future insurance loss exposure of an individual applicant or insured.
(9) “Personal insurance” shall mean private passenger automobile, homeowners, motorcycle, mobile homeowners, and noncommercial dwelling fire insurance policies and boat, personal watercraft, snowmobile, and recreational vehicle policies. Such policies must be individually underwritten for personal, family, or household use. No other type of insurance shall be included as personal insurance for the purpose of this article.
An insurer authorized to do business in this state that uses credit information to underwrite or rate risks, shall not:
(1) Use an insurance score that is calculated using income, gender, race, address, ZIP Code, ethnic group, religion, marital status, or nationality of the consumer as a factor;
(2) Deny, cancel, or nonrenew a policy of personal insurance solely on the basis of credit information, without consideration of any other applicable underwriting factor independent of credit information and not expressly prohibited by paragraph (1) of this Code section;
(3) Base an insured's renewal rates for personal insurance solely upon credit information, without consideration of any other applicable factor independent of credit information;
(4) Take an adverse action against a consumer solely because he or she does not have a credit card account, without consideration of any other applicable factor independent of credit information;
(5) Consider an absence of credit information or an inability to calculate an insurance score in underwriting or rating personal insurance, unless the insurer does one of the following:
(A) Treat the consumer as otherwise approved by the Commissioner of Insurance, if the insurer presents information that such an absence or inability relates to the risk for the insurer;
(B) Treat the consumer as if the applicant or insured had neutral credit information, as defined by the insurer; or
(C) Exclude the use of credit information as a factor and use only other underwriting criteria;
(6) Take an adverse action against a consumer based on credit information unless an insurer obtains and uses a credit report issued or an insurance score calculated within 180 days from the date the policy is first written or renewal is issued;
(7) Use credit information unless not later than every 36 months following the last time that the insurer obtained credit information for the insured, the insurer recalculates the insurance score or obtains an updated credit report. Regardless of the requirements of this paragraph:
(A) At annual renewal, upon the request of a consumer, the insurer shall reunderwrite and rerate the policy based upon a credit report or insurance score. An insurer need not recalculate the insurance score or obtain the updated credit report of a consumer more frequently than once in a 12 month period. Prior to a consumer exercising his or her option for the insurer to reunderwrite or rerate the policy, the insurer shall notify the consumer orally or in writing that the reunderwriting or rerating of the policy may result in a higher rate, a lower rate, or other possible consequences, including nonrenewal or termination of the policy, or could produce no change for the consumer;
(B) The insurer shall have the discretion to obtain credit information upon any renewal before the 36 months, if consistent with its underwriting guidelines; and
(C) No insurer need obtain credit information for an insured, despite the requirements of subparagraph (A) of this paragraph, if one of the following applies:
(i) The insurer is treating the consumer as otherwise approved by the Commissioner;
(ii) The insured is in the most favorably priced tier of the insurer, within a group of affiliated insurers; however, the insurer shall have the discretion to order such report, if consistent with its underwriting guidelines;
(iii) Credit information was not used for underwriting or rating such insured when the policy was initially written; however, the insurer shall have the discretion to use credit for underwriting or rating such insured upon renewal, if consistent with its underwriting guidelines; or
(iv) The insurer reevaluates the insured beginning no later than 36 months after inception and thereafter based upon other underwriting or rating factors, excluding credit information; or
(8) Use the following as a negative factor in any insurance scoring methodology or in reviewing credit information for the purpose of underwriting or rating a policy of personal insurance:
(A) Credit inquiries not initiated by the consumer or inquiries requested by the consumer for his or her own credit information;
(B) Inquiries relating to insurance coverage, if so identified on a consumer's credit report;
(C) Collection accounts with a medical industry code, if so identified on the consumer's credit report;
(D) Multiple lender inquiries, if coded by the consumer reporting agency on the consumer's credit report as being from the home mortgage industry and made within 30 days of one another, unless only one inquiry is considered; or
(E) Multiple lender inquiries, if coded by the consumer reporting agency on the consumer's credit report as being from the automobile lending industry and made within 30 days of one another, unless only one inquiry is considered.
If an item or items contained in the credit information for an applicant or insured are in dispute pursuant to the dispute resolution process set forth in the federal Fair Credit Reporting Act, 15 USC 1681i, the insurer, during the 45 day period following the date on which the item was placed in dispute pursuant to such dispute resolution process, shall either not use such disputed item or items in making its underwriting or rating determination for such applicant or insured or shall treat the credit information as neutral with respect to the item or items in dispute.
(a) If an insurer writing personal insurance uses credit information in underwriting or rating a consumer, the insurer or its agent shall disclose, either on the insurance application or at the time the insurance application is taken, that it may obtain credit information in connection with such application. Such disclosure shall be either written or provided to an applicant in the same medium as the application for insurance. The insurer need not provide the disclosure statement required under this Code section to any insured on a renewal policy, if such consumer has previously been provided a disclosure statement.
(b) The disclosure required by this Code section shall be in substantially the following form: “In connection with this application for insurance, we may review your credit report or obtain or use a credit based insurance score based on the information contained in that credit report. We may use a third party in connection with the development of your insurance score.”
If an insurer takes an adverse action based upon credit information, the insurer must meet the notice requirements of this Code section. Such insurer shall provide notification to the consumer that an adverse action has been taken, in accordance with the requirements of the federal Fair Credit Reporting Act, 15 USC 1681m(a), and shall provide notification to the consumer explaining the reason or reasons for the adverse action. The reasons must be provided in sufficiently clear and specific language so that a person can identify the basis for the insurer's decision to take an adverse action. Such notification shall include a description of up to four factors that were the primary influences of the adverse action. The use of generalized terms such as “poor credit history,” “poor credit rating,” or “poor insurance score” does not meet the explanation requirements of this Code section. Standardized credit explanations provided by consumer reporting agencies or other third party vendors are deemed to comply with this Code section.
(a) Insurers that use insurance scores to underwrite and rate risks must file their scoring models or other scoring processes with the Commissioner of Insurance. A third party may file scoring models on behalf of insurers licensed to do business in this state, provided that such third parties are on an approved list maintained by the Commissioner. A filing that includes insurance scoring may include loss experience justifying the use of credit information.
(b) Any filing relating to credit information is considered to be a trade secret and proprietary information of the entity filing the information. Such information shall not be subject to public disclosure and shall be exempt from disclosure under the provisions of Article 4 of Chapter 18 of Title 50.
An insurer shall indemnify, defend, and hold agents harmless from and against all liability, fees, and costs arising out of or relating to the actions, errors, or omissions of an agent or a producer who obtains or uses credit information or insurance scores for an insurer, provided the agent or producer follows the instructions and procedures established by the insurer and complies with any applicable law or regulation. Nothing in this Code section shall be construed to provide a consumer or other insured with a cause of action that does not exist in the absence of this Code section.
(a) No consumer reporting agency shall provide or sell data or lists that include any information that in whole or in part was submitted in conjunction with an insurance inquiry about a consumer's credit information or a request for a credit report or insurance score. Such information includes, but is not limited to, the expiration dates of an insurance policy or any other information that may identify time periods during which a consumer's insurance may expire and the terms and conditions of the consumer's insurance coverage.
(b) The restrictions provided in subsection (a) of this Code section do not apply to data or lists the consumer reporting agency supplies to the insurance agent or producer from whom information was received, the insurer on whose behalf such agent or producer acted, or such insurer's affiliates or holding companies.
(c) Nothing in this Code section shall be construed to restrict any insurer from being able to obtain a claims history report or a motor vehicle report.
Notwithstanding any provision of law to the contrary, insurers shall be allowed to use insurance scores in rating and underwriting subject to the provisions of this article.
A “contract of life insurance” is one whereby the insurer, for a consideration, assumes an obligation to be performed upon the death of the insured or upon the death of another in the continuance of whose life the insured has an insurable interest, whether such obligation is one to pay a sum of money, to perform services, or to furnish goods, wares, or merchandise, or other things of value, and whether the cost or value of the undertaking on the part of the insurer is more or less than the consideration flowing to him.
(a) Except for group life insurance policies, all life insurance policies which contain any reference to the application for insurance or to the constitution, bylaws, or other rules of the insurer as forming part of or as affecting the contract between the parties shall include or have attached to the policy a correct copy of the application signed by the applicant and of the constitution, bylaws, and rules to which reference is made.
(b) Unless included in or attached to the policy, no application, constitution, bylaws, or rules shall be considered a part of the contract or as an independent contract, nor shall they be received in evidence either as part of or as affecting the contract or as an independent contract in any controversy between the parties to or interested in the policy. This Code section shall not apply to applications for reinstatement.
(a) Except as provided in subsection (b) of this Code section, no policy of life insurance shall be delivered or issued for delivery in this state unless it contains in substance the following provisions:
(1) GRACE PERIOD.A provision that the insured is entitled to a grace period of not less than 30 days within which the payment of any premium after the first may be made, during which period of grace the policy shall continue in force; but if a claim arises under the policy during the grace period, the amount of any premium due or overdue may be deducted from any amount payable under the policy in settlement;
(2) INCONTESTABILITY.A provision that the policy exclusive of provisions relating to disability benefits or to additional benefits in the event of death by accident or accidental means shall be incontestable, except for nonpayment of premiums, after it has been in force during the lifetime of the insured for a period of two years from its date of issue;
(3) MISSTATEMENT OF AGE.A provision that, if the age of the person insured or of any other person whose age is considered in determining the premium or benefit has been misstated, any amount payable or any benefit accruing under the policy shall be such as the premium would have purchased at the correct age or ages;
(4) DIVIDENDS.A provision in participating policies that, beginning not later than the end of the third policy year, the insurer shall annually ascertain and apportion the divisible surplus, if any, that will accrue on the policy anniversary or other dividend date specified in the policy. Except as provided in this paragraph, any dividend becoming payable shall at the option of the party entitled to elect such option be either payable in cash or applied to any one of such other dividend options as may be provided by the policy. If any other dividend options are provided, the policy shall further state which option shall be automatically effective if the party shall not have elected some other option. If a policy specifies a period within which the other option may be elected, the period shall be not less than 30 days following the date on which the dividend is due and payable. The annually apportioned dividend shall be deemed to be payable in cash within the meaning set forth in this paragraph, even though the policy provides that payment of the dividend is to be deferred for a specified period, provided the period does not exceed six years from the date of apportionment and that interest will be added to the dividend at a specified rate. If a participating policy provides that the benefit under any paid-up nonforfeiture provision is to be participating, it may provide that any divisible surplus becoming payable or apportioned while the insurance is in force under the nonforfeiture provision shall be applied in the manner set forth in the policy;
(5) POLICY LOAN.A provision that after three full years' premiums have been paid, and after the policy has a cash surrender value, and while no premium is in default beyond the grace period for payment, the insurer will loan on the execution of a proper note or loan agreement by the owner of the policy, and on proper assignment of the policy and on the sole security of the policy, at a specified rate of interest, a sum equal to or, at the option of the owner of the policy, less than the cash value of the policy at the end of the current policy year including any dividend additions to the policy. The company may deduct from the loan value or from the proceeds of the loan any existing indebtedness on or secured by the policy not already deducted in determining the cash value, including interest due or accrued, and any unpaid balance of the premium for the current policy year, and may collect interest in advance of the loan through the end of the current policy year. The policy shall reserve to the insurer the right to defer the granting of a loan, other than for the payment of any premium to the insurer, for six months after application for such deferment. The policy may also provide that if interest on any indebtedness is not paid when due, it shall then be added to the existing indebtedness and shall bear interest at the same rate, and that if and when the total indebtedness on the policy, including interest due or accrued, equals or exceeds the amount of the loan value of the policy, then the policy shall terminate and become void, but not until at least 30 days' notice shall have been mailed by the insurer to the last known address of the insured or policy owner and to that of any assignee of record at the home office of the insurer. The policy, at the insurer's option, may provide for an automatic premium loan, subject to an election of the party entitled to elect. No condition other than as provided in this paragraph shall be exacted as a prerequisite to any loan. This provision shall not apply to term insurance or to term insurance benefits provided by rider or supplemental policy provisions;
(6) TABLES OF INSTALLMENTS.In case the policy provides that the proceeds may be payable in installments which are determinable at issue of the policy, there shall be a table showing the amounts of the guaranteed installments;
(7) TABLES OF OPTIONS AND VALUES.In the case of policies which cause on a basis guaranteed in the policy unscheduled changes in benefits or premiums, or which provide an option for changes in benefits or premiums other than a change to a new policy, a statement of the mortality table, interest rate, and method used in calculating cash surrender values and the paid-up nonforfeiture benefits available under the policy. In the case of all other policies, a statement of the mortality table and interest rate used in calculating the cash surrender values and the paid-up nonforfeiture benefits available under the policy, together with a table showing the cash surrender value, if any, and paid-up nonforfeiture benefits, if any, available under the policy on each policy anniversary, either during the first 20 policy years or during the term of the policy, whichever is shorter, such values and benefits to be calculated upon the assumption that there are no dividends or paid-up additions credited to the policy and that there is no indebtedness to the insurer on the policy;
(8) REINSTATEMENT.A provision that unless the policy has been surrendered for its cash surrender value or its cash surrender value has been exhausted, or unless the paid-up term insurance, if any, has expired, the policy will be reinstated at any time within three years from the date of premium default upon written application for reinstatement, the production of evidence of insurability satisfactory to the insurer, the payment of all premiums in arrears, and the payment or reinstatement of any other indebtedness to the insurer upon the policy all with interest not exceeding 6 percent per annum compounded annually;
(9) TITLE.On each such policy there shall be placed a title which shall briefly and accurately describe the nature and form of the policy;
(10) PAYMENT OF PREMIUMS.A provision relative to the payment of premiums;
(11) PAYMENT OF CLAIMS.A provision that, when a policy shall become a claim by the death of the insured, settlement shall be made upon receipt of due proof of death and, at the insurer's option, surrender of the policy and proof of the interest of the claimant. If an insurer shall specify a particular period prior to the expiration of which settlement shall be made, the period shall not exceed two months from the receipt of such proofs;
(12) ENTIRE CONTRACT.A provision that, if any reference is made to the application for insurance or to the constitution, bylaws, or rules of the insurer as forming part of or as affecting the policy between the parties, there shall be included in or attached to the policy, when issued, a correct copy of the application signed by the applicant and of the constitution, bylaws, and rules to which reference is made.
(b) Any of the provisions enumerated in subsection (a) of this Code section or portions thereof not applicable to single premium or term policies shall to that extent not be incorporated in single premium or term policies. This Code section shall not apply to credit or group insurance, or to any provision of a life insurance policy, or contract supplemental to a life insurance policy, relating to disability benefits or to additional benefits in event of death by accident or accidental means.
(a) As used in this Code section, the term:
(1) “Policy” means a contract of life insurance, a life benefit certificate issued by a fraternal benefit society, or an annuity contract.
(2) “Policyholder” means the owner of the policy or the person designated on the records of the company as the person responsible to pay the premiums.
(3) “Policy loan” means a cash loan or a premium loan made by an insurer on a policy in accordance with the provisions of this title.
(4) “Policy loan interest rate” means the interest rate charged on a policy loan made in accordance with the provisions of this title including the interest rate charged on reinstatement of a policy loan for the period during and after any lapse of the policy.
(5) “Published monthly average” means:
(A) Moody's Corporate Bond Yield Average--Monthly Average Corporates as published by Moody's Investors Service, Inc., or by any successor thereto; or
(B) In the event that Moody's Corporate Bond Yield Average--Monthly Average Corporates, or any successor thereto, is no longer published, “published monthly average” means any substantially similar average which the Commissioner shall, by rule or regulation, designate to be used in its place.
(b) No policy of life insurance which provides for policy loans shall be issued, delivered, or issued for delivery in this state on or after July 1, 1983, unless it contains one of the following provisions relating to policy loan interest rates:
(1) A provision permitting a specified rate of interest on policy loans, not to exceed 8 percent per annum, in accordance with the provisions of paragraph (5) of subsection (a) of Code Section 33-25-3 and the rules and regulations promulgated by the Commissioner pursuant thereto; or
(2) A provision permitting an adjustable maximum policy loan interest rate established from time to time by the insurer in accordance with subsection (c) of this Code section.
(c) If the policy provides for an adjustable maximum policy loan interest rate as allowed under paragraph (2) of subsection (b) of this Code section, the insurer shall also be required to comply with the following requirements:
(1) The policy loan interest rate charged shall not exceed the higher of the following:
(A) The published monthly average for the calendar month ending two months before the date on which the rate is determined; or
(B) The rate used to calculate the cash surrender values under the policy during the applicable period plus 1 percent per annum.
(2) The policy shall contain a provision setting forth the frequency at which the policy loan interest rate is to be determined for that policy;
(3) The maximum policy loan interest rate for each policy must be determined at regular intervals at least once every 12 months, but not more frequently than once in any three-month period;
(4) At the intervals specified in the policy:
(A) The policy loan interest rate being charged may be increased whenever such increase as determined by this Code section would increase the policy loan interest rate by 1/2 percent or more per annum; and
(B) The policy loan interest rate being charged must be reduced whenever such reduction as determined in this Code section would reduce the policy loan interest rate by 1/2 percent or more per annum;
(5) The insurer shall:
(A) Notify the policyholders, at the time a cash loan is made, of the initial policy loan interest rate applicable to the loan;
(B) Notify the policyholder who makes a premium loan of the initial policy loan interest rate as soon as it is reasonably practical to do so after the making of the initial loan. Notice need not be given to the policyholder when a further premium loan is made unless there is an increase in the policy loan interest rate, in which case notice shall be given in accordance with subparagraph (C) of this paragraph;
(C) Send policyholders with policy loans reasonable advance notice of any increase in the policy loan interest rate; and
(D) Include in the notice required to be sent under subparagraph (C) of this paragraph a statement concerning the applicable policy loan interest rate and the frequency at which such rate is determined; and
(6) A statement concerning the applicable policy loan interest rate and the frequency at which such rate is determined shall be included in the policy.
(d) Notwithstanding any provisions of this title which might be construed to the contrary, no policy shall terminate in a policy year as the sole result of a change in the interest rate during that policy year and the life insurer shall maintain coverage during that policy year until the time at which it would otherwise have terminated if there had been no change during that policy year.
(e) Notwithstanding any provisions of the laws of this state which might be construed to the contrary, the maximum rate of interest which may be charged on a policy loan shall be governed exclusively by the provisions of this Code section unless such other laws are specifically made applicable to policy loans.
(f) No insurer shall be permitted to issue policies with adjustable maximum policy loan interest rates as allowed under paragraph (2) of subsection (b) of this Code section unless such insurer also makes available policies, which may or may not be on the same type of policy form, with specified rates of interest on policy loans in accordance with the provisions of paragraph (1) of subsection (b) of this Code section.
(g) The provisions of this Code section shall not apply to any policy issued before July 1, 1983, unless the policyholder agrees in writing to the applicability of such provisions in accordance with such requirements as may be established by the Commissioner.
(a)(1) Except as provided in subsection (f) of this Code section, no policy of life insurance issued on or after January 1, 1966, shall be delivered or issued for delivery in this state unless it shall contain the following provisions, or corresponding provisions which in the opinion of the Commissioner are at least as favorable to the defaulting or surrendering policyholder as are in the minimum requirements hereinafter specified and are essentially in compliance with subsection (h) of this Code section:
(A) A provision that, in the event of default in any premium payment, the insurer will grant, upon proper request not later than 60 days after the due date of the premium in default, a paid-up nonforfeiture benefit on a plan stipulated in the policy, effective as of such due date, of such amount as specified in subsection (c) of this Code section. In lieu of such stipulated paid-up nonforfeiture benefit, the insurer may substitute, upon proper request not later than 60 days after the due date of the premium in default, an actuarially equivalent alternative paid-up nonforfeiture benefit which provides a greater amount or longer period of death benefits or, if applicable, a greater amount or earlier payment of endowment benefits;
(B) A provision that, upon surrender of the policy, within 60 days after the due date of any premium payment in default, after premiums have been paid for at least three full years, the insurer will pay, in lieu of any paid-up nonforfeiture benefit, a cash surrender value of such amount as specified in subsection (b) of this Code section;
(C) A provision that a specified paid-up nonforfeiture benefit shall become effective as specified in the policy unless the person entitled to make such election elects another available option not later than 60 days after the due date of the premium in default;
(D) A provision that, if the policy shall have become paid up by completion of all premium payments, or if it is continued under any paid-up nonforfeiture benefit which became effective on or after the third policy anniversary, the insurer will pay, upon surrender of the policy within 30 days after any policy anniversary, a cash surrender value of such amount as specified in subsection (b) of this Code section;
(E) An explanation of the manner in which the cash surrender values and the paid-up nonforfeiture benefits are altered by the existence of any paid-up additions, credited to the policy, or any indebtedness to the insurer on the policy; if a detailed statement of the method of computation of the values and benefits shown in the policy is not stated in the policy, a statement that the method of computation has been filed with the supervisory insurance official of the state in which the policy is delivered; and a statement of the method to be used in calculating the cash surrender value and paid-up nonforfeiture benefit available under the policy on any policy anniversary beyond the last anniversary for which the values and benefits are consecutively shown in the policy.
(2) Any of the provisions or portions thereof set forth in subparagraphs (a)(1)(A) through (a)(1)(E) of this Code section not applicable by reason of the plan of insurance may, to the extent inapplicable, be omitted from the policy.
(3) The insurer shall reserve the right to defer the payment of any cash surrender value for a period of six months after demand therefor with surrender of the policy.
(b)(1) Any cash surrender value available under the policy in the event of default in a premium payment due on any policy anniversary, whether or not required by subsection (a) of this Code section, shall be an amount not less than the excess, if any, of the present value on the anniversary of the future guaranteed benefits which would have been provided for by the policy, including any existing paid-up additions, if there had been no default, over the sum of the then present value of the adjusted premiums as defined in subsections (d) and (e) of this Code section, corresponding to premiums which would have fallen due on and after the anniversary and the amount of any indebtedness to the insurer on account of or secured by the policy.
(2) Provided, however, that for any policy issued on or after the operative date of subsection (e) of this Code section as defined in subsection (e) of this Code section which provides supplemental life insurance or annuity benefits at the option of the insured and for an identifiable additional premium by rider or supplemental policy provision, the cash surrender value referred to in paragraph (1) of this subsection shall be an amount not less than the sum of the cash surrender value as defined in paragraph (1) of this subsection for an otherwise similar policy issued at the same age without such rider or supplemental policy provision and the cash surrender value as defined in paragraph (1) of this subsection for a policy which provides only the benefits otherwise provided by such rider or supplemental policy provision.
(3) Provided, further, that for any family policy issued on or after the operative date of subsection (e) of this Code section as defined in subsection (e) of this Code section which defines a primary insured and provides term insurance on the life of the spouse of the primary insured expiring before the spouse's age 71, the cash surrender value referred to in paragraph (1) of this subsection shall be an amount not less than the sum of the cash surrender value as defined in paragraph (1) of this subsection for an otherwise similar policy issued at the same age without such term insurance on the life of the spouse and the cash surrender value as defined in paragraph (1) of this subsection for a policy which provides only the benefits otherwise provided by such term insurance on the life of the spouse.
(4) Any cash surrender value available within 30 days after any policy anniversary under any policy paid up by completion of all premium payments or any policy continued under any paid-up nonforfeiture benefit, whether or not required by subsection (a) of this Code section, shall be an amount not less than the present value on the anniversary of the future guaranteed benefits provided for by the policy, including any existing paid-up additions, decreased by any indebtedness to the insurer on account of or secured by the policy.
(c) Any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment due on any policy anniversary shall be such that its present value as of the anniversary shall be at least equal to the cash surrender value then provided for by the policy or, if none is provided for, that cash surrender value which would have been required by this Code section in the absence of the condition that premiums shall have been paid for at least a specified period.
(d)(1) This subsection shall not apply to policies issued on or after the operative date of subsection (e) of this Code section as defined in subsection (e) of this Code section, except that, with respect to such policies for which the gross premium during the first policy year includes any additional amounts for which no comparable additional benefit is provided during that year, this subsection shall continue to apply until the effective date of subsection (h) of this Code section. Except as provided in paragraph (3) of this subsection, the adjusted premiums for any policy shall be calculated on an annual basis and shall be such uniform percentage or percentages of the respective premiums specified in the policy for each policy year, excluding extra premiums on a substandard policy and excluding any additional amounts payable during the first policy year for which there are no comparable additional insurance benefits provided during that year, that the present value at the date of issue of the policy of all such adjusted premiums shall be equal to the sum of (A) the then present value of the future guaranteed benefits provided for by the policy; (B) 2 percent of the amount of the insurance if the insurance be uniform in amount, or of the equivalent uniform amount, as defined in paragraph (3) of this subsection, if the amount of insurance varies with the duration of the policy; (C) 40 percent of the adjusted premium for the first policy year; (D) 25 percent of either the adjusted premium for the first policy year or the adjusted premium for a whole life policy of the same uniform or equivalent uniform amount with uniform premiums for the whole of life issued at the same age for the same amount of insurance, whichever is less, reduced by (E) any additional amounts payable during the first policy year for which there are no comparable additional insurance benefits provided during that year.
(2) The adjusted premiums shall be a single uniform percentage of the respective premiums specified in the policy for each policy year, unless the adjusted premiums result in cash surrender values which are smaller than endowment amounts provided by the policy prior to maturity as of the date or dates such endowment amounts are provided, in which event the adjusted premiums shall be determined as uniform percentages of the respective premiums specified in the policy such that no cash surrender value is smaller than any endowment amount provided by the policy prior to maturity as of the date or dates such endowment amount is provided. For the purposes of this paragraph, the Commissioner may treat any cash surrender value actually provided by the policy as equivalent to an endowment amount; provided, however, that in applying the percentages specified in items (C) and (D) of paragraph (1) of this subsection no adjusted premium shall be deemed to exceed 4 percent of the amount of insurance or uniform amount equivalent thereto. The date of issue of a policy for the purpose of this Code section shall be the date as of which the rated age of the insured is determined.
(3) In the case of a policy providing an amount of insurance varying with the duration of the policy, the equivalent uniform amount of insurance, for the purpose of this subsection, shall be deemed to be the uniform amount of insurance provided by an otherwise similar policy containing the same endowment benefit or benefits, if any, issued at the same age and for the same term, the amount of which does not vary with duration, and the benefits under which have the same present value at the date of issue as the benefits under the policy; provided, however, that, in the case of a policy providing a varying amount of insurance issued on the life of a child under age ten, the equivalent uniform amount may be computed as though the amount of insurance provided by the policy prior to the attainment of age ten was the amount provided by the policy at age ten. In the case of a policy which provides pure endowment benefits which are payable without reducing the amount of insurance provided by the policy and which may be applied to provide additional amounts of paid-up life insurance, the equivalent uniform amount of insurance shall be determined on the amounts of insurance which would be effective if all the pure endowment benefits were applied to provide such additional amounts of paid-up life insurance.
(4) The adjusted premiums for any policy providing term insurance benefits by rider or supplemental policy provision shall be equal to (A) the adjusted premiums for an otherwise similar policy issued at the same age without such term insurance benefits, increased, during the period for which premiums for such term insurance benefits are payable, by (B) the adjusted premiums for such term insurance, items (A) and (B) of this paragraph being calculated separately and as specified in paragraphs (1) through (3) of this subsection, except that, for the purpose of items (B), (C), and (D) of paragraph (1) of this subsection, the amount of insurance or equivalent uniform amount of insurance used in the calculation of the adjusted premiums referred to in item (B) of this paragraph shall be equal to the excess of the corresponding amount determined for the entire policy over the amount used in the calculation of the adjusted premiums in item (A) of this paragraph.
(5) All adjusted premiums and present values referred to in this Code section shall, for all policies of ordinary insurance, be calculated on the basis of the Commissioners 1958 Standard Ordinary Mortality Table, provided that, for any category of ordinary insurance issued on female risks, adjusted premiums and present values may be calculated according to an age not more than six years younger than the actual age of the insured. Such calculations for all policies of industrial insurance shall be made on the basis of the 1941 Standard Industrial Mortality Table; provided, however, that any insurer may file with the Commissioner a written notice of its election that such adjusted premiums and present values shall be calculated on the basis of the Commissioners 1961 Standard Industrial Mortality Table, after a specified date before January 1, 1968, and, whether or not any election has been made, such calculations for all policies of industrial insurance, issued on or after January 1, 1968, shall be made on the basis of the Commissioners 1961 Standard Industrial Mortality Table. All calculations shall be made on the basis of the rate of interest specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits. Such rate of interest shall not exceed 3 1/2 percent per annum, except that a rate of interest not exceeding 4 percent per annum may be used for policies issued on or after July 1, 1973; and prior to July 1, 1979, a rate of interest not exceeding 5 1/2 percent per annum may be used for policies issued on or after July 1, 1979; and for any single premium whole life or endowment insurance policy, a rate of interest not exceeding 6 1/2 percent per annum may be used. In calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed in the case of ordinary policies may not be more than those shown in the Commissioners 1958 Extended Term Insurance Table and in the case of industrial policies may not be more than 130 percent of the rates of mortality according to the 1941 Standard Industrial Mortality Table. After January 1, 1968, when the Commissioners 1961 Standard Industrial Mortality Table becomes applicable, such rates of mortality assumed may be not more than those shown in the Commissioners 1961 Industrial Extended Term Insurance Table. For insurance issued on a substandard basis, the calculation of any adjusted premiums and present values may be based on such other table of mortality as may be specified by the insurer and approved by the Commissioner.
(e)(1) As used in this subsection, the term “operative date of the valuation manual” has the same meaning as in paragraph (2) of subsection (o) of Code Section 33-10-13.
(1.1) This subsection shall apply to any life insurance policy issued on or after January 1, 1989, or such earlier date as may have been elected by the insurer with respect to such policy in accordance with the provisions of paragraph (11) of this subsection. Except as provided in paragraph (3) of this subsection, the adjusted premiums for any policy shall be calculated on an annual basis and shall be such uniform percentage of the respective premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments or special hazards and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the date of issue of the policy, of all adjusted premiums shall be equal to the sum of (A) the then present value of the future guaranteed benefits provided for by the policy; (B) one percent of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first ten policy years; and (C) 125 percent of the nonforfeiture net level premium as defined in this subsection; provided, however, that in applying the percentage specified in item (C) of this paragraph no nonforfeiture net level premium shall be deemed to exceed 4 percent of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first ten policy years. The date of issue of a policy for the purpose of this subsection shall be the date as of which the rated age of the insured is determined.
(2) The nonforfeiture net level premium shall be equal to the present value, at the date of issue of the policy, of the guaranteed benefits provided for by the policy divided by the present value, at the date of issue of the policy, of an annuity of one per annum payable on the date of issue of the policy and on each anniversary of such policy on which a premium falls due.
(3) In the case of policies which cause on a basis guaranteed in the policy unscheduled changes in benefits or premiums or which provide an option for changes in benefits or premiums other than a change to a new policy, the adjusted premiums and present values shall initially be calculated on the assumption that future benefits and premiums do not change from those stipulated at the date of issue of the policy. At the time of any such change in the benefits or premiums the future adjusted premiums, nonforfeiture net level premiums and present values shall be recalculated on the assumption that the future benefits and premiums do not change from those stipulated by the policy immediately after the change.
(4) Except as otherwise provided in paragraph (7) of this subsection, the recalculated future adjusted premiums for any such policy shall be such uniform percentage of the respective future premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments and special hazards and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the time of change to the newly defined benefits or premiums, of all such future adjusted premiums shall be equal to the excess of (A) the sum of (i) the then present value of the then future guaranteed benefits provided for by the policy and (ii) the additional expense allowance, if any, over (B) the then cash surrender value, if any, or present value of any paid-up nonforfeiture benefit under the policy.
(5) The additional expense allowance, at the time of the change to the newly defined benefits or premiums, shall be the sum of (A) 1 percent of the excess, if positive, of the average amount of insurance at the beginning of each of the first ten policy years subsequent to the change over the average amount of insurance prior to the change at the beginning of each of the first ten policy years subsequent to the time of the most recent previous change, or, if there has been no previous change, the date of issue of the policy; and (B) 125 percent of the increase, if positive, in the nonforfeiture net level premium.
(6) The recalculated nonforfeiture net level premium shall be equal to the result obtained by dividing (A) by (B) where:
(A) Equals the sum of:
(i) The nonforfeiture net level premium applicable prior to the change times the present value of an annuity of one per annum payable on each anniversary of the policy on or subsequent to the date of the change on which a premium would have fallen due had the change not occurred; and
(ii) The present value of the increase in future guaranteed benefits provided for by the policy; and
(B) Equals the present value of an annuity of one per annum payable on each anniversary of the policy on or subsequent to the date of change on which a premium falls due.
(7) Notwithstanding any other provisions of this subsection to the contrary, in the case of a policy issued on a substandard basis which provides reduced graded amounts of insurance so that, in each policy year, such policy has the same tabular mortality cost as an otherwise similar policy issued on the standard basis which provides higher uniform amounts of insurance, adjusted premiums and present values for such substandard policy may be calculated as if it were issued to provide such higher uniform amounts of insurance on the standard basis.
(8) All adjusted premiums and present values referred to in this Code section shall for all policies of ordinary insurance be calculated on the basis of (A) the Commissioners 1980 Standard Ordinary Mortality Table or (B) at the election of the insurer for any one or more specified plans of life insurance, the Commissioners 1980 Standard Ordinary Mortality Table with Ten-Year Select Mortality Factors; shall for all policies of industrial insurance be calculated on the basis of the Commissioners 1961 Standard Industrial Mortality Table; and shall for all policies issued in a particular calendar year be calculated on the basis of a rate of interest not exceeding the nonforfeiture interest rate as defined in this subsection for policies issued in that calendar year; provided, however, that:
(A) At the option of the insurer, calculations for all policies issued in a particular calendar year may be made on the basis of a rate of interest not exceeding the nonforfeiture interest rate, as defined in this subsection, for policies issued in the immediately preceding calendar year;
(B) Under any paid-up nonforfeiture benefit, including any paid-up dividend additions, any cash surrender value available, whether or not required by subsection (a) of this Code section, shall be calculated on the basis of the mortality table and rate of interest used in determining the amount of such paid-up nonforfeiture benefit and paid-up dividend additions, if any;
(C) An insurer may calculate the amount of any guaranteed paid-up nonforfeiture benefit including any paid-up additions under the policy on the basis of an interest rate no lower than that specified in the policy for calculating cash surrender values;
(D) In calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners 1980 Extended Term Insurance Table for policies of ordinary insurance and not more than the Commissioners 1961 Industrial Extended Term Insurance Table for policies of industrial insurance;
(E) For insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on appropriate modifications of the aforementioned tables;
(F) For policies issued prior to the operative date of the valuation manual, any Commissioners standard ordinary mortality tables adopted after 1980 by the National Association of Insurance Commissioners that are approved by regulation promulgated by the Commissioner for use in determining the minimum nonforfeiture standard may be substituted for the Commissioners 1980 Standard Ordinary Mortality Table with or without Ten-Year Select Mortality Factors or for the Commissioners 1980 Extended Term Insurance Table. For policies issued on or after the operative date of the valuation manual, the valuation manual shall provide the Commissioners standard mortality table for use in determining the minimum nonforfeiture standard that may be substituted for the Commissioners 1980 Standard Ordinary Mortality Table with or without Ten-Year Select Mortality Factors or for the Commissioners 1980 Extended Term Insurance Table. If the Commissioner approves by regulation any Commissioners standard ordinary mortality table adopted by the National Association of Insurance Commissioners for use in determining the minimum nonforfeiture standard for policies issued on or after the operative date of the valuation manual, then that minimum nonforfeiture standard supersedes the minimum nonforfeiture standard provided by the valuation manual; and
(G) For policies issued prior to the operative date of the valuation manual, any Commissioners standard industrial mortality tables adopted after 1980 by the National Association of Insurance Commissioners that are approved by regulation promulgated by the Commissioner for use in determining the minimum nonforfeiture standard may be substituted for the Commissioners 1961 Standard Industrial Mortality Table or the Commissioners 1961 Industrial Extended Term Insurance Table. For policies issued on or after the operative date of the valuation manual, the valuation manual shall provide the Commissioners standard mortality table for use in determining the minimum nonforfeiture standard that may be substituted for the Commissioners 1961 Standard Industrial Mortality Table or the Commissioners 1961 Industrial Extended Term Insurance Table. If the Commissioner approves by regulation any Commissioners standard industrial mortality table adopted by the National Association of Insurance Commissioners for use in determining the minimum nonforfeiture standard for policies issued on or after the operative date of the valuation manual, then that minimum nonforfeiture standard supersedes the minimum nonforfeiture standard provided by the valuation manual.
(9) The nonforfeiture interest rate is defined as follows:
(A) For policies issued prior to the operative date of the valuation manual, the nonforfeiture interest rate per annum for any policy issued in a particular calendar year shall be equal to 125 percent of the calendar year statutory valuation interest rate for such policy as defined in Code Section 33-10-13, the Standard Valuation Law, rounded to the nearer one quarter of 1 percent; provided, however, that the nonforfeiture interest rate shall not be less than 4 percent.
(B) For policies issued on and after the operative date of the valuation manual, the nonforfeiture interest rate per annum for any policy issued in a particular calendar year shall be provided by the valuation manual.
(10) Notwithstanding any other provision in this title to the contrary, any refiling of nonforfeiture values or their methods of computation for any previously approved policy form which involves only a change in the interest rate or mortality table used to compute nonforfeiture values shall not require refiling of any other provisions of that policy form.
(11) After November 1, 1982, any insurer may file with the Commissioner a written notice of its election to comply with the provisions of this subsection with respect to specified policy forms after a specified date before January 1, 1989, which shall be the operative date of this subsection for such specified policy forms. If an insurer makes no such election, the operative date of this subsection for such insurer shall be January 1, 1989.
(f) In the case of any plan of life insurance which provides for future premium determination, the amounts of which are to be determined by the insurer based on then estimates of future experience, or in the case of any plan of life insurance which is of such a nature that minimum values cannot be determined by the methods described in subsections (a), (b), (c), (d), or (e) of this Code section, then:
(1) The Commissioner must be satisfied that the benefits provided under the plan are substantially as favorable to policyholders and insureds as the minimum benefits otherwise required by subsections (a) through (e) of this Code section;
(2) The Commissioner must be satisfied that the benefits and the pattern of premiums of that plan are not such as to mislead prospective policyholders or insureds;
(3) The cash surrender values and paid-up nonforfeiture benefits provided by such plan must not be less than the minimum values and benefits required for the plan computed by a method consistent with the principles of this Code section, as determined by regulations promulgated by the Commissioner.
(g) Any cash surrender value and any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment due at any time other than on the policy anniversary shall be calculated with allowance for the lapse of time and the payment of fractional premiums beyond the last preceding policy anniversary, except that, in the case of industrial insurance, proportionate increases in value may be calculated on the basis of quarter-year payment. All values referred to in subsections (b) through (e) of this Code section may be calculated upon the assumption that any death benefit is payable at the end of the policy year of death. The net value of any paid-up additions, other than paid-up term additions, shall be not less than the amounts used to provide such additions. Notwithstanding subsection (b) of this Code section, additional benefits payable (1) in the event of death or dismemberment by accident or accidental means; (2) in the event of total and permanent disability; (3) as reversionary annuity or deferred reversionary annuity benefits; (4) as term insurance benefits provided by a rider or supplemental policy provision to which, if issued as a separate policy, this Code section would not apply; (5) as term insurance on the life of a child, or on the lives of children provided in a policy on the life of a parent of the child, if the term insurance expires before the child attains age 26, is uniform in amount after the child attains age one and has not become paid up by reason of the death of a parent of the child; or (6) as other policy benefits additional to life insurance and endowment benefits, and premiums for all such additional benefits shall be disregarded in ascertaining cash surrender values and nonforfeiture benefits required by this Code section, and no such additional benefits shall be required to be included in any paid-up nonforfeiture benefits.
(h)(1) This subsection, in addition to all other applicable subsections of this Code section, shall apply to all policies issued on or after January 1, 1986, except that, with respect to such policies for which the gross premium during the first policy year includes any additional amounts for which no comparable additional benefit is provided during that year, this subsection shall apply to any such policies issued after a specified operative date before January 1, 1986, as defined in subsection (e) of this Code section. Any cash surrender value available under the policy in the event of default in a premium payment due on any policy anniversary shall be in an amount which does not differ by more than two tenths of 1 percent of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first ten policy years, from the sum of (A) the greater of zero and the basic cash value hereinafter specified and (B) the present value of any existing paid-up additions less the amount of any indebtedness to the insurer under the policy.
(2) The basic cash value shall be equal to the present value on such anniversary of the future guaranteed benefits which would have been provided for by the policy, excluding any existing paid-up additions and before deduction of any indebtedness to the insurer, if there had been no default, less the then present value of the nonforfeiture factors, as hereinafter defined, corresponding to premiums which would have fallen due on and after such anniversary; provided, however, that the effects on the basic cash value of supplemental life insurance or annuity benefits or of family coverage, as described in subsection (b) or (d) of this Code section, whichever is applicable, shall be the same as are the effects specified in subsection (b) or (d) of this Code section, whichever is applicable, on the cash surrender values defined in that subsection.
(3) The nonforfeiture factor for each policy year shall be an amount equal to a percentage of the adjusted premium for the policy year, as defined in subsection (d) or (e) of this Code section, whichever is applicable. Except as is required by paragraph (4) of this subsection, such percentage:
(A) Must be the same percentage for each policy year between the second policy anniversary and the later of (i) the fifth policy anniversary and (ii) the first policy anniversary at which there is available under the policy a cash surrender value in an amount, before including any paid-up additions and before deducting any indebtedness, of at least two tenths of 1 percent of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first ten policy years; and
(B) Must be such that no percentage after the later of the two policy anniversaries specified in subparagraph (A) of this paragraph may apply to fewer than five consecutive policy years.
(4) Provided, that no basic cash value may be less than the value which would be obtained if the adjusted premiums for the policy, as defined in subsection (d) or (e) of this Code section, whichever is applicable, were substituted for the nonforfeiture factors in the calculation of the basic cash value.
(5) All adjusted premiums and present values referred to in this subsection shall for a particular policy be calculated on the same mortality and interest bases as are used in demonstrating the policy's compliance with the other subsections of this Code section. The cash surrender values referred to in this subsection shall include any endowment benefits provided for by the policy.
(6) Any cash surrender value available other than in the event of default in a premium payment due on a policy anniversary and the amount of any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment shall be determined in manners consistent with the manners specified for determining the analogous minimum amounts in subsections (a), (b), (c), (e), and (g) of this Code section. The amounts of any cash surrender values and of any paid-up nonforfeiture benefits granted in connection with additional benefits such as those listed as items (1) through (6) in subsection (g) of this Code section shall conform with the principles of this subsection.
(i) This Code section shall not apply to any of the following:
(1) Reinsurance;
(2) Group insurance;
(3) Pure endowment;
(4) Annuity or reversionary annuity contract;
(5) Term policy of uniform amount, which provides no guaranteed nonforfeiture or endowment benefits, or renewal thereof, of 20 years or less expiring before age 71, for which uniform premiums are payable during the entire term of the policy;
(6) Term policy of decreasing amount, which provides no guaranteed nonforfeiture or endowment benefits, on which each adjusted premium, calculated as specified in subsections (d) and (e) of this Code section, is less than the adjusted premium so calculated on a term policy of uniform amount, or renewal thereof, which provides no guaranteed nonforfeiture or endowment benefits, issued at the same age and for the same initial amount of insurance and for a term of 20 years or less expiring before age 71, for which uniform premiums are payable during the entire term of the policy; or
(7) Policy, which provides no guaranteed nonforfeiture or endowment benefits, for which no cash surrender value, if any, or present value of any paid-up nonforfeiture benefit, at the beginning of any policy year, calculated as specified in subsections (b), (c), (d), and (e) of this Code section, exceeds 2 1/2 percent of the amount of insurance at the beginning of the same policy year.
For purposes of determining the applicability of this Code section, the age at expiry for a joint term life insurance policy shall be the age at expiry of the oldest life.
(a) No policy of life insurance, except as stated in subsection (c) of this Code section, shall be delivered or issued for delivery in this state if it contains a provision which excludes or restricts liability for death caused in a certain specified manner or occurring while the insured has a specified status, except that the policy may contain provisions excluding or restricting coverage as specified therein in event of death under any one or more of the following circumstances:
(1) Death as a result, directly or indirectly, of war, declared or undeclared, or of any act or hazard of such war;
(2) Death as the result of aviation or any air travel or flight;
(3) Death as a result of a specified hazardous occupation or occupations;
(4) Death while the insured is a resident outside the continental United States and Canada; or
(5) Death within two years from the date of issue of the policy as a result of suicide, while sane or insane.
(b) A policy which contains any exclusion or restriction pursuant to subsection (a) of this Code section shall also provide that in the event of death under circumstances to which any such exclusion or restriction is applicable, the insurer will pay an amount not less than a reserve determined according to the Commissioner's reserve valuation method upon the basis of the mortality table and interest rate specified in the policy for the calculation of nonforfeiture benefits or, if the policy provides no such benefits, computed according to a mortality table and interest rate determined by the insurer and specified in the policy with adjustment for indebtedness or dividend credit.
(c) This Code section shall not apply to group life insurance, reinsurance, annuities, or to any provision of a life insurance policy, or contract supplemental thereto, relating to disability benefits, or to additional benefits in the event of death by accident or accidental means.
(d) Nothing contained in this Code section shall prohibit any provision which in the opinion of the Commissioner is more favorable to the policyholder than a provision permitted by this Code section.
A life insurer may issue both participating and nonparticipating policies only if the right or absence of right to participate is reasonably related to the premium charged.
A clause in any policy of life insurance which provides that the policy shall be incontestable after a specified period shall preclude only a contest of the validity of the policy and shall not preclude the assertion at any time of defenses based upon provisions in the policy which exclude or restrict coverage, whether or not the restrictions or exclusions are excepted in the clause.
(a) Every individual life insurance policy or contract issued for delivery in this state, except those issued in connection with a credit transaction, shall have printed on or attached to the contract a notice stating in substance that the person to whom the policy or contract is issued shall be permitted to return the policy or contract within ten days after receipt thereof and to have the premium paid refunded if, after examination of the policy or contract, the purchaser is not satisfied with it for any reason.
(b) If the purchaser, pursuant to such notice, returns the policy or contract to the insurer at its home or branch office or to the agent through whom it was purchased, it shall be void from the beginning and the parties shall be in the same position as if no policy or contract had been issued.
(c) Without limiting any other method of returning a policy or contract under this Code section, it shall be prima-facie evidence of the fact and date of return of a policy or contract if the policy or contract is dispatched by certified mail or statutory overnight delivery to the insurer or agent, as provided in this Code section, and a return receipt provided by the United States Postal Service or the commercial delivery company is obtained.
(d) A person shall be deemed to have received a policy or contract for purposes of subsection (a) of this Code section if there has elapsed a period of six months from the effective date of the policy or contract or if there has elapsed a period of time from the effective date of the policy or contract during which there have been sent to the person two premium notices or other such statements of policy or contract activity, whichever period is longer.
Except as expressly provided in this Code section, no life insurance policy shall be issued or delivered in this state, as a part of or in combination with any insurance, endowment, or annuity contract, any agreement or plan additional to the rights, dividends, and benefits arising out of any such insurance, endowment, or annuity contract:
(1) Which provides for the accumulation of profits over a period of years and for payment of all or any part of the accumulated profits only to members or policyholders of a designated group or class who continue as members or policyholders until the end of a specified period of years;
(2) Which provides that on the death of anyone other than a beneficiary or a person insured thereunder the owner or beneficiary of the policy shall receive the payment or granting of anything of value;
(3) Which provides that the whole or any part of the premiums or consideration for the policy, dividends, coupons, reserves, special reserves, lapses, or the excess interest therefrom, or any funds or money in excess of the normal reserve required to meet the contractual guarantees of the policy are to be placed or invested in special funds or segregated accounts and the funds or earnings therefrom divided among those taking the policy, their beneficiaries, or assignees; or
(4) Which provides for the sale, solicitation, or delivery of any stock or shares of stock in any company or which provides for a benefit certificate, securities, or any special advisory board contract or other contracts or resolutions of similar nature or which provides for policy dividends bearing a stated relationship to dividends on the stock of any company as an inducement to or in connection with the sale or acceptance of such policy.
(a) Each insurer admitted to transact life insurance in this state shall pay interest on proceeds or payments under any individual policy of life insurance, payable to a beneficiary residing in this state or to a beneficiary under a policy issued in this state or to a beneficiary under a policy insuring a person resident in this state at the time of death.
(b) Interest payable pursuant to subsection (a) of this Code section shall be computed from the insured's death until the date of payment and shall be at the following rate of interest:
(1) In the event an action to recover the proceeds due under such policy is commenced and results in a judgment against the insurer, interest shall be computed at the legal rate of interest; or
(2) In the event no such action has been commenced, interest shall be computed daily at the greater of the rate of 6 percent per annum or the highest interest rate currently paid by the insurer on proceeds left under an interest settlement option; provided, however, that when a claim for the policy proceeds is filed with the insurer, interest shall be computed daily from 30 days after the date the claim is filed until the date of payment at the rate of 12 percent.
(c) This Code section shall not:
(1) Apply to proceeds under any such policy paid within 30 days after the date of death of the insured;
(2) Require the payment of interest in an amount of less than $5.00;
(3) Apply to policies of credit life insurance;
(4) Require the payment of interest for any period during which an insurer is required to pay interest under any state or federal law pertaining to interpleader; or
(5) Apply to any individual policy issued within 12 months of the death of the insured.
(d) For the purposes of this Code section, payment shall be deemed to have been received by a resident when manually delivered by an agent or representative of the insuring company or when deposited by the insuring company in the United States mail, postage prepaid, and directed to the resident at his last known address as evidenced by the business records of the insuring company.
(e)(1) For the purposes of this Code section, a claim shall be deemed to have been filed with an insurer on the date that the insurer receives a substantially completed application or other written notice for the policy proceeds and reasonable proof of death of the insured.
(2) In cases of group life insurance, a claim shall be deemed to have been filed on the date that the insurer receives the information provided in paragraph (1) of this subsection and receives from the group policyholder written evidence of eligibility for coverage.
(a) Whenever any person residing in the state shall die leaving insurance on his or her life, such insurance shall inure exclusively to the benefit of the person for whose use and benefit such insurance is designated in the policy, and the proceeds thereof shall be exempt from the claims of creditors of the insured unless the insurance policy or a valid assignment thereof provides otherwise. Whenever the insurance, by designation or otherwise, is payable to the insured or to the insured's estate or to his or her executors, administrators, or assigns, the insurance proceeds shall become a part of the insured's estate for all purposes and shall be administered by the personal representative of the estate of the insured in accordance with the probate laws of the state in like manner as other assets of the insured's estate.
(b) Payments as directed in this Code section shall, in every such case, discharge the insurer from any further liability under the policy, and the insurer shall in no event be responsible for, or be required to see to, the application of such payments.
(c) The cash surrender values of life insurance policies issued upon the lives of citizens or residents of this state, upon whatever form, shall not in any case be liable to attachment, garnishment, or legal process in favor of any creditor of the person whose life is so insured unless the insurance policy was assigned to or was effected for the benefit of such creditor or unless the purchase, sale, or transfer of the policy is made with the intent to defraud creditors.
A reinstated policy of life insurance may be contested on account of fraud or misrepresentation of facts material to the reinstatement only for the same period following reinstatement and with the same conditions and exceptions as the policy provides with respect to contestability after original issuance.
No person who commits murder or voluntary manslaughter or who conspires with another to commit murder shall receive any benefits from any insurance policy on the life of the deceased, even though the person so killing or conspiring be named beneficiary in the insurance policy. A plea of guilty or a judicial finding of guilt not reversed or otherwise set aside as to any of such crimes shall be prima-facie evidence of guilt in determining rights under this Code section. All right, interest, estate, and proceeds in such an insurance policy shall go to the other heirs of the deceased who may be entitled thereto by the laws of descent and distribution of this state, unless secondary beneficiaries be named in the policy, in which event such secondary beneficiaries shall take.
(a) This Code section shall be known and may be cited as the “Unclaimed Life Insurance Benefits Act.”
(b) This Code section shall require recognition of the escheat or unclaimed property statutes of this state and require the complete and proper disclosure, transparency, and accountability relating to any method of payment for life insurance death benefits regulated by the Department of Insurance; provided, however, that neither the Commissioner nor the State Treasurer shall promulgate regulations or issue bulletins that impose, or interpret this Code section to impose, additional duties and obligations on insurers, beyond those set forth in this Code section, or otherwise attempt to expand the requirements of this Code section.
(c) As used in this Code section, the term:
(1) “Account owner” means the owner of a retained asset account who is a resident of this state.
(2) “Annuity” means an annuity contract issued in this state. The term “annuity” shall not include any annuity contract used to fund an employment-based retirement plan or program where the insurer takes direction from the plan sponsor and plan administrator.
(3) “Death Master File” means the Social Security Administration's Death Master File or any other data base or service that is at least as comprehensive as the Social Security Administration's Death Master File for determining that a person has reportedly died.
(4) “Death Master File match” means a search of the Death Master File that results in a match of a person's name and social security number or the name and date of birth.
(5) “Insurer” means a life insurance company authorized to transact the class of insurance designated in Code Section 33-3-5 as Class (1).
(6) “Knowledge of death” means, for purposes of this chapter and Article 5 of Chapter 12 of Title 44:
(A) A receipt of an original or valid copy of a certified death certificate; or
(B) A Death Master File match validated by a secondary source by the insurer.
(7) “Person” means the policy owner, insured, annuity owner, annuitant, or account owner, as applicable under the policy, annuity, or retained asset account subject to this Code section.
(8) “Policy” means any policy or certificate of life insurance issued in this state. The term “policy” shall not include:
(A) Any policy or certificate of life insurance that provides a death benefit under an employee benefit plan subject to the Employee Retirement Income Security Act of 1974, 29 U.S.C. Section 1002, as periodically amended, or under any federal employee benefit program;
(B) Any policy or certificate of life insurance that is used to fund a preneed funeral contract or prearrangement;
(C) Any policy or certificate of credit life or accidental death insurance; or
(D) Any policy issued to a group master policyholder for which the insurer does not provide record keeping services.
(9) “Record keeping services” means those circumstances under which the insurer has agreed with a group policyholder to be responsible for obtaining, maintaining, and administering in its own systems information about each individual insured under an insured's group insurance contract, or a line of coverage thereunder, at least the following information:
(A) Social security number or name and date of birth;
(B) Beneficiary designation information;
(C) Coverage eligibility;
(D) Benefit amount; and
(E) Premium payment status.
(d)(1)(A) An insurer shall perform a comparison of its in-force policies, annuities, and retained asset accounts issued in this state against a Death Master File, on at least a semiannual basis, to identify potential Death Master File matches.
(B) An insurer may comply with the requirements of this subsection by using the full Death Master File once and thereafter using the Death Master File update files for future comparisons.
(C) Nothing in this subsection shall limit the insurer from requesting a valid death certificate as part of any claims validation process.
(2)(A) If an insurer learns of the possible death of a person, through a Death Master File match or otherwise, then the insurer shall within 90 days:
(i) Complete a good faith effort, which shall be documented by the insurer, to confirm the death of the person against other available records and information;
(ii) Review its records to determine whether the deceased person had purchased any other products with the insurer;
(iii) Determine whether benefits may be due in accordance with any applicable policy, annuity, or retained asset account; and
(iv) If the beneficiary or other authorized representative has not communicated with the insurer within the 90 day period, take reasonable steps, which shall be documented by the insurer, to locate and contact the beneficiary or beneficiaries or other authorized representative on any such policy, annuity, or retained asset account, including but not limited to sending the beneficiary information regarding the insurer's claims process, including the need to provide an official death certificate if applicable under the policy, annuity, or retained asset account.
(B) In the event the insurer is unable to confirm the death of a person following a Death Master File match, an insurer may consider such policy, annuity, or retained asset account to be in-force in accordance with its terms.
(3) To the extent permitted by law, an insurer may disclose minimum necessary personal information about a person or beneficiary to a person who the insurer reasonably believes may be able to assist the insurer in locating the beneficiary or a person otherwise entitled to payment of the claims proceeds.
(4) An insurer or its service provider shall not charge any beneficiary or other authorized representative for any fees or costs associated with a Death Master File search or verification of a Death Master File match conducted pursuant to this subsection.
(5) The benefits from a life insurance policy, annuity, or retained asset account, plus any applicable accrued interest, shall be payable pursuant to the terms of the contract or, if applicable, in accordance with probate law. In the event the proper recipients cannot be found, the benefits shall escheat to the state as unclaimed property pursuant to Code Section 44-12-198. Interest payable under Code Section 33-25-10 shall not be payable as unclaimed property under Code Section 44-12-198.
(6) The Commissioner may adopt such rules and regulations as may be reasonably necessary to implement the provisions of this subsection.
(7) The Commissioner may, in his or her reasonable discretion, make an order:
(A) Limiting an insurer's Death Master File comparisons required under paragraph (1) of this subsection to the insurer's electronic searchable files or approving a plan and timeline for conversion of the insurer's files to electronic searchable files;
(B) Exempting an insurer from the Death Master File comparisons required under paragraph (1) of this subsection or permitting an insurer to perform such comparisons less frequently than semiannually upon a demonstration of financial hardship by the insurer; or
(C) Phasing in compliance with this subsection according to a plan and timeline approved by the Commissioner.
(8) Failure to meet any requirement of this subsection with such frequency as to constitute a general business practice is a violation of Chapter 6 of this title. Nothing herein shall be construed to create or imply a private cause of action for a violation of this subsection.
(e) In the event that an insurer:
(1) Has identified a person as deceased through a Death Master File match through a search described in paragraph (1) of subsection (d) of this Code section or other information source;
(2) Has validated such information through a secondary information source; and
(3) Is unable to locate a beneficiary located in this state under the policy, annuity, or retained asset account after conducting reasonable search efforts during the period of up to one year after the insurer's validation of the Death Master File match, or if no beneficiary, if the person, as applicable for unclaimed reporting purposes, has a last known address in this state,
then the insurer is authorized to report and remit the proceeds of such policy, annuity, or retained asset account due to this state on an early reporting basis, without further notice or consent by the state, after attempting to contact such beneficiary pursuant to Code Section 44-12-198. Once reported and proceeds remitted, the insurer shall be relieved and indemnified from any and all additional liability to any person relating to the proceeds reported and remitted, including but not limited to any liability under Code Section 44-12-214 for all proceeds reported and remitted to the state pursuant to this subsection. This indemnification from liability shall be in addition to any other protections provided by law.
(a) As used in this Code section, the term:
(1) “Agent” means a person that is the agent of record of a policy or that has a business relationship with the policy owner or insured.
(2) “Insurer” means the insurance company that issued or currently insures the policy.
(3) “Person” means an individual or a legal entity.
(4) “Policy” means an individual life insurance policy owned by an individual who is a resident of this state, regardless of whether such individual life insurance policy has been issued, delivered, or renewed in this state.
(b) No insurer or any other person shall terminate, fine, or otherwise penalize an agent for:
(1) Apprising a policy owner or his or her designee of options under the policy terms to the lapse or surrender of the policy; or
(2) Assisting a policy owner with securing any benefits under the policy terms.
Industrial life insurance is that form of insurance under which not more than $2,000.00 on a single life, exclusive of additional benefits in the event of death from accidental means, is payable on any such policy for which the premiums are payable monthly or more frequently and which bears the words “industrial policy” or “weekly premium policy” or words of similar import imprinted on the face of the policy as a part of the descriptive matter.
(a) No policy of industrial life insurance shall be delivered or issued for delivery in this state unless it contains in substance the following provisions or contains provisions which in the opinion of the Commissioner are more favorable to policyholders:
(1) GRACE PERIOD.A provision that the insured is entitled to a grace period of not less than 30 days within which the payment of any premium after the first may be made, during which period of grace the policy shall continue in force. If a claim arises under the policy during such period of grace, the amount of any premium due or overdue may be deducted from any amount payable under the policy in settlement;
(2) INCONTESTABILITY.A provision that the policy (exclusive of provisions relating to disability benefits or to additional benefits in the event of death by accident or accidental means) shall be incontestable, except for nonpayment of premiums, after it has been in force during the lifetime of the insured for a period of two years from its date of issue;
(3) ALTERATION OF CONTRACT.A provision that no agent shall have the power or authority to waive, change, or alter any of the terms or conditions of any policy, except that at the option of the insurer, prior to the issuance of a policy, the terms or conditions may be changed by an endorsement or rider which is signed by a duly authorized officer of the insurer and receipt of which is acknowledged by the applicant in writing;
(4) MISSTATEMENT OF AGE.A provision that, if the age of the person insured or of any other person whose age is considered in determining the premium or benefit has been misstated, any amount payable or benefit accruing under the policy shall be such as the premium would have purchased at the correct age or ages;
(5) DIVIDENDS.A provision in participating policies that, beginning not later than the end of the third policy year, the insurer shall annually ascertain and apportion the divisible surplus, if any, that will accrue on the policy anniversary or other dividend date specified in the policy. Except as provided in this Code section, any dividend becoming payable shall, at the option of the party entitled to elect such option, be either payable in cash or applied to any one of such other dividend options as may be provided by the policy. If any such other dividend options are provided, the policy shall further state which option shall be automatically effective if such party has not elected some other option. If a policy specifies a period within which such other option may be elected, such period shall be not less than 30 days following the date on which such dividend is due and payable. The annually apportioned dividend shall be deemed to be payable in cash even though the policy provides that payment of such dividend is to be deferred for a specified period, provided that such period does not exceed six years from the date of apportionment and that interest will be added to such dividend at a specified rate. If a participating policy provides that the benefit under any paid-up nonforfeiture provision is to be participating, it may provide that any divisible surplus becoming payable or apportioned while the insurance is in force under such nonforfeiture provision shall be applied in the manner set forth in the policy;
(6) POLICY LOANS.A provision that after three full years' premiums have been paid and after the policy has a cash surrender value and while no premium is in default beyond the grace period for payment, the insurer will loan on the execution of a proper note or loan agreement by the owner of the policy and on proper assignment of the policy and on the sole security thereof, at a specified rate of interest, a sum equal to or, at the option of the owner of the policy, less than the cash value of the policy at the end of the current policy year and of any dividend additions thereto. The policy shall further provide that the company may deduct from such loan value or from the proceeds of the loan any existing indebtedness on or secured by the policy not already deducted in determining such cash value, including interest due or accrued and any unpaid balance of the premium for the current policy year, and that the company may collect interest in advance of the loan to the end of the current policy year. The policy shall reserve to the insurer the right to defer the granting of a loan, other than for the payment of any premium to the insurer, for six months after the application therefor. The policy may also provide that if interest on any indebtedness is not paid when due it shall then be added to the existing indebtedness and shall bear interest at the same rate. The policy may provide that if and when the total indebtedness on the policy, including interest due or accrued, equals or exceeds the amount of the loan value thereof, then the policy shall terminate and become void, but not until at least 30 days' notice shall have been mailed by the insurer to the last known address of the insured or policy owner; of the individual identified by the policy owner or insured as an additional contact, if any; and of any assignee of record at the home office of the insurer. The policy, at the insurer's option, may provide for an automatic premium loan, subject to an election of the party entitled to elect. No condition other than as provided in this paragraph shall be exacted as a prerequisite to any such loan. This paragraph shall not apply to term insurance or to term insurance benefits provided by rider or supplemental policy provisions or to any policy with a loan value of less than $25.00;
(7) TABLES OF OPTIONS AND VALUES.A statement of the mortality table and interest rate used in calculating the cash surrender values and the paid-up nonforfeiture benefits available under the policy, together with a table showing the cash surrender value, if any, reduced paid-up value, if any, and the extended term value, if any, available under the policy on each policy anniversary, either during the first 20 policy years or during the term of the policy, whichever is shorter. Upon written request, the company will furnish an extension of such table beyond the year shown in the policy. Such values and benefits shall be calculated upon the assumption that there are no dividends or paid-up additions credited to the policy and that there is no indebtedness to the insurer on the policy;
(8) REINSTATEMENT.A provision that unless the policy has been surrendered for its cash surrender value or its cash surrender value has been exhausted or unless the paid-up term insurance, if any, has expired, the policy will be reinstated at any time within three years from the date of premium default upon written application therefor, the production of evidence of insurability satisfactory to the insurer, the payment of all premiums in arrears, and the payment or reinstatement of any other indebtedness to the insurer upon the policy. All such sums may bear interest not exceeding 6 percent per annum compounded annually; provided, however, that acceptance of all or any part of a premium more than 30 days in arrears by the agent or company without requiring reinstatement application shall continue the policy in force without showing any lapse of time;
(9) TITLE.On each such policy there shall be placed a title which shall briefly and accurately describe the nature and form of the policy;
(10) PAYMENT OF PREMIUMS.
(A) A provision that all premiums shall be payable in advance either at the home or district office or to any agent of the company upon delivery of a receipt signed by the agent. Such receipt shall bear the agent's license number and the signature of one or more of the officers who shall be named in the policy;
(B) In the case of weekly premium policies, there shall be a provision that while premiums on the policy are not in default beyond the grace period and upon proper notice to the insurer of the intention to pay future premiums directly to the insurer at its home office or any office designated by the insurer for the purpose, the insurer will, at the end of a period of 26 weeks from the due date of the first premium so paid and for any additional weekly premium payment thereafter, for which period such premiums are so paid continuously without default beyond the grace period, refund a stated percentage of the premiums in an amount which fairly represents the savings in collection expense.
(11) PAYMENT OF CLAIMS.A provision that, when a policy shall become a claim by the death of the insured, settlement shall be made upon receipt of due proof of death and, at the insurer's option, surrender of the policy or proof of the interest of the claimant or both. If an insurer specifies a particular period prior to the expiration of which settlement shall be made, such period shall not exceed two months from the receipt of such proofs;
(12) ENTIRE CONTRACT.A provision that, if any reference is made to the application for insurance or to the constitution, bylaws, or rules of the insurer as forming part of or affecting the policy between the parties, then there shall be included in or attached to said policy when issued a correct copy of the application signed by the applicant and the constitution, bylaws, and rules referred to. All statements made by the applicant in the application shall be deemed to be representations and not warranties. No statement in the application shall be used to void the policy or deny payment of a claim unless a copy of such application has been attached to and made a part of such policy when issued;
(13) CONVERSION PRIVILEGE.A provision that, upon written request and without evidence of insurability (except for any additional amount of insurance), an industrial life insurance policyholder is guaranteed the privilege of converting any industrial insurance policy to any form of ordinary life insurance with less frequent premium payments regularly issued by the insurer and is guaranteed the privilege of converting small industrial policies with the same insurer into one larger policy with combined benefits; and
(14) SPACE FOR NAME OF DESIGNATED BENEFICIARY.There shall be a space on the front or back page of the policy for the name of the designated beneficiary.
(b) Any of such required provisions or portions thereof not applicable to single premium or term policies or to provisions relating to disability benefits or to additional benefits in the event of death or dismemberment by accidental means shall to that extent not be incorporated therein.
(c) No policy of industrial life insurance shall contain any of the following provisions:
(1) A provision by which the insurer may deny liability under the policy for the reason that the insured has previously obtained other insurance from the same insurer;
(2) A provision giving the insurer the right to declare the policy void because the insured has had any disease or ailment, whether specified or not, or because the insured has received institutional, hospital, medical, or surgical treatment or attention. However, a policy may contain a provision which gives the insurer the right to declare the policy void if the insured has, within two years prior to the issuance of the policy, received institutional, hospital, medical, or surgical treatment or attention and the insured or claimant under the policy fails to show that the condition occasioning such treatment or attention was not of a serious nature or was not material to the risk. The policy may also contain a provision that the policy shall not become effective if on the date of the application for the policy the insured had knowledge that he was afflicted with any serious disease tending to shorten life, which fact was not shown on the application for the policy; or
(3) A provision giving the insurer the right to declare the policy void because the insured has been rejected for insurance, unless such right is conditioned upon a showing by the insurer that knowledge of such rejection would have led to a refusal by the insurer to make such contract.
(d) An exact copy of the application shall be given to the applicant at the time of the sale, which application shall disclose and contain the following information and language:
(1) An itemized list of all policies presently in force with all insurers, showing company names, premiums charged, amounts of insurance, total premiums, and total amounts of insurance provided;
(2) The premium cost of the insurance policy purchased;
(3) The premium cost for each optional additional benefit, if any, shall be shown separately and conspicuously apart from the premium charge for the basic natural death benefit; and
(4) The following statements shall appear on the applicant's copy in not less than ten-point type:
(A) “You may wish to compare the total cost of this insurance policy with your net income.”
(B) “I hereby certify, as signed below, that I was given an exact copy of this application at the time this application was made to the agent of record whose signature appears below.
| | ________________________________________________ | | --- | --- | | | Applicant's Signature” |
(C) “I, as the agent of record, hereby certify as signed below, that I gave the applicant, whose signature appears above, an exact copy of this application at the time this application was taken. I further certify that I have inquired of the applicant as to all policies in force and that I have listed all such policies on said application.
| | ________________________________________________ | | --- | --- | | | Agent's Signature | | | ________________________________________________ | | | Agent's License Number” |
(e) Policyholders or insureds who are 65 years of age and older shall have the option to provide the name and address of a person as an additional contact to the insurer who shall also be notified by the insurer in writing by mail to the last known address of such person prior to the lapse, termination, or cancellation of any industrial life insurance policy by the insurer.
Any policy of industrial life insurance may provide a weekly benefit for disability, caused by sickness or accident, not greater than $40.00 per week.
(a) Every industrial life policy or contract issued for delivery in this state shall have printed thereon or attached thereto a notice stating in substance that the person to whom the policy or contract is issued shall be permitted to return the policy or contract within ten days after receipt thereof and to have the premium paid refunded if, after examination of the policy or contract, the purchaser is not satisfied with it for any reason.
(b) If the purchaser, pursuant to such notice, returns the policy or contract to the insurer at its home or branch office or to the agent through whom it was purchased, it shall be void from the beginning and the parties shall be in the same position as if no policy or contract had been issued.
(c) Without limiting any other method of returning a policy or contract under this Code section, it shall be prima-facie evidence of the fact and date of return of a policy or contract if the policy or contract is dispatched by at least first-class mail to the insurer or agent, as provided in this Code section and a receipt provided by the United States Postal Service is obtained.
The proceeds and avails of any industrial life insurance policy shall be free from the claims of creditors and representatives of the insured and of persons effecting the same to the same extent and under the same conditions as provided for in the case of other life insurance policies under Code Section 33-25-11.
In addition to the requirements specifically set forth in this chapter, no policy of industrial life insurance shall be delivered or issued for delivery in this state unless it complies with Code Sections 33-25-4, 33-25-5, 33-25-7, 33-25-9, 33-25-10, and 33-25-12.
No insurer shall knowingly issue an industrial life insurance policy insuring the life of a person if the issuance of such policy would cause the aggregate face amount of industrial life insurance payable on the life of such person under any and all such policies issued by such insurer to exceed the sum of $2,000.00, exclusive of additional benefits in the event of death from accidental means.
(a) No insurer shall issue a policy which allows for the collection or payment of premiums which in the aggregate will be greater than 150 percent of the face amount of the policy.
(b) This Code section shall apply to industrial whole life policies, which are policies which may be kept in force for a person's whole life and which pay a benefit upon the person's death, whenever such death occurs, or policies which may have a designated age certain, as specified in the policy, when premium payments would cease.
Any company, agent, representative, or solicitor for the company, agent, or representative who shall write, offer to the public, or deliver to any insured any policy or contract of insurance which in form or legal effect is contrary to or in violation of this chapter with respect to cash surrender value, extended insurance, or other benefits in case of lapsed industrial life insurance policies shall be guilty of a misdemeanor.
No policy of group life insurance shall be delivered in this state unless it conforms to one of the following descriptions:
(1) Employee groups. A policy issued to an employer or to the trustees of a fund established by an employer, which employer or trustee shall be deemed the policyholder, to insure employees of the employer for the benefit of persons other than the employer, subject to the following requirements:
(A) The employees eligible for insurance under the policy shall be all of the employees of the employer or all of any class or classes thereof determined by conditions pertaining to their employment. The policy may provide that the term “employees” shall include the employees of one or more subsidiary corporations and the employees, individual proprietors, and partners of one or more affiliated corporations, proprietors, or partnerships, if the business of the employer and of such affiliated corporations, proprietors, or partnerships is under common control through stock ownership or contract or otherwise. The policy may provide that the term “employees” shall include the individual proprietor or partners if the employer is an individual proprietor or a partnership. The policy may provide that the term “employees” shall include retired employees. No individual proprietor or partner shall be eligible for insurance under the policy unless he is actively engaged in and devotes a substantial part of his time to the conduct of the business of the proprietor or partnership. A policy issued to insure the employees of a public body may provide that the term “employees” shall include elected or appointed officials;
(B) The premium for the policy shall be paid by the policyholder either from the employer's own funds or from charges collected from the insured employee specifically for such insurance or from funds contributed by both the employer and the employee. A policy in which no part of the premium is to be derived from funds contributed by the insured employee must insure each eligible employee, except for any employee as to whom evidence of individual insurability is not satisfactory to the insurer;
(C) The policy must cover at least two employees at date of issue; and
(D) The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the employees or by the employer or trustee.
(2) Debtor groups. A policy issued to a creditor or to a trustee or agent appointed by two or more creditors, which creditor, trustee, or agent shall be deemed the policyholder, to insure debtors of the creditor, subject to the following requirements:
(A) The debtors eligible for insurance under the policy shall be all of the debtors of the creditor whose indebtedness is repayable either in installments, including any extraordinary payment of an installment or lease-purchase obligation, or in one sum at the end of a period not in excess of 24 months from the initial date of debt or all of any class or classes thereof determined by conditions pertaining to the indebtedness or to the purchase giving rise to the indebtedness. The policy may provide that the term “debtors” shall include the debtors of one or more subsidiary corporations and the debtors of one or more affiliated corporations, proprietors, or partnerships, if the business of the policyholder and of such affiliated corporations, proprietors, or partnerships is under common control through stock ownership, contract, or otherwise. No debtor shall be eligible unless the indebtedness constitutes an irrevocable obligation to repay which is binding upon him during his lifetime at the time the insurance becomes effective upon his life;
(B) The premium for the policy shall be paid by the policyholder either from the creditor's funds, from charges collected from the insured debtors, or from both. A policy on which part or all of the premium is to be derived from the collection from the insured debtors of identifiable charges not required of uninsured debtors shall not include, in the class or classes of debtors eligible for insurance, debtors under obligations outstanding at its date of issue without evidence of individual insurability unless at least 75 percent of the then eligible debtors elect to pay the required charges. A policy on which no part of the premium is to be derived from the collection of such identifiable charges must insure all eligible debtors or all except any as to whom evidence of individual insurability is not satisfactory to the insurer;
(C) The policy may be issued only if the policy reserves to the insurer the right to require evidence of individual insurability if less than 75 percent of the new entrants become insured. The policy may exclude from the classes eligible for insurance classes of debtors determined by age;
(D) The amount of insurance on the life of any debtor shall at no time exceed the amount owed by him which is repayable in installments, the amount of the unpaid indebtedness, or $75,000.00, whichever is less. Where the indebtedness is repayable in one sum to the creditor, the insurance on the life of any debtor shall in no instance be in effect for a period in excess of 24 months, except that such insurance may be continued for an additional period not exceeding six months in the case of default, extension, or recasting of the loan; and
(E) The insurance shall be payable to the policyholder. Such payment shall reduce or extinguish the unpaid indebtedness of the debtor to the extent of such payment.
(3) Mortgagee group. A policy issued to a creditor, or to a trustee or agent appointed by two or more creditors, which creditor, trustee, or agent shall be deemed the policyholder, to insure mortgagors of the creditor. The insurance must be written in connection with a credit transaction that is secured by a first mortgage or deed of trust; made to finance the purchase of real property or the construction of a dwelling thereon, or to refinance a prior credit transaction made for the purpose; and shall be payable to the policyholder. Such payment shall reduce or extinguish the unpaid mortgage of the mortgagor to the extent of such payment.
(4) Agricultural loans. Notwithstanding the provisions of this Code section, group life insurance in connection with agricultural loans may be written up to the amount of the loan or loan commitment on the nondecreasing or level term plan; however, the amount of insurance on the life of any such debtor shall not on any anniversary date of the insurance exceed the amount then owed by him which is repayable in installments, the amount of the then unpaid indebtedness, or $75,000.00, whichever is less.
(5) Labor union groups. A policy issued to a labor union, which shall be deemed the policyholder, to insure members of such union for the benefit of persons other than the union or any of its officials, representatives, or agents, subject to the following requirements:
(A) The members eligible for insurance under the policy shall be all of the members of the union or all of any class or classes thereof determined by conditions pertaining to their employment or to membership in the union, or both;
(B) The premium for the policy shall be paid by the policyholder either wholly from the union's funds or partly from such funds and partly from funds contributed by the insured members specifically for their insurance. No policy may be issued on which the entire premium is to be derived from funds contributed by the insured members specifically for their insurance. A policy on which no part of the premium is to be derived from funds contributed by the insured members specifically for their insurance must insure all eligible members or all except any as to whom evidence of individual insurability is not satisfactory to the insurer;
(C) The policy must cover at least 25 members at date of issue; and
(D) The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the members or by the union.
(6) Trustee groups. A policy issued to the trustees of a fund established by two or more employers or by one or more labor unions or by one or more employers and one or more labor unions, which trustees shall be deemed the policyholder, to insure employees of the employers or members of the unions for the benefit of persons other than the employers or the unions, subject to the following requirements:
(A) The persons eligible for insurance shall be all of the employees of the employers, all of the members of the unions, or all of any class or classes of employees or union members determined by conditions pertaining to their employment, to membership in the unions, or to both. The policy may provide that the term “employees” shall include retired employees and the individual proprietor or partners if an employer is an individual proprietor or a partnership. No director of a corporate employer shall be eligible for insurance under the policy unless such person is otherwise eligible as a bona fide employee of the corporation by performing services other than the usual duties of a director. No individual proprietor or partner shall be eligible for insurance under the policy unless he is actively engaged in and devotes a substantial part of his time to the conduct of the business of the proprietor or partnership. The policy may provide that the term “employees” shall include the trustees or their employees, or both, if their duties are principally connected with such trusteeship;
(B) The premium for the policy shall be paid by the trustees wholly from funds contributed by the employer or employers of the insured persons, by the union or unions, or by both or partly from such funds and partly from funds contributed by the insured persons. No policy may be issued on which the entire premium is to be derived from funds contributed by the insured persons specifically for their insurance. A policy on which no part of the premium is to be derived from funds contributed by the insured persons specifically for their insurance must insure all eligible persons or all except any as to whom evidence of individual insurability is not satisfactory to the insurer;
(C) The policy must cover at date of issue at least 100 persons; and, if the fund is established by the members of an association of employers, the policy may be issued only if either the participating employers constitute at date of issue at least 60 percent of those employer members whose employees are not already covered for group life insurance or the total number of persons covered at date of issue exceeds 600; and the policy shall not require that, if a participating employer discontinues membership in the association, the insurance of his employees shall cease solely by reason of the discontinuance; and
(D) The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the insured persons or by the policyholder, employers, or unions.
(7) Association groups. The lives of a group of individuals may be insured under a policy issued to an association, which shall be deemed the policyholder, to insure members of such association for the benefit of persons other than the association. As used in this paragraph, the term “association” means an association of governmental or public employees, an association of employees of a common employer, or an organization formed and operated in good faith for purposes other than that of procuring insurance and composed of members engaged in a common trade, business, or profession. The policy shall be subject to the following requirements:
(A) The members eligible for insurance under the policy shall be all of the members of the association or all of any class or classes of the association determined by conditions pertaining to their employment, to their trade, business, or profession, to their membership in the association, or to any two or more of such conditions. The policy may provide that officers and employees of the association who are bona fide members may be insured under the policy;
(B) The policy must cover at least 25 members at date of issue;
(C) The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the association or by the members; and
(D) The premium for the policy shall be paid by the policyholder either from the association's own funds, or from charges collected from the insured members specifically for the insurance, or from both.
(8) Bank and credit union groups. A bank authorized to do business in this state may carry insurance upon its depositors for amounts not to exceed the savings deposit balances of each depositor or $5,000.00, whichever is less, and a credit union organized pursuant to the laws of this state or the Federal Credit Union Act 1 may carry insurance upon its members for amounts not to exceed the share and deposit balances of each member or $5,000.00, whichever is less. Such insurance shall be subject to the requirements of subparagraphs (A) through (D) of paragraph (7) of this Code section.
(9) Multiple employer welfare arrangements.
(A) The lives of a group of individuals may be insured under a policy issued to a legal entity providing a multiple employer welfare arrangement. As used in this paragraph, the term “multiple employer welfare arrangement” means any employee benefit plan which is established or maintained for the purpose of offering or providing life insurance benefits to the employees of two or more employers, including self-employed individuals and their dependents. The term does not apply to any plan or arrangement which is established or maintained by a tax-exempt rural electric cooperative or a collective bargaining agreement.
(B) The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the employees, employers, or trustee.
(10) Special employee groups. An entity or a trustee of a trust established by an entity which has an insurable interest in employees pursuant to subsection (d) of Code Section 33-24-3 and authority to effectuate insurance on employees pursuant to paragraph (4) or (5) of subsection (a) of Code Section 33-24-6 may establish an employee group to effectuate group life insurance policies on employees when such corporation or trustee of a trust is providing life, health, disability, retirement, or similar benefits to employees, provided that the premium for such group policies is wholly paid by the corporation or trustee of the trust and the proceeds of such policies are used to provide supplemental funding for such employee benefit plans.
(11) Discretionary groups. Group life insurance offered to a resident of this state under a group life insurance policy issued to a group other than one described in paragraphs (1) through (10) of this Code section shall be subject to the following requirements:
(A) No such group life insurance policy shall be delivered in this state unless the Commissioner finds that:
(i) The issuance of such group policy is not contrary to the best interest of the public;
(ii) The issuance of the group policy would result in economies of acquisition or administration; and
(iii) The benefits are reasonable in relation to the premiums charged;
(B) No such group life insurance coverage may be offered in this state by an insurer under a policy issued in another state unless this state or such other state having requirements substantially similar to those contained in divisions (i) through (iii) of subparagraph (A) of this paragraph has made a determination that the requirements have been met;
(C) The premium for the policy shall be paid either from the policyholder's funds or from funds contributed by the covered persons, or from both; and
(D) An insurer may exclude or limit the coverage on any person as to whom evidence of individual insurability is not satisfactory to the insurer.
1 12 U.S.C.A. § 1751 et seq.
(a) Any policy issued pursuant to paragraphs (1), (4), and (5) of Code Section 33-27-1 may be extended to insure the employees or members against loss due to the death of their spouses and dependent or minor children or any class or classes thereof, subject to the following requirements:
(1) The premium for the insurance shall be paid by the policyholder either from the employer's or union's funds or funds contributed by the insured employees or members, or from both. If no part of the premium is to be derived from funds contributed by the employees or members, all eligible employees or members, excluding any as to whose family members' evidence of insurability is not satisfactory to the insurer, must be insured with respect to their spouses and children;
(2) The insurance must be based on some plan precluding individual selection by the employees or members or by the policyholder, employer, or union;
(3) Upon termination of the insurance with respect to the members of the family of any employee or member by reason of the employee's or member's termination of employment, termination of membership in the class or classes eligible for coverage under the policy, or death, the spouse shall be entitled to have issued by the insurer without evidence of insurability an individual policy of life insurance without disability or other supplementary benefits, providing application for the individual policy shall be made and the first premium paid to the insurer within 31 days after such termination, subject to the requirements of paragraph (8) of subsection (a) of Code Section 33-27-3. If the group policy terminates or is amended so as to terminate the insurance of any class of employees or members and the employee or member is entitled to have issued an individual policy under paragraph (9) of subsection (a) of Code Section 33-27-3, the spouse shall also be entitled to have issued by the insurer an individual policy, subject to the conditions and limitations provided in this Code section. If the spouse dies within the period during which the spouse would have been entitled to have an individual policy issued in accordance with this provision, the amount of life insurance which the spouse would have been entitled to have issued under such individual policy shall be payable as a claim under the group policy, whether or not application for the individual policy or the payment of the first premium therefor has been made.
(b) Notwithstanding paragraph (7) of subsection (a) of Code Section 33-27-3, only one certificate need be issued for delivery to an insured person if a statement concerning any dependent's coverage is included in the certificate.
(a) No policy of group insurance shall be delivered in this state unless it contains in substance the following provisions or provisions which in the opinion of the Commissioner are more favorable to the persons insured or at least as favorable to the persons insured and more favorable to the policyholder:
(1) A provision that the policyholder is entitled to a grace period of not less than 31 days for the payment of any premium due except the first, during which grace period the death benefit coverage shall continue in force, unless the policyholder shall have given the insurer written notice of discontinuance in advance of the date of discontinuance and in accordance with the terms of the policy. The policy may provide that the policyholder shall be liable to the insurer for the payment of a pro rata premium for the time the policy was in force during such grace period;
(2) A provision that the validity of the policy shall not be contested, except for nonpayment of premiums, after it has been in force for two years from its date of issue and that no statement made by any person insured under the policy relating to his or her insurability shall be used in contesting the validity of the insurance, with respect to which the statement was made, after the insurance has been in force prior to the contest for a period of two years during such person's lifetime nor unless it is contained in a written instrument signed by him or her;
(3) A provision that a copy of the application, if any, of the policyholder shall be attached to the policy when issued, that all statements made by the policyholder or by the persons insured shall be deemed representations and not warranties, and that no statement made by any person insured shall be used in any contest unless a copy of the instrument containing the statement is or has been furnished to the person or to his or her beneficiary;
(4) A provision setting forth the conditions, if any, under which the insurer reserves the right to require a person eligible for insurance to furnish evidence of individual insurability satisfactory to the insurer as a condition to part or all of his or her coverage;
(5) A provision specifying an equitable adjustment of premiums or of benefits or of both to be made in the event the age of a person insured has been misstated, such provision to contain a clear statement of the method of adjustment to be used;
(6) A provision that any sum becoming due by reason of the death of the person insured shall be payable to the beneficiary designated by the person insured, except as otherwise provided in paragraph (11) of this subsection, subject to the provisions of the policy, in the event there is no designated beneficiary living at the death of the person insured, as to all or any part of such sum and subject to any right reserved by the insurer in the policy and set forth in the certificate to pay at its option a part of such sum not exceeding $500.00 to any person appearing to the insurer to be entitled equitably thereto by reason of having incurred funeral or other expenses incident to the last illness or death of the person insured;
(7) A provision that the insurer will issue to the policyholder for delivery to each person insured an individual certificate setting forth a statement as to the insurance protection to which he or she is entitled, the person to whom the insurance benefits are payable, and the rights and conditions set forth in paragraphs (8) through (10) of this subsection;
(8) A provision that, if the insurance or any portion of it on a person covered under the policy other than the child of an employee insured pursuant to Code Section 33-27-2 ceases because of termination of employment or of membership in the class or classes eligible for coverage under the policy, the person shall be entitled to have issued to him or her by the insurer without evidence of insurability an individual policy of life insurance without disability or other supplementary benefits. Application for the individual policy shall be made and the first premium paid to the insurer within 31 days after termination of employment or of membership in the class or classes eligible for coverage under the policy. The individual policy shall at the option of the person be on any one of the forms, except term insurance, then customarily issued by the insurer at the age and for the amount applied for. The individual policy shall be in an amount not in excess of the amount of life insurance which ceases because of the termination, less the amount of any life insurance for which such person is or becomes eligible within 31 days after termination under the same or any other group policy, provided that any amount of insurance which shall have matured on or before the date of the termination as an endowment payable to the person insured, whether in one sum or in installments or in the form of an annuity, shall not for the purposes of this paragraph be included in the amount which is considered to cease because of such termination. The premium on the individual policy shall be at the insurer's then customary rate applicable to the form and amount of the individual policy, to the class of risk to which such person then belongs, and to his or her age attained on the effective date of the individual policy;
(9) A provision that, if the group policy terminates or is amended so as to terminate the insurance of any class of insured persons, every person insured under the group policy at the date of such termination, other than a child of an employee insured pursuant to Code Section 33-27-2, whose insurance terminates and who has been so insured for at least five years prior to such termination date shall be entitled to have issued to him or her by the insurer an individual policy of life insurance, subject to the same conditions and limitations as are provided by paragraph (8) of this subsection, except that the group policy may provide that the amount of such individual policy shall not exceed the smaller of the amount of the person's life insurance protection ceasing because of the termination or amendment of the group policy, less the amount of any life insurance for which he or she is or becomes eligible under any group policy issued or reinstated by the same or another insurer within 31 days after such termination, and $2,000.00;
(10) A provision that, if a person insured under the group policy dies during the period within which he or she would have been entitled to have an individual policy issued to him or her in accordance with paragraph (8) or (9) of this subsection, before such an individual policy shall have become effective, the amount of life insurance which he or she would have been entitled to have issued to him or her under such individual policy shall be payable as a claim under the group policy, whether or not application for the individual policy or the payment of the first premium therefor has been made; and
(11) An entity or trustee of a trust having an insurable interest pursuant to subsection (d) of Code Section 33-24-3 and effectuation authority pursuant to paragraph (4) or (5) of subsection (a) of Code Section 33-24-6, providing life, health, disability, retirement, or similar benefits to employees may designate the beneficiary of a group life insurance policy, provided that the corporation or trustee of a trust uses the insurance proceeds to provide life, health, disability, retirement, or similar benefits to such employees. As used in this paragraph, the term “employees” shall include directors, officers, employees, retired employees, or the dependents of such persons. The term “employee” shall include any former employee, but only for the purpose of replacing existing life insurance that will be surrendered in exchange for new life insurance in an amount not exceeding the insurance being surrendered.
(b)(1) The provisions of paragraphs (6), (8), (9), and (10) of subsection (a) of this Code section shall not apply to policies issued to a creditor to insure debtors or mortgagors of such creditor.
(2) The standard provisions required for individual life insurance policies shall not apply to group insurance policies.
(3) If the group life insurance policy is on a plan of insurance other than the term plan, it shall contain a nonforfeiture provision or provisions which in the opinion of the Commissioner is or are equitable to the insured persons and to the policyholder, but nothing in this Code section shall be construed to require that group life insurance policies contain the same nonforfeiture provisions as are required for individual life insurance policies.
(4) The provisions of paragraphs (6), (7), (8), (9), and (10) of subsection (a) of this Code section shall not apply to policies issued to a corporation or trustee of a trust pursuant to paragraph (9) of Code Section 33-27-1.
Each insurer admitted to transact life insurance in this state shall pay interest on proceeds or payments under any policy of group life insurance payable to a beneficiary residing in this state, to a beneficiary under a policy issued in this state, or to a beneficiary under a policy insuring a person resident in this state at the time of death, in accordance with Code Section 33-25-10.
(a) If any individual insured under a group insurance policy delivered in this state becomes entitled under the terms of the policy to have an individual policy of life insurance issued to him or her without evidence of insurability, subject to making of application therefor and payment of the first premium within the period specified in such policy and, if such individual is not given notice of the existence of the right at least 15 days prior to the expiration date of the period, in such event the individual shall have an additional period within which to exercise the right, but nothing contained in this Code section shall be construed to continue any insurance beyond the period provided in the policy. This additional period shall expire 15 days after such individual is given notice, but in no event shall the additional period extend beyond 60 days after the expiration date of the period provided in the policy.
(b) Written notice presented to the individual or mailed by the policyholders to the last known address of the individual or mailed by the insurer to the last known address of the individual as furnished by the policyholder shall constitute notice for the purpose of this Code section.
(c) Nothing in this Code section shall have the effect of extending the time within which a death claim shall be paid under the policy as provided in paragraph (10) of subsection (a) of Code Section 33-27-3.
(d) Inclusion of a statement of this conversion privilege in the insurance certificate issued to the individual insured shall constitute a notice of conversion privileges to the individual insured as required by this Code section.
Nothing in this title or in any other law shall be construed to prohibit any person insured under a group life insurance policy from making an assignment of all or any part of his or her incidents of ownership under the policy, including, but not limited to, the privilege to have issued to him or her an individual policy of life insurance pursuant and subject to paragraphs (8) and (9) of subsection (a) of Code Section 33-27-3 and Code Section 33-27-5 and the right to name a beneficiary. Subject to the terms of the policy or agreement between the insured, the group policyholder and the insurer relating to assignment of incidents of ownership under the policy, an assignment made by an insured is valid for the purpose of vesting in the assignee, in accordance with any provisions included in the policy as to the time at which it is to be effective, all of the incidents of ownership so assigned without prejudice to the insurer on account of any payment it may make or individual policy it may issue in accordance with paragraphs (8) and (9) of subsection (a) of Code Section 33-27-3 prior to receipt of notice of the assignment.
(a) The proceeds and avails of any group life insurance policy shall be free from the claims of creditors and representatives of the insured and of the person effecting the same to the same extent and under the same conditions as provided for in the case of other life insurance policies under Code Section 33-25-11.
(b) This Code section shall not apply to group life insurance issued to a creditor covering his debtors to the extent that the proceeds are applied to payment of the obligation for the purpose of which the insurance was issued.
(a) As used in this Code section, the term “small group” means a group or subgroup of 50 or fewer employees, members, or enrollees.
(b) The claims experience produced by small groups covered under group life insurance for each insurer shall be fully pooled for rating purposes. Except to the extent that the claims experience of an individual small group affects the overall experience of the small group pool, the claims experience produced by any individual small group of an insurer shall not be used in any manner for rating purposes or solely as a reason for termination of any individual small group.
(c) Each insurer's small group pool shall consist of each insurer's total claims experience produced by all small groups in this state, regardless of the marketing mechanism or distribution system utilized in the sale of the group life insurance. The pool shall include the experience generated under separate group contracts; contracts issued to trusts, multiple employer trusts, or association groups or trusts; or any other group-type coverage. The experience produced under multiple employer trusts or arrangements through contracts issued in this state or provided by solicitation and sale to Georgia residents through an out-of-state multiple employer trust or arrangement for all the Georgia small groups shall be fully pooled for rating purposes. Multiple employer trusts or arrangements shall include any group or group-type coverage issued to a trust or association or to any other group policyholder where such group or group-type contract provides coverage, primarily or incidentally, for sole proprietors, employers, or both.
(d) Notwithstanding subsection (b) of this Code section, age, sex, area, industry, occupational, and avocational factors may be considered in the initial and renewal rating of each small group. Durations since issue and tier factors may not be considered. Substandard rating in accordance with recognized underwriting practices may be applied to each employee, member, or enrollee and to each dependent member of the small group in the initial underwriting of a new or replacement group or when the member or dependent enters the small group for the first time but shall not be used for renewal rating purposes. Notwithstanding subsection (b) of this Code section, the total premium calculated for any individual small group may deviate from the pool rate by not more than plus or minus 25 percent based upon individual small group experience factors. The direct premium result of select or substandard underwriting practices shall not be considered a deviation from the pool rate.
(e) If standard or substandard rating cannot be offered to any individual according to recognized underwriting practices, coverage may be declined if the balance of the small group is accepted.
(f) This Code section shall not apply to:
(1) Policies issued to an employer in another state which provides coverage for employees of this state employed by such employer policyholder;
(2) Policies issued to true association groups, which shall be defined as an association of governmental or public employees, an association of employees of a common employer, or an organization formed and operated in good faith for purposes other than that of procuring insurance and composed of members engaged in a common trade, business, or profession; or
(3) A policy negotiated in connection with a collective bargaining agreement.
Notice of the maximum amount of a group life insurance premium increase shall be mailed or delivered to the group policyholder and to each employer group or subgroup insured under the group policy not less than 60 days prior to the effective date of the premium increase.
As used in this chapter, the term:
(1) “Annuity” means a contract by which one party in return for a stipulated payment or payments promises to pay periodic installments for a stated certain period of time or for the life or lives of the person or persons specified in the contract. The term does not cover the proceeds of life insurance no matter how payable.
(2) “Pure endowment” means a contract under which one party in return for stipulated payment is obligated to pay a fixed sum if and only if the person designated in the contract survives a certain period specified in the contract.
(3) “Reversionary annuity” means an annuity contract under which the person otherwise entitled to the proceeds is not to receive any payments unless that person survives another person or persons specified in the contract.
(a) No annuity, reversionary annuity, or pure endowment contract, other than group annuities and except as stated in this Code section, shall be delivered or issued for delivery in this state unless it contains in substance each of the provisions specified in subsection (b) of this Code section or contains provisions which in the opinion of the Commissioner are more favorable to contract holders. Any of the provisions not applicable to single premium annuities or single premium pure endowment contracts shall not, to that extent, be incorporated in the policy. This Code section shall not apply to contracts for deferred annuities included in or upon the lives of beneficiaries under life insurance policies.
(b)(1) GRACE PERIOD.A provision that there shall be a grace period of not less than 30 days within which any stipulated payment to the insurer falling due after the first may be made during which grace period the contract shall continue in force but, if a claim arises under the contract during the period of grace, the amount of the payments may be deducted from any amount payable under the contract in settlement except that, in the case of reversionary annuities, the insurer may at its option provide for an equitable reduction of the amount of the annuity payments in settlement of an overdue or deferred payment in lieu of providing for deduction of such payments from an amount payable upon settlement under the contract.
(2) INCONTESTABILITY.A provision that the contract shall be incontestable after it has been in force for a period of two years from its date of issue during the life of the person or of each of the persons upon whose life or lives the contract is made except for nonpayment of stipulated payments to the insurer. Provisions relating to benefits in the event of total and permanent disability and provisions which grant additional insurance specifically against death by accident or accidental means may also be excepted.
(3) ENTIRE CONTRACT.A provision that if any reference is made to the application for the contract or to the constitution, bylaws, or the rules of the insurer as forming part of or as affecting the contract between the parties there shall be included in or attached to the contract, when issued, a correct copy of the application signed by the applicant and of the constitution, bylaws, and rules referred to.
(4) MISSTATEMENT OF AGE OR SEX.A provision that if the age or sex of the person or persons upon whose life or lives the contract is made, or of any of them, has been misstated, the amount payable or benefits accruing under the contract shall be such as the stipulated payment or payments to the insurer would have purchased according to the correct age or sex; and that if the insurer shall make or has made any overpayment or overpayments on account of any such misstatement, the amount of the overpayment or overpayments with interest at the rate to be specified in the contract, but not exceeding 6 percent per annum, may be charged against the current or next succeeding payment or payments to be made by the insurer under the contract.
(5) DIVIDENDS.If the contract is participating, there shall be a provision that beginning not later than the end of the third contract year the insurer shall annually ascertain and apportion any divisible surplus accruing on the contract.
(6) REINSTATEMENT.A provision that the contract may be reinstated at any time within one year from the default in making stipulated payments to the insurer, unless the cash surrender value has been paid, but all overdue stipulated payments and any indebtedness to the insurer on the contract shall be paid or reinstated with interest thereon at a rate to be specified in the contract but not exceeding 6 percent per annum compounded annually and, in cases where applicable, the insurer may also include a requirement of evidence of insurability satisfactory to the insurer. This paragraph shall not apply to reversionary annuities.
(7) REVERSIONARY ANNUITIES; REINSTATEMENT.In reversionary annuity contracts there shall be a provision that the contract may be reinstated at any time within three years from the date of default in making stipulated payments to the insurer, upon production of evidence of insurability satisfactory to the insurer and upon condition that all overdue payments and any indebtedness to the insurer on account of the contract be paid or, within the limits permitted by the then cash values of the contract, reinstated with interest as to both payments and indebtedness at a rate to be specified in the contract but not exceeding 6 percent per annum compounded annually.
(8) PAYMENT OF CERTAIN CLAIMS.For any cash refund annuity, refund annuity, or any other annuity which provides for a lump sum settlement upon the death of the annuitant, a provision that interest shall be payable on the amount of such lump sum settlement in the same manner, at the same rate, and subject to the same conditions as provided by Code Section 33-25-10 for payment of interest on proceeds or payments under an individual policy of life insurance.
(a) This Code section shall be known and may be cited as the “Standard Nonforfeiture Law for Individual Deferred Annuities.”
(b) This Code section shall not apply to any reinsurance, group annuity purchased under a retirement plan or plan of deferred compensation established or maintained by an employer, including a partnership or sole proprietorship, or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under Section 408 of the Internal Revenue Code, premium deposit fund, variable annuity, immediate annuity, any deferred annuity contract after annuity payments have commenced, or reversionary annuity, nor to any contract which shall be delivered outside this state through an agent or other representative of the company issuing the contract.
(c) No contract of annuity, except as stated in subsection (b) of this Code section, shall be delivered or issued for delivery in this state unless it contains in substance the following provisions or corresponding provisions which in the opinion of the Commissioner are at least as favorable to the contract holder upon cessation of payment of considerations under the contract:
(1) That upon cessation of payment of considerations under a contract, the company shall grant a paid-up annuity benefit on a plan stipulated in such contract of such value as is specified in subsections (e) through (h) and (j) of this Code section;
(2) If a contract provides for a lump sum settlement at maturity or at any other time, that upon surrender of such contract at or prior to the commencement of any annuity payments, the company shall pay in lieu of any paid-up annuity benefit a cash surrender benefit of such amount as is specified in subsections (e) through (h) and (j) of this Code section and that interest shall be payable on such amount in the same manner, at the same rate, and subject to the same conditions as provided by Code Section 33-25-10 for payment of interest on proceeds or payments under an individual policy of life insurance. Subject to the provisions of this paragraph, the company shall reserve the right to defer the payment of the cash surrender benefit for a period of six months after demand for the benefit with surrender of the contract. The provisions of this paragraph requiring the payment of interest shall not apply to variable contracts which provide for annuity benefits which may vary according to the investment experience of any separate account or accounts maintained by the company as to such contract;
(3) A statement of the mortality table, if any, and interest rates used in calculating any minimum paid-up annuity, cash surrender, or death benefits that are guaranteed under the contract together with sufficient information to determine the amounts of the benefits;
(4) A statement that any paid-up annuity, cash surrender, or death benefits that may be available under the contract are not less than the minimum benefits required by any statute of the state in which such contract is delivered and an explanation of the manner in which the benefits are altered by the existence of any additional amounts credited by the company to such contract, any indebtedness to the company on such contract, or any prior withdrawals from or partial surrenders of such contract; and
(5) Notwithstanding the requirements of this subsection, any deferred annuity contract may provide that if no considerations have been received under a contract for a period of two full years and the portion of the paid-up annuity benefit at maturity on the plan stipulated in such contract arising from considerations paid prior to such period would be less than $20.00 monthly, the company may at its option terminate such contract by payment in cash of the then present value of the portion of the paid-up annuity benefit, calculated on the basis of the mortality table, if any, and interest rate specified in the contract for determining the paid-up annuity benefit, and by the payment shall be relieved of any further obligation under such contract.
(d) The minimum values as specified in subsections (e) through (h) and (j) of this Code section of any paid-up annuity, cash surrender, or death benefits available under an annuity contract shall be based upon minimum nonforfeiture amounts as defined by the Commissioner by rule and regulation based upon interest rates set by the Commissioner to reflect current and prevailing economic and financial conditions; provided, however, that such interest rates shall not be less than 0.15 percent per annum nor more than 3 percent per annum.
(e) Any paid-up annuity benefit available under a contract shall be such that its present value on the date annuity payments are to commence is at least equal to the minimum nonforfeiture amount on that date. The present value shall be computed using the mortality table, if any, and the interest rate specified in the contract for determining the minimum paid-up annuity benefits guaranteed in the contract.
(f) For contracts which provide cash surrender benefits, such cash surrender benefits available prior to maturity shall not be less than the present value as of the date of surrender of that portion of the maturity value of the paid-up annuity benefit which would be provided under the contract at maturity arising from considerations paid prior to the time of cash surrender reduced by the amount appropriate to reflect any prior withdrawals from or partial surrenders of such contract, such present value being calculated on the basis of an interest rate not more than 1 percent higher than the interest rate specified in such contract for accumulating the net considerations to determine such maturity value, decreased by the amount of any indebtedness to the company on such contract, including interest due and accrued, and increased by any existing additional amounts credited by the company to such contract. In no event shall any cash surrender benefit be less than the minimum nonforfeiture amount at that time. The death benefit under such contracts shall be at least equal to the cash surrender benefit.
(g) For contracts which do not provide cash surrender benefits, the present value of any paid-up annuity benefit available as a nonforfeiture option at any time prior to maturity shall not be less than the present value of that portion of the maturity value of the paid-up annuity benefit provided under the contract arising from considerations paid prior to the time the contract is surrendered in exchange for, or changed to, a deferred paid-up annuity, such present value being calculated for the period prior to the maturity date on the basis of the interest rate specified in such contract for accumulating the net considerations to determine the maturity value and increased by any existing additional amounts credited by the company to such contract. For contracts which do not provide any death benefits prior to the commencement of any annuity payments, the present values shall be calculated on the basis of the interest rate and the mortality table specified in the contract for determining the maturity value of the paid-up annuity benefit. However, in no event shall the present value of a paid-up annuity benefit be less than the minimum nonforfeiture amount at that time.
(h) For the purpose of determining the benefits calculated under subsections (f) and (g) of this Code section, in the case of annuity contracts under which an election may be made to have annuity payments commence at optional maturity dates, the maturity date shall be deemed to be the latest date for which election shall be permitted by the contract but shall not be deemed to be later than the anniversary of the contract next following the annuitant's seventieth birthday or the tenth anniversary of the contract, whichever is later.
(i) Any contract which does not provide cash surrender benefits or does not provide death benefits at least equal to the minimum nonforfeiture amount prior to the commencement of any annuity payments shall include a statement in a prominent place in the contract that such benefits are not provided.
(j) Any paid-up annuity, cash surrender, or death benefits available at any time, other than on the contract anniversary under any contract with fixed, scheduled considerations, shall be calculated with allowance for the lapse of time and the payment of any scheduled considerations beyond the beginning of the contract year in which cessation of payment of considerations under the contract occurs.
(k) For any contract which provides, within the same contract by rider or supplemental contract provision, both annuity benefits and life insurance benefits that are in excess of the greater of cash surrender benefits or a return of the gross considerations with interest, the minimum nonforfeiture benefits shall be equal to the sum of the minimum nonforfeiture benefits for the annuity portion and the minimum nonforfeiture benefits, if any, for the life insurance portion computed as if each portion were a separate contract. Notwithstanding subsections (e) through (h) and (j) of this Code section, additional benefits payable in the event of total and permanent disability as reversionary annuity or deferred reversionary annuity benefits or as other policy benefits additional to life insurance, endowment, and annuity benefits, and considerations for all such additional benefits shall be disregarded in ascertaining the minimum nonforfeiture amounts, paid-up annuity, cash surrender, and death benefits that may be required by this Code section. The inclusion of such additional benefits shall not be required in any paid-up benefits, unless such additional benefits separately would require minimum nonforfeiture amounts, paid-up annuity, cash surrender, and death benefits.
A clause in any annuity contract providing that the contract shall be incontestable after a specified period shall preclude only a contest of the validity of the contract and shall not preclude the assertion at any time of defenses based upon provisions in the contract which exclude or restrict coverage, whether or not the restrictions or exclusions are excepted in the clause.
A reinstated annuity contract may be contested on account of fraud or misrepresentation of facts material to the reinstatement only for the same period following reinstatement and with the same conditions and exceptions as the contract provides with respect to contestability after original issuance.
(a) Every annuity, reversionary annuity, or pure endowment contract issued for delivery in this state, except group annuities, shall have printed on or attached to the contract a notice stating in substance that the person to whom the annuity or contract is issued shall be permitted to return the annuity or contract within ten days after receipt thereof and to have the premium paid refunded if, after examination of the annuity or contract, the purchaser is not satisfied with it for any reason.
(b) If the purchaser, pursuant to such notice, returns the annuity or contract to the insurer at its home or branch office or to the agent through whom it was purchased, it shall be void from the beginning and the parties shall be in the same position as if no annuity or contract had been issued.
(c) Without limiting any other method of returning an annuity or contract under this Code section, it shall be prima-facie evidence of the fact and date of return of an annuity or contract if the annuity or contract is dispatched by certified mail or statutory overnight delivery to the insurer or agent, as provided in this Code section, and a return receipt provided by the United States Postal Service or the commercial delivery company is obtained.
The proceeds of annuity, reversionary annuity, or pure endowment contracts issued to citizens or residents of this state, upon whatever form, shall not in any case be liable to attachment, garnishment, or legal process in favor of any creditor of the person who is the beneficiary of such annuity contract unless the annuity contract was assigned to or was effected for the benefit of such creditor or unless the purchase, sale, or transfer of the policy is made with the intent to defraud creditors.
(a) As used in this chapter, the term “accident and sickness policy” means any policy insuring against loss resulting from sickness or from bodily injury or death by accident, or both, or any contract to furnish ambulance service in the future.
(b) Nothing in this chapter shall apply to or affect:
(1) Any policy of workers' compensation insurance or any policy of workers' insurance or any policy of liability insurance with or without supplementary expense coverage on the policy;
(2) Any policy or contract of reinsurance;
(3) Any policy, the renewal of which is subject to continuation of employment with a specified employer, or any blanket or group policy of insurance, or any policy issued pursuant to the exercise of conversion privileges provided for in group insurance policies; or
(4) Life insurance, endowment or annuity contracts, or contracts supplemental thereto which contain only such provisions relating to accident and sickness insurance which provide additional benefits in case of death or dismemberment or loss of sight by accident, or which operate to safeguard such contracts against lapse or give a special surrender value or special benefit or an annuity in the event that the insured or annuitant becomes totally and permanently disabled as defined by the contract or supplemental contract.
(a) No policy of accident and sickness insurance shall be delivered or issued for delivery in this state unless it meets the following requirements:
(1) The entire money and other considerations for the policy are expressed in such policy;
(2) The time at which the insurance takes effect and terminates is expressed in such policy;
(3) It purports to insure only one person, provided that a policy may insure, originally or by subsequent amendment upon the application of an adult member of a family who shall be deemed the policyholder, any two or more eligible members of that family, including husband, wife, dependent children, or any children, under a specified age which shall not exceed 19 years, and any other person dependent upon the policyholder; provided, further, that, if a policy purports to insure a dependent child of the policyholder, the child shall continue to be insured up to and including age 25 so long as the policy continues in effect, the child remains a dependent of the policyholder, and the child, in each calendar year since reaching the age specified in the policy for termination of benefits as a dependent of the policyholder, has been enrolled for five calendar months or more as a full-time student in a postsecondary institution of higher learning or, if not so enrolled, would have been eligible to be so enrolled and was prevented from being so enrolled due to illness or injury;
(4) The style, arrangement, and overall appearance of the policy gives no undue prominence to any portion of the text and every printed portion of the text of the policy and of any endorsements or attached papers is plainly printed in lightfaced type of a style in general use, the size of which shall be uniform and not less than ten-point with a lower case unspaced alphabet length not less than 120 point. The text shall include all printed matter except the name and address of the insurer, name or title of the policy, the brief description, if any, and captions and subcaptions. When a policy is renewable only at the option of the insurer, such fact shall be made known in prominent lettering on the face of the policy;
(5) The exceptions and reductions of indemnity are set forth in the policy and, except those which are set forth in Code Sections 33-29-3 and 33-29-4, are printed, at the insurer's option, either with the benefit provisions to which they apply or under an appropriate caption such as “exceptions,” or “exceptions and reductions,” provided that, if an exception or reduction specifically applies only to a particular benefit of the policy, a statement of such exception or reduction shall be included with the benefit provision to which it applies;
(6) Each form, including riders and endorsements, shall be identified by a form number in the lower left-hand corner of the first page thereof;
(7) It contains no provision purporting to make any portion of the charter, rules, constitution, or bylaws of the insurer a part of the policy unless such portion is set forth in full in the policy, except in the case of the incorporation of, or reference to, a statement of rates or classification of risks or short-rate table filed with the Commissioner;
(8) It contains no provision purporting to exclude or reduce coverage provided an otherwise insurable person solely for the reason that the person is eligible for or receiving medical assistance, as defined in Code Section 49-4-141. Any such provision appearing in an individual accident and sickness insurance policy shall be null and void; and
(9) It contains no provision relating to insurance with other insurers, provided that group conversion policies and major medical policies may contain provisions relating to other insurance benefits payable under group or blanket accident and sickness insurance policies.
(b) Individual major medical policies, including franchise and conversion policies, shall make available to each applicant for such coverage optional cash deductible amounts up to at least $5,000.00. No such policy shall contain any provision in which the length of the cash deductible accumulation period is not reasonable in relation to the amount of the cash deductibles. An insurer may offer higher optional deductibles to existing policyholders as a means of reducing the cost of such policies or to offset premium increases.
(a) Each accident and sickness policy delivered or issued for delivery in this state shall contain the provisions specified in subsection (b) of this Code section in the words in which the same appear in subsection (b) of this Code section, except that the insurer may, at its option, substitute for one or more of such provisions corresponding provisions of different wording approved by the Commissioner which are in each instance not less favorable in any respect to the insured or the beneficiary. The provisions shall be preceded individually by the captions appearing in this Code section, or, at the option of the insurer, by such appropriate individual or group captions or subcaptions as the Commissioner may approve. If any such provision is in whole or in part inapplicable to or inconsistent with the coverage provided by a particular form of policy, the insurer, with the approval of the Commissioner, shall omit from such policy any inapplicable provision or part of a provision and shall modify any inconsistent provision or part of a provision in such manner as to make the provision as contained in the policy consistent with the coverage provided by the policy.
(b)(1) ENTIRE CONTRACT; CHANGES.This policy, including the endorsements and the attached papers, if any, constitutes the entire contract of insurance. No change in this policy shall be valid until approved by an executive officer of the insurer and unless such approval is endorsed hereon or attached hereto. No agent has authority to change this policy or to waive any of its provisions.
(2) TIME LIMIT ON CERTAIN DEFENSES.
(A) After two years from the date of issue of this policy and in the absence of fraud, no misstatements made by the applicant in the application for such policy shall be used to void the policy or to deny a claim for loss incurred or disability, as defined in the policy, commencing after the expiration of such two-year period. In order for the insurer to void the policy or to deny a claim for loss incurred or disability based upon an applicant's fraudulent misstatement in an application, a copy of such application must be furnished to the policyholder or his or her beneficiary, and such fraudulent misstatement must have been in writing, must be material to the risk assumed by the insurer, and, in the case of a claim, must also relate to the specific type of loss or disability for which the claim is made.
(i) The policy provision in subparagraph (A) of this paragraph shall not be so construed as to affect any legal requirements for avoidance of a policy or denial of a claim during such initial two-year period, nor to limit the application of paragraphs (1) through (3) of subsection (b) of Code Section 33-29-4 in the event of misstatement with respect to age or occupation or other insurance. For purposes of this paragraph, fraud means the willful misrepresentation of a material fact.
(ii) A policy which the insurer has the right to continue in force subject to its terms by the timely payment of premium until at least age 60 or, in the case of a policy issued after age 54, for at least five years from its date of issue may contain in lieu of the provisions of subparagraph (A) of this paragraph the following provision, from which the clause in brackets may be omitted at the insurer's option, under the caption “incontestable”: In the absence of fraud and after this policy has been in force for a period of two years during the lifetime of the insured, excluding any period during which the insured is disabled, it shall become incontestable as to the statements contained in the application.
(B) In the absence of fraud, no claim for loss incurred or disability, as defined in the policy, commencing after two years from the date of issue of this policy shall be reduced or denied on the ground that a disease or physical condition not excluded from coverage by name or specific description effective on the date of loss had existed prior to the effective date of coverage of this policy.
(3) GRACE PERIOD.A grace period of _____ days will be granted for the payment of each premium falling due after the first premium, during which grace period the policy shall continue in force. The insurer shall insert in the blank space a number not less than “seven” for weekly premium policies, “ten” for monthly premium policies and “30” for all other policies. A policy in which the insurer reserves the right to refuse renewal shall have at the beginning of the above provision the following language: “unless not less than 30 days prior to the premium due date the insurer has delivered to the insured or has mailed to his last address as shown by the records of the insurer written notice of its intention not to renew this policy beyond the period for which the premium has been accepted․․․․ ”
(4) REINSTATEMENT.
(A) If any renewal premium is not paid within the time granted the insured for payment, a subsequent acceptance of any premium by the insurer or by any agent duly authorized by the insurer to accept the premium, without requiring in connection therewith an application for reinstatement, shall reinstate the policy; provided, however, that, if the insurer or such agent requires an application for reinstatement and issues a conditional receipt for the premium tendered, the policy will be reinstated upon approval of such application by the insurer or, lacking such approval, upon the forty-fifth day following the date of such conditional receipt unless the insurer has previously notified the insured in writing of its disapproval of such application. The reinstated policy shall cover only loss resulting from any accidental injury as may be sustained after the date of reinstatement and loss due to such sickness as may begin more than ten days after that date. In all other respects the insured and insurer shall have the same rights thereunder as they had under the policy immediately before the due date of the defaulted premium, subject to any provisions endorsed hereon or attached hereto in connection with the reinstatement. Any premium accepted in connection with a reinstatement shall be applied to a period for which premium has not been previously paid, but not to any period more than 60 days prior to the date of reinstatement.
(B) The last sentence of subparagraph (A) of this paragraph may be omitted from any policy which the insured has the right to continue in force subject to its terms by the timely payment of premiums, until at least age 60, or, in the case of a policy issued after age 54, for at least five years from its date of issue.
(5) NOTICE OF CLAIM.
(A) Written notice of claim must be given to the insurer within 20 days after the occurrence or commencement of any loss covered by the policy or as soon thereafter as is reasonably possible. Notice given by or on behalf of the insured or the beneficiary to the insurer at _____ (insert the location of such office as the insurer may designate for the purpose), or to any authorized agent of the insurer, with information sufficient to identify the insured, shall be deemed notice to the insurer.
(B) In a policy providing a loss-of-time benefit which may be payable for at least two years, an insurer may at its option insert the following provision between the first and second sentences of subparagraph (A) of this paragraph:
“Subject to the qualifications set forth below, if the insured suffers loss of time on account of disability for which indemnity may be payable for at least two years, he shall at least once in every six months after having given notice of claim give to the insurer notice of continuance of said disability, except in the event of legal incapacity. The period of six months following any filing of proof by the insured or any payment by the insurer on account of such claim or any denial of liability in whole or in part by the insurer shall be excluded in applying this provision. Delay in the giving of such notice shall not impair the insured's right to any indemnity which would otherwise have accrued during the period of six months preceding the date on which such notice is actually given.”
(6) CLAIM FORMS.The insurer, upon receipt of a notice of claim, will furnish to the claimant such forms as are usually furnished by it for filing proofs of loss. If the forms are not furnished within ten working days after the giving of the notice, the claimant shall be deemed to have complied with the requirements of this policy as to proof of loss upon submitting, within the time fixed in the policy for filing proofs of loss, written proof covering the occurrence, the character, and the extent of the loss for which claim is made.
(7) PROOFS OF LOSS.Written proof of loss must be furnished to the insurer at its office, in case of a claim for loss for which this policy provides any periodic payment contingent upon continuing loss, within 90 days after the termination of the period for which the insurer is liable and, in case of claim for any other loss, within 90 days after the date of such loss. Failure to furnish proof within the time required shall not invalidate nor reduce any claim if it was not reasonably possible to give proof within such time, provided such proof is furnished as soon as reasonably possible and in no event, except in the absence of legal capacity, later than one year from the time proof is otherwise required.
(8) TIME OF PAYMENT OF CLAIMS.The policy shall include a provision incorporating and restating the substance of the provisions of subsections (b) and (c) of Code Section 33-24-59.5, relating to time limits for payment of claims for benefits under health benefit policies and sanctions for failure to pay timely. If a policy provides benefits for loss of time, such policy shall also provide that, subject to proof of such loss, all accrued benefits payable under the policy for loss of time will be paid not later than at the expiration of each period of 30 days during the continuance of the period for which the insurer is liable and any balance remaining unpaid at the termination of such period will be paid immediately upon receipt of such proof.
(9) PAYMENT OF CLAIMS.
(A) Indemnity for loss of life will be payable in accordance with the beneficiary designation and the provisions respecting such payment which may be prescribed herein and effective at the time of payment. If no such designation or provision is then effective, such indemnity shall be payable to the estate of the insured. Any other accrued indemnities unpaid at the insured's death may, at the option of the insurer, be paid either to such beneficiary or to such estate. All other indemnities will be payable to the insured.
(B) The following provisions, or either of them, may be included with the provisions of subparagraph (A) of this paragraph at the option of the insurer:
(i) If any indemnity of this policy shall be payable to the estate of the insured or to an insured or beneficiary who is a minor or otherwise not competent to give a valid release, the insurer may pay such indemnity, up to an amount not exceeding $_____ (insert an amount which shall not exceed $1,000.00), to any relative by blood or connection by marriage of the insured or beneficiary who is deemed by the insurer to be equitably entitled thereto. Any payment made by the insurer in good faith pursuant to this provision shall fully discharge the insurer to the extent of such payment;
(ii) Subject to any written direction of the insured in the application or otherwise, all or a portion of any indemnities provided by this policy on account of hospital, nursing, or medical services may, at the insurer's option and unless the insured requests otherwise in writing not later than the time of filing proofs of such loss, be paid directly to the hospital or person rendering such services; but it is not required that the service be rendered by a particular hospital or person.
(10) PHYSICAL EXAMINATIONS AND AUTOPSY.The insurer at its own expense shall have the right and opportunity to examine the person of the insured when and as often as it may reasonably require during the pendency of a claim hereunder and to make an autopsy in case of death where it is not forbidden by law.
(11) LEGAL ACTION.No action at law or in equity shall be brought to recover on this policy prior to the expiration of 60 days after written proof of loss has been furnished in accordance with the requirements of this policy. No action shall be brought after the expiration of three years after the time written proof of loss is required to be furnished.
(12) CHANGE OF BENEFICIARY.Unless the insured makes an irrevocable designation of beneficiary, the right to change of beneficiary is reserved to the insured and the consent of the beneficiary or beneficiaries shall not be requisite to surrender or assignment of this policy or to any change of beneficiary or beneficiaries, or to any other changes in this policy.
(c) The first clause of paragraph (12) of subsection (b) of this Code section, relating to the irrevocable designation of beneficiary, may be omitted at the insurer's option.
(d) The provisions of this Code section shall also apply to individual accident and sickness insurance policies issued by a fraternal benefit society, a health care corporation, a health maintenance organization, or any other similar entity.
(a) Every insurer authorized to issue individual accident and sickness insurance plans, policies, or contracts shall be required to make available, either as a part of or as an optional endorsement to all such policies providing major medical insurance coverage which are issued, delivered, issued for delivery, or renewed coverage for human heart transplants, including any charges for acquisition, transportation, or donation of a human heart when a human heart transplant is performed. Such coverage shall be at least as extensive and provide at least the same degree of coverage as that provided by the respective plan, policy, or contract for the treatment of other types of physical illnesses. Such an optional endorsement shall also provide that the coverage required to be made available pursuant to this Code section shall also cover the spouse and the dependents of the insured if the insured's spouse and dependents are covered under such benefit plan, policy, or contract.
(b) The optional endorsement required to be made available under subsection (a) of this Code section shall not contain any exclusions, reductions, or other limitations as to coverages, deductibles, or coinsurance provisions which apply to human heart transplants unless such provisions apply generally to other similar benefits provided or paid for under the accident and sickness insurance benefit plan, policy, or contract; provided, however, the optional endorsement may contain a waiting period for the coverage or a delayed eligibility date of not more than 12 months from the effective date of the endorsement.
(c) Nothing in this Code section shall be construed to prohibit an insurer, nonprofit corporation, health care plan, health maintenance organization, or other person issuing any similar individual accident and sickness insurance benefit plan, policy, or contract from issuing or continuing to issue an individual accident and sickness insurance benefit plan, policy, or contract which provides benefits greater than the minimum benefits required to be made available under this Code section or from issuing any such plans, policies, or contracts which provide benefits which are generally more favorable to the insured than those required to be made available under this Code section.
(d) Nothing in this Code section shall be construed to prohibit the inclusion of coverage for human heart transplants that differs from the coverage provided in the same insurance plan, policy, or contract for physical illnesses if the policyholder does not purchase the optional coverage made available pursuant to this Code section.
(a) As used in this Code section, the term:
(1) “Female at risk” means a woman:
(A) Who has a personal history of breast cancer;
(B) Who has a personal history of biopsy proven benign breast disease;
(C) Whose grandmother, mother, sister, or daughter has had breast cancer; or
(D) Who has not given birth prior to age 30.
(2)(A) “Mammogram” means any low-dose radiologic screening procedure for the early detection of breast cancer provided to a woman and which utilizes equipment approved by the Department of Community Health dedicated specifically for mammography and includes a physician's interpretation of the results of the procedure or interpretation by a radiologist experienced in mammograms in accordance with guidelines established by the American College of Radiology.
(B) Reimbursement for a mammogram authorized under this Code section shall be made only if the facility in which the mammogram was performed meets accreditation standards established by the American College of Radiology or equivalent standards established by this state.
(C) Policies subject to this Code section shall contain coverage for mammograms made with at least the following frequency:
(i) Once as a base-line mammogram for any female who is at least 35 but less than 40 years of age;
(ii) Once every two years for any female who is at least 40 but less than 50 years of age;
(iii) Once every year for any female who is at least 50 years of age; and
(iv) When ordered by a physician for a female at risk.
(3) “Pap smear” or “Papanicolaou smear” means an examination, in accordance with standards established by the American College of Pathologists, of the tissues of the cervix of the uterus for the purpose of detecting cancer when performed upon the order of a physician, which examination may be made once a year or more often if ordered by a physician.
(4) “Policy” means any benefit plan, contract, or policy except a disability income policy, specified disease policy, or hospital indemnity policy.
(5) “Prostate-specific antigen test” means a measurement, in accordance with standards established by the American College of Pathologists, of a substance produced by the epithelium to determine if there is any benign or malignant prostate tissue.
(b)(1) Every insurer authorized to issue an individual accident and sickness insurance policy in this state which includes coverage for any female shall include as part of or as a required endorsement to each such policy which is issued, delivered, issued for delivery, or renewed coverage for mammograms and Pap smears for the covered females which at least meets the minimum requirements of this Code section.
(2) Every insurer authorized to issue an individual accident and sickness insurance policy in this state which includes coverage for any male shall include as a part of or as a required endorsement to each such policy which is issued, delivered, issued for delivery, or renewed coverage for annual prostate-specific antigen tests for the covered males who are 45 years of age or older, or for covered males who are 40 years of age or older, if ordered by a physician.
(c) The coverage required under subsection (b) of this Code section may be subject to such exclusions, reductions, or other limitations as to coverages, deductibles, or coinsurance provisions as may be approved by the Commissioner.
(d) Nothing in this Code section shall be construed to prohibit the issuance of individual accident and sickness insurance policies which provide benefits greater than those required by subsection (b) of this Code section or more favorable to the insured than those required by subsection (b) of this Code section.
(e) The provisions of this Code section shall apply to individual accident and sickness insurance policies issued by a fraternal benefit society, a health care plan, a health maintenance organization, or any similar entity.
(f) Nothing contained in this Code section shall be deemed to prohibit the payment of different levels of benefits or from having differences in coinsurance percentages applicable to benefit levels for services provided by preferred and nonpreferred providers as otherwise authorized under the provisions of Article 2 of Chapter 30 of this title, relating to preferred provider arrangements.
(g) Every insurer subject to paragraph (1) of subsection (b) of this Code section shall provide notification to each female insured upon such female attaining the age of 40 of her coverage for mammograms and continuing annually thereafter, for as long as mammogram screening is recommended for such female insured based on her individual health status, as determined by her physician.
(a) Every insurer authorized to issue individual accident and sickness insurance plans, policies, or contracts shall be required to make available, either as a part of or as an optional endorsement to all such policies providing major medical insurance coverage which are issued, delivered, issued for delivery, or renewed coverage for bone marrow transplants for the treatment of breast cancer and Hodgkin's disease. Such coverage shall be at least as extensive and provide at least the same degree of coverage as that provided by the respective plan, policy, or contract for the treatment of other types of physical illnesses. Such an optional endorsement shall also provide that the coverage required to be made available pursuant to this Code section shall also cover the spouse and the dependents of the insured if the insured's spouse and dependents are covered under such benefit plan, policy, or contract.
(b) The optional endorsement required to be made available under subsection (a) of this Code section shall not contain any exclusions, reductions, or other limitations as to coverages, deductibles, or coinsurance provisions which apply to bone marrow transplants for the treatment of breast cancer and Hodgkin's disease unless such provisions apply generally to other similar benefits provided or paid for under the accident and sickness insurance benefit plan, policy, or contract.
(c) Nothing in this Code section shall be construed to prohibit an insurer, nonprofit corporation, health care plan, health maintenance organization, or other person issuing any similar individual accident and sickness insurance benefit plan, policy, or contract from issuing or continuing to issue an individual accident and sickness insurance benefit plan, policy, or contract which provides benefits greater than the minimum benefits required to be made available under this Code section or from issuing any such plans, policies, or contracts which provide benefits which are generally more favorable to the insured than those required to be made available under this Code section.
(d) Nothing in this Code section shall be construed to prohibit the inclusion of coverage for bone marrow transplants for the treatment of breast cancer and Hodgkin's disease that differs from the coverage provided in the same insurance plan, policy, or contract for physical illnesses if the policyholder does not purchase the optional coverage made available pursuant to this Code section.
(e) The provisions of this Code section shall apply to individual accident and sickness insurance policies issued by a fraternal benefit society, a health care plan, a health maintenance organization, or any similar entity.
(a) As used in this Code section, the term:
(1) “Child wellness services” means the periodic review of a child's physical and emotional status conducted by a physician or conducted pursuant to a physician's supervision, but shall not include periodic dental examinations or other dental services. The review shall include a medical history, complete physical examination, developmental assessment, appropriate immunizations, anticipatory guidance for the parent or parents, and laboratory testing in keeping with prevailing medical standards.
(2) “Policy” means any health care plan, subscriber contract, or accident and sickness plan, contract, or policy by whatever name called other than a disability income policy, a long-term care insurance policy, a medicare supplement policy, a health insurance policy written as a part of workers' compensation equivalent coverage, a specified disease policy, a credit insurance policy, a hospital indemnity policy, a limited accident policy, or other type of limited accident and sickness policy.
(b) Every insurer authorized to issue an individual accident and sickness policy in this state shall include, either as a part of or as a required endorsement to each basic medical or hospital expense, major medical, or comprehensive medical expense policy issued, delivered, issued for delivery, or renewed in this state basic coverage for child wellness services for an insured child from birth through the age of five years. Any such policy may provide that the child wellness services which are rendered during a periodic review shall only be covered to the extent that such services are provided by or under the supervision of a single physician during the course of one visit. The Commissioner shall define by regulation the basic coverage for child wellness services and may consider the current recommendations for preventive pediatric health care by the American Academy for Pediatrics and any other relevant data or information in the promulgation of such regulation.
(c) The coverage required under subsection (b) of this Code section may be subject to exclusions, reductions, or other limitations as to coverages or coinsurance provisions as may be approved by the Commissioner, but shall not be subject to deductibles.
(d) Nothing in this Code section shall be construed to prohibit the issuance of individual accident and sickness policies which provide benefits greater than those required by subsection (b) of this Code section or more favorable to the insured than those required by subsection (b) of this Code section.
(e) The provisions of this Code section shall apply to individual basic medical or hospital expense, major medical, or comprehensive medical expense insurance policies issued by a fraternal benefit society, a health care corporation, a health maintenance organization, or any similar entity.
(f) Nothing contained in this Code section shall be deemed to prohibit the payment of different levels of benefits or having differences in coinsurance percentages applicable to benefit levels for services provided by preferred and nonpreferred providers as otherwise authorized under the provisions of Article 2 of Chapter 30 of this title, relating to preferred provider arrangements.
(a) No accident and sickness policy delivered or issued for delivery in this state shall contain provisions respecting the matters set forth in this Code section unless such provisions are in the words in which the same appear in subsection (b) of this Code section, except that the insurer may, at its option, use in lieu of any such provision a corresponding provision of different wording approved by the Commissioner which is not less favorable in any respect to the insured or the beneficiary. Any such provision contained in the policy shall be preceded individually by the appropriate caption appearing in this Code section or, at the option of the insurer, by such appropriate individual or group captions or subcaptions as the Commissioner may approve. If any such provision is in whole or in part inapplicable to or inconsistent with the coverage provided by a particular form of policy, the insurer, with the approval of the Commissioner, shall omit from the policy any inapplicable provision or part of a provision and shall modify any inconsistent provision or part of a provision in such a manner as to make the provision as contained in the policy consistent with the coverage provided by the policy.
(b)(1) CHANGE OF OCCUPATION. If the insured is injured or contracts sickness after having changed his or her occupation to one classified by the insurer as more hazardous than that stated in this policy or while doing for compensation anything pertaining to an occupation so classified, the insurer shall pay only such portion of the indemnities provided in this policy as the premium paid would have purchased at the rates and within the limits fixed by the insurer for such more hazardous occupation. If the insured changes his or her occupation to one classified by the insurer as less hazardous than that stated in this policy, the insurer, upon receipt of proof of such change of occupation, shall reduce the premium rate accordingly and shall return the excess pro rata unearned premium from the date of change of occupation or from the policy anniversary date immediately preceding receipt of such proof, whichever is the more recent. In applying this provision, the classification of occupational risk and the premium rates shall be such as have been last filed by the insurer, prior to the occurrence of the loss for which the insurer is liable or prior to date of proof of change in occupation, with the state official having supervision of insurance in the state where the insured resided at the time this policy was issued. If, however, such filing was not required, then the classification of occupational risk and the premium rates shall be those last made effective by the insurer in the state prior to the occurrence of the loss or prior to the date of proof of change in occupation.
(2) MISSTATEMENT OF AGE.If the age of the insured has been misstated, all amounts payable under this policy shall be such as the premium paid would have purchased at the correct age.
(3) OTHER INSURANCE WITH THIS INSURER.
(A) If an accident or sickness or accident and sickness policy or policies previously issued by the insurer to the insured is in force concurrently herewith, making the aggregate indemnity for __________ (insert type of coverage or coverages) in excess of $ __________ (insert maximum limit of indemnity or indemnities), the excess insurance shall be void and all premiums paid for the excess shall be returned to the insured or to his or her estate;
or, in lieu thereof:
(B) Insurance effective at any one time on the insured under a like policy or policies with this insurer is limited to the one such policy elected by the insured, his or her beneficiary, or his or her estate, as the case may be, and the insurer will return all premiums paid for all other policies.
(4) RELATION OF EARNINGS TO INSURANCE.
(A) If the total monthly amount of loss of time benefits promised for the same loss under all valid loss of time coverage upon the insured, whether payable on a weekly or monthly basis, shall exceed the monthly earnings of the insured at the time disability commenced or his or her average monthly earnings for the period of two years immediately preceding a disability for which claim is made, whichever is the greater, the insurer will be liable only for such proportionate amount of such benefits under this policy as the amount of the monthly earnings or the average monthly earnings of the insured bears to the total amount of monthly benefits for the same loss under all such coverage upon the insured at the time such disability commences and for the return of that part of the premiums paid during such two years which exceeds the pro rata amount of the premiums for the benefits actually paid hereunder; but this shall not operate to reduce the total monthly amount of benefits payable under all the coverage upon the insured below the sum of $200.00 or the sum of the monthly benefits specified in the coverages, whichever is the lesser, nor shall it operate to reduce benefits other than those payable for loss of time.
(B) The policy provision of subparagraph (A) of this paragraph may be inserted only in a policy which the insured has the right to continue in force subject to its terms by the timely payment of premiums until at least age 60 or, in the case of a policy issued after age 54, for at least five years from its date of issue. The insurer may, at its option, include in this provision a definition of “valid loss of time coverage,” approved as to form by the Commissioner, which definition shall be limited in subject matter to coverage provided by governmental agencies or by organizations subject to regulation by insurance law or by insurance authorities of this or any other state of the United States or any province of Canada, or to any other coverage the inclusion of which may be approved by the Commissioner or any combination of such coverages. In the absence of that definition the term shall not include any coverage provided for the insured pursuant to any compulsory benefit statute, including any workers' compensation or employer's liability statute, or benefits provided by union welfare plans or by employer or employee benefit organizations.
(5) UNPAID PREMIUM.Upon the payment of a claim under this policy, any premiums then due and unpaid or covered by any note or written order may be deducted therefrom.
(6) RETURN OF PREMIUM ON CANCELLATION.If the insured cancels this policy, the earned premium shall be computed by the use of the short-rate table last filed with the state official having supervision of insurance in the state where the insured resided when the policy was issued. Cancellation shall be without prejudice to any claim originating prior to the effective date of cancellation.
(7) CONFORMITY WITH STATE STATUTES.Any provision of this policy which, on its effective date, is in conflict with the statutes of the state, District of Columbia, or territory in which the insured resides on such date is amended to conform to the minimum requirements of such statutes.
(8) ILLEGAL OCCUPATION.The insurer shall not be liable for any loss to which a contributing cause was the insured's commission of or attempt to commit a felony or to which a contributing cause was the insured's being engaged in an illegal occupation.
(9) INTOXICANTS AND NARCOTICS.The insurer shall not be liable for any loss sustained or contracted in consequence of the insured being intoxicated or under the influence of any narcotic unless administered on the advice of a physician.
(10) CANCELLATION OF TRAVEL ACCIDENT POLICIES.With respect only to travel accident insurance policies, the following optional provisions may be inserted in the policy:
“The insurer reserves the right to cancel this policy under the provisions set forth in Code Section 33-24-44.”
The provisions which are the subject of Code Sections 33-29-3 and 33-29-4, or any corresponding provisions which are used in lieu thereof in accordance with such Code sections, shall be printed in consecutive order of the provisions in such Code sections or, at the option of the insurer, any such provisions may appear as a unit in any part of the policy, with other provisions to which they may be logically related, provided the resulting policy shall not be in whole or in part unintelligible, uncertain, ambiguous, abstruse, or likely to mislead a person to whom the policy is offered, delivered, or issued.
(a) The benefits on account of medical or surgical services provided by an individual policy of accident and sickness insurance may be limited by its terms to services performed by specifically defined professions, provided that in the absence of such definitions the term “physician” or “surgeon,” as used in such policy, shall not be deemed limited solely to medical practitioners licensed under Chapter 34 of Title 43.
(b) When an individual policy of accident and sickness insurance, except policies providing special coverage for limited diseases, accident protection only, or dental policies, provides for hospital care, there may be included within the scope of coverage hospital care rendered on account of mental illnesses and hospital care rendered by any psychiatric hospital duly licensed by this state. If such coverage is not included in the policy, a statement that the policy does not cover mental illnesses shall be printed in the policy in boldface type or stamped on the face of the policy and printed or stamped on any identification card issued pursuant to any such policy.
(c) Any other laws to the contrary notwithstanding, whenever the term “physician” or “surgeon” is used in any policy of health or accident and sickness insurance issued in this state or in any contract for health care, services, or benefits existing under, and by virtue of, any laws of this state, said term shall include, within its meaning, medical practitioners licensed under and in accordance with Chapter 11 of Title 43, relating to dentists, in respect to any care, services, procedures, or benefits covered by said policy of insurance or health care contract which the said persons are licensed to perform, any provisions in any such policy of insurance or health care contract to the contrary notwithstanding. This subsection shall be applicable to all policies in this state, regardless of date of issue.
(a) Subject to Code Section 33-29-21, each policy, covered by this chapter, except accident insurance only policies, in which the insurer reserves the right to refuse renewal on an individual basis, shall provide, in substance, in a provision of the policy entitled “renewability,” that, subject to the right to terminate the policy upon nonpayment of premiums when due, the right to refuse renewal shall not be exercised before the renewal date occurring on, or after and nearest, each anniversary or, in the case of lapse and reinstatement, at the renewal date occurring on, or after and nearest, each anniversary of the last reinstatement, and that any refusal or renewal shall be without prejudice to any claim originating while the policy is in force.
(b) The insurer shall not amend or endorse the policy prior to the anniversary date in a manner tending to restrict or lower the benefits, add exclusions, or increase the premium.
(a) Except as provided in subsection (b) of this Code section, every insurer delivering or issuing for delivery in this state policies of accident and sickness insurance which are renewable at the option of the insurer or cancelable at the option of the insurer shall provide in said policies a provision as follows:
“If the company cancels or refuses to renew this policy except for nonpayment of premiums prior to age _____ (insert age which shall not be less than 60), it will refund 75 percent of the premiums paid in excess of the benefits received. The requirements of this provision shall not apply to cancellation or refusal to accept renewal premiums because of change in occupation of the insured to an occupation generally classified by the insurer as to all applicants as uninsurable.”
(b) This Code section shall not apply to and the provision prescribed in subsection (a) of this Code section need not be included in any major medical policy which provides that the insurer may cancel or refuse to renew the policy as of an anniversary date when also canceling or refusing to renew all policies with the same provisions and premium rate basis in the jurisdiction in which the insured resides, and then only if either or both of the following conditions are applicable:
(1) The insured is or could be covered by benefits, substantially similar in both kind and amount to those of the policy, in accordance with any federal or state governmental health insurance program; or
(2) The insurer is prevented by any law or any regulation or ruling of a governmental agency from applying to the policy a table of premium rates which the insurer certifies, based on its experience, is reasonable in relation to the benefits provided.
(c) For the purpose of this chapter, a major medical policy is any policy which provides benefits of at least 75 percent of necessary, reasonable, and customary charges for medical care, including hospitalization in semiprivate accommodations, with maximum lifetime benefit of at least $100,000.00, subject only to such exceptions, restrictions, limitations, and deductible as the Commissioner may deem reasonable.
(a) No policy of accident or sickness insurance shall refer to its noncancelable nature without at the same time disclosing all options the insurer may have in regard to renewability; and the guaranteed renewable nature of any such policy shall not be referred to unless the reference at the same time discloses the qualifications on the guarantee of renewability, including any age limits, any right to change premium rates by class, any aggregate provisions, and any other limitations on the right to renewal in a manner which shall not minimize or render obscure the qualifying conditions.
(b) An insurer operating in the major medical or comprehensive, guaranteed renewable business in this state shall permit an insured to change his or her major medical or comprehensive coverage, upon election at any renewal, to a comparable product offered by that insurer or a product offered by that insurer with more limited product benefits; to a product with higher deductibles; or to modify his or her existing coverage to elect any optional higher deductibles under that policy. If such product, benefit, or deductible change is elected by the insured during the 60 day required period after notice of renewal premium increase but before renewal date, such insured shall not be subject to any new preexisting conditions exclusion that did not apply to his or her original coverage.
(c) The Commissioner shall adopt such rules and regulations as he or she deems necessary for the administration of this Code section.
(a) If any accident and sickness policy delivered or issued for delivery in this state contains a provision establishing, as an age limit or otherwise, a date after which the coverage provided by the policy will not be effective and, if the date falls within a period for which premium is accepted by the insurer or if the insurer accepts a premium after such date, the coverage provided by the policy will continue in force until the end of the period for which premium has been accepted.
(b) In the event the age of the insured has been misstated and if, according to the correct age of the insured, the coverage provided by the policy would not have become effective or would have ceased prior to the acceptance of the premium or premiums, then the liability of the insurer shall be limited to the refund, upon request, of all premiums paid for the period not covered by the policy.
(a) Every individual accident and sickness policy or contract, except single premium nonrenewable policies or contracts, issued for delivery in this state by an insurer shall have printed on or attached to the policy or contract a notice stating in substance that the person to whom the policy or contract is issued shall be permitted to return the policy or contract within ten days of its delivery to said purchaser and to have the premium paid refunded if, after examination of the policy or contract, the purchaser is not satisfied with it for any reason.
(b) If the insured or purchaser, pursuant to such notice, returns the policy or contract to the insurer at its home or branch office, or to the agent through whom it was purchased, it shall be void from the beginning and the parties shall be in the same position as if no policy or contract had been issued. Without limiting any other method of returning a policy or contract under this Code section, it shall be prima-facie evidence of the fact and date of return of a policy or contract if the policy or contract is dispatched by certified mail or statutory overnight delivery to the insurer or agent, as provided in this Code section, and a return receipt provided by the United States Postal Service or commercial delivery company is obtained.
(a) Any policy of a foreign or alien insurer, when delivered or issued for delivery to any person in this state, may contain any provision which is not less favorable to the insured or the beneficiary than those provisions contained in this chapter and which is prescribed or required by the law of the state under which the insurer is organized.
(b) Any policy of a domestic insurer may, when issued for delivery in any other state or country, contain any provision permitted or required by the laws of the other state or country.
Every insurer shall furnish to any applicant for accident and sickness insurance in this state a written outline showing the major coverage of the policy applied for, the major exclusions of the policy applied for, the renewal provisions of the policy applied for, and a reference to the policy with respect to further provisions. The written outline shall be given to the applicant at the time of signing the application for the policy and the forms of the outlines shall be subject to the same requirements for filing and approval as are set forth for the filing and approval of policy forms as required in Code Sections 33-24-9 and 33-24-10.
This chapter shall not be construed as preventing a person other than the insured with a proper insurable interest from making application for and owning a policy covering the insured or from being entitled under such policy to any indemnities, benefits, and rights provided in the policy.
(a) The proceeds or avails of all accident and sickness policies and of provisions providing benefits on account of the insured's disability which are supplemental to life insurance or annuity contracts, except credit accident and sickness policies and credit life policies, shall be exempt from all liability for any debt of the insured and from any debt of the beneficiary existing at the time the proceeds are made available for his or her use.
(b) The exemption of income benefits payable as the result of disability shall not exceed an average of $250.00 of such benefits per month of the period of disability.
The requirements of this chapter may be complied with by the insurer by attaching to the policy such rider or endorsement as may be necessary for the purpose.
(a) No policy provision which is not subject to this chapter shall make a policy, or any portion thereof, less favorable in any respect to the insured or the beneficiary than the provisions thereof which are subject to this chapter.
(b) A policy delivered or issued for delivery to any person in this state in violation of this chapter shall be held valid but shall be construed as provided in this chapter. When any provision in a policy subject to this chapter is in conflict with any provision of this chapter, the rights, duties, and obligations of the insurer, the insured, and the beneficiary shall be governed by this chapter.
(a) As used in this Code section, the term “employees” means the officers, managers, and employees and retired employees of the employer and the individual proprietor or partners if the employer is an individual proprietor or partnership.
(b) Accident and sickness insurance on a franchise plan is that form of accident and sickness insurance issued to:
(1) Two or more employees of any corporation, copartnership, or individual employer or any governmental corporation, agency, or department thereof; or
(2) Ten or more members, employees, or employees of members of any trade or professional association or of a labor union or of any other association having had an active existence for at least two years, where the association or union has a constitution or bylaws and is formed in good faith for purposes other than that of obtaining insurance; where the persons, with or without their dependents, are issued the same form of an individual policy varying only as to amounts and kinds of coverage applied for by the persons under an arrangement whereby the premiums on the policies may be paid to the insurer periodically by the employer, with or without payroll deductions, or by the association or union for its members, or by some designated person acting on behalf of such employee or association or union.
(a) This Code section shall apply only to the filing of rate modifications for individual accident and sickness policies which provide for an optional loss ratio guarantee.
(b) As used in this Code section, the term:
(1) “Expected loss ratio” in an experience period means the ratio of: (A) the sum of expected claims in the experience period for each year of issue, based on the corresponding loss ratio standards as recited in accordance with paragraph (1) of subsection (d) of this Code section, to (B) the earned premium in the experience period.
(2) “Loss ratio” means the ratio of incurred claims to earned premium.
(c) Rate modification on individual accident and sickness policies which provide for an optional loss ratio guarantee must be filed with the Commissioner prior to implementation.
(d) At the time of filing new premium rates on any previously approved form for individual accident and sickness insurance policies which provide for an optional loss ratio guarantee, the benefits provided by the policies shall be deemed reasonable as to the premium charged so long as the insurer complies with the terms of a loss ratio guarantee filed with the Commissioner. The loss ratio guarantee shall be in writing and shall include at least the following:
(1) A recitation of the loss ratio standards included in the original actuarial memorandum filed with the policy form at the time of the initial approval of the policy form. Such loss ratio standards must be given for each of the first ten years after issue;
(2) A guarantee that the actual loss ratios in this state for each experience period will meet or exceed the expected loss ratio in the experience period. If the annual earned premium volume in this state under a policy form is less than $1 million, the loss ratio guarantee shall be based on the actual loss ratio for the aggregate of states having less than $1 million of earned premium for the policy form. If such aggregate annual earned premium is less than $1 million, the experience period shall be extended until the end of the calendar year in which $1 million of earned premium is attained;
(3) A guarantee that the actual loss ratio results for each calendar year the rates are in effect shall be independently audited during the second quarter of the following year at the expense of the insurer. The audited results shall be reported to the Commissioner no later than the date for filing the applicable accident and sickness policy experience exhibit. The Commissioner may disapprove the audit for reasonable cause;
(4) A guarantee that affected policyholders in this state shall be issued a refund proportional to premiums paid in an amount such that when added to incurred claims will bring the actual loss ratio up to the expected loss ratio in the experience period. If aggregate loss ratios are used, the total amount refunded in this state shall equal the dollar amount necessary to achieve the loss ratio standards multiplied by the total premium earned in this state on the policy form and divided by the total premiums earned in all aggregated states on the policy form. The refund shall be made to all policyholders insured under the applicable policy form as of the last day of the applicable experience period and whose individual refund would equal $10.00 or more. The refund shall include interest at the maximum interest rate permitted by law in the valuation of whole life insurance issued on the last date of the applicable experience period calculated from the last day of the applicable experience period until the date of payment, which shall be during the third quarter of the following year; and
(5) A guarantee that refunds of less than $10.00 shall be aggregated by the insurer and paid to the Department of Insurance.
(a) As used in this Code section, the term:
(1) “Functional deformity” means a deformity of the bone or joint structure of the maxilla or mandible such that the normal character and essential function of such bone structure is impeded.
(2) “Policy” means any major medical benefit plan, contract, or policy except a credit insurance policy, disability income policy, specified disease policy, hospital indemnity policy, limited accident policy, or other similarly limited accident and sickness policy.
(3) “Temporomandibular joint” means the connection of the mandible and the temporal bone through the articular disc surrounded by the joint capsule and associated ligaments and tendons.
(4) “Temporomandibular joint dysfunction” means congenital or developed anomalies of the temporomandibular joint.
(b) No policy may be issued or issued for delivery in this state which:
(1) Excludes medically necessary surgical or nonsurgical treatment for the correction of temporomandibular joint dysfunction by physicians or dentists professionally qualified by training and experience; or
(2) Excludes medically necessary surgery for the correction of functional deformities of the maxilla and mandible.
(c) The provisions of this Code section shall not cover cosmetic or elective orthodontic or periodontic care or general dental care.
(d)(1) The coverage under paragraph (1) of subsection (b) of this Code section may contain such types of exclusions, reductions, or other limitations as to coverages, deductibles, or coinsurance provisions which apply to other benefits under the accident and sickness insurance benefit plan, policy, or contract.
(2) Basic coverage for the nonsurgical treatment of temporomandibular joint dysfunction under paragraph (1) of subsection (b) of this Code section may be limited to history and examination; radiographs, which must be diagnostic for temporomandibular joint dysfunction; splint therapy with necessary adjustments, provided that removable appliances designed for orthodontic purposes would not be reimbursable under a major medical plan; and diagnostic or therapeutic masticatory muscle and temporomandibular joint injections.
(e) Except as provided in paragraph (1) of subsection (c) of Code Section 33-30-23, for policies limited only to dental coverage, nothing contained in this Code section shall be deemed to prohibit the payment of different levels of benefits or from having differences in coinsurance percentages applicable to benefit levels for services provided by preferred and nonpreferred providers as otherwise authorized under the provisions of Article 2 of Chapter 30 of this title, relating to preferred provider arrangements.
Pursuant to the provisions of the federal Health Insurance Portability and Accountability Act of 1996, P.L. 104-191, and subject to applicable rules and regulations as issued by the Centers for Medicare and Medicaid Services, all insurers which issue, issue for delivery, deliver, or renew existing individual policies, certificates, or contracts of accident and sickness insurance in this state shall, subject only to timely payment of premiums, renew or continue such coverage at the option of the insured. Such other exemptions and exclusions as are permitted by the federal Health Insurance Portability and Accountability Act of 1996, P.L. 104-191, Section 2742 shall also apply to individual accident and sickness insurance and insurers in this state.
Every policy which contains a provision for termination of coverage of a dependent upon the reaching of a certain age shall contain a provision to the effect that, upon the date of the dependent reaching the age at which coverage would terminate under the provisions of the policy, the dependent shall be entitled to have issued to him or her, without evidence of insurability, upon application made to the company within 45 days following the date the dependent reaches the age at which coverage would terminate and upon the payment of the appropriate premium, an individual or family policy of accident and sickness insurance then being issued by the insurer which provides coverage most nearly similar to the coverage contained in the policy which was terminated by reason of such dependent reaching a certain age or any similar individual or family policy then being issued by the insurer which contains lesser coverage. Any and all probationary or waiting periods set forth in such an individual or family policy shall be considered as being met to the extent coverage was in force under the prior policy.
Notice of any premium increase shall be mailed or delivered to each holder of an individual accident and sickness insurance policy not less than 60 days prior to the effective date of such increase.
(a) It is the intention of this chapter together with Code Section 33-24-21.1 to provide an acceptable alternative mechanism for the availability of individual health insurance coverage, as contemplated by Section 2741 of the federal Public Health Service Act, 42 U.S.C.A. Section 300gg-41. This chapter shall be construed and administered so as accomplish 1 such intention.
(b) Any reference in this chapter to any federal statute shall refer to that federal statute as it existed on January 1, 1997, including its amendment by the federal Health Insurance Portability and Accountability Act of 1996, P.L. 104-191.
1 So in original.
(a) As used in this chapter, the terms:
(1) “Creditable coverage” and “eligible individual” have the same meaning as specified in Sections 2701 and 2741 of the federal Public Health Service Act, 42 U.S.C.A. Sections 300gg and 300gg-41 except that a person shall not be an eligible individual under this chapter if such person is eligible for or has declined any continuation or conversion coverage or has terminated any such coverage prior to its exhaustion.
(2) “Health insurance issuer” and “health maintenance organization” have the same meaning as specified in Section 2791 of the federal Public Health Service Act, 42 U.S.C.A. Section 300gg-92.
(3) “Health insurer” means any health insurance issuer which is not a managed care organization.
(4) “Managed care organization” means a health maintenance organization or a nonprofit health care corporation.
(b) Any other term which is used in this chapter and which is also defined in Section 2791 of the federal Public Health Service Act, 42 U.S.C.A. Section 300gg-92, and not otherwise defined in this chapter shall have the same meaning specified in said Section 2791.
Each health insurer and managed care corporation which is licensed to and does offer health insurance coverage in the individual market in this state shall as a condition of such licensure agree to participation in its respective assignment system provided by this chapter. This Code section shall not apply to an entity which offers only excepted benefits as specified in Section 2791(c) of the federal Public Health Service Act, 42 U.S.C.A. Section 300gg-91(c).
(a) Each eligible individual in this state whose most recent creditable coverage was provided by an entity other than a managed care organization shall be entitled to participate in the Georgia Health Insurance Assignment System (sometimes referred to as GHIAS in this chapter) created pursuant to this Code section. Each eligible individual in this state whose most recent creditable coverage was provided by a managed care organization shall be entitled to participate in the Georgia Health Benefits Assignment System created pursuant to Code Section 33-29A-5.
(b) The Commissioner shall develop the GHIAS system which shall provide for the equitable assignment of eligible individuals who are entitled to and desirous of participating in the system to health insurers offering coverage in the individual market in the state. Such assignment shall be based primarily on the pro rata volume of individual health insurance business done in this state by each such health insurer. The system may include other factors for equitable assignment, as determined to be appropriate by the Commissioner, including but not limited to the geographic area or areas in the state normally served by a health insurer.
(c) Upon assignment of an eligible individual to a health insurer, the eligible individual shall have the right to purchase and the health insurer shall have the obligation to sell either of the standard health insurance policies provided for in subsection (d) of this Code section at a premium not to exceed the maximum specified in said subsection.
(d) The Commissioner shall develop two standard health insurance policies to be provided by health insurers to which eligible individuals are assigned pursuant to this Code section. The actuarial value of the benefits under each such coverage shall be at least 85 percent of the average actuarial value of the benefits provided by all individual health insurance coverage issued by all issuers in the state. Except to the extent specifically provided to the contrary in this chapter, all laws of this state relating to the normal provision of such coverage in the individual market shall apply to the provision of such coverage under this chapter. The Commissioner shall fix a maximum premium to be charged for each such standard policy which shall be not more than 150 percent of the average premium which is or would be charged by all issuers in the state for the same or similar coverage issued other than under this Code section, as determined by the Commissioner. The Commissioner may authorize a health insurer to charge a premium in excess of said 150 percent maximum if and only if the insurer demonstrates to the Commissioner that the application of the 150 percent maximum would endanger the financial solvency of that health insurer.
(e) Nothing in this Code section shall be construed to require a health insurer to offer to an eligible individual any coverage other than one of the two standard health insurance plans developed under subsection (d) of this Code section. Nothing in this Code section shall be construed to prohibit any insurer from offering to any individual any otherwise lawful coverage.
(a) Each eligible individual in this state whose most recent creditable coverage was provided by a managed care organization shall be entitled to participate in the Georgia Health Benefits Assignment System (sometimes referred to as GHBAS in this chapter) created pursuant to this Code section. Each eligible individual in this state whose most recent creditable coverage was provided by an entity other than a managed care organization shall be entitled to participate in the Georgia Health Insurance Assignment System created pursuant to Code Section 33-29A-4.
(b) The Commissioner shall develop the GHBAS system which shall provide for the equitable assignment of eligible individuals who are entitled to and desirous of participating in the system to managed care organizations doing business in the state. Such assignment shall be based primarily on the pro rata volume of individual business done in this state by each such managed care organization and the geographic area or areas in the state normally served by a managed care organization. The system may include other factors for equitable assignment, as determined to be appropriate by the Commissioner. No managed care organization shall be required to provide coverage outside the geographic area or areas normally served by that managed care organization. However, where this geographic limitation makes it impossible to assign to a managed care organization its equitable share of eligible individuals, a managed care organization may be required by the Commissioner to contract for provision of coverage of eligible individuals, as provided for in Code Section 33-29A-6.
(c) Upon assignment of an eligible individual to a managed care organization, the eligible individual shall have the right to purchase and the managed care organization shall have the obligation to sell enrollment in either of the standard health benefit plans provided for in subsection (d) of this Code section at a premium not to exceed the maximum specified in said subsection.
(d) The Commissioner shall develop two standard health benefit plans to be provided by managed care organizations to which eligible individuals are assigned pursuant to this Code section. The actuarial value of the benefits under each such health benefit plan shall be at least 85 percent of the average actuarial value of the benefits provided by all health benefit plans issued in the individual market by all managed care organizations in the state. Except to the extent specifically provided to the contrary in this chapter, all laws of this state relating to the normal provision of such coverage in the individual market shall apply to the provision of such coverage under this chapter. The Commissioner shall fix a maximum premium to be charged for each such standard health benefit plan which shall be not more than 150 percent of the average premium which is or would be charged by all managed care organizations in the state for the same or similar coverage issued other than under this Code section, as determined by the Commissioner. The Commissioner may authorize a managed care organization to charge a premium in excess of said 150 percent maximum if and only if the managed care organization demonstrates to the Commissioner that the application of the 150 percent maximum would endanger the financial solvency of that managed care organization.
(e) Nothing in this Code section shall be construed to require a managed care organization to offer to an eligible individual any coverage other than one of the two standard health benefit plans developed under subsection (d) of this Code section. Nothing in this Code section shall be construed to prohibit any managed care organization from offering to any individual any otherwise lawful coverage.
Any combination of one or more health insurers and one or more managed care organizations may contract with each other for the assumption by one or more health insurers of the obligations otherwise imposed by this chapter on one or more managed care organizations. Under any such contract the responsibility for providing the coverage required by this chapter shall be with a health insurer licensed to do business in this state. Where the obligations of a managed care organization are contractually assumed by a health insurer, the assuming health insurer may substitute coverage under a standard policy of health insurance for coverage under a standard health benefit plan, and provision of such substituted coverage shall satisfy the obligation otherwise owed to an affected eligible individual.
The Commissioner may impose a moratorium upon the required issuance of coverage by a health insurer or managed care organization, if the Commissioner determines after public notice and hearing that the continuation of such required issuance by that entity will endanger the solvency of that entity.
(a) The Commissioner shall adopt rules and regulations for the implementation of this chapter. Notwithstanding any provision of Chapter 2 of this title or any other law to the contrary, such rules and regulations shall be adopted in exact compliance with the procedures specified in Article 1 of Chapter 13 of Title 50, the “Georgia Administrative Procedure Act.” In addition to any other materials submitted under subsection (e) of Code Section 50-13-4, there shall be so submitted the full text of the Georgia Health Insurance Assignment System, the Georgia Health Benefits Assignment System, the standard health insurance policies provided for in Code Section 33-29A-4, and the standard health benefit plans provided for in Code Section 33-29A-5.
(b) The rules and regulations developed by the Commissioner shall include provisions for applications for GHIAS and GHBAS to be submitted by licensed insurance agents and for such agents to be compensated at a commission rate of not less than 3 percent from the premiums received by the issuing health insurer or managed care organization. For purposes of applications for GHIAS and GHBAS, licensed agents shall not be subject to the certificate of authority requirements of Code Section 33-23-26.
(a) Upon the effective date whereupon guaranteed issue coverage is available pursuant to the federal Patient Protection and Affordable Care Act, a health insurer or managed care organization shall not be required to offer health care policies under the Georgia Health Insurance Assignment System and Georgia Health Benefits Assignment System.
(b) Each health insurer or managed care organization that has offered health care policies under the Georgia Health Insurance Assignment System and the Georgia Health Benefits Assignment System may terminate, cancel, or nonrenew such existing policies as of the date upon which guaranteed issue coverage is available pursuant to the federal Patient Protection and Affordable Care Act, provided that the health insurer or managed care organization provides at least 90 days' notice prior to the termination of the coverage to all policyholders and to the Commissioner.
(c) An insurer may not terminate, cancel, or nonrenew any policy under this subsection if, at the end of the 90 day cancellation period, the insured would not have at least 90 days of remaining open enrollment to obtain insurance coverage through an exchange created pursuant to the federal Patient Protection and Affordable Care Act.
The General Assembly recognizes the high level of uninsured individuals in this state and the need for individuals or other purchasers of health insurance coverage in this state to have the opportunity to choose health insurance plans that are more affordable and flexible than existing market policies offering accident and sickness insurance coverage. Therefore, the General Assembly seeks to increase the availability of health insurance coverage by allowing insurers authorized to transact insurance in Georgia to issue individual accident and sickness policies in Georgia that are currently approved for issuance in another state.
For purposes of this article, the term “individual accident and sickness insurance policy” means any policy insuring against loss resulting from sickness or from bodily injury or death by accident, or both, or any contract to furnish ambulance service in the future but does not include limited benefit insurance policies exempted from the definition of the term “health benefit policy” in Code Section 33-1-2. The term “individual accident and sickness insurance policy” shall also include comprehensive major medical coverage for medical and surgical benefits, and also includes “high deductible health plans” sold or maintained under the applicable provisions of Section 223 of the Internal Revenue Code.
The Commissioner shall approve for sale in Georgia any individual accident and sickness insurance policy that is currently approved for issuance in another state where the insurer or the insurer's affiliate or subsidiary is authorized to transact insurance so long as the insurer or the insurer's affiliate or subsidiary filing and issuing such policy in Georgia is also authorized to transact insurance in this state pursuant to Chapter 3 of this title and provided that any such policy meets the requirements set forth in this article. Additionally, any insurer authorized to transact insurance in this state can offer an individual accident and sickness insurance policy with benefits equivalent to those in any policy approved for sale in Georgia under this article, provided that any such offered policy meets the requirements set forth in this article.
(a) Any insurer selling an insurance policy pursuant to this article, and any policy approved pursuant to this article, shall satisfy actuarial standards set forth by the National Association of Insurance Commissioners (NAIC) and any regulation promulgated by the Commissioner that is not inconsistent with such NAIC standards. Any insurer selling an insurance policy pursuant to this article, and any policy approved pursuant to this article, shall, except as otherwise provided in this article, comply with the requirements of this title and the regulations promulgated by the Commissioner.
(b) The Commissioner shall have the authority to determine whether an insurer satisfies the standards required by this Code section and may not approve a plan that he or she finds lacks compliance with this Code section. The Commissioner shall have the authority to determine whether the plan sold pursuant to this article continues to satisfy the requirements set forth in this Code section in the same manner as he or she does with an individual accident and sickness insurance policy approved pursuant to another applicable chapter in this title.
(c) Any policy sold pursuant to this article shall comply with paragraph (3) of subsection (c) of Code Section 9-9-2 and shall not require the insured or his or her beneficiary to arbitrate disputes arising under the policy.
(a) Each written application for a policy sold pursuant to this article shall contain the following language in boldface type at the beginning of the document:
“The benefits of this policy may primarily be governed by the laws of a state other than Georgia; therefore, all of the laws applicable to policies filed in this state may not apply to this policy. Any purchase of individual health insurance should be considered carefully since future medical conditions may make it impossible to qualify for another individual health insurance policy.”
(b) Each policy sold pursuant to this article shall contain the following language in boldface type at the beginning of the document:
“The benefits of this policy providing your coverage may be governed primarily by the laws of a state other than Georgia. The benefits covered may be different from other policies you can purchase. Please consult your insurance agent or insurer to determine which health benefits are covered under this policy.”
(c) Each individual accident and sickness policy sold pursuant to this article shall contain a side-by-side chart that compares the definitions of each benefit covered by the policy that has been sold in the other state with the definitions of the benefits covered under current Georgia laws and regulations where the specified benefit is similarly termed but defined differently.
(a) The Commissioner shall adopt rules and regulations necessary to implement this article, which shall include, but shall not be limited to, standard forms for the disclosure of benefits, and preserve the intent and effect of Code Sections 33-24-27, 33-24-27.1, and 33-24-59.12 and subsection (c) of Code Section 33-29-6.
(b) Any dispute resolution mechanism or provision for notice and hearing in this title shall apply to insurers issuing and delivering policies pursuant to this article.
(a) “Group accident and sickness insurance” is that form of accident and sickness insurance covering the groups of persons listed in paragraphs (1) through (7) of this subsection, with or without one or more members of their families or one or more of their dependents or covering one or more members of the families or one or more dependents of persons in such groups, and issued upon the following basis:
(1) Under a policy issued to an employer or trustees of a fund established by an employer, who shall be deemed the policyholder, insuring at least two employees of such employer for the benefit of persons other than the employer. As used in this paragraph, the term “employees” includes the officers, managers, and employees of the employer; the individual proprietor or partners, if the employer is an individual proprietor or partnership; the officers, managers, and employees of subsidiary or affiliated corporations; and the individual proprietors, partners, and employees of individuals and firms, if the business of the employer and such individual or firm is under common control through stock ownership, contract, or otherwise. The term may include retired employees. A policy issued to insure employees of a public body may provide that the term “employees” shall include elected or appointed officials;
(2) Under a policy issued to an association, including a labor union, which shall have a constitution and bylaws and which has been organized and is maintained in good faith for purposes other than that of obtaining insurance, insuring at least ten members, employees, or employees of members of the association for the benefit of persons other than the association or its officers or trustees. As used in this paragraph, the term “employees” may include retired employees;
(3) Under a policy issued to the trustees of a fund established by two or more employers in the same industry, by one or more labor unions, by one or more employers and one or more labor unions, or by an association, as defined in paragraph (2) of this subsection, which trustees shall be deemed the policyholder, to insure not less than ten employees of the employers or members of the union or of such association or of members of such association for the benefit of persons other than the employers or other unions or such associations. As used in this paragraph, the term “employees” includes the officers, managers, and employees of the employer and the individual proprietor or partners, if the employer is an individual proprietor or partnership. The term may include retired employees. The policy may provide that the term “employees” shall include the trustees or their employees, or both, if their duties are principally connected with such trusteeship;
(4) Under a policy issued to any person or organization to which a policy of group life insurance may be delivered in this state, to insure any class or classes of individuals that could be insured under such group life policy;
(5) Under a policy issued to a creditor, or to a trustee or agent appointed by two or more creditors, which creditor, trustee, or agent shall be deemed to be the policyholder, to insure mortgagors of the creditor. The insurance must be written in connection with a credit transaction that is secured by a first mortgage or deed of trust; must be made to finance the purchase of real property or the construction of a dwelling thereon, or to refinance a prior credit transaction made for such a purpose; and shall be payable to the policyholder. Such payment shall reduce or extinguish the unpaid mortgage of the mortgagor to the extent of such payment;
(6) Under a policy issued to cover any other substantially similar group which in the discretion of the Commissioner may be subject to the issuance of a group accident and sickness policy or contract; or
(7)(A) Under a policy issued to a legal entity providing a multiple employer welfare arrangement, which means any employee benefit plan which is established or maintained for the purpose of offering or providing accident and sickness benefits to the employees of two or more employers, including self-employed individuals, individuals whose compensation is reported on federal Internal Revenue Service Form 1099, and their spouses or dependents. The term shall not apply to any plan or arrangement which is established or maintained by a tax-exempt rural electric cooperative or a collective bargaining agreement.
(B) The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the employees, employers, or trustee.
(b) As used in this chapter, the term “true association” means an organization that:
(1) Has been in existence for at least five years;
(2) Has been formed and maintained in good faith for purposes other than obtaining insurance;
(3) Does not condition membership in the association on any health status related factor relating to an individual (including an employee of an employer or a dependent of an employee);
(4) Makes health insurance coverage offered through the association available to all members regardless of any health status related factor relating to such members (or individual eligible for coverage through a member);
(5) Does not make health insurance coverage offered through the association available other than in connection with a member of the association; and
(6) Meets such additional requirements as may be imposed under Georgia law or regulation.
This chapter shall apply to policies of insurance, certificates evidencing coverage under a policy of insurance, or any other evidence of insurance, issued by an insurer, delivered, or issued for delivery in this state except for policies issued to an employer in another state which provides coverage for employees of this state employed by such employer policyholder.
Nothing in this chapter validates any charge or practice illegal under any rule of law or regulation governing usury, small loans, retail installment sales, or the like or extends the application of any statute, rule, or regulation to any transaction not otherwise subject thereto.
“Blanket accident and sickness insurance” is that form of group accident and sickness insurance covering the groups of persons listed in paragraphs (1) through (6) of this Code section and issued upon the following basis:
(1) Under a group policy or contract issued to any common carrier or to any operator, owner, or lessee of a means of transportation, who or which shall be deemed the policyholder, covering a group defined as all persons or all persons of a class who may become passengers on such common carrier or such means of transportation;
(2) Under a group policy or contract issued to an employer, who shall be deemed the policyholder, covering all employees, dependents, or guests defined by reference to specified hazards incident to the activities or operations of the employer or any class of employees, dependents, or guests similarly defined;
(3) Under a group policy or contract issued to a school or other institution of learning, a camp, the sponsor of the institution of learning or camp, or to the head or principal thereof, who or which shall be deemed the policyholder, covering students or campers; and supervisors and employees may be included;
(4) Under a group policy or contract issued in the name of any religious, charitable, recreational, educational, or civic organization, which shall be deemed the policyholder, covering participants in activities sponsored by the organization;
(5) Under a group policy or contract issued to a sports team or sponsors thereof, which shall be deemed the policyholder, covering members, officials, and supervisors; or
(6) Under a group policy or contract issued to cover any other risk or class of risks which in the discretion of the Commissioner may be properly eligible for blanket accident and sickness insurance. The discretion of the Commissioner may be exercised on an individual risk basis or class of risks, or both.
Each group accident and sickness policy shall contain in substance the following provisions:
(1) A provision that, in the absence of fraud or intentional misrepresentation of material fact in applying for or procuring coverage under the terms of the group policy or contract, all statements made by the policyholder shall be deemed representations and not warranties, and that no statement made for the purpose of effecting insurance shall avoid the insurance or reduce benefits unless contained in a written instrument signed by the policyholder, a copy of which has been furnished to the policyholder;
(2) A provision that the insurer will furnish to the policyholder, for delivery to each employee or member of the insured group, an individual certificate setting forth in summary form a statement of the essential features of the insurance coverage of the employee or member and to whom benefits are payable. If dependents or family members are included in the coverage, additional certificates need not be issued for delivery to the dependents or family members;
(3) A provision that from time to time eligible new employees or members or dependents, in accordance with the terms of the policy, may be added to the group originally insured;
(4) A provision that, with respect to termination of benefits for, or coverage of, any person who is a dependent child of an insured, the child shall continue to be insured up to and including age 25 so long as the coverage of the member continues in effect, the child remains a dependent of the insured parent or guardian, and the child, in each calendar year since reaching any age specified for termination of benefits as a dependent, has been enrolled for five calendar months or more as a full-time student at a postsecondary institution of higher learning or, if not so enrolled, would have been eligible to be so enrolled and was prevented from being so enrolled due to illness or injury. This paragraph shall not apply to group policies under which an employer provides coverage for dependents of its employees and pays the entire cost of the coverage without any charge to the employee or dependents; and
(5) A provision that the policyholder is entitled to a grace period of not less than 31 days for the payment of any premium due except the first, during which grace period the policy shall continue in force unless the policyholder shall have given the insurer written notice of discontinuance in advance of the date of discontinuance and in accordance with the terms of the policy. The policy may provide that the policyholder shall be liable to the insurer for the payment of a pro rata premium for the time the policy was in force during such grace period.
(a) Every insurer authorized to issue group accident and sickness insurance benefit plans, policies, or contracts shall be required to make available, either as a part of or as an optional endorsement to all such policies providing major medical insurance coverage which are issued, delivered, issued for delivery, or renewed on or after July 1, 1988, coverage for human heart transplants, including any charges for acquisition, transportation, or donation of a human heart when a human heart transplant is performed. Such coverage shall be at least as extensive and provide at least the same degree of coverage as that provided by the respective plan, policy, or contract for the treatment of other types of physical illnesses. Such an optional endorsement shall also provide that the coverage required to be made available pursuant to this Code section shall also cover the spouse and the dependents of the insured if the insured's spouse and dependents are covered under such benefit plan, policy, or contract.
(b) The optional endorsement required to be made available under subsection (a) of this Code section shall not contain any exclusions, reductions, or other limitations as to coverages, deductibles, or coinsurance provisions which apply to human heart transplants unless such provisions apply generally to other similar benefits provided or paid for under the accident and sickness insurance benefit plan, policy, or contract; provided, however, the optional endorsement may contain a waiting period for the coverage or a delayed eligibility date of not more than 12 months from the effective date of the endorsement.
(c) Nothing in this Code section shall be construed to prohibit an insurer, nonprofit corporation, health care plan, health maintenance organization, or other person issuing any similar group accident and sickness insurance benefit plan, policy, or contract from issuing or continuing to issue a group accident and sickness insurance benefit plan, policy, or contract which provides benefits greater than the minimum benefits required to be made available under this Code section or from issuing any such plans, policies, or contracts which provide benefits which are generally more favorable to the insured than those required to be made available under this Code section.
(d) The requirements of this Code section shall be satisfied if the coverage specified in subsections (a) and (b) of this Code section is made available to the master policyholder of the group plan, policy, or contract. Nothing in this Code section shall be construed to require the group insurer, nonprofit corporation, health care plan, health maintenance organization, or master policyholder to provide or to make available such coverage to any insured under such group or blanket plan, policy, or contract.
(e) Nothing in this Code section shall be construed to prohibit the inclusion of coverage for human heart transplants that differs from the coverage provided in the same insurance plan, policy, or contract for physical illnesses if the policyholder does not purchase the optional coverage made available pursuant to this Code section.
(f) The provisions of this Code section shall also apply to group accident and sickness insurance policies or contracts issued by a fraternal benefit society, a health care plan, a health maintenance organization, or any other similar entity.
(a) As used in this Code section, the term:
(1) “Female at risk” means a woman:
(A) Who has a personal history of breast cancer;
(B) Who has a personal history of biopsy proven benign breast disease;
(C) Whose grandmother, mother, sister, or daughter has had breast cancer; or
(D) Who has not given birth prior to age 30.
(2)(A) “Mammogram” means any low-dose radiologic screening procedure for the early detection of breast cancer provided to a woman and which utilizes equipment approved by the Department of Community Health dedicated specifically for mammography and includes a physician's interpretation of the results of the procedure or interpretation by a radiologist experienced in mammograms in accordance with guidelines established by the American College of Radiology.
(B) Reimbursement for a mammogram authorized under this Code section shall be made only if the facility in which the mammogram was performed meets accreditation standards established by the American College of Radiology or equivalent standards established by this state.
(C) Policies subject to this Code section shall contain coverage for mammograms made with at least the following frequency:
(i) Once as a base-line mammogram for any female who is at least 35 but less than 40 years of age;
(ii) Once every two years for any female who is at least 40 but less than 50 years of age;
(iii) Once every year for any female who is at least 50 years of age; and
(iv) When ordered by a physician for a female at risk.
(3) “Pap smear” or “Papanicolaou smear” means an examination, in accordance with standards established by the American College of Pathologists, of the tissues of the cervix of the uterus for the purpose of detecting cancer when performed upon the order of a physician, which examination may be made once a year or more often if ordered by a physician.
(4) “Policy” means any benefit plan, contract, or policy except a disability income policy, specified disease policy, or hospital indemnity policy.
(5) “Prostate-specific antigen test” means a measurement, in accordance with standards established by the American College of Pathologists, of a substance produced by the epithelium to determine if there is any benign or malignant prostate tissue.
(b)(1) Every insurer authorized to issue a group accident and sickness insurance policy in this state which includes coverage for any female shall include as part of or as a required endorsement to each such policy which is issued, delivered, issued for delivery, or renewed coverage for mammograms and Pap smears for the covered females which at least meets the minimum requirements of this Code section.
(2) Every insurer authorized to issue a group accident and sickness insurance policy in this state which includes coverage for any male shall include as a part of or as a required endorsement to each such policy which is issued, delivered, issued for delivery, or renewed coverage for annual prostate-specific antigen tests for the covered males who are 45 years of age or older or for covered males who are 40 years of age or older, if ordered by a physician.
(c) The coverage required under subsection (b) of this Code section may be subject to such exclusions, reductions, or other limitations as to coverages, deductibles, or coinsurance provisions as may be approved by the Commissioner.
(d) Nothing in this Code section shall be construed to prohibit the issuance of group accident and sickness insurance policies which provide benefits greater than those required by subsection (b) of this Code section or more favorable to the insured than those required by subsection (b) of this Code section.
(e) The provisions of this Code section shall apply to group accident and sickness insurance policies issued by a fraternal benefit society, a health care plan, a health maintenance organization, or any similar entity.
(f) Nothing contained in this Code section shall be deemed to prohibit the payment of different levels of benefits or from having differences in coinsurance percentages applicable to benefit levels for services provided by preferred and nonpreferred providers as otherwise authorized under the provisions of Article 2 of this chapter, relating to preferred provider arrangements.
(a) For the purposes of this Code section, the term “health care insurer” means an insurer, including a fraternal benefit society, a health care plan, or a health maintenance organization authorized to sell accident and sickness insurance policies, subscriber certificates, or other contracts of accident and sickness insurance by whatever name called.
(b) A group or blanket accident and sickness insurance policy, plan, contract, or fund may not be issued, delivered, issued for delivery, or renewed by a health care insurer if such policy, plan, contract, or fund requires that insureds thereunder obtain pharmaceutical services, including prescription drugs, exclusively from a mail-order pharmaceutical distributor. Insureds who do not utilize a mail-order pharmaceutical distributor shall not be required to pay a different copayment fee or have imposed any varying conditions for the receipt of pharmaceutical services, including prescription drugs, when that payment or condition is not imposed upon those insureds who utilize a mail-order pharmaceutical distributor for those services if the provider of pharmaceutical services utilized by the insured has agreed to the same terms and conditions as applicable to the mail-order pharmaceutical distributor and has agreed to accept payment or reimbursement from the health care insurer at no more than the same amount which would have been paid to the mail-order pharmaceutical distributor for the same pharmaceutical services.
(c) Any health care insurer who issues a group or blanket accident and sickness policy, plan, contract, or fund that provides coverage for pharmaceutical services, including prescription drugs, by a mail-order pharmaceutical distributor shall issue to each insured under such policy, plan, contract, or fund an explanation of the payment or reimbursement method applicable to mail-order pharmaceutical distributors as compared to other providers of pharmaceutical services. For those health care insurers which provide benefit booklets to their insureds, the inclusion of such an explanation in any such benefit booklet shall constitute compliance with this subsection.
(d) Any health care insurer who contracts with a mail-order pharmaceutical distributor to provide pharmaceutical services, including prescription drugs, under a group or blanket accident and sickness policy, plan, contract, or fund shall include in such contract a provision requiring the mail-order pharmaceutical distributor in its initial written correspondence with an insured to include a notice that the insured may obtain pharmaceutical services, including prescription drugs, from other providers of pharmaceutical services and that the exclusive utilization of the mail-order pharmaceutical distributor is not required.
(e) A provider of pharmaceutical services who desires to provide services to insureds in their service area shall, upon written request to the health care insurer, be provided information pertaining to the terms and conditions applicable to mail-order pharmaceutical services available in such service area. If the provider of pharmaceutical services agrees to such terms and conditions in writing and agrees to be paid or reimbursed at no more than the same amount which would be paid to a mail-order pharmaceutical distributor for the same services, the provider of pharmaceutical services will be paid or reimbursed at no more than the same amount paid to the mail-order pharmaceutical distributor for the same pharmaceutical services.
(a) Every insurer authorized to issue group accident and sickness insurance benefit plans, policies, or contracts shall be required to make available, either as a part of or as an optional endorsement to all such policies providing major medical insurance coverage which are issued, delivered, issued for delivery, or renewed on or after July 1, 1995, coverage for bone marrow transplants for the treatment of breast cancer and Hodgkin's disease. Such coverage shall be at least as extensive and provide at least the same degree of coverage as that provided by the respective plan, policy, or contract for the treatment of other types of physical illnesses. Such an optional endorsement shall also provide that the coverage required to be made available pursuant to this Code section shall also cover the spouse and the dependents of the insured if the insured's spouse and dependents are covered under such benefit plan, policy, or contract.
(b) The optional endorsement required to be made available under subsection (a) of this Code section shall not contain any exclusions, reductions, or other limitations as to coverages, deductibles, or coinsurance provisions which apply to bone marrow transplants for the treatment of breast cancer and Hodgkin's disease unless such provisions apply generally to other similar benefits provided or paid for under the accident and sickness insurance benefit plan, policy, or contract.
(c) Nothing in this Code section shall be construed to prohibit an insurer, nonprofit corporation, health care plan, health maintenance organization, or other person issuing any similar group accident and sickness insurance benefit plan, policy, or contract from issuing or continuing to issue a group accident and sickness insurance benefit plan, policy, or contract which provides benefits greater than the minimum benefits required to be made available under this Code section or from issuing any such plans, policies, or contracts which provide benefits which are generally more favorable to the insured than those required to be made available under this Code section.
(d) The requirements of this Code section shall be satisfied if the coverage specified in subsections (a) and (b) of this Code section is made available to the master policyholder of the group plan, policy, or contract. Nothing in this Code section shall be construed to require the group insurer, nonprofit corporation, health care plan, health maintenance organization, or master policyholder to provide or to make available such coverage to any insured under such group or blanket plan, policy, or contract.
(e) Nothing in this Code section shall be construed to prohibit the inclusion of coverage for bone marrow transplants for the treatment of breast cancer and Hodgkin's disease that differs from the coverage provided in the same insurance plan, policy, or contract for physical illnesses if the policyholder does not purchase the optional coverage made available pursuant to this Code section.
(f) The provisions of this Code section shall also apply to group accident and sickness insurance policies or contracts issued by a fraternal benefit society, a health care plan, a health maintenance organization, or any other similar entity.
(a) As used in this Code section, the term:
(1) “Child wellness services” means the periodic review of a child's physical and emotional status conducted by a physician or conducted pursuant to a physician's supervision, but shall not include periodic dental examinations or other dental services. The review shall include a medical history, complete physical examination, developmental assessment, appropriate immunizations, anticipatory guidance for the parent or parents, and laboratory testing in keeping with prevailing medical standards.
(2) “Policy” means any medical expense plan, subscriber contract, or accident and sickness plan, contract, or policy by whatever name called other than a disability income policy, a long-term care insurance policy, a medicare supplement policy, a health insurance policy written as a part of workers' compensation equivalent coverage, a specified disease policy, a credit insurance policy, a blanket accident and sickness policy, a franchise policy issued on an individual basis to a member of a true association as defined in Code Section 33-30-12, a hospital indemnity policy, a limited accident policy, or other similar limited accident and sickness policy.
(b) Every insurer authorized to issue a group accident and sickness policy in this state shall include, either as a part of or as a required endorsement to each such basic medical or hospital expense, major medical, and comprehensive medical expense insurance policy issued, delivered, issued for delivery, or renewed in this state basic coverage for child wellness services for an insured child from birth through the age of five years. Any such policy may provide that the child wellness services which are rendered during a periodic review shall only be covered to the extent that such services are provided by or under the supervision of a single physician during the course of one visit. The Commissioner shall define by regulation the basic coverage for child wellness services and may consider the recommendations for preventive pediatric health care by the American Academy for Pediatrics and any other relevant data or information in the promulgation of such regulation.
(c) The coverage required under subsection (b) of this Code section may be subject to exclusions, reductions, or other limitations as to coverages or coinsurance provisions as may be approved by the Commissioner, but shall not be subject to deductibles.
(d) Nothing in this Code section shall be construed to prohibit the issuance of group accident and sickness policies which provide benefits greater than those required by subsection (b) of this Code section or more favorable to the insured than those required by subsection (b) of this Code section.
(e) The provisions of this Code section shall apply to group basic medical or hospital expense, major medical, or comprehensive medical expense insurance policies issued by a fraternal benefit society, a health care corporation, a health maintenance organization, or any similar entity.
(f) Nothing contained in this Code section shall be deemed to prohibit the payment of different levels of benefits or from having differences in coinsurance percentages applicable to benefit levels for services provided by preferred and nonpreferred providers as otherwise authorized under the provisions of Article 2 of this chapter, relating to preferred provider arrangements.
Any group accident and sickness policy may provide that all or any portion of any indemnities provided by any policy on account of hospital, nursing, or medical or surgical services may, at the insurer's option, be paid directly to the hospital or person rendering such services; but the policy shall not require that the service be rendered by a particular hospital or person. Payments so made shall discharge the insurer's obligation with respect to the amount of insurance so paid.
(a) Any insurance company authorized to write accident and sickness insurance in this state shall have the power to issue blanket accident and sickness insurance. No blanket policy may be issued or delivered in this state unless a copy of the form of the blanket policy shall have been filed in accordance with Code Section 33-24-9.
(b) Every blanket and group policy, certificate of insurance, or by whatever name called shall contain provisions which in the opinion of the Commissioner are at least as favorable to the policyholder and the individual insured as the following:
(1) A provision that the policy and the application shall constitute the entire contract between the parties, and that all statements made by the policyholder shall, in absence of fraud or intentional misrepresentation of material fact in applying for or procuring coverage under the terms of the group policy or contract, be deemed representations and not warranties, and that no such statements shall be used in defense to a claim under the policy, unless contained in a written application;
(2) A provision that written notice of sickness or of injury must be given to the insurer within 20 days after the date when such sickness or injury occurred. Failure to give notice within that time shall neither invalidate nor reduce any claim if it shall be shown not to have been reasonably possible to give the notice and that notice was given as soon as was reasonably possible;
(3) A provision that the insurer will furnish to the policyholder such forms as are usually furnished by it for filing proof of loss. If the forms are not furnished before the expiration of ten working days after the giving of notice, the claimant shall be deemed to have complied with the requirements of the policy as to proof of loss upon submitting, within the time fixed in the policy for filing proof of loss, written proof covering the occurrence, character, and extent of the loss for which claim is made;
(4) A provision that in the case of claim for loss of time for disability, written proof of the loss must be furnished to the insurer within 30 days after the commencement of the period for which the insurer is liable, and that subsequent written proofs of the continuance of the disability must be furnished to the insurer at such intervals as the insurer may reasonably require, and that in the case of claim for any other loss, written proof of the loss must be furnished to the insurer within 90 days after the date of the loss. Failure to furnish the proof within such time shall neither invalidate nor reduce any claim if it shall be shown not to have been reasonably possible to furnish the proof and that the proof was furnished as soon as was reasonably possible;
(5) A provision incorporating and restating the substance of the provisions of subsections (b) and (c) of Code Section 33-24-59.5, relating to time limits for payment of claims for benefits under health benefit policies and sanctions for failure to pay timely. If a policy provides benefits for loss of time, such policy shall also provide that, subject to proof of such loss, all accrued benefits payable under the policy for loss of time will be paid not later than at the expiration of each period of 30 days during the continuance of the period for which the insurer is liable and any balance remaining unpaid at the termination of such period will be paid immediately upon receipt of such proof;
(6) A provision that the insurer, at its own expense, shall have the right and opportunity to examine the person of the insured when and so often as it may reasonably require during the pendency of a claim under the policy and shall also have the right and opportunity to make an autopsy in case of death, if an autopsy is not prohibited by law;
(7) A provision that no action at law or in equity shall be brought to recover under the policy prior to the expiration of 60 days after written proof of loss has been furnished in accordance with the requirements of the policy, and that no action shall be brought after the expiration of three years after the time written proof of loss is required to be furnished; and
(8) A provision that, with respect to termination of benefits for, or coverage of, any person who is a dependent child of an insured, the child shall continue to be insured up to and including age 25 so long as the coverage of the insured parent or guardian continues in effect, the child remains a dependent of the parent or guardian, and the child, in each calendar year since reaching any age specified for termination of benefits as a dependent, has been enrolled for five months or more as a full-time student at a postsecondary institution of higher learning or, if not so enrolled, would have been eligible to be so enrolled and was prevented from being so enrolled due to illness or injury.
(c) The provisions of this Code section shall also apply to group and blanket accident and sickness insurance policies issued by a fraternal benefit society, a health care corporation, a health maintenance organization, or any other similar entity.
(a) The benefits on account of medical or surgical services provided by a group or blanket policy of accident and sickness insurance may be limited by its terms to services performed by specifically defined professions, provided that in the absence of such definitions, the term “physician” or “surgeon,” as used in such a policy, shall not be deemed limited solely to medical practitioners licensed under Chapter 34 of Title 43.
(b) When a group or blanket policy of accident and sickness insurance, except policies providing special coverage for limited diseases, accident protection only, or dental policies, provides for hospital care, there may be included within the scope of coverage hospital care rendered on account of mental illnesses and hospital care rendered by any psychiatric hospital duly licensed by this state. If the coverage is not included in the policy, a statement that the policy does not cover mental illnesses shall be printed in the policy in boldface type or stamped on the face of the policy and printed or stamped on any identification card issued pursuant to the policy.
(c) Any other laws to the contrary notwithstanding, whenever the term “physician” or “surgeon” is used in any policy of health or accident insurance issued in this state or in any contract for the provision of health care, services, or benefits issued by any health, medical, or other service corporation existing under, and by virtue of, any laws of this state, said term shall include, within its meaning, medical practitioners licensed under and in accordance with Chapter 11 of Title 43, relating to dentists, in respect to any care, services, procedures, or benefits covered by said policy of insurance or health care contract which the said persons are licensed to perform, any provisions in any such policy of insurance or health care contract to the contrary notwithstanding. This subsection shall be applicable to all policies in this state regardless of date of issue.
An individual application shall not be required for a person to be covered under a blanket accident and sickness policy or contract, nor shall it be necessary for the insurer to furnish each person so insured a certificate.
(a) All benefits under any group or blanket accident and sickness policy shall be payable to the person insured, to his designated beneficiary or beneficiaries, or to his estate, provided that if the person insured is a minor or mental incompetent, the benefits may be made payable to his parent, guardian, or other person actually supporting him or, if the entire cost of the insurance has been borne by the employer, the benefits may be made payable to the employer.
(b) The policy may provide that all or any portion of any indemnities provided by any policy on account of hospital, nursing, and medical or surgical services may, at the insurer's option, be paid directly to the hospital or person rendering the services; but the policy may not require that the service be rendered by a particular hospital or person. Payment so made shall discharge the insurer's obligation with respect to the amount of insurance so paid.
The proceeds or avails of all group or blanket accident and sickness policies shall be exempt from all liability for debt to the same extent and under the same conditions as provided for in the case of individual accident and sickness insurance by Code Section 33-29-15.
Chapter 29 of this title shall not apply to group accident and sickness or blanket accident and sickness insurance policies; but, except as otherwise provided in this chapter, no policy of group or blanket accident and sickness insurance shall contain any provision relative to notice or proof of loss, to the time for paying benefits, or to the time within which an action may be brought on the policy, which provision is less favorable to the individuals insured than would be permitted by the comparable provisions required for individual accident and sickness insurance policies.
(a) As used in this Code section, the term “small group” means a group or subgroup of at least two and no more than 50 employees, members, or enrollees.
(b) Except as otherwise provided in this Code section, the claims experience produced by small groups covered under accident and sickness insurance for each insurer shall be fully pooled for rating purposes. Except to the extent that the claims experience of an individual small group affects the overall experience of the small group pool, the claims experience produced by any individual small group of each insurer shall not be used in any manner for rating purposes or solely as a reason for termination of any individual group.
(c) Each insurer's small group pool shall consist of each insurer's total claims experience produced by all small groups in this state, regardless of the marketing mechanism or distribution system utilized in the sale of the group insurance. The pool shall include the experience generated under any medical expense insurance coverage offered under separate group contracts; contracts issued to trusts, multiple employer trusts, or association groups or trusts; or any other group-type coverage. The experience produced under multiple employer trusts or arrangements through contracts issued in this state or provided by solicitation and sale to Georgia residents through an out-of-state multiple employer trust or arrangement for all the Georgia small groups shall be fully pooled for rating purposes. Multiple employer trusts or arrangements shall include any group or group-type coverage issued to a trust or association or to any other group policyholder where such group or group-type contract provides coverage, primarily or incidentally, for sole proprietors, employers, or both.
(d) Notwithstanding the requirements of subsection (b) of this Code section, age, sex, size, area, industry, occupational and avocational factors, and any other factors deemed relevant by the Commissioner may be considered in the initial and renewal rating of each small group. Durations since issue and tier factors may not be considered. Substandard rating in accordance with recognized underwriting practices may be applied only when the employee, member, enrollee, or dependent enters the small group for the first time but shall not be used for renewal rating purposes. Any substandard rating may only be applied across the entire group such that similarly situated employees are charged the same rate. For the purposes of this Code section, an individual who qualifies as a “newly eligible employee,” as defined in paragraph (4) of subsection (a) of Code Section 33-30-15, shall not be specified as entering the small group for the first time. Notwithstanding subsection (b) of this Code section, the total initial or renewal premium calculated for any individual small group may deviate from the pool rate by not more than plus or minus 25 percent based upon individual small group experience factors. The direct premium result of select or substandard underwriting practices shall not be considered a deviation from the pool rate.
(e) This Code section shall not apply to:
(1) Policies issued to an employer in another state which provides coverage for employees of this state employed by such employer policyholder;
(2) Policies issued to true associations, as defined in subsection (b) of Code Section 33-30-1;
(3) A policy negotiated in connection with a collective bargaining agreement; or
(4) Limited benefit insurance policies. For the purposes of this Code section, the term “limited benefit insurance” means accident and sickness insurance designed, advertised, and marketed to supplement major medical insurance. The term “limited benefit insurance” includes accident only, CHAMPUS supplement, dental, disability income, fixed indemnity, long-term care, medicare supplement, specified disease, vision, and any other accident and sickness insurance other than basic hospital expense, basic medical-surgical expense, or major medical insurance.
(f) The Commissioner is authorized to exempt insurers from one or more provisions of this Code section upon satisfactory demonstration that such exemption will not result in rates which are unreasonable, inequitable, or unfair under the circumstances and would not conflict with the requirements of the federal Health Insurance Portability and Accountability Act of 1996, P.L. 104-191.
(a) Notice of the maximum amount of a group premium increase shall be mailed or delivered to the group policyholder and to each employer group or subgroup insured under the group policy not less than 60 days prior to the effective date of the premium increase.
(b) The commissioner of community health shall also provide notice to each person covered under the health insurance plans established pursuant to Article 1 of Chapter 18 of Title 45 when any premium increase occurs of how much of such increase is attributable to the federal Patient Protection and Affordable Care Act 1.
1 "PL 111-148, March 23, 2010, 124 Stat 119."
(a) As used in this Code section, the term “insurer” means an accident and sickness insurer, fraternal benefit society, health care corporation, provider sponsored health care corporation, health maintenance organization, or any similar entity.
(b)(1) All insurers shall furnish, regardless of the rating methodology used, claims experience to group policyholders within 30 days of any policyholder's request unless such information has been furnished to the group policyholder within the preceding six months. Such claims experience shall be furnished for all groups of 51 or more covered employees, members, or enrollees, not including dependents, and shall include, but shall not be limited to:
(A) Earned premiums separated by policy year for at least the last two policy years, if applicable;
(B) Total paid claims and total incurred claims, inclusive of any high amount or pooled claims, including both capitated and noncapitated expenses set forth in the same manner as premiums; and
(C) Any amounts in excess of the individual pooling or stop-loss point applicable to the group.
(2) Insurers that utilize provider contracting methods including financial devices such as global fee arrangements to cover all medical expenses may make application to the Commissioner for approval of the use of an alternative form of claims experience reporting. The insurer must still provide Georgia experience on a group-specific basis or on such other reasonable basis as the Commissioner may approve for such insurer, in advance, based upon a submission of an explanation and supporting documentation. Any insurer that received approval for an alternative form of group claims experience reporting to policyholders shall be required to seek the Commissioner's advance approval of a proposed response letter to group policyholders who request experience reporting. Such letter should describe the insurer's reasons for seeking an alternative reporting process and describe the alternative form of reporting approved by the Commissioner.
(3) Insurers may charge a reasonable fee for providing this information to group policyholders. The schedule or amount of fees to be charged group policyholders for providing this information shall be filed by each insurer with the Commissioner.
(4) In providing claims experience to group policyholders under this Code section, insurers shall adhere to all state and federal laws regarding disclosure of protected health or personal information.
(a) As used in this Code section, the term:
(1) “Functional deformity” means a deformity of the bone or joint structure of the maxilla or mandible such that the normal character and essential function of such bone structure is impeded.
(2) “Policy” means any major medical benefit plan, contract, or policy except the Georgia Basic Health Plan, a credit insurance policy, disability income policy, specified disease policy, hospital indemnity policy, limited accident policy, or other similarly limited accident and sickness policy.
(3) “Temporomandibular joint” means the connection of the mandible and the temporal bone through the articular disc surrounded by the joint capsule and associated ligaments and tendons.
(4) “Temporomandibular joint dysfunction” means congenital or developed anomalies of the temporomandibular joint.
(b) No policy may be issued or issued for delivery in this state which:
(1) Excludes medically necessary surgical or nonsurgical treatment for the correction of temporomandibular joint dysfunction by physicians or dentists professionally qualified by training and experience; or
(2) Excludes medically necessary surgery for the correction of functional deformities of the maxilla and mandible.
(c) The provisions of this Code section shall not cover cosmetic or elective orthodontic or periodontic care or general dental care.
(d)(1) The coverage under paragraph (1) of subsection (b) of this Code section may contain such types of exclusions, reductions, or other limitations as to coverages, deductibles, or coinsurance provisions which apply to other benefits under the accident and sickness insurance benefit plan, policy, or contract.
(2) Basic coverage for the nonsurgical treatment of temporomandibular joint dysfunction under paragraph (1) of subsection (b) of this Code section may be limited to history and examination; radiographs, which must be diagnostic for temporomandibular joint dysfunction; splint therapy with necessary adjustments, provided that removable appliances designed for orthodontic purposes would not be reimbursable under a major medical plan; and diagnostic or therapeutic masticatory muscle and temporomandibular joint injections.
(e) Except as provided in paragraph (1) of subsection (c) of Code Section 33-30-23 for policies limited only to dental coverage, nothing contained in this Code section shall be deemed to prohibit the payment of different levels of benefits or from having differences in coinsurance percentages applicable to benefit levels for services provided by preferred and nonpreferred providers as otherwise authorized under the provisions of Article 2 of this chapter, relating to preferred provider arrangements.
(a) As used in this Code section, the term:
(1) “Affiliation period” means a period, used by health maintenance organizations in lieu of a preexisting condition exclusion clause, beginning on the enrollment date, which must expire before health insurance coverage provided by a health maintenance organization becomes effective. The health maintenance organization is not required to provide health care benefits during such period, nor is it authorized to charge premiums over such a period.
(2) “Creditable coverage” under another health benefit plan means medical expense coverage with no greater than a 90 day gap in coverage under any of the following:
(A) Medicare or Medicaid;
(B) An employer based accident and sickness insurance or health benefit arrangement;
(C) An individual accident and sickness insurance policy, including coverage issued by a health maintenance organization, health care corporation, or fraternal benefit society;
(D) A spouse's benefits or coverage under medicare or Medicaid or an employer based health insurance or health benefit arrangement;
(E) A conversion policy;
(F) A franchise policy issued on an individual basis to a member of a true association as defined in subsection (b) of Code Section 33-30-1;
(G) A health plan formed pursuant to 10 U.S.C. Chapter 55;
(H) A health plan provided through the Indian Health Service or a tribal organization program or both;
(I) A state health benefits risk pool;
(J) A health plan formed pursuant to 5 U.S.C. Chapter 89;
(K) A public health plan; or
(L) A Peace Corps Act health benefit plan.
(3) “Insurer” means an accident and sickness insurer, fraternal benefit society, health care corporation, health maintenance organization, or any similar entity and any self-insured health care plan not subject to the exclusive jurisdiction of the federal Employee Retirement Income Security Act of 1974, 29 U.S.C. Section 1001, et seq.
(4) “Newly eligible group member” means a Georgia domiciled group member or the dependent of a currently enrolled Georgia domiciled group member who has creditable coverage and who first becomes eligible to elect coverage under a group sponsored comprehensive major medical or hospitalization plan. A newly eligible group member also includes:
(A) During a special enrollment period, existing group members and existing dependents of existing group members who declined coverage when first offered because of the existence of other creditable coverage, if all the following conditions are met:
(i) The group member or group member's dependent had creditable coverage at such time when the group coverage was first offered;
(ii) The group member stated in writing that such creditable coverage was the reason for declining enrollment in group coverage, if such statement is required by the policyholder;
(iii) The coverage of the group member or group member's dependent was under COBRA and has been exhausted or the creditable coverage was terminated as a result of loss of eligibility for the creditable coverage or policyholder contributions toward such creditable coverage were terminated; and
(iv) The group member requests such enrollment not later than 31 days after the date of exhaustion or termination of the creditable coverage; or
(B) In the case of marriage, if the group member requests such enrollment not later than 31 days following the date of marriage or the date dependent coverage is first made available, whichever is later, coverage of the spouse shall commence not later than the first day of the first month beginning after the date the completed request for enrollment is received.
(b) Notwithstanding any other provision of this title which might be construed to the contrary, all group basic hospital or medical expense, major medical, or comprehensive medical expense coverages which are issued, delivered, issued for delivery, or renewed in this state shall provide the following:
(1) Subject to compliance with the provisions of subsections (c) and (d) of this Code section, any newly eligible group member, subscriber, enrollee, or dependent who has had creditable coverage under another health benefit plan within the previous 90 days shall be eligible for coverage immediately upon completion of any policyholder imposed waiting period; and
(2) Once such creditable coverage terminates, including termination of such creditable coverage after any period of continuation of coverage required under Code Section 33-24-21.1 or the provisions of Title X of the Omnibus Budget Reconciliation Act of 1986, 1 the insurer must offer a conversion policy to the eligible group member, subscriber, enrollee, or dependent.
(c) Notwithstanding any provisions of this Code section which might be construed to the contrary, such coverages may include a limitation for preexisting conditions not to exceed 12 months for group members who enroll when newly eligible and 18 months for group members who enroll late following the effective date of coverage; provided, however, that:
(1) Such coverages shall waive any time period applicable to the preexisting condition exclusion or limitation for the period of time an individual was previously covered by creditable coverage; or
(2) Such coverages shall waive any time period applicable to the preexisting condition exclusion or limitation in accordance with an insurer's election of an alternative method pursuant to Section 701(c)(3)(B) of the Employee Retirement Income Security Act of 1974. 2
(d) The preexisting condition limitation described in subsection (c) of this Code section shall not apply to pregnancies.
(e) The preexisting condition limitation described in subsection (c) of this Code section shall not apply to newborn children or newly adopted children where such children are added to the plan by the insured no later than 31 days following the date of birth or the date placed for adoption under order of the court of jurisdiction.
(f) In case of a group health plan offered by a health maintenance organization, an affiliation period may be offered in place of the preexisting condition limitation described in subsection (c) of this Code section, provided that the affiliation period:
(1) Is applied uniformly without regard to any health status related factors;
(2) Does not exceed:
(A) Two months for newly eligible group members and dependents; or
(B) Three months for group members who enroll late; and
(3) Runs concurrently with any policyholder imposed waiting period under the plan.
(g) The Commissioner shall promulgate appropriate procedures and guidelines by rules and regulations to implement the provisions of this Code section after notification and review of such regulations by the appropriate standing committees of the House of Representatives and Senate in accordance with the requirements of applicable law. The Commissioner may allow in such regulations methods other than that described in subsection (f) of this Code section for health maintenance organizations to address adverse selection, as authorized by the Employee Retirement Income Security Act of 1974, Section 701(g)(3). 3
1 29 U.S.C.A. § 1161 et seq. and 42 U.S.C.A. § 300bb-1 et seq.
2 29 U.S.C.A. § 1181(c)(3)(B).
3 29 U.S.C.A. § 1181(g)(3).
(a) As used in this Code section, the term:
(1) “Operative date” means the date on which either of the following occurs:
(A) A federal law is enacted which expressly repeals 42 U.S.C. Section 300gg-3 or 42 U.S.C. Section 300gg-4 of the PPACA; or
(B) 42 U.S.C. Section 300gg-3 or 42 U.S.C. Section 300gg-4 of the PPACA is invalidated by the United States Supreme Court.
(2) “PPACA” means the Patient Protection and Affordable Care Act, Public Law 111-148, as amended by the Health Care and Education Reconciliation Act of 2010, Public Law 111-152.
(3) “Preexisting medical condition” means a condition that was present before the effective date of coverage under a policy, whether or not any medical advice, diagnosis, care, or treatment was recommended or received before the effective date of coverage. Such term includes a condition identified as a result of a preenrollment questionnaire or physical examination given to the individual or a review of medical records relating to the preenrollment period.
(b)(1) Not later than 30 days after the operative date, and notwithstanding any other law to the contrary, every insurer issuing, delivering, or issuing for delivery comprehensive individual major medical health insurance policies in this state shall make at least one reasonably priced comprehensive major medical health insurance policy available to residents in the insurer's approved service areas of this state, and such insurer may not exclude, limit, deny, or delay coverage under such policy due to one or more preexisting medical conditions.
(2) Such insurer may not limit or exclude benefits under such policy, including a denial of coverage applicable to an individual as a result of information relating to an individual's health status before the individual's effective date of coverage, or if coverage is denied, before the date of the denial.
(c) The comprehensive major medical health insurance policy that the insurer is required to offer under this Code section shall be a policy that had been actively marketed in this state by the insurer as of the operative date and that was also actively marketed in this state during the year immediately preceding the operative date.
This article shall be known and may be cited as the “Preferred Provider Arrangements Act.”
It is the intent of the General Assembly to encourage health care cost containment while preserving quality of care by allowing health care insurers to enter into preferred provider arrangements and by establishing minimum standards for preferred provider arrangements and the health benefit plans associated with those arrangements.
As used in this article, the term:
(1) “Emergency services” or “emergency care” means those physical or mental health care services that are provided for a condition, including but not limited to a mental health condition or substance use disorder, in which a person is exhibiting acute symptoms of sufficient severity, including, but not limited to, severe pain, regardless of the initial, interim, final, or other diagnoses that are given, that would lead a prudent layperson, possessing an average knowledge of medicine and health, to believe that his or her condition, sickness, or injury is of such a nature that failure to obtain immediate medical care could result in:
(A) Placing the patient's health in serious jeopardy;
(B) Serious impairment to bodily functions; or
(C) Serious dysfunction of any bodily organ or part.
“Emergency services” or “emergency care” includes medical services rendered after such person is stabilized and as part of outpatient observation or an inpatient or outpatient stay with respect to the visit in which such services are furnished, unless each of the conditions of subdivision (a)(3)(C)(ii)(II) of the federal Public Health Service Act, 42 U.S.C. Section 300gg-111 are met.
(2) “Health benefit plan” means the health insurance policy or subscriber agreement between the covered person or the policyholder and the health care insurer which defines the covered services and benefit levels available.
(3) “Health care insurer” means an insurer, a fraternal benefit society, a health care plan, or a health maintenance organization authorized to sell accident and sickness insurance policies, subscriber certificates, or other contracts of insurance by whatever name called under this title.
(4) “Health care provider” means any person duly licensed or legally authorized to provide health care services.
(5) “Health care services” means services rendered or products sold by a health care provider within the scope of the provider's license or legal authorization. The term includes, but is not limited to, hospital, medical, surgical, dental, vision, chiropractic, psychological, and pharmaceutical services or products.
(6) “Preferred provider” means a health care provider or group of providers who have contracted to provide specified covered services.
(7) “Preferred provider arrangement” means a contract between or on behalf of the health care insurer and a preferred provider which complies with all the requirements of this article.
(a) Notwithstanding any provisions of law to the contrary, any health care insurer may enter into preferred provider arrangements as provided in this article. Such arrangements shall:
(1) Establish the amount and manner of payment to the preferred provider;
(2) Include fair, reasonable, and equitable mechanisms for the assignment and payment of benefits to nonpreferred providers;
(3)(A) Include mechanisms which are designed to minimize the cost of the health benefit plan such as the review or control of utilization of health care services.
(B) Include procedures for determining whether health care services rendered are medically necessary;
(4) Provide to covered persons eligible to receive health care services under that arrangement a statement of benefits under the arrangement and, at least every 60 days, an updated listing of physicians who are preferred providers under the arrangement, which statement and listing may be made available by mail or by publication on an Internet service site made available by the health care insurer at no cost to such covered persons; and
(5) Require that the covered person, or that person's agent, parent, or guardian if the covered person is a minor, be permitted to appeal to a physician agent or employee of the health care insurer any decision to deny coverage for health care services recommended by a physician.
(b) Such arrangements shall not:
(1) Unfairly deny health benefits for medically necessary covered services;
(2) Have differences in benefit levels payable to preferred providers compared to other providers which unfairly deny benefits for covered services;
(3) Have differences in coinsurance percentages applicable to benefit levels for services provided by preferred and nonpreferred providers which differ by more than 30 percentage points;
(4) Have a coinsurance percentage applicable to benefit levels for services provided by nonpreferred providers which exceeds 40 percent of the benefit levels under the policy for such services;
(5) Have an adverse effect on the availability or the quality of services; and
(6) Be a result of a negotiation with a primary care physician to become a preferred provider unless such physician shall be furnished with a schedule showing common office based fees payable for services under such arrangement.
(c)(1) Notwithstanding the provisions of paragraphs (3) and (4) of subsection (b) of this Code section, health benefit plans providing incentives for covered persons to use pharmaceutical or dental services of preferred providers shall contain a provision which clearly identifies that the payment or reimbursement for a noncontracting provider of covered pharmaceutical or dental services shall be the same as the payment or reimbursement for a preferred provider of covered pharmaceutical or dental services; provided, however, the health benefit plan shall not be required to make payment or reimbursement in an amount which is greater than the actual fee charged by the provider for the dental or pharmaceutical services rendered.
(2) Notwithstanding any provisions of this title to the contrary, paragraphs (3) and (4) of subsection (b) of this Code section shall not apply to routine physical examinations covered under a health benefit plan.
(d) If an entity enters into a contract providing covered services with a health care provider, but is not engaged in activities which would require it to be licensed as a health care insurer, such entity shall file with the Commissioner information describing its activities and a description of the contract or agreement it has entered into with the health care providers. Employers who enter into contracts with health care providers for the exclusive benefit of their employees and dependents are exempt from this requirement.
(e) Any other provision of law to the contrary notwithstanding, if a covered person provides in writing to a health care provider, whether the health care provider is a preferred provider or not, that payment for health care services shall be made solely to the health care provider and be sent directly to the health care provider by the health care insurer, and the health care provider certifies to same upon filing a claim for the delivery of health care services, the health care insurer shall make payment solely to the health care provider and shall send said payment directly to the health care provider. This subsection shall not be construed to extend coverages or to require payment for services not otherwise covered.
Health care insurers may issue health benefit plans which provide for incentives for covered persons to use the health care services of preferred providers. Such policies or subscriber certificates shall contain at least the following provisions:
(1) A provision that if a covered person receives emergency care for services specified in the preferred provider arrangement and cannot reasonably reach a preferred provider, that emergency care rendered during the course of the emergency will be paid for in accordance with the terms of the health benefit plan, at benefit levels at least equal to those applicable to treatment by preferred providers for emergency care in an amount based on the usual, customary, and reasonable charges in the area where the treatment is provided; and
(2) A provision which clearly identifies the differences in benefit levels for health care services of preferred providers and benefit levels for health care services of nonpreferred providers.
For purposes of this Code section, when a request for emergency care is made through the emergency 9-1-1 system on behalf of a covered person and the ambulance service licensed under Chapter 11 of Title 31 that was dispatched in response to the request is not a preferred provider, for purposes of payment under paragraph (1) of this Code section, it shall be presumed that the covered person could not reasonably reach a preferred provider.
Subject to the approval of the Commissioner under such procedures as he may develop, health care insurers may place reasonable limits on the number or classes of preferred providers which satisfy the standards set forth by the health care insurer, provided that there be no discrimination against providers on the basis of religion, race, color, national origin, age, sex, or marital or corporate status, and provided, further, that all health care providers within any defined service area who are licensed and qualified to render the services covered by the preferred provider arrangement and who satisfy the standards set forth by the health care insurer shall be given the opportunity to apply and to become a preferred provider.
Health care insurers as defined in this article shall be subject to and shall be required to comply with all other applicable provisions of this title and rules and regulations promulgated pursuant to this title.
The Commissioner shall promulgate all rules and regulations necessary or appropriate to the administration and enforcement of this article.
As used in this chapter, the term:
(1) “Agent” shall be defined as provided in Code Section 33-23-1.
(2) “Carrier” means any entity that provides health insurance to employers in this state. For the purposes of this chapter, carrier includes an insurance company, hospital or medical service corporation, health care plan as defined in Code Section 33-20-3, fraternal benefit society, health maintenance organization, or any other licensed entity providing a plan of health insurance or health benefits subject to state insurance regulation.
(3) “Health benefit plan” means any hospital or medical insurance policy or certificate, health care plan contract or certificate, qualified higher deductible health plan, or health maintenance organization subscriber contract. Health benefit plan does not include policies issued in accordance with Chapter 31 of this title; disability income policies; policies issued in accordance with Code Section 34-9-14 or 34-9-122.1; limited accident and sickness insurance policies such as credit, dental, vision, medicare supplement, long-term care, hospital indemnity, or specified disease insurance; coverage issued as a supplement to liability insurance; workers' compensation or similar insurance; or automobile medical payment insurance.
(4) “Health plan purchasing cooperative,” “purchasing cooperative,” or “cooperative” means a nonprofit corporation authorized by the Commissioner pursuant to this chapter and operated for the benefit of members located within a particular geographic area of the state by providing members with purchasing services and detailed information on comparative prices, usage, medical outcomes, quality, and enrollee satisfaction through selected health benefit plans. For purposes of Chapter 30 of this title, a health plan purchasing cooperative shall be considered as a true group and not as an association.
(5) “Medical outcome” means a change in an individual's health status after the provision of health services.
(6) “Premium” means all moneys paid by an employer and eligible employees as a condition of receiving coverage from a carrier, including any fees or other contributions associated with the health benefit plan. Premiums shall not include fees for membership in the cooperative.
(7) “Small employer” means any person, firm, corporation, partnership, association, political subdivision, or sole proprietor that is actively engaged in a business that, at the time of application, on at least 50 percent of its working days during the preceding calendar quarter, employed no fewer than two and no more than 50 eligible employees, in which a bona fide employer-employee relationship exists. In determining the number of eligible employees, companies that are affiliated companies or companies that are eligible to file a combined tax return for purposes of state taxation shall be considered one employer. Subsequent to the issuance of a health benefit plan to a small employer and for the purpose of determining eligibility, the size of a small employer shall be determined annually. Except as otherwise provided, provisions of this chapter that apply to a small employer shall continue to apply at least until the plan anniversary following the date the small employer no longer meets the requirements of this paragraph. Nothing in this chapter shall be construed to prohibit a carrier from including self-employed individuals in its definition of small employer.
(a) On and after July 1, 1997, the Commissioner is authorized to issue certificates of authority to nonprofit corporations to operate as health plan purchasing cooperatives to provide services to members located within particular geographic areas of the state in accordance with the provisions of this chapter.
(b) A health plan purchasing cooperative authorized by the Commissioner pursuant to subsection (a) of this Code section may also offer other related employee benefits and services to its members, including continuation coverage administration and purchasing services for limited accident and sickness insurance coverages such as dental, vision, and long-term care; provided, however, that a purchasing cooperative offering such related benefits or services must provide separate and explicitly identified rate or fee schedules for such benefits and services to distinguish them from health benefit plan premiums and membership fees.
(c)(1) Any health benefit plan, limited accident and sickness policy, or other insurance offered through a cooperative must be provided by a carrier.
(2) A cooperative may not directly provide insurance or bear any risk associated with any health benefit plan or other insurance offered through the cooperative.
(d) No entity shall hold itself out as a health plan purchasing cooperative without a certificate of authority granted by the Commissioner. Any entity not authorized as a health plan purchasing cooperative by the Commissioner shall not use as part of its advertising or marketing any self-descriptive term which is confusingly similar to a health plan purchasing cooperative. Any entity not authorized as a health plan purchasing cooperative by the Commissioner and providing services substantially similar to those of a purchasing cooperative shall clearly indicate in its advertising and marketing materials that such entity is not a health plan purchasing cooperative. Failure to comply with this subsection shall be an unfair and deceptive act or practice in the business of insurance within the meaning of paragraph (1) of subsection (b) of Code Section 33-6-4.
(e) Nothing in this chapter shall be deemed to permit a health plan purchasing cooperative to act as an insurer as defined in Code Section 33-1-2 or as an agent as defined in Code Section 33-23-1.
(a) Each health plan purchasing cooperative shall serve a particular geographic area of the state that consists of either one entire county or more than one contiguous entire county. The Commissioner shall not authorize any purchasing cooperative to serve a geographic area which divides any county or contains noncontiguous counties.
(b) Any purchasing cooperative which serves any portion of a metropolitan statistical area shall not serve less than all of that metropolitan statistical area. The Commissioner shall not authorize any purchasing cooperative to serve a geographic area which divides any metropolitan statistical area.
(c) The authority granted by the Commissioner to a purchasing cooperative to serve a particular geographic area shall be nonexclusive, and there shall be no limit upon the number of purchasing cooperatives which may be authorized to serve any particular geographic area.
(d) The Commissioner shall authorize service for any geographic service area as proposed by the applicant nonprofit corporation if such proposed service area meets the requirements of this Code section.
(e) Except as provided elsewhere in this Code section, nothing in this chapter shall restrict the geographic area served by a purchasing cooperative having less than 100,000 enrolled member subscribers. For purposes of this subsection, the purchasing cooperative shall report to the Commissioner, in a manner prescribed by the Commissioner, the number of member subscribers enrolled in the purchasing cooperative on an annual basis. For purchasing cooperatives having greater than 100,000 enrolled member subscribers, the purchasing cooperative shall demonstrate annually, to the satisfaction of the Commissioner, that permission to continue to enroll additional member subscribers will not have an adverse effect on the availability of private health benefit plan coverage offered outside the purchasing cooperative's geographic service area. Failure to provide satisfactory evidence shall result in the suspension of the purchasing cooperative's authority to enroll additional member subscribers in all or part of the purchasing cooperative's geographic service area, until such time as the Commissioner shall conclude that the requirements of this subsection have been satisfied.
(f) Officers, directors, or employees of a health plan purchasing cooperative shall not serve as officers, directors, or employees of another health plan purchasing cooperative.
(g) A geographic area may include one or more contiguous counties in an adjoining state.
(a)(1) Membership in a health plan purchasing cooperative shall be voluntary.
(2) A purchasing cooperative shall accept for membership in the cooperative any eligible small employer which agrees to pay the membership fee and a premium for coverage through the purchasing cooperative and which abides by the bylaws and rules of the purchasing cooperative.
(3) A purchasing cooperative may, at its option, accept for membership in the cooperative any otherwise eligible employer which does not qualify as a small employer because it employed more than 50 eligible employees during 50 percent or more of its working days during the previous calendar quarter.
(4) A purchasing cooperative may, at its option, accept for membership in the cooperative any otherwise eligible employer which does not qualify as a small employer because it is an individual or sole proprietor. If a purchasing cooperative chooses to accept such employers, the purchasing cooperative may not discriminate in the acceptance process based upon health status.
(5) A purchasing cooperative and its contracted carriers shall comply with the small group health insurance rating requirements provided for in Code Section 33-30-12.
(b) Each purchasing cooperative shall have the following powers, duties, and responsibilities:
(1) Establishing and clearly defining the conditions of membership and participation in the purchasing cooperative. Each cooperative shall establish conditions for small employers which must include, but need not be limited to, assurance that the group is a valid small employer and is not formed for the purpose of securing health benefit coverage and assurance that the individuals in the small employer group are employees and have not been added for the purpose of securing health benefit coverage. A purchasing cooperative shall not establish or enforce membership conditions or participation requirements, bylaws, rules, or policies, financial or otherwise, which have the effect of excluding or including membership on the basis of health status of otherwise eligible individuals or other risk characteristics, including, but not limited to, industry type, occupation, experience, age, gender, family composition, education, avocation, or income; nor shall a purchasing cooperative require any small employer, employee, self-employed individual, or dependent to subscribe to limited accident and sickness insurance policies, products, or services not related to health care;
(2) Providing to cooperative members clear, standardized information on each health benefit plan or other coverage offered by carriers through the cooperative to cooperative members, including information on price, enrollee costs, quality, patient satisfaction, enrollment, and enrollee responsibilities and obligations and providing health benefit plan and other insurance comparison sheets in accordance with department rule;
(3) Annually offering to all members of the cooperative all health benefit plans and other insurance offered by carriers which meet the requirements of this chapter and which submit a responsive proposal as to information necessary for health benefit plans and other insurance comparison sheets and providing assistance to cooperative members in selecting and obtaining coverage with carriers that meet those requirements. A purchasing cooperative shall, whenever feasible, contract with multiple, unaffiliated carriers to offer health benefit plans and other insurance to its members. A purchasing cooperative may selectively contract with carriers based on the quality and cost effectiveness of services and other factors deemed to be relevant by the purchasing cooperative;
(4) Requesting proposals for health benefit plans and other insurance from carriers;
(5) Establishing administrative procedures and accounting procedures consistent with generally accepted accounting principles for the operation of the cooperative and members' services, preparing an annual cooperative budget, and preparing annual program and fiscal reports on cooperative operations as required by this chapter;
(6) Developing and implementing a marketing plan to publicize the cooperative to potential members;
(7) Developing grievance procedures to be used in resolving disputes between members and the cooperative and disputes between carriers and the cooperative. Any member of, or carrier that serves, a cooperative shall not be prohibited from filing grievances directly with the department;
(8) Ensuring that carriers have grievance procedures to be used in resolving disputes with members of the cooperative. A member may appeal to the cooperative any grievance that is not resolved by the carrier;
(9) Maintaining all records, reports, and other information required by this chapter or by department rule or other applicable laws;
(10) Contracting with qualified, independent third parties for any services necessary to carry out the powers and duties required by this chapter;
(11) Assisting agents or employees in enrolling eligible members, employees, and dependents in selected health benefit plans and other insurance and services, establishing procedures for collecting premiums, collecting premiums, appropriately distributing collected premiums to participating carriers, and paying third-party contractors. The cooperative shall pay participating carriers their contracting premium amounts on a prepaid monthly basis or as otherwise mutually agreed upon; and
(12) Working with participating carriers to establish standard criteria for selecting participating licensed agents.
(c) Each cooperative may set and collect reasonable fees for membership in the cooperative which may finance reasonable and necessary costs incurred in administering the cooperative. Any such fee must be clearly identified and not inconsistent with the provisions of paragraph (1) of subsection (b) of this Code section.
(d)(1) Each cooperative shall provide semiannual financial statements and annual reports regarding cooperative programs and operations to the Commissioner.
(2) Each cooperative shall provide for annual independent audits by a certified public accountant and make reports of such audits available to the Commissioner and the public.
(3) Each purchasing cooperative shall file annually with the Commissioner, at such time and in such form and manner as specified by the Commissioner, evidence of adequate security and prudence in account, premium collection, and the handling and transfer of moneys and evidence of compliance with the provisions of this chapter, including a description of the specific services provided by the purchasing cooperative.
(e) Each purchasing cooperative shall maintain a trust account or accounts for the deposit of any premium moneys collected.
(f) Each purchasing cooperative shall disclose to the Commissioner any oral or written agreements made prior to its authorization as a purchasing cooperative.
(g) Any act of selling health benefit plans or other insurance shall be in accordance with Chapter 23 of this title.
The department shall assist health plan purchasing cooperatives. To this end, the department is responsible for:
(1) Initially and thereafter annually certifying that each cooperative complies with the provisions of this chapter and regulations adopted pursuant to Code Section 33-30A-9. The department may decertify any cooperative if the cooperative fails to comply with the provisions of this chapter and the regulations adopted by the Commissioner;
(2) Conducting an annual review of the performance of each cooperative to ensure that the cooperative is in compliance with the provisions of this chapter and applicable regulations;
(3) Establishing criteria for plans to be offered through cooperatives to cooperative members. Such plans may include without limitation fee-for-service plans, preferred provider organizations, health maintenance organizations, provider sponsored health care corporation plans, and medical savings accounts;
(4) Receiving and reviewing appeals by members of a cooperative and carriers whose grievances were not resolved by the cooperative; and
(5) Providing annually to the House Committee on Insurance and the Senate Insurance and Labor Committee a detailed status report on the effect and administration of this chapter.
(a) Each cooperative shall use appropriate, efficient, and standardized means to notify members of the availability of health benefit plan coverage offered through the cooperative.
(b)(1) Each cooperative shall make available to its members marketing materials prepared by or for the cooperative that accurately summarize the health benefit plans and other insurance and services that are offered through it to members, including descriptions and standardized comparisons of each plan or service and information on price, benefits, and measures of performance such as medical outcomes and consumer satisfaction. A purchasing cooperative shall disseminate such descriptive and comparative information to all members of the cooperative.
(2) Such marketing materials and measures of performance shall be filed with and approved by the Commissioner prior to the use or dissemination of such materials or measures of performance.
(c)(1) Each cooperative shall offer annually to each member all health benefit plans and other insurance and services available through the cooperative and provide each member with the appropriate materials relating thereto.
(2) Each purchasing cooperative shall adopt its own policy regarding whether member employers shall be permitted to limit the selection of carriers, health benefit plans, or other insurance for their employees from among those health benefit plans and other insurance policies offered through the purchasing cooperative. Any limitation imposed by an employer must be made without discrimination as to the health status of an individual or class.
(a)(1) Each purchasing cooperative shall be a nonprofit corporation, and the provisions of Chapter 3 of Title 14 shall apply to each purchasing cooperative; provided, however, that the provisions of this chapter shall control to the extent of any conflict with the provisions of Chapter 3 of Title 14.
(2) Prior to authorization by the Commissioner to operate as a health plan purchasing cooperative, a nonprofit corporation must provide the Commissioner with a certificate of existence issued pursuant to Code Section 14-3-128.
(b) A purchasing cooperative may not amend its articles of incorporation to operate as a for profit corporation.
(c) Nothing in this Code section shall limit a cooperative from contracting with a for profit corporation to provide services specified in paragraph (10) of subsection (b) of Code Section 33-30A-4.
(d)(1) No person having had a financial interest in a purchasing cooperative's financing, marketing, or delivery of services, other than as a representative of a member employer or a consumer of services, during the immediately preceding 12 month period shall serve as a member of the board of directors of the purchasing cooperative.
(2) No person serving as a member of the board of directors of a purchasing cooperative shall have a financial interest in the purchasing cooperative's financing, marketing, or delivery of services, other than as a representative of a member employer or as a consumer of services, during his or her term as a board member.
(e) A purchasing cooperative may establish, as it deems necessary and appropriate, an advisory group to assist its board of directors in deliberations. Such advisory group may include health care providers, carriers, insurance agents, consumers, or other persons.
(a) Prior to authorization by the Commissioner to operate as a health plan purchasing cooperative, a nonprofit corporation shall, directly or through a contractor which provides administrative services to the corporation, file with the Commissioner a corporate surety bond in an amount deemed adequate by the Commissioner to provide for administration of the proposed purchasing cooperative for a six-month period, in favor of the state and for the use and benefit of the state and of members and creditors of the cooperative. Such bond shall be for protection against insolvency; or against malfeasance, including fraud or theft of funds. The bond shall be conditioned as follows:
(1) For prompt payment of premiums due;
(2) For payment of all indebtedness of the corporation; and
(3) For payment of costs incurred by the state in the administration of the corporation.
(b) Any such bond filed or deposit made or remaining portion thereof held under this Code section shall be released and discharged upon settlement and termination of all liabilities against it.
(c) Any health benefit plan offered through a purchasing cooperative must guarantee uninterrupted coverage for a six-month period in the event of the purchasing cooperative's insolvency, subject to timely payment of premiums due.
(d) Examinations, rehabilitation, receivership, orders, and administrative supervision of health plan purchasing cooperatives shall be in accordance with this title.
The Commissioner shall issue regulations in accordance with Code Section 33-2-9 for the administration of this chapter.
Fees collected by the Commissioner under this chapter shall be as authorized under Chapter 8 of this title.
Health plan purchasing cooperatives shall be subject to the provisions of Chapter 6 of this title.
This chapter shall be known and may be cited as the “Spending Account and Consumer Driven Health Plan Advancement Act.”
The purposes of this chapter are to provide enabling provisions for spending accounts and consumer driven health plans, provide statutory authorization for the establishment of such plans, and facilitate the advancement of such plans as a response to escalating costs of health care plans in this state. This chapter shall be construed and interpreted liberally to effectuate these purposes in as broad a manner as possible.
As used in this chapter, the term:
(1) “Consumer driven health plan” means a plan for the provision or reimbursement of health care services that makes available to enrolled individuals information on health, health care, the pricing of health care, and the pricing of health care services by particular providers. Such plan may, but is not required to, include a spending account feature and may either rely upon indemnity reimbursements for services or contracted amounts for health care services from providers.
(2) “Plan” means an agreement between an individual and a plan sponsor or a declaration by an individual which defines services and benefit levels for which reimbursements will be made.
(3) “Plan sponsor” means the group or individual entering into a contract with an insurer under which the insurer provides reimbursement to the plan for expenditures or obligations incurred for the provision of health care services over and above a certain attachment point.
(4) “Spending account” includes, but is not limited to, medical spending accounts, health reimbursement arrangements, pre-tax benefit spending accounts, and other forms of funding for health care goods and services. As such, the source of funding may be from an individual, an employer, an employee, or a combination of sources, as appropriate.
(a) A spending account plan or consumer driven health plan may be written in this state for a group or for an individual. Such plan may contain a spending account feature which will provide the first-dollar payments for health care services up to a designated amount. Group plans may, but are not required to, provide for a uniform spending account limit. An individual plan may incorporate a spending account feature with a limit not exceeding $10,000.00 annually.
(b) All spending accounts shall be in the name of the individual for which the spending account has been established but may be administered in accordance with the applicable plan.
For any plan having a spending account feature, the amount of the spending account is not required to be the same as the attachment point for insurance reimbursements. If the attachment point for insurance reimbursements to the plan is higher than the amount contained in the spending account, a notice describing the monetary gap for which an individual will be liable shall be given to the holder of the spending account.
The insurance contract providing reimbursements for expenditures for health care services incurred by the plan may be a stop-loss, specific excess and aggregate, or other similar contract. It may be written by an insurer licensed for life, accident, and sickness insurance under Code Section 33-7-2 or by an insurer licensed for casualty insurance under Code Section 33-7-3. In either case, the contract shall be in the name of the plan as the contract holder and shall contain at least the following:
(1) The attachment point after which the payments by the insurer will be made;
(2) The amounts for allowable spending accounts;
(3) An attachment containing the plan document;
(4) A conspicuous disclosure on the first page of the contract that it is not a policy of accident and sickness insurance; and
(5) All other relevant terms and conditions.
(a) A stop-loss or specific excess and aggregate contract issued under this chapter shall not be construed or interpreted as an accident and sickness insurance policy.
(b) No stop-loss or specific excess and aggregate policy may be cancelled or nonrenewed because of the level of health care claims.
As used in this chapter, the term:
(1) “Credit accident and sickness insurance” means insurance on a debtor to provide indemnity for payments becoming due on a specific loan or other credit transaction while the debtor is disabled as defined in the policy.
(2) “Credit life insurance” means insurance on the life of a debtor pursuant to or in connection with a specific loan or other credit transaction.
(3) “Creditor” means the lender of money or vendor or lessor of goods, services, property, rights, or privileges for which payment is arranged through a credit transaction or any successor to the right, title, or interest of any such lender, vendor, or lessor and an affiliate, associate, or subsidiary of any of them or any director, officer, or employee of any of them or any other person in any way associated with any of them.
(4) “Debtor” means a borrower of money or a purchaser or lessee of goods, services, property, rights, or privileges for which payment is arranged through a credit transaction.
(5) “Indebtedness” means the total amount payable by a debtor to a creditor in connection with a loan or other credit transaction.
(a) Except as provided otherwise in subsection (c) of this Code section, all life insurance and all accident and sickness insurance sold in connection with loans or other credit transactions pursuant to a plan covering all debtors of a creditor or a class or classes of debtors shall be subject to this chapter, except such insurance sold in connection with a loan or other credit transaction of five years' duration or more.
(b) Nothing in this chapter is intended to prohibit or discourage reasonable competition.
(c) All life insurance and all accident and sickness insurance sold in connection with loans or other credit transactions pursuant to a plan covering all debtors of a creditor or a class or classes of debtors shall be subject to this chapter, except such insurance sold in connection with a loan or other credit transaction of more than ten years' duration.
Credit life insurance and credit accident and sickness insurance shall be issued only in the following forms:
(1) Individual policies of life insurance issued to debtors on the term plan;
(2) Individual policies of accident and sickness insurance issued to debtors on a term plan or disability provisions in individual policies of credit life insurance;
(3) Group policies of life insurance issued to creditors providing insurance upon the lives of debtors on the term plan; and
(4) Group policies of accident and sickness insurance issued to creditors on a term plan insuring debtors or disability provisions in group life policies to provide the coverage.
(a) The amount of credit life insurance shall not exceed the indebtedness. Where indebtedness repayable in substantially equal installments is secured by an individual policy of credit life insurance, the amount of insurance shall not exceed the approximate unpaid indebtedness on the date of death and, where secured by a group policy of credit life insurance, shall not exceed the exact amount of unpaid indebtedness on that date.
(b) The amount of indemnity payable by credit accident and sickness insurance in the event of disability, as defined in the policy, shall not exceed the aggregate of the periodic scheduled unpaid installments of indebtedness; and the amount of each periodic indemnity payment shall not exceed the original indebtedness divided by the number of periodic installments.
(c) The limitations set forth in subsections (a) and (b) of this Code section shall not apply to insurance regulated under Chapter 3 of Title 7 as to loans made under that chapter.
(d) Notwithstanding this Code section, credit life insurance in connection with agricultural loans not exceeding five years may be written up to the amount of the loan or loan commitment on the nondecreasing or level term plan.
The term of any credit life insurance or credit accident and sickness insurance shall commence, subject to acceptance by the insurer, on the date when the debtor becomes obligated to the creditor, except that, where a group policy provides coverage with respect to existing obligations, the insurance on a debtor with respect to the indebtedness shall commence on the effective date of the policy. In no event, however, in the case of a contract obligation involving future delivery or performance, must the insurance become effective before the date of such delivery or completion of such performance or before the date when all of the terms of the indebtedness are set forth in the contract or instrument creating the indebtedness. The term of the insurance shall not extend more than 15 days beyond the scheduled maturity date of the indebtedness, except when extended without additional cost to the debtor. If the indebtedness is discharged due to renewal or refinancing prior to the scheduled maturity date, the insurance in force shall be terminated before any new insurance may be issued in connection with the renewed or refinanced indebtedness. In all cases of termination prior to scheduled maturity, a refund shall be paid or credited as provided in Code Section 33-31-9.
All policies of credit life insurance and credit accident and sickness insurance shall be delivered or issued for delivery in this state only by an insurer authorized to do an insurance business in this state and shall be issued only through holders of licenses issued by the Commissioner.
(a) All credit life insurance and credit accident and sickness insurance sold shall be evidenced by an individual policy or, in the case of group insurance, by a certificate of insurance, which individual policy or group certificate of insurance shall be delivered to the debtor.
(b) Each individual policy or group certificate of credit life insurance and credit accident and sickness insurance, in addition to other requirements of law, shall set forth the name and home office address of the insurer; the identity by name or otherwise of the person or persons insured; the rate or amount of premium separately in connection with credit life insurance and credit accident and sickness insurance if an identifiable charge is made to the debtor; and a description of the coverage, including any exceptions, limitations, or restrictions; and it shall state that the benefits shall be paid to the creditor to reduce or extinguish the unpaid indebtedness and, wherever the amount of insurance may exceed the unpaid indebtedness, shall state that any excess shall be payable to a beneficiary, other than the creditor, named by the debtor or to his estate.
(c) The individual policy or group certificate of insurance shall be delivered to the insured debtor at the time the indebtedness is incurred except as provided in subsection (d) of this Code section.
(d) If the individual policy or group certificate of insurance is not delivered to the debtor at the time the indebtedness is incurred and if an identifiable charge is made to him or her for credit life insurance or credit accident and sickness insurance, a copy of the application for the policy signed by the debtor or a notice of proposed insurance setting forth the name and home office address of the insurer, the name or names of the debtor, the rate or amount of premium separately in connection with credit life insurance and credit accident and sickness insurance coverage, and a brief description of the coverage provided shall be delivered to the debtor at the time the indebtedness is incurred. The copy of the application or the notice of proposed insurance shall refer exclusively to insurance coverage and shall be separate and apart from the loan, sale, or other credit statement of account, instrument, or agreement unless the information required by this subsection is prominently set forth in the application or the notice of proposed insurance. Upon acceptance of the insurance and within 60 days of the date upon which the indebtedness is incurred, the insurer shall cause the individual policy or group certificate of insurance to be delivered to the debtor. The application or notice of proposed insurance shall state when the insurance shall become effective, which shall be determined as provided in Code Section 33-31-5.
(e) Unless an individual policy is incontestable from date of issue, it shall provide that the validity of the policy shall not be contested, except for nonpayment of premiums, after it has been in force for two years from its date of issue and that no statement relating to insurability made by any person insured under the policy shall be used in contesting the validity of the insurance with respect to which the statement was made after the insurance has been in force prior to the contest for a period of two years during such person's lifetime, unless it is contained in a written instrument signed by the person; that a copy of the application, if any, of the policyholder shall be attached to the policy when issued; and that all statements made by the policyholder or by the persons insured shall be deemed representations and not warranties, and that no statement made by any person insured shall be used in any contest unless a copy of the instrument containing the statement is or has been furnished to the person or to his beneficiary.
(f) A provision specifying an equitable adjustment of premiums or of benefits or of both, to be made in the event the age of a person insured has been misstated, shall contain a clear statement of the method of adjustment to be used.
All forms, including policies, certificates of insurance, notices of proposed insurance, applications for insurance, binders, endorsements, and riders, together with the schedule of premiums therefor and the applicable maximum identifiable charges to debtors shall be filed with the Commissioner. The procedure for filing and approval of forms shall be in accordance with Code Section 33-24-9. The Commissioner shall disapprove any form filed or withdraw any previous approval of such form if the benefits provided in such form are not reasonable in relation to the premium charges or if it contains provisions which are unjust, unfair, inequitable, misleading, deceptive, or which encourage misrepresentation of the policy.
(a) Any insurer, subject to the power of the Commissioner to disapprove the form as provided in Code Section 33-31-8, may revise its schedules of premium rates from time to time and shall file such revised schedules with the Commissioner. Premiums charged by an insurer shall be deemed to be reasonable and in compliance with this chapter and this title if the rate utilized in the calculation of the premium has been approved by the Commissioner. No insurer shall charge premiums for credit life insurance or credit accident and sickness insurance which exceed the premium rate then on file with the Commissioner, except that for the second and subsequent years of insurance provided for the debtors of a creditor it may charge a premium in excess of such maximum if such increase is approved by the Commissioner because of unfavorable claims experience. Nothing in this chapter shall be deemed to prohibit an insurer from decreasing the premium rate on the insurance provided for the debtors of a creditor for the second and subsequent years of insurance.
(b) The amount collected by the creditor from the debtor for any credit life insurance or any credit accident and sickness insurance shall be consistent with the premium rate charged by the insurer. Nothing in this chapter shall be construed to legalize any charge illegal under any statute or rule of law governing credit transactions.
(c) Each individual policy, notice of proposed insurance, or group certificate of credit life insurance and credit accident and sickness insurance shall provide that, in the event of termination of the insurance prior to the scheduled maturity date of the indebtedness, any refund of premium due shall be calculated as of the date the indebtedness terminated and be paid or credited promptly to the person entitled to such refund; provided, however, that the Commissioner shall prescribe a minimum refund and no refund which would be less than such minimum need be made. The formula to be used in computing a refund shall be filed with and approved by the Commissioner. It shall be the obligation of the insured to notify the insurer of the early payoff of the indebtedness which is covered by the insurance.
(c.1) Each individual policy, notice of proposed insurance, or group certificate of credit life insurance and credit accident and sickness insurance issued shall provide a notice on the face of such policy, notice, or certificate in at least 10 point type that it is the obligation of the insured to notify the insurer of any early payoff of the indebtedness which is covered by the insurance.
(d) If a creditor requires a debtor to make a payment in connection with credit life insurance or credit accident and sickness insurance and an individual policy or group certificate of insurance is not issued, the creditor shall immediately give written notice to the debtor and shall promptly make an appropriate credit to the account.
(a) All claims shall be promptly reported to the insurer or its designated claim representative and the insurer shall maintain adequate claim files. All claims shall be settled as soon as possible and in accordance with the terms of the insurance contract.
(b) All claims shall be paid either by draft drawn upon the insurer or by check of the insurer to the order of the claimant to whom payment of the claim is due pursuant to the policy provisions or, upon direction of the claimant, to one specified.
(c) No plan or arrangement shall be used whereby any person, firm, or corporation other than the insurer or its designated claim representative shall be authorized to settle or adjust claims. The creditor shall not be designated as claim representative for the insurer in adjusting claims, provided that a group policyholder, by arrangement with the group insurer, may draw drafts or checks in payment of claims due to the group policyholder subject to audit and review by the insurer.
When credit life insurance or credit accident and sickness insurance is required as additional security for any indebtedness, the debtor, upon written request to the creditor, shall have the option of furnishing the required amount of insurance through existing policies of insurance owned or controlled by him or of procuring and furnishing the required coverage through any insurer authorized to transact an insurance business within this state.
(a) The Commissioner after notice and hearing may issue such rules and regulations as he deems appropriate for the supervision of this chapter, including regulation of maximum premiums or maximum charges to debtors for all credit life or credit accident and sickness insurance. Whenever the Commissioner finds that there has been a violation of this chapter or of any rules or regulations issued pursuant to this chapter, after written notice of the violation and hearing given to the insurer or other person authorized or licensed by the Commissioner he shall set forth the details of his findings together with an order for compliance by a specified date. The order shall be binding on the insurer and other person authorized or licensed by the Commissioner on the date specified, unless previously withdrawn by the Commissioner.
(b) In addition to any other penalty provided by law, any person who violates an order of the Commissioner after it has become final and while the order is in effect, upon proof of the violation to the satisfaction of the court, shall forfeit and pay to this state a sum not to exceed $250.00, which may be recovered in a civil action, except that if such violation is found to be willful, the amount of such penalty shall be a sum not to exceed $1,000.00. The Commissioner, in his discretion, may revoke or suspend the license or certificate of authority of the person guilty of such violation. The order for suspension or revocation shall be subject to judicial review as provided in Chapter 2 of this title.
(a) No policy of fire insurance covering property located in this state shall be made, issued, or delivered unless it conforms as to all provisions and the sequence of the standard or uniform form prescribed by the Commissioner, except that, with regard to multiple line coverage providing other kinds of insurance combined with fire insurance, this Code section shall not apply if the policy contains, with respect to the fire portion of the policy, language at least as favorable to the insured as the applicable portions of the standard fire policy and such multiple line policy has been approved by the Commissioner.
(b) The Commissioner shall file and maintain on file in his office a true copy of the standard fire policy designated as such and bearing the Commissioner's authenticating certificate and signature and the date of filing. The standard fire insurance policy shall not be required for casualty insurance, marine and transportation insurance, or insurance on growing crops. Insurers issuing the standard fire insurance policy are authorized to affix to or include in such policy a written statement that the policy does not cover loss or damage caused by nuclear reaction or nuclear radiation or radioactive contamination, whether directly or indirectly resulting from an insured peril under the policy; provided, however, that nothing contained in this Code section shall be construed to prohibit the attachment to any such policy of an endorsement or endorsements specifically assuming loss or damage caused by nuclear reaction or nuclear radiation or radioactive contamination.
A policy of insurance may be made to cover personal property changing in its specifics.
The privilege of rebuilding or reinstating property sustaining loss or damage shall not exist unless it is reserved in the policy.
In the event of a total loss of property, if an insurer shall pay to the insured an amount less than the maximum amount authorized to be paid under an insurance policy covering the property, the insurer shall refund to the insured the difference between the amount of premiums actually paid for the insurance policy and the amount of premiums which would have been charged for a property insurance policy having a maximum amount payable equal to the amount actually paid by the insurer to the insured.
(a) Whenever any policy of insurance is issued to a natural person or persons or to any legal entity wholly owned by a natural person or persons insuring a specifically described one or two family residential building or structure located in this state against loss by fire and the building or structure is wholly destroyed by fire without fraudulent or criminal fault on the part of the insured or one acting in his or her behalf, the amount of insurance set forth in the policy relative to the building or structure shall be taken conclusively to be the value of the property, except to the extent of any depreciation in value occurring between the date of the policy or its renewal and the loss, provided that, if loss occurs within 30 days of the original effective date of the policy, the insured shall be entitled to the actual loss sustained not exceeding the sum insured. Nothing in this Code section shall be construed as prohibiting the use of coinsurance or as preventing the insurer from repairing or replacing damaged property at its own expense without contribution on the part of the insured.
(b) Subsection (a) of this Code section shall not apply where:
(1) The building or structure is not wholly destroyed by fire;
(2) Insurance policies are issued or renewed by more than one company insuring the same building or structure against fire and the existence of the additional insurance is not disclosed by the insured to all insurers issuing policies;
(3) Two or more buildings or structures are insured under a blanket form for a single amount of insurance; or
(4) The completed value of a building or structure is insured under a builders' risk policy.
Any insurer issuing a policy providing crop insurance coverage, other than federal crop insurance pursuant to 7 U.S.C. Section 1501, et seq., for tobacco crops grown in this state against loss or damage due to wind, hail, or both shall make available such coverage for a term extending until such time as the tobacco crop is harvested, either as a part of or as an optional endorsement to such policy of crop insurance.
All insurers licensed to write and writing property insurance in this state on a direct basis are authorized, subject to approval and regulation by the Commissioner, to establish and maintain a Fair Access to Insurance Requirements (FAIR) Plan and to establish and maintain an underwriting association and to formulate and from time to time amend the plan and articles of association and rules and regulations in connection therewith and to assess and share on a fair and equitable basis all expenses, income, and losses incident to the Fair Access to Insurance Requirements Plan and underwriting association in a manner consistent with this chapter.
The Fair Access to Insurance Requirements Plan and articles of association shall make provision for an underwriting association having authority on behalf of its members to cause to be issued property insurance policies, to reinsure in whole or in part any such policies, and to cede any such reinsurance. The plan and articles of association shall provide, among other things, for the perils to be covered; geographical area of coverage; compensation and commissions; assessments of members; the sharing of expenses, income, and losses on an equitable basis; cumulative weighted voting for the board of directors of the association; the administration of the plan and association; and any other matter necessary or convenient for the purpose of assuring fair access to insurance requirements.
(a) Each insurer authorized to write and writing property insurance in this state shall be required to become and remain a member of the plan and the underwriting association and to comply with the requirements of the plan and the underwriting association as a condition of its authority to transact property insurance business.
(b) Each insurer shall participate in the writings, expenses, profits, and losses of the association in the following manner:
(1) For habitational risks, the same proportion as its habitational premiums written bear to the aggregate habitational premiums written by all insurers in the program; and
(2) For commercial risks, the same proportion as its commercial premiums written bear to the aggregate commercial premiums written by all insurers in the program.
(a) The directors of the association shall submit to the Commissioner, for review, a proposed Fair Access to Insurance Requirements Plan and articles of association consistent with this chapter.
(b) The Fair Access to Insurance Requirements Plan and articles of association shall be subject to approval by the Commissioner and shall take effect ten days after having been approved by the Commissioner. If the Commissioner disapproves all or any part of the proposed plan and articles, the directors of the association shall within 30 days submit for review an appropriately revised plan and articles; and, if the directors fail to do so, the Commissioner shall thereafter promulgate such plan and articles consistent with this chapter.
(c) The directors of the association may, on their own initiative or at the request of the Commissioner, amend the plan and articles, subject to approval by the Commissioner.
In conformity with Chapter 9 of this title, insurers may make reasonable rate modifications for fire and extended coverage and such other classes of basic property insurance.
There shall be no liability on the part of, and no cause of action of any nature shall arise against, insurers, any inspection bureau, placement facility, or underwriting association, or their directors, agents, or employees, or the Commissioner or his or her authorized representatives for any inspections undertaken or statements made by any of them concerning the property to be insured; and any reports and communications in connection therewith shall not be considered public documents.
Any person aggrieved by any action or decision of the administrators of the plan, the underwriting association, or of any insurer as a result of its participation in the plan may appeal to the Commissioner within 30 days from the date of the action or the decision. The Commissioner, after a hearing held upon proper notice, shall issue an order approving the action or decision or disapproving the action or decision with respect to the matter which is the subject of appeal. All final orders and decisions of the Commissioner shall be subject to judicial review as provided in Chapter 2 of this title.
(a) For the purposes of this Code section, the term “local public entity” means a county, municipality, or local board of education.
(b) In the event the insurance coverage of a local public entity filing an appeal of an adverse underwriting decision of the association established pursuant to this chapter is scheduled to cancel or expire while such appeal is pending, the Commissioner shall direct the association to provide coverage authorized under this chapter on a temporary basis to the local public entity as provided in this Code section.
(c) It shall be the duty of the local public entity to notify the Commissioner in writing at the same time the appeal is filed of the date its existing insurance coverage is to cancel or expire. Failure of the local public entity to notify the Commissioner as provided in this subsection shall render the local public entity ineligible for the temporary coverage authorized by this Code section. Upon receiving such notice, the Commissioner shall direct the association to provide coverage authorized under this chapter to the local public entity, shall specify the date such coverage is to be effective, and shall specify the date of termination of such coverage, which shall not be set prior to the date of the Commissioner's final order disposing of the issues on appeal. The premium for the temporary coverage provided by this Code section shall be paid in full by the local public entity at the time the coverage is issued by such method and in such manner as directed by the Commissioner.
(d) Upon receipt of the notice from the public entity specified in subsection (c) of this Code section, the Commissioner shall notify such entity of the emergency property protection measures, if any, which will be required during the period of temporary coverage. Such measures may include the following:
(1) Protection of physically damaged property from further damage;
(2) Prevention or limitation of access to the premises;
(3) Disconnection of utilities;
(4) Installation of locks, alarms, or security lighting;
(5) Inspections of the premises; or
(6) Provision of security guards.
(e) After ordering the temporary coverage required under subsection (b) of this Code section, the Commissioner shall cause notice of such action and any emergency protection measures pertaining to such coverage to be published in the legal organ of the county in which the property is located.
This chapter shall be known and may be cited as the “Georgia Motor Vehicle Accident Reparations Act.”
As used in this chapter, the term:
(1) “Medical payments coverage” includes any coverage in which the insurer agrees to reimburse the insured and others for reasonable and necessary medical expenses and funeral expenses incurred as a result of bodily injury or death caused by a motor vehicle accident, without regard to the insured's liability for the accident. Coverage shall be available to the named insured, resident spouse, and any resident relative while occupying the covered motor vehicle, and to any other person legally occupying a covered motor vehicle. Expenses must be incurred for services rendered within three years from the date of the accident; provided, however, that nothing shall prevent an insurer from allowing a longer period of time. Any rule or regulation promulgated which expands or conflicts with this definition shall be null and void.
(2) “Motor vehicle” means a vehicle having more than three load-bearing wheels of a kind required to be registered under the laws of this state relating to motor vehicles designed primarily for operation upon the public streets, roads, and highways and driven by power other than muscular power. The term includes a trailer drawn by or attached to such a vehicle and also includes without limitation a low-speed vehicle.
(3) “Owner” means the natural person, corporation, firm, partnership, cooperative, association, group, trust, estate, organization, or other entity in whose name the motor vehicle has been registered. If no registration is in effect at the time of an accident involving the motor vehicle, the term means the natural person, corporation, firm, partnership, cooperative, association, group, trust, estate, organization, or other entity who holds the legal title to the motor vehicle or, in the event the motor vehicle is subject to a security agreement or lease with an option to purchase with the debtor or the lessee having the right to possession, the term means the debtor or the lessee.
(4) “Self-insurer” means any owner who has on file with the Commissioner an approved plan of self-insurance which provides for coverages, benefits, and efficient claims handling procedures substantially equivalent to those afforded by a policy of automobile liability insurance that complies with all of the requirements of this chapter.
(a)(1) All policies of motor vehicle liability insurance issued in this state must be in accordance with the requirements of this chapter. Such policies shall contain at least the minimum coverages required under this chapter and shall be issued for a minimum term of six months.
(2) All insurers authorized to transact or transacting insurance in this state or controlling or controlled by or under common control by or with an insurer authorized to transact or transacting insurance in this state which issue policies or contracts providing motor vehicle liability insurance coverage or any other similar coverage in any state or Canadian province shall include in the policies or contracts of insurance a provision which provides at least the minimum liability coverage required under Code Section 33-34-4 with respect to motorists insured under the policies or contracts who are involved in motor vehicle accidents in this state and, notwithstanding any provisions of the policies or contracts to the contrary, all such policies or contracts of insurance shall be deemed to satisfy the minimum requirements of this chapter if a motorist insured under the policies or contracts of insurance is involved in a motor vehicle accident in this state.
(3) Nothing contained in this Code section shall be deemed to prohibit a nonadmitted insurer not otherwise required by paragraph (2) of this subsection to provide the minimum liability coverage required by Code Section 33-34-4 from providing such coverage for its insured motorists who are involved in motor vehicle accidents in this state and, to the extent that such coverage is provided, such policies or contracts shall be deemed to provide the minimum liability coverage required by this chapter.
(4)(A) No insurer shall issue a policy of motor vehicle liability insurance without requiring advance payment for the first 30 days of coverage. Insurers may rely on the insured's statements in the policy application for the purpose of calculating the initial payment required by this paragraph. This paragraph shall not apply to any renewal or continuation of a policy, to any replacement of a policy where there is no lapse of coverage, or to any personal automobile policy issued in connection with an employer sponsored payroll deduction plan. This paragraph shall apply only to personal automobile or family-type automobile liability insurance policies.
(B) If an insurer, agent, or premium finance company collects such advance payment in the form of a check or money order which is not honored upon initial presentation, such insurer, agent, or premium finance company shall be deemed to have complied with subparagraph (A) of this paragraph and may, thereafter, cancel for nonpayment of premium as provided in Code Section 33-24-44.
(b) Nothing in Code Section 33-34-4 shall be construed to prohibit the issuance of policies providing coverage more extensive than the minimum liability coverage required by that Code section.
(c) Policies purporting to satisfy the requirements of Code Section 33-34-4 shall contain a provision which states that, notwithstanding any of the other terms and conditions of the policy, the coverage afforded shall be at least as extensive as the minimum liability coverage required.
(d) Each policy of liability insurance issued in this state providing coverage to motor vehicles owned by a person, firm, or corporation engaged in the business of selling at retail new and used motor vehicles shall provide that, when an accident involves the operation of a motor vehicle by a person who is neither the owner of the vehicle involved in the accident nor an employee of the owner and the operator of the motor vehicle is an insured under a complying policy other than the complying policy insuring the motor vehicle involved in the accident, primary coverage as to all coverages provided in the policy under which the operator is an insured shall be afforded by the liability policy insuring the said operator and any liability policy under which the owner is an insured shall afford excess coverages. If the liability policy under which the owner is an insured and which affords excess coverage contains a provision which eliminates such excess coverage based on the existence of coverage provided in the operator's liability policy, such provision of the owner's liability policy shall be void.
(e) Each policy of motor vehicle liability insurance issued in this state shall provide that the requirement for giving notice of a claim, if not satisfied by the insured within 30 days of the date of the accident, may be satisfied by an injured third party who, as the result of such accident, has a claim against the insured; provided, however, that notice of a claim given by an injured third party to an insurer under this subsection shall be accomplished by mail. Each policy of motor vehicle liability insurance issued or renewed in this state shall be deemed to include and construed as including the provision regarding the notice requirements provided in this subsection.
(a) All insurers writing private passenger automobile insurance in this state shall file rates and forms for medical payments coverage for a limit of at least $2,000.00 but may file rates for higher or lower limits. The requirement for filing forms and rates under this subsection shall not be construed as a requirement for the offering or quoting of medical payment coverages to insureds or as authority for the Commissioner to require the offering or quoting of such coverage.
(b) Insurers may offer other optional coverage including combinations of sublimits and interests restricted to named insureds and resident relatives. Insurers may make collision, comprehensive, and loss of use coverages available as separate individual coverages and subject to differing levels of deductibles at the request of the policyholder.
(c) Any rule or regulation promulgated which expands or conflicts with this Code section shall be null and void.
No owner of a motor vehicle required to be registered in this state or any other person, other than a self-insurer as defined in this chapter, shall operate or authorize any other person to operate the motor vehicle unless the owner has motor vehicle liability insurance equivalent to that required as evidence of security for bodily injury and property damage liability under Chapter 9 of Title 40, the “Motor Vehicle Safety Responsibility Act.”
(a)(1) Except as otherwise provided in paragraphs (2) and (3) of this subsection, any person in whose name one or more vehicles are registered in this state may qualify as a self-insurer by obtaining a certificate of self-insurance from the Commissioner. The Commissioner may, in his or her discretion, upon the application of such person, issue such a certificate when he or she is satisfied that such person has and will continue to have the ability to provide coverages, benefits, and claims-handling procedures substantially equivalent to those afforded by a policy of vehicle insurance in compliance with this chapter.
(2) Except as otherwise provided in paragraph (3) of this subsection with regard to taxicabs, any person who operates one or more vehicles for hire which transport passengers and in whose name a certificate of title has been issued pursuant to Chapter 3 of Title 40 on one or more such vehicles may qualify as a self-insurer by obtaining a certificate of self-insurance from the Commissioner. The Commissioner may, in his or her discretion, upon the application of such person, issue such a certificate when he or she is satisfied that such person has and will continue to have the ability to provide coverages, benefits, and claims-handling procedures substantially equivalent to those afforded by a policy of vehicle insurance in compliance with this chapter.
(3)(A) As used in this paragraph, the term “taxicab” means a motor vehicle used to transport passengers for a fare and which is fitted with a taximeter to compute such fare.
(B) Any person who operates 25 or more taxicabs and in whose name such vehicles are registered may qualify as a self-insurer by obtaining a certificate of self-insurance from the Commissioner. The Commissioner may, in his or her discretion, upon the application of such person, issue such a certificate when he or she is satisfied that such person has and will continue to have the ability to provide coverages, benefits, and claims-handling procedures substantially equivalent to those afforded by a policy of vehicle insurance in compliance with this chapter. A person who operates fewer than 25 taxicabs and in whose name such vehicles are registered shall not be allowed to qualify as a self-insurer with regard to such vehicles.
(C) To qualify for a certificate of self-insurance under subparagraph (B) of this paragraph, a person shall maintain with the Commissioner a cash deposit of at least $100,000.00 and shall also possess and thereafter maintain an additional amount of at least $300,000.00 which shall be invested in the types of assets described in subparagraphs (A) through (H) of paragraph (3) of Code Section 33-11-5 and Code Sections 33-11-10, 33-11-14.1, 33-11-20, 33-11-21, and 33-11-25, which relate to various types of authorized investments for insurers.
(D) Each year, a person operating as a self-insurer pursuant to this paragraph shall submit to the Commissioner, on forms prescribed by the Commissioner, reports of the business affairs and operations of the self-insurer in the same manner as required of insurers pursuant to Code Section 33-3-21. A person operating as a self-insurer pursuant to this paragraph shall also submit to the Commissioner an annual financial statement audited by an independent certified public accountant. The value of any asset listed in any report required by this subparagraph shall be limited to the equity interest of the person operating as a self-insurer pursuant to this paragraph.
(E) Any person operating as a self-insurer pursuant to this paragraph shall be subject to examination and proceedings in the same manner applicable to insurers transacting motor vehicle insurance in this state as provided in Chapter 2 of this title and shall maintain reserves for losses in the same manner as insurers transacting motor vehicle insurance as provided in Chapter 10 of this title.
(F) Until December 31, 2003, the provisions of subparagraph (C) of this paragraph shall not apply to taxicab self-insurers which were located in counties with populations of 400,000 or less according to the United States decennial census of 1990 or any future such census and were licensed by the Commissioner on December 31, 1998.
(b)(1) In addition to the persons described in subsection (a) of this Code section, a religious organization that meets the requirements of this subsection may qualify as a self-insurer for motor vehicle liability insurance for all motor vehicles registered in this state that are owned or leased by members of such religious organization that obtains a certificate from the Commissioner. The Commissioner may, in his or her discretion, upon the application of such religious organization, issue a certificate when he or she is satisfied that such religious organization meets the qualifications of this subsection and has and will continue to have the ability to provide coverages, benefits, and claims-handling procedures substantially equivalent to those afforded by a policy of vehicle insurance in compliance with this chapter.
(2) In addition to any other rules or regulations established by the Commissioner, a religious organization seeking to obtain a certificate under the provisions of this subsection shall meet the following qualifications:
(A) The religious organization shall be a recognized sect or division of a recognized religious group having established tenets or teachings and shall have remained in existence continuously since December 31, 1950, and whose members hold a common belief in mutual financial assistance in time of need;
(B) The religious organization shall be a recognized sect or division of a religious group which has been a recognized religious group for purposes of exemption from federal social security and medicare taxes since December 31, 1970; and
(C) The religious organization has filed with the Commissioner the required minimum security. The required minimum security shall in no event be less than the following amounts:
| Number of Vehicles | Required Security | | --- | --- | | 1-50 | $150,000.00 | | 51-100 | $200,000.00 | | 101-150 | $300,000.00 | | 151-200 | $350,000.00 | | 201-250 | $400,000.00 | | 251-350 | $500,000.00 | | 351 or more | $600,000.00 |
(3) The only forms of acceptable required minimum security shall be rendered in one or more of the following:
(A) United States currency placed as collateral with the Commissioner;
(B) Irrevocable letters of credit valid for a period of at least 24 months and renewable every 12 months and issued by a financial institution chartered by an agency of this state or the federal government; or
(C) Bonds or other negotiable obligations issued by this state, or a subdivision or instrumentality of this state, if not in default as to principal or interest.
(4) A certificate issued pursuant to this subsection shall be valid for a period of 12 months and may be renewed upon the religious organization's filing of an appropriate application, including a report of all claims incurred during the preceding calendar year, the number of covered motor vehicles, and proof that the organization continues to meet the requirements of this subsection. If, based upon the number of claims incurred by the organization during the preceding calendar year or the number of covered motor vehicles, the Commissioner determines that the required minimum security under this subsection is inadequate, the Commissioner may require additional minimum security or reports, or both.
(c) Upon a determination that any self-insurer, including a religious organization granted a certificate pursuant to subsection (b) of this Code section, has failed to pay on any valid claim within 30 days of its submission or has failed to satisfy any judgment within 30 days after such judgment shall become final, the Commissioner shall revoke such insurer's certificate. The Commissioner may on reasonable grounds cancel a certificate of self-insurance, including a certificate granted pursuant to subsection (b) of this Code section, and is authorized to promulgate rules and regulations prescribing such grounds for the cancellation of such certificates.
(a) Subject to the provisions of subsection (b) of this Code section, no insurer shall represent to a person making a claim under a motor vehicle insurance policy that the use of or the failure to use a particular repair facility or particular repair facilities may result in the nonpayment of a claim.
(b) No insurer shall require a person making a claim under a motor vehicle insurance policy to use a particular repair facility or particular repair facilities in order to settle a claim if the person making the claim can obtain the repair work on the motor vehicle at the same cost from another source.
Upon the death of or termination of the marital relationship of a named insured under a personal lines policy of insurance covering a private passenger motor vehicle, a spouse of said named insured who was covered under said policy of insurance immediately prior to the death or termination of the marital relationship shall upon notice to the insurer or agent of the insurer continue to be covered under said policy for a period of 90 days following such death or termination of marital relationship or until the expiration of the policy term, whichever is shorter. Every personal lines policy of insurance covering a private passenger motor vehicle shall contain a provision providing the coverage required by this Code section; and in the absence of such a provision in such a policy the policy shall be deemed to contain such a provision.
The Commissioner shall provide by rule or regulation procedures for the expeditious and efficient settlement of first-party property damage claims under personal private passenger motor vehicle policies. Such procedures may include, but shall not be limited to:
(1) Loss of use reimbursements;
(2) Cost of repairs;
(3) Determination of fair market value on total losses;
(4) Use of aftermarket parts;
(5) Time limitations for payments of claims for property damage by insureds; and
(6) Establishment of a panel for arbitration of disputed property damage claims where such claims involve total losses.
(a) Notwithstanding any other provision of law, in any claim involving a total loss of a vehicle which is subject to more than one lien, the proceeds of an insurance policy shall be applied to pay in full the debt owed to the senior lienholder before any proceeds of an insurance policy shall be applied to any other lien on the vehicle.
(b) For the purpose of implementing this Code section, at the discretion of the state revenue commissioner, an insurer may be granted access via electronic means to individual motor vehicle records. Any such access shall be in accordance with Code Section 40-3-23, and the Department of Revenue shall establish the application and approval process before allowing any such access. The information provided to an insurer pursuant to this Code section shall be limited to the verification of the vehicle owner's name, vehicle information, and any recorded security interests or liens as shown on the records of the Department of Revenue.
This chapter shall be known and may be cited as the “Georgia Vehicle Protection Product Act.”
As used in this chapter, the term:
(1) “Administrator” means a third party other than the warrantor who is designated by the warrantor to be responsible for the administration of vehicle protection product warranties.
(2) “Department” means the Department of Insurance.
(3) “Service contract” means a contract or agreement as defined under Code Section 33-7-6.
(4) “Incidental costs” means expenses specified in the warranty incurred by the warranty holder related to the failure of the vehicle protection product to perform as provided in the warranty. Incidental costs may include, without limitation, insurance policy deductibles, rental vehicle charges, the difference between the actual value of the stolen vehicle at the time of theft and the cost of a replacement vehicle, sales taxes, registration fees, transaction fees, and mechanical inspection fees.
(5) “Vehicle protection product” means a vehicle protection device, system, or service that:
(A) Is installed on or applied to a vehicle;
(B) Is designed to prevent loss or damage to a vehicle from a specific cause; and
(C) Includes a written warranty.
For purposes of this chapter, the term “vehicle protection product” shall include, without limitation, alarm systems, body part marking products, steering locks, window etch products, pedal and ignition locks, fuel and ignition kill switches, and electronic, radio, and satellite tracking devices.
(6) “Vehicle protection product warranty” or “warranty” means, for the purposes of this chapter, a written agreement by a warrantor that provides that if the vehicle protection product fails to prevent loss or damage to a vehicle from a specific cause, then the warranty holder shall be paid specified incidental costs by the warrantor as a result of the failure of the vehicle protection product to perform pursuant to the terms of the warranty.
(7) “Vehicle protection product warrantor” or “warrantor” for the purposes of this chapter means a person who is contractually obligated to the warranty holder under the terms of the vehicle protection product warranty agreement. “Warrantor” does not include an authorized insurer.
(8) “Warranty holder” for the purposes of this chapter means the person who purchases a vehicle protection product or who is a permitted transferee.
(9) “Warranty reimbursement insurance policy” means a policy of insurance that is issued to the vehicle protection product warrantor to provide reimbursement to the warrantor or to pay on behalf of the warrantor all covered contractual obligations incurred by the warrantor under the terms and conditions of the insured vehicle protection product warranties sold by the warrantor.
(a) No vehicle protection product may be sold or offered for sale in this state unless the seller, warrantor, and administrator, if any, comply with the provisions of this chapter.
(b) Vehicle protection product warrantors and related vehicle protection product sellers and warranty administrators complying with this chapter are not required to comply with and are not subject to any other provision of this title.
(c) Service contract providers who do not sell vehicle protection products are not subject to the requirements of this chapter and sales of vehicle protection products are exempt from the requirements of Code Section 33-7-6.
(d) Warranties, indemnity agreements, and guarantees that are not provided as a part of a vehicle protection product are not subject to the provisions of this chapter.
(e) Vehicle manufacturers shall not be subject to any of the provisions of this chapter.
(a) A person may not operate as a warrantor or represent to the public that the person is a warrantor unless the person is registered with the department on a form prescribed by the Commissioner.
(b) Warrantor registration records shall be filed annually and shall be updated within 30 days of any change. The registration records shall contain the following information:
(1) The warrantor's name, any fictitious names under which the warrantor does business in this state, principal office address, and telephone number;
(2) The name and address of the warrantor's agent for service of process in this state if other than the warrantor;
(3) The names of the warrantor's executive officer or officers directly responsible for the warrantor's vehicle protection product business;
(4) The name, address, and telephone number of any administrators designated by the warrantor to be responsible for the administration of vehicle protection product warranties in this state;
(5) A copy of the warranty reimbursement insurance policy or policies or other financial information required by Code Section 33-34-5; and
(6) A copy of each warranty the warrantor proposes to use in this state.
(c) The Commissioner may charge each registrant a reasonable fee to offset the cost of processing the registration and maintaining the records in an amount not to exceed $750.00 annually. The information in paragraphs (1) and (2) of subsection (b) of this Code section shall be made available to the public.
(d) If a registrant fails to register by the renewal deadline, the Commissioner shall give him or her written notice of the failure and the registrant will have 30 days to complete the renewal of his or her registration before he or she is suspended from being registered in this state.
(e) An administrator or person who sells or solicits a sale of a vehicle protection product but who is not a warrantor shall not be required to register as a warrantor or be licensed under the insurance laws of this state to sell vehicle protection products.
No vehicle protection product shall be sold or offered for sale in this state unless the vehicle protection product warrantor is insured under warranty insurance policy meeting the following conditions in order to ensure adequate performance under the warranty:
(1) The warranty reimbursement insurance policy is issued by an insurer authorized to do business in this state and provides that the insurer will pay to, or on behalf of, the warrantor 100 percent of all sums that the warrantor is legally obligated to pay according to the warrantor's contractual obligations under the warrantor's vehicle protection product warranty;
(2) A true and correct copy of the warranty reimbursement insurance policy has been filed with the Commissioner by the warrantor; and
(3) The policy contains the provision required in Code Section 33-34A-6.
No other financial security requirements or financial standards for warrantors shall be required.
No warranty reimbursement insurance policy shall be issued, sold, or offered for sale in this state unless the policy meets the following conditions:
(1) The policy states that the issuer of the policy will reimburse or pay on behalf of the vehicle protection product warrantor all covered sums which the warrantor is legally obligated to pay or will provide that all service that the warrantor is legally obligated to perform according to the warrantor's contractual obligations under the provisions of the insured warranties sold by the warrantor;
(2) The policy states that in the event payment due under the terms of the warranty is not provided by the warrantor within 60 days after proof of loss has been filed according to the terms of the warranty by the warranty holder, the warranty holder may file directly with the warranty reimbursement insurance company for reimbursement;
(3) The policy provides that a warranty reimbursement insurance company that insures a warranty shall be deemed to have received payment of the premium if the warranty holder paid for the vehicle protection product and insurer's liability under the policy shall not be reduced or relieved by a failure of the warrantor, for any reason, to report the issuance of a warranty to the insurer; and
(4) The policy has the following provisions regarding cancellation of the policy:
(A) The issuer of a reimbursement insurance policy shall not cancel such policy until a notice of cancellation in writing has been mailed or delivered to the Commissioner and each insured warrantor;
(B) The cancellation of a reimbursement insurance policy shall not reduce the issuer's responsibility for vehicle protection products sold prior to the date of cancellation; and
(C) In the event an insurer cancels a policy that a warrantor has filed with the Commissioner, the warrantor shall do either of the following:
(i) File a copy of a new policy with the Commissioner, before the termination of the prior policy, provided that there is no lapse in coverage following the termination of the prior policy; or
(ii) Discontinue acting as a warrantor as of the termination date of the policy until a new policy becomes effective and is accepted by the Commissioner.
(a) Every vehicle protection product warranty shall be written in clear, understandable language and shall be printed or typed in an easy-to-read point size and font and shall not be sold or offered for sale in the state unless the warranty:
(1) Conspicuously states that the obligations of the warrantor to the warranty holder are guaranteed under a warranty reimbursement insurance policy;
(2) Conspicuously states that in the event a warranty holder must make a claim against a party other than the warranty reimbursement insurance policy issuer, the warranty holder is entitled to make a direct claim against the insurer upon the failure of the warrantor to pay any claim or meet any obligation under the terms of the warranty within 60 days after proof of loss has been filed with the warrantor;
(3) Conspicuously states the name and address of the issuer of the warranty reimbursement insurance policy. This information need not be preprinted on the warranty form but may be stamped on the warranty;
(4) Identifies the warrantor, the seller, and the warranty holder;
(5) Sets forth the total purchase price and the terms under which it is to be paid; however, the purchase price is not required to be preprinted on the vehicle protection product warranty and may be negotiated with the consumer at the time of sale;
(6) Sets forth the procedure for making a claim, including a telephone number;
(7) Conspicuously states the existence of a deductible amount, if any;
(8) Specifies the payments or performance to be provided under the warranty including payments for incidental costs, the manner of calculation or determination of payments or performance, and any limitations, exceptions, or exclusions;
(9) Sets forth the conditions on which substitution will be allowed;
(10) Conspicuously sets forth all of the obligations and duties of the warranty holder such as the duty to protect against any further damage to the vehicle, the obligation to notify the warrantor in advance of any repair, or other similar requirements, if any;
(11) Sets forth any terms, restrictions, or conditions governing transferability of the warranty, if any; and
(12) Contains a disclosure that reads substantially as follows: “This agreement is a product warranty and is not insurance.”
(b) At the time of sale, the seller or warrantor shall provide to the purchaser:
(1) A copy of the vehicle protection product warranty; or
(2) A receipt or other written evidence of the purchase of the vehicle protection product and a copy of the warranty within 30 days of the date of purchase.
(a) No vehicle protection product may be sold or offered for sale in this state unless the vehicle protection product warranty clearly states the terms and conditions governing the cancellation of the sale and warranty, if any.
(b) The warrantor may only cancel the warranty if the warranty holder does any of the following:
(1) Fails to pay for the vehicle protection product;
(2) Makes a material misrepresentation to the seller or warrantor;
(3) Commits fraud; or
(4) Substantially breaches the warranty holder's duties under the warranty.
(c) A warrantor canceling a warranty shall mail written notice of cancellation to the warranty holder at the last address of the warranty holder in the warrantor's records at least 30 days prior to the effective date of the cancellation. The notice shall state the effective date of the cancellation and the reason for the cancellation.
(a) Unless licensed as an insurance company, a vehicle protection product warrantor shall not use in its name, contracts, or literature the words “insurance,” “casualty,” “surety,” “mutual,” or any other word that is descriptive of the insurance, casualty, or surety business or that is deceptively similar to the name or description of any insurance or surety corporation or any other vehicle protection product warrantor. A warrantor may use the term “guaranty” or a similar word in the warrantor's name.
(b) A vehicle protection product warrantor shall not make, permit, or cause any false or misleading statements, either oral or written, in connection with the sale, offer to sell, or advertisement of a vehicle protection product.
(c) A vehicle protection product warrantor shall not permit or cause the omission of any material statement in connection with the sale, offer to sell, or advertisement of a vehicle protection product, which under the circumstances should have been made in order to make the statements that were made not misleading.
(d) A vehicle protection product warrantor shall not make, permit, or cause any false or misleading statements, either oral or written, about the performance required or payments that may be available under the vehicle protection product warranty.
(e) A vehicle protection product warrantor shall not make, permit, or cause any statement or practice that has the effect of creating or maintaining a fraud.
(f) A bank, savings and loan association, insurance company, or other lending institution shall not require the purchase of a vehicle protection product as a condition of a loan.
(g) A vehicle protection product seller or warrantor may not require as a condition of sale or financing that a retail purchaser of a motor vehicle purchase a vehicle protection product that is not installed on the motor vehicle at the time of sale.
(a) All vehicle protection product warrantors shall keep accurate accounts, books, and records concerning transactions regulated under this chapter.
(b) A vehicle protection product warrantor's accounts, books, and records shall include:
(1) Copies of all vehicle protection product warranties;
(2) The name and address of each warranty holder; and
(3) The dates, amounts, and descriptions of all receipts, claims, and expenditures.
(c) A vehicle protection product warrantor shall retain all required accounts, books, and records pertaining to each warranty holder for at least two years after the specified period of coverage has expired. A warrantor discontinuing business in the state shall maintain its records until it furnishes the Commissioner satisfactory proof that is has discharged all obligations to warranty holders in this state.
(d) Vehicle protection product warrantors shall make all accounts, books, and records concerning transactions regulated under this chapter available to the Commissioner for the purpose of examination.
(a) The Commissioner may conduct examinations of warrantors, administrators, or other persons to enforce this chapter and protect warranty holders in this state. Upon request of the Commissioner, a warrantor shall make available to the Commissioner all accounts, books, and records concerning vehicle protection products sold by the warrantor that are necessary to enable the Commissioner to reasonably determine compliance or noncompliance with this chapter.
(b) The Commissioner may take action that is necessary or appropriate to enforce the provisions of this chapter and the Commissioner's rules and orders and to protect warranty holders in this state. If a warrantor engages in a pattern or practice of conduct that violates this chapter and that the Commissioner reasonably believes threatens to render the warrantor insolvent or cause irreparable loss or injury to the property or business of any person or company located in this state, the Commissioner may:
(1) Issue an order directed to that warrantor to cease and desist from engaging in further acts, practices, or transactions that are causing the conduct;
(2) Issue an order prohibiting that warrantor from selling or offering for sale service contracts in violation of this chapter;
(3) Issue an order imposing a civil penalty on that warrantor; or
(4) Issue any combination of paragraphs (1) through (3) of this subsection, as applicable.
(c) Prior to the effective date of any order issued pursuant to this Code section, the Commissioner must provide written notice of the order to the warrantor and the opportunity for a hearing to be held within ten business days after receipt of the notice, except that prior notice and hearing shall not be required if the Commissioner reasonably believes that the warrantor has become, or is about to become, insolvent.
(d) A person aggrieved by an order issued under this Code section may request a hearing before the Commissioner. The hearing request shall be filed with the Commissioner within 20 days after the date the Commissioner's order is effective, and the Commissioner must hold such a hearing within 15 days after receipt of the hearing request.
(e) At the hearing, the burden shall be on the Commissioner to show why the order issued pursuant to this Code section is justified. The provisions of Chapter 13 of Title 50, the “Georgia Administrative Procedure Act,” shall apply to a hearing request under this Code section.
(f) The Commissioner may bring an action in any court of competent jurisdiction for an injunction or other appropriate relief to enjoin threatened or existing violations of this chapter or of the Commissioner's orders or rules. An action filed under this Code section also may seek restitution on behalf of persons aggrieved by a violation of this chapter or orders or rule of the Commissioner.
(g) A person who is found to have violated this chapter or orders or rules of the Commissioner may be ordered to pay to the Commissioner a civil penalty in an amount, determined by the Commissioner, of not more than $500.00 per violation and not more than $10,000.00 in the aggregate for all violations of a similar nature. For purposes of this Code section, violations shall be of a similar nature if the violation consists of the same or similar course of conduct, action, or practice, irrespective of the number of times the conduct, action, or practice that is determined to be a violation of this chapter occurred.
The Commissioner shall adopt rules and regulations which include disclosures for the benefit of the warranty holder, record keeping, and procedures for public complaints. Such rules and regulations shall also include the conditions under which surplus lines insurers may be rejected for the purpose of underwriting vehicle protection product warranty agreements.
(a) The purposes of this chapter are to provide for the registration of prepaid legal services plans, to promote access to quality legal services at the lowest possible price, and to regulate the development and operation of prepaid legal services plans; and it is the intention of the General Assembly that this chapter be interpreted as liberally as necessary to accomplish these purposes.
(b) The General Assembly finds that insurers authorized to transact casualty, life, or accident and sickness insurance in this state are authorized to write policies for prepaid legal services. The General Assembly further finds that there exists no other specific framework within the insurance laws of this state designed to regulate prepaid legal services. Because of the interest of the state in the controlled development of new methods for providing legal services, exertion of the state's power is necessary for the protection of its citizens.
As used in this chapter, the term:
(1) “Advertising” means any communication, other than a solicitation, as defined in paragraph (5) of this Code section, to the public or any segment of the public by means of radio, television, newspaper, magazine, periodical, brochure, pamphlet, circular, or any other means, the apparent purpose or reasonable effect of which would be to convey information purporting to relate to or describe legal rights, legal services, attorneys, or prepaid legal services plans.
(2) “Insurer” means an insurer authorized to transact casualty, life, or accident and sickness insurance in this state.
(3) “Legal services” means any services normally provided by an attorney as well as the payment of court costs and related expenses incurred in the exercise of any right, but not including the payment of fines, penalties, judgments, or assessments.
(4) “Prepaid legal services plan” or “plan” means any arrangement whereby responsibility is undertaken to provide, arrange for, pay for, or reimburse any part of the cost of any legal services for a consideration consisting in part of prepaid or periodic charges or dues.
(5) “Solicitation” means any written or oral communication in person or by means of telephone, radio, television, newspaper, magazine, periodical, brochure, circular, or otherwise of any offer of coverage in a prepaid legal services plan, any invitation or request to enroll in a prepaid legal services plan, any attempt to obtain consideration for the coverage of a prepaid legal services plan, or any other device, the apparent purpose or reasonable effect of which would be to induce the recipient of such communication to enroll in or pay any consideration for the coverage provided by a prepaid legal services plan.
(6) “Sponsor” means any person, group, or fraternal or benevolent organization, including but not limited to insurers; corporations; partnerships; trusts; labor, craft, or other unions; or other entities which establish or operate prepaid legal services plans.
(7) “Subscriber” means any person who has been enrolled in a prepaid legal services plan and is entitled to receive the benefits provided in the plan.
(8) “Subscription contract” means any contract signed by an authorized representative of a prepaid legal services plan and an individual or an authorized representative of his group or employer or labor union or other entity with which he is affiliated under which the individual becomes a subscriber to the plan.
This chapter shall not apply to the benefits available under automobile club membership contracts and automobile liability insurance policies which supply limited legal services or reimbursement for legal services in automobile related matters under certificates of authority issued by the Commissioner, to any legal aid or other legal services program for the indigent, or to any employer-employee legal services plan which is excluded from this chapter by the federal Employee Retirement Income Security Act of 1974. 1
1 29 U.S.C.A. § 1001 et seq.
(a) No person other than an insurer, as defined in paragraph (2) of Code Section 33-35-2, shall act as a sponsor or enter into any contract with an individual person or persons whereby such person or persons become subscribers to a prepaid legal services plan without first having obtained a license from the Commissioner to act as sponsor of prepaid legal services in this state.
(b) The annual license fee shall be as provided in Code Section 33-8-1. The fee for the license shall be paid to the Commissioner for the use of the state on or before March 1 of each year.
(c) Before any licensee changes his address, he shall return his license to the Commissioner who shall endorse the license, indicating the change.
(d) The person to whom the license or the renewal of such license may be issued shall file sworn answers, subject to the penalties of perjury, to such interrogatories as the Commissioner may require. The Commissioner shall have authority at any time to require the applicant fully to disclose the identity of all stockholders, partners, officers, and employees; and he may in his discretion refuse to issue or renew a license in the name of any firm, partnership, or corporation if he is not satisfied that any officer, employee, stockholder, or partner of the firm, partnership, or corporation who may materially influence the applicant's conduct meets the standards of this chapter.
(a) Upon the filing of an application and the payment of the license fee, the Commissioner shall make an investigation of each applicant and shall issue a license if he finds the applicant is qualified in accordance with this chapter. If the Commissioner does not so find, he shall within 90 days after he has received such application notify the applicant and, at the request of the applicant, give the applicant a full hearing.
(b) The Commissioner shall issue or renew a license as may be applied for when he is satisfied that the person to be licensed:
(1) Is competent and trustworthy and intends to act in good faith as a sponsor of prepaid legal services plans in this state;
(2) Has a good business reputation and has had experience, training, or education so as to be qualified to act as a sponsor of prepaid legal services plans; and
(3) If a corporation, is a corporation incorporated under the laws of this state or a foreign corporation authorized to transact business in this state.
No license or renewal license under this chapter shall be issued to a sponsor other than an insurer as defined in paragraph (2) of Code Section 33-35-2, unless such sponsor:
(1) Shall possess as minimum capital and thereafter maintain a minimum balance of at least $5,000.00 in its capital accounts as shown in its annual report to the Commissioner; provided, however, that the Commissioner shall in his discretion require such higher amounts of capital as he deems necessary for the protection of the public;
(2) Shall deposit with the Commissioner securities acceptable to the Commissioner in the amount of $25,000.00 or shall file with the Commissioner a bond to be approved by the Commissioner and made payable to the Commissioner or his successors in office, which bond is executed by such applicant as principal and by a corporate surety authorized to do business in this state in the penal sum of $25,000.00, conditioned that the sponsor will conduct his business in accordance with this chapter and the laws of this state and that the sponsor will properly account for all moneys collected in connection therewith. The bond shall remain in full force and effect until the surety is released from liability by the Commissioner or until the bond is canceled by the surety and the bond shall not be canceled or terminated unless prior to the cancellation or termination 30 days' written notice is filed with the Commissioner; and
(3) Shall maintain such minimum surplus as the Commissioner may require, which shall be at least 25 percent of its anticipated income over a two-year period calculated on the basis of estimates of premium writings for two-year and five-year periods which shall be filed with the Commissioner as a part of the sponsors' rate filing required under Code Section 33-35-11.
(a) The Commissioner may revoke, suspend, or refuse to renew the license of any sponsor when and if, after investigation, the Commissioner finds that:
(1) Any license issued to the sponsor was obtained by fraud;
(2) There was any misrepresentation in the application for the license;
(3) The sponsor has otherwise shown itself untrustworthy or incompetent to act as a sponsor;
(4) The sponsor has violated any of the provisions of this chapter or of the rules and regulations of the Commissioner;
(5) The sponsor has misappropriated, converted, illegally withheld, or refused to pay over upon proper demand any moneys entrusted to the sponsor in its fiduciary capacity belonging to an insurer or insured; or
(6) The sponsor is found to be in an unsound condition or in such condition as to render the future transaction of business in this state hazardous to the public.
(b) Before the Commissioner shall revoke, suspend, or refuse to renew the license of any sponsor, he shall give to that person an opportunity to be heard fully and to introduce evidence in his behalf.
(c) In lieu of revoking, suspending, or refusing to renew the license for any of the causes enumerated in subsection (a) of this Code section, after hearing as provided in this subsection the Commissioner may place the sponsor on probation for a period of time not to exceed one year or may fine the sponsor not more than $2,000.00 for each offense, or do both, when, in the Commissioner's judgment he or she finds that the public interest would not be harmed by the continued operation of the sponsor. The amount of any penalty shall be paid by such sponsor to the Commissioner for the use of the state.
(d) At any hearing provided by this Code section, the Commissioner shall have authority to administer oaths to witnesses. Anyone testifying falsely after having been administered the oath shall be subject to the penalty of perjury.
(e) Any action of the Commissioner taken pursuant to this Code section shall be subject to such review as may be provided in Chapter 2 of this title.
(a) Any sponsor of any prepaid legal services plan or authorized representative of any prepaid legal services plan may enter into a subscription contract with any person, with any person's employer, or with any other person or group acting in his or its behalf under which a minimum of 80 percent of all individuals lawfully represented by such person or group become subscribers to the prepaid legal services plan; provided, however, that: (1) no subscription contract shall be written for a period longer than one year; and (2) in the case of subscription contracts issued to groups, no member of the group shall be bound by the subscription contract unless he indicates in writing to the group no earlier than ten days after the date on which he has received effective notice of the terms and benefits of the plan and of the intention of his group to contract for the plan that he does wish to become a subscriber and to be bound by the subscription contract. The notice received by the member shall contain without limitation the provisions itemized in subsection (b) of this Code section.
(b) Every subscription contract shall be in writing and shall contain the following provisions:
(1) A brief statement of the plan's financial structure, including a statement of the amount of any premiums, charges, or dues to be charged or currently being charged and the manner in which such amount is to be paid;
(2) A statement of the amount of benefits, reimbursement, or indemnity to be furnished to each subscriber and the period during which it will be furnished and, if there are exceptions, reductions, exclusions, limitations, or restrictions of such reimbursement or indemnity, a detailed statement of such exceptions, reductions, exclusions, limitations, or restrictions;
(3) A statement of the terms and conditions upon which the subscription contract may be canceled or otherwise terminated by the sponsor or by the subscriber or by his employer or by his group; provided, however, that any cancellation or termination by the sponsor shall not become effective unless accomplished in accordance with Code Section 33-24-44;
(4) A statement describing the applicability or nonapplicability of the benefits of the plan to the family dependents of the subscriber;
(5) A statement of the period of grace which will be allowed the subscriber or his employer or group for making any payment due under the subscription contract, which period shall not be less than ten days;
(6) A statement describing a procedure for settling disputes between or among the sponsor, participating or staff attorneys, and the subscribers;
(7) A statement that the subscription contract includes the endorsements on the contract and attached papers, if any, and contains the entire contract; and
(8) A statement that no statements by the subscriber or his employer or group in the application for the contract shall void the subscription contract or be used in any legal proceeding under the contract, unless such application or an exact copy of the application is included in or attached to such subscription contract.
(c) If a prepaid legal services plan is sponsored by an insurer or is underwritten by an insurer pursuant to subsection (a) of Code Section 33-35-10, the subscription contract of the plan shall contain a provision which shall provide that nothing contained in the subscription contract shall interfere in any way with the right of any individual subscriber to retain any attorney of his free choice at the expense of the plan.
(d) Every subscriber shall be furnished a copy of his subscription contract, and every employer or other group shall be furnished a copy of the subscription contract signed by it.
(e) The sponsor shall be required to file every subscription contract and a copy of its underwriting rules with the Commissioner; also a copy of such subscription contract and underwriting rules shall be sent to the State Bar of Georgia by the sponsor. The filings with the Commissioner shall be deemed approved 90 days after the date the filing is received by the Commissioner, unless prior to the expiration of said 90 day period the Commissioner notifies the sponsor of the prepaid legal services plan in writing of the Commissioner's disapproval. The Commissioner shall require that all subscription contracts shall be fair and reasonable and shall not approve any subscription contracts or underwriting rules that are unfair or inequitable or contrary to the public policy of this state or would, because the provisions are unclear or deceptively worded, encourage misrepresentation.
(a) Nothing contained in this Code section shall be deemed to prohibit an insurer authorized to transact casualty, life, or accident and sickness insurance in this state from selling or offering for sale in this state individually underwritten and individually issued policies of prepaid legal services insurance on policy forms which have been approved by the Commissioner pursuant to Chapter 9 of this title.
(b) This Code section shall not apply to any subscription contracts negotiated and issued in accordance with Section 302C of the Labor Management Relations Act of 1947 (87 Stat. 314, 29 U.S.C.A. Section 186(c)(8)).
(c) This Code section shall not apply in the event that prior to April 1, 1976, legal services plans' coverages are mandated by any applicable state or federal laws or court decisions.
(a)(1) The sponsor of any prepaid legal services plan or authorized representative of the plan may contract with any company licensed to transact casualty, life, or accident and sickness insurance in this state under which contracts the company agrees for a consideration consisting of a specified premium to assume the monetary obligations of the plan to provide or pay for the legal services covered by the subscription contracts issued under such plan upon the failure of the plan itself to meet such obligations within a specified period. The duration of the contract shall not be longer than three years and each contract shall be filed with and subject to the approval of the Commissioner for the fairness of its terms and premiums. The contracts shall be deemed to be approved 90 days after the date of filing with the Commissioner, unless prior to the expiration of such 90 day period the Commissioner notifies the sponsor of the prepaid legal services plan in writing of the Commissioner's disapproval.
(2) Any sponsor entering into such contracts shall fairly disclose to all subscribers affected by them the nature and extent of the extra protection provided by them. Any plan having lawful access to any other source of funds besides the premiums collected, which may be used to meet the obligations of the plan under its subscription contracts, shall make similar fair disclosure to affected subscribers.
(3) Any sponsor which seeks to limit its liability under its subscription contracts to the total of funds collected in premiums from subscribers shall state such limitation clearly and prominently in all subscription contracts.
(b) Any sponsor of any prepaid legal services plan or authorized representative of the plan may contract with any person to provide administrative services necessary to the administration of the plan and the subscription contracts issued under such plan. The duration of the contracts shall not be longer than three years, and each contract shall be filed with and subject to the approval of the Commissioner as to the fairness of its terms. The contracts shall be deemed to be approved 90 days after the date of filing with the Commissioner, unless prior to the expiration of the 90 day period the Commissioner notifies the sponsor of the prepaid legal services plan in writing of the Commissioner's disapproval.
(a) No sponsor of any prepaid legal services plan or authorized representative of the plan shall enter into any contract with subscribers unless and until the sponsor has filed with the Commissioner a copy of its underwriting rules and a full schedule of the rates, premiums, or membership fees to be charged to the subscribers. These filings shall be deemed to be approved by the Commissioner 90 days after the date of filing with the Commissioner, unless prior to the expiration of the 90 day period the Commissioner notifies the sponsor of the prepaid legal services plan in writing of the Commissioner's disapproval.
(b) In considering whether or not to approve a given rate schedule, the Commissioner shall consider the following factors:
(1) Whether the rates are adequate to ensure that all the benefits contracted for will be supplied;
(2) Whether the rates are excessive;
(3) Whether the rates are unfairly discriminatory; and
(4) Whether the rates are otherwise contrary to the laws or public policies of this state.
(c) Insurers authorized to transact casualty, life, or accident and sickness insurance in this state shall be required to comply with the requirements of this Code section if they sell or offer for sale policies of prepaid legal services insurance in this state or if they underwrite prepaid legal services plans of sponsors licensed to operate prepaid legal services plans in this state; provided, however, that nothing contained in this Code section shall be deemed to relieve any insurer authorized to transact casualty, life, or accident and sickness insurance in this state from complying with the requirements of this title and the laws of this state.
All advertising and solicitation concerning prepaid legal services plans shall be conducted in a simple, dignified manner. Every item of advertising or solicitation shall conform with the following standards:
(1) The form and content of any advertisement or solicitation shall be accurate and shall be sufficiently complete and clear to avoid deception or the capacity or tendency to mislead or deceive. Whether an advertisement has a capacity or tendency to mislead or deceive shall be determined by the Commissioner from the overall impression that the advertisement may be reasonably expected to create upon a person of average education or intelligence within the segment of the public to which it is directed or within a segment of the public to which such advertisement may be reasonably calculated to reach;
(2) All advertisements and solicitations shall be truthful and not misleading in fact or in implication. Words or phrases, the meaning of which is clear only by implications or by familiarity with insurance terminology, shall not be used;
(3) Advertising and solicitation which include references to the legal rights or remedies of citizens shall be legally accurate;
(4) Advertising and solicitation which include references to the particular characteristics of one or more sponsors or prepaid legal services plans or which compare one or more sponsors or prepaid legal services plans shall be truthful and not misleading; and
(5) No advertising or solicitation shall contain the name, address, telephone number, or any other identifying information about any attorney; and no such advertising or solicitation shall extol the alleged virtues or qualifications or point out the alleged shortcomings of any attorney, whether named or not; provided, however, that communications directed solely to existing subscribers of prepaid legal services plans which restrict their benefits to services rendered by attorneys preselected by the plan may include the names, addresses, and telephone numbers of participating attorneys.
A sponsor shall invest the funds of a prepaid legal services plan only in such investments as are authorized by the laws of this state for the investment of assets of insurance companies and subject to the limitations placed on the investments.
Any deposits of a sponsor of a prepaid legal services plan deposited with the Commissioner pursuant to this chapter shall be administered by the Commissioner in accordance with Chapter 12 of this title as though deposited by a domestic casualty, life, or accident and sickness insurer authorized to transact insurance in this state.
(a) The Commissioner shall require every sponsor of a prepaid legal services plan to retain at the address shown on its license the plan related books, records, accounts, and vouchers for a term of three years beginning immediately after the completion of the transaction and shall require that they be kept in such manner that the Commissioner or his authorized representatives may readily verify its annual statements and determine whether the plan and the sponsor are in compliance with the law.
(b) The Commissioner or his designee shall at least every three years visit each sponsor of a prepaid legal services plan and examine into such of its affairs as relate to the business of operating the plan. The Commissioner shall have free access to all plan related books, records, accounts, and vouchers of the plan and may summon and examine under oath officers, trustees, agents, and employees of the plan and any other persons regarding the affairs and condition of the plan; provided, however, that no written or oral information need be supplied under this or any other subsection of this chapter in violation of the attorney-client privilege as it is construed by the courts of this state.
(c) Every sponsor of a plan being examined and its officers, employees, and representatives shall produce and make freely accessible to the Commissioner the accounts, records, documents, and files in its possession or control relating to the subject of the examination. The officers, employees, and representatives shall facilitate such examination and aid the examiners as far as it is in their power in making the examination.
(d)(1) The Commissioner shall make a full written report of each examination made by him containing only facts ascertained from the accounts, records, and documents examined and from the sworn testimony of witnesses.
(2) The report shall be certified by the Commissioner or by the examiner in charge of the examination and when so certified, after filing as provided in paragraph (3) of this subsection, shall be admissible in evidence in any proceeding brought by the Commissioner against the sponsor of the plan examined or any officer or agent of such sponsor and shall be prima-facie evidence of the facts stated in the report.
(3) The Commissioner shall furnish a copy of the proposed report to the sponsor of the plan examined not less than 20 days prior to filing the report. If the plan so requests in writing within the 20 day period or such longer period as the Commissioner may grant, the Commissioner shall grant a hearing with respect to the report and shall not file the report until after the hearing and such modifications have been made in the report as the Commissioner may deem proper.
(4) The Commissioner may withhold from public inspection the report of any examination or investigation for so long as he deems it to be in the public interest or necessary to protect the plan examined from unwarranted injury.
(5) After the report has been filed, the Commissioner may publish the report or the results of the report in one or more newspapers published in this state if he should deem it to be in the public interest.
(e) The sponsor of the plan so examined shall pay at the direction of the Commissioner all the actual travel and living expenses of the examination. When the examination is made by an examiner who is not a regular employee of the department, the sponsor examined shall pay the proper charges for the services of the examiner and his assistants in an amount approved by the Commissioner. A consolidated account for the examination shall be filed by the examiner with the Commissioner. No sponsor or other entity shall pay and no examiner shall accept any additional emolument on account of any examination. When the examination is conducted in whole or in part by regular salaried employees of the department, payment for the services and proper expenses shall be made by the sponsor examined to the Commissioner; and the payment shall be deposited with the Office of the State Treasurer.
Every sponsor of a prepaid legal services plan shall annually on or before March 1 file in the office of the Commissioner the following items:
(1) A statement verified by at least two of its principal officers or trustees showing the financial condition of the plan on December 31 of the preceding year, which statement shall be in such form and shall contain such matters as the Commissioner shall prescribe. A copy of such statement shall also be sent to each subscriber to the plan on or before March 31 unless such sponsor is an insurer as defined in Code Section 33-35-2 whose annual report of its affairs and operations has been filed with the Commissioner in accordance with Code Section 33-3-21;
(2) A statistical summary listing the numbers and types of claims paid and the average dollar amount of each type of claim;
(3) A list of the groups currently subscribing to the plan;
(4) A statement of the name, organizational form, and principal place of business of the plan and the name, organizational form, and principal place of business of the sponsor of the plan;
(5) Copies of all advertising or solicitation material which the plan is using; and
(6) Such other pertinent and relevant information as the Commissioner may reasonably require for the proper administration of this chapter; provided, however, that all information furnished under this paragraph shall be kept confidential by the Commissioner and shall not be made public by the Commissioner or any other person without the prior written consent of the sponsor or insurer to which it pertains, unless the Commissioner, after giving the sponsor or insurer who would be affected by the information notice and opportunity to be heard, determines that the interests of the subscribers, policyholders, or the public will be served by the publication of the information, in which event he may publish all or any part thereof in such manner as he may deem appropriate except to the extent that it may be produced in any judicial or administrative proceeding and may be admissible in evidence therein.
Except as otherwise provided in this chapter, all hearings and proceedings held under this chapter shall be conducted in accordance with Chapter 2 of this title and the Commissioner shall have all the powers granted to him in Chapter 2 of this title.
If the Commissioner finds that any prepaid legal services plan or its sponsor: (1) has failed to comply with any provision of this chapter; (2) is fraudulently operated; (3) is in such condition as to render further plan operations hazardous to the public interest or the interest of subscribers; (4) is financially unable to meet its obligations and claims as they come due; or (5) has violated any other law, he may apply to the Superior Court of Fulton County for an injunction. The court may immediately issue a temporary injunction restraining the transaction of any business by the plan; and it may after a full hearing make the injunction permanent and appoint one or more receivers to take possession of the books, papers, moneys, and other assets of the plan to settle its affairs and distribute its funds to those entitled to such funds, subject to such rules and orders as the court may prescribe. If it appears that a crime has been committed in connection with the sale, advertisement, administration, or management of any prepaid legal services plan, the Attorney General of this state may pursue the appropriate criminal action.
The venue provisions applicable to insurers under Chapter 4 of this title shall apply to sponsors as defined in paragraph (6) of Code Section 33-35-2.
This chapter shall apply to all persons, groups, or fraternal or benevolent organizations, including but not limited to insurers; corporations; partnerships; trusts; labor, craft, or other unions; or any other entities who propose to operate or are operating or participating in the operation of a prepaid legal services plan as such plan is defined in paragraph (4) of Code Section 33-35-2.
All insurers authorized to transact casualty, life, or accident and sickness insurance in this state which is authorized to issue policies of prepaid legal services insurance in this state shall be required to meet all the requirements of this chapter unless specifically excepted from the requirements by this chapter, provided that nothing contained in this chapter shall be deemed to relieve the obligations of an insurer authorized to transact casualty, life, or accident and sickness insurance in this state from complying with any other applicable requirements of this title and any other applicable laws of this state.
Chapter 6 of this title, applicable to insurers, shall apply to sponsors as defined in paragraph (6) of Code Section 33-35-2; and, for the purpose of determining whether a violation of Chapter 6 of this title has occurred, a subscriber, as defined in paragraph (7) of Code Section 33-35-2, shall be deemed to be an insured or a policyholder as used in Chapter 6 of this title, whichever is applicable.
This chapter shall be known and may be cited as the “Georgia Insurers Insolvency Pool Act.”
There is created a Georgia Insurers Insolvency Pool which shall consist of three accounts: (1) workers' compensation account; (2) automobile account; and (3) all other covered insurance account. The pool shall be responsible for the investigation, adjustment, compromise, settlement, and payment of covered claims; for the investigation, handling, and denial of noncovered claims; and for the management and investment of funds administered by the pool. The members of the pool shall be responsible for the payment of assessments levied pursuant to subsection (b) of Code Section 33-36-7; for adherence to the rules of the plan approved pursuant to Code Section 33-36-6; and for other obligations imposed by this chapter. The pool shall come under the immediate supervision of the Commissioner and shall be subject to the applicable provisions of the insurance laws of this state.
As used in this chapter, the term:
(1) “Affiliate” means a person who, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with another person.
(2) “Affiliate of the insolvent insurer” means a person who, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with an insolvent insurer on December 31 of the year next preceding the date the insurer becomes an insolvent insurer.
(3) “Control” means the direct or indirect possession of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise unless the power is the result of an official position with or corporate office held by the person. Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing 10 percent or more of the voting securities of any other person. This presumption may be rebutted by a showing that control does not exist in fact and any person disputing his or her status as an affiliate of an insurer authorized to do business in Georgia or an insolvent insurer may file a disclaimer in accordance with subsection (i) of Code Section 33-13-4.
(4)(A) “Covered claim” means an unpaid claim which:
(i) Arises out of a property or casualty insurance policy issued by an insurer which becomes an insolvent insurer which was authorized to do an insurance business in this state either at the time the policy was issued or when the insured event occurred; and
(ii) Is within any of the classes of claims under subparagraph (B) of this paragraph.
(B) A claim shall not be paid unless it arises out of an insurable event under a property or casualty insurance policy and it is:
(i) An unearned premium claim of a policyholder who at the time of the insolvency was a resident of this state;
(ii) An unearned premium claim of a policyholder under a policy affording coverage for property permanently situated in this state;
(iii) The claim of a policyholder or insured who at the time of the insured event was a resident of this state;
(iv) The claim of a person having an insurable interest in or related to property which was permanently situated in this state; or
(v) A claim under a liability or workers' compensation insurance policy when either the insured or third-party claimant was a resident of this state at the time of the insured event.
(C) A covered claim shall not include any claim in an amount of less than $50.00; provided, however, that any claim of $50.00 or more shall be paid in full.
(D) A covered claim shall not include that portion of any first-party claim which is in excess of the applicable limits provided in the policy or $300,000.00, whichever is less.
(E) A covered claim shall not include that portion of any third-party claim, other than a workers' compensation claim, which is in excess of the applicable limits provided in the policy or $300,000.00, whichever is less.
(F) A covered claim shall not include any obligation to insurers, reinsurers, insurance pools, underwriting associations, health maintenance organizations, hospital plan corporations, or professional health service corporations as subrogation recoveries, reinsurance recoveries, contribution, indemnification, or otherwise. No such claim for any amount due any reinsurer, insurer, insurance pool, underwriting association, health maintenance organization, hospital plan corporation, or professional health service corporation may be asserted against a person insured under a policy issued by an insolvent insurer other than to the extent such claim exceeds the pool obligation limitations set forth in this Code section.
(G) A covered claim shall not include any first-party claim by an insured whose net worth exceeds $10 million on December 31 of the year next preceding the date the insurer becomes an insolvent insurer; provided, however, that an insured's net worth on such date shall be deemed to include the aggregate net worth of the insured and all of its subsidiaries and affiliates as calculated on a consolidated basis; or any third-party claim relating to a policy of an insured whose net worth exceeds $25 million on December 31 of the year next preceding the date the insurer becomes an insolvent insurer; provided, however, that an insured's net worth on such date shall be deemed to include the aggregate net worth of the insured and all of its subsidiaries and affiliates as calculated on a consolidated basis; and further provided that this exclusion shall not apply to third-party claims against the insured where the insured has applied for or consented to the appointment of a receiver, trustee, or liquidator for all or a substantial part of its assets, filed a voluntary petition in bankruptcy, filed a petition or an answer seeking a reorganization or arrangement with creditors or to take advantage of any insolvency law or, if an order, judgment, or decree is entered by a court of competent jurisdiction, on the application of a creditor, adjudicating the insured bankrupt or insolvent or approving a petition seeking reorganization of the insured or of all or substantial part of its assets.
(H) A covered claim shall not include any first-party claims by an insured which is an affiliate of the insolvent insurer.
(I) A covered claim shall not include any claim or judgment for punitive damages and attorney's fees associated therewith against any insolvent insurer, its insured, or the insurers insolvency pool.
(J) A covered claim shall not include any workers' compensation benefits payable under subsection (e) or (f) of Code Section 34-9-221 or paragraph (2), (3), or (4) of subsection (b) of Code Section 34-9-108 after the effective date of the court order of rehabilitation or liquidation.
(K) A covered claim shall include a claim for unearned premium only if such claim derives from the payment of a stated premium and shall not include those which derive from an unstated premium such as calculated from audit, dividend, deposit, or retrospect plans. Further, a covered claim shall not include:
(i) That portion of a claim for unearned premium which is in excess of $20,000.00; or
(ii) A claim for unearned premium resulting from a policy which was not in force on the date of the final order of liquidation.
(L) A covered claim shall not include any fee or other amount relating to goods or services sought by or on behalf of any attorney or other provider of goods or services retained by the insolvent insurer or an insured prior to the date it was determined to be insolvent.
(M) A covered claim shall not include any fee or other amount sought by or on behalf of an attorney or other provider of goods or services retained by any insured or claimant in connection with the assertion or prosecution of any claim, covered or otherwise, against the pool. However, in such a case, the pool shall not offset amounts from any recovery paid to a claimant in such an action which the claimant has agreed are to be paid to the attorney in a contingency fee arrangement.
(N) A covered claim shall not include any claims for interest.
(5) “Insolvent insurer” means an insurer which was licensed to issue property or casualty insurance policies in this state at any time subsequent to July 1, 1970, and against which a final order of liquidation with a finding of insolvency has been entered by a court of competent jurisdiction in the insurer's state of domicile or of this state and which order of liquidation has not been stayed or been the subject of a writ of supersedeas or other comparable order.
(6) “Insolvency pool” or “pool” means the Georgia Insurers Insolvency Pool established pursuant to Code Section 33-36-2.
(7) “Insured” means any named insured, any additional insured, any vendor, any lessor, or any other party identified as an insured under the policy as long as insurable interests remain relevant.
(8) “Insurer” or “company” means any corporation or organization that has held or currently holds a license to engage in the writing of property or casualty insurance policies in this state, including the exchanging of reciprocal or interinsurance contracts among individuals, partnerships, and corporations, except farmer assessment mutual insurers, county assessment mutual insurers, and municipal assessment mutual insurers.
(9) “Net direct written premiums” means direct gross premiums written on property or casualty insurance policies, less return premiums on the policies and dividends paid or credited to policyholders on such direct business. Premiums written by any authorized insurer on policies issued to self-insurers, whether or not designated as reinsurance contracts, shall be deemed net direct written premiums.
(10) “Person” means any individual or legal entity, including governmental entities.
(11) “Property and casualty insurance policies” or “policy” means any contract, including endorsements to such contract and without regard to the nature or form of the contract or endorsement, which provides coverages as enumerated in Code Sections 33-7-3 and 33-7-6, except:
(A) Life insurance and annuities (being that class of insurance referred to in Code Section 33-7-4);
(B) Accident, health, and disability insurance except where written as part of an automobile insurance contract (being that class of insurance referred to in Code Section 33-7-2);
(C) Title insurance (being that class of insurance referred to in Code Section 33-7-8);
(D) Credit life insurance (being that class of insurance referred to in paragraph (2) of Code Section 33-31-1);
(E) Credit insurance, vendors' single interest insurance, or collateral protection insurance, or any similar insurance protecting the interests of a creditor arising out of a creditor-debtor transaction;
(F) Mortgage guaranty, financial guaranty, or other forms of insurance offering protection against investment risks;
(G) Fidelity or surety bonds or any other bonding obligations;
(H) Insurance of warranties or service contracts including insurance that provides for the repair, replacement, or service of goods or property, or indemnification for repair, replacement, or service, for the operational or structural failure of the goods or property due to a defect in materials, workmanship, or normal wear and tear, or provides reimbursement for the liability incurred by the issuer of agreements or service contracts that provide such benefits;
(I) Ocean marine insurance;
(J) Any transaction or combination of transactions between a person, including affiliates of such person, and an insurer, including affiliates of such insurer, which involves the transfer of investment or credit risk unaccompanied by the transfer of insurance risk; or
(K) Any insurance provided by or guaranteed by government.
(a) There shall be a board of trustees of the Georgia Insurers Insolvency Pool which shall be known as the Insurers Solvency Board and which shall consist of seven members. At all times, the board shall contain at least one member from a domestic insurer. The members of the board shall not be considered employees of the department. The members of the board shall be selected by the Commissioner. Each board member so selected shall represent a company licensed to do business in Georgia. Any member may be removed from office by the Commissioner when, in his or her judgment, the public interest may so require. Each member appointed shall serve for a term of three years and until his or her successor has been appointed and qualified and, in case of a vacancy for any reason in the office of any such member, the Commissioner shall appoint a member to fill the unexpired term of such vacant office.
(b) In approving selections to the board, the Commissioner shall consider among other things whether all member insurers are fairly represented.
(c) The actual expenses of the members of the board incurred in attending meetings shall be paid out of the assets of the insolvency pool, but members of the board shall not otherwise be compensated by the pool for their services. For the purpose of considering questions before it, the board shall have access to all the books, records, reports, and papers in the department, including all confidential communications; and the members of the board shall treat such communications as confidential.
Every insurer authorized to write property or casualty insurance policies in this state shall be a member of the insolvency pool and shall be liable for assessments pursuant to Code Section 33-36-7 and shall also be responsible for the other obligations imposed pursuant to this chapter.
(a) The Georgia Insurers Insolvency Pool is a nonprofit legal entity with the right to bring and defend actions and such right to bring and defend actions includes the power and right to intervene as a party before any court in this state that has jurisdiction over an insolvent insurer as defined in this chapter. The pool shall adopt, and the Commissioner shall approve, a reasonable plan which is not inconsistent with this chapter and which is fair to insurers and equitable to their policyholders, pursuant to which all admitted insurers shall become members of the pool. All members of the pool shall adhere to the rules of the plan. The plan may be amended by an affirmative vote of a majority of the Insurers Solvency Board.
(b) If, for any reason, the pool fails to adopt a suitable plan, or if, at any time, the pool fails to adopt necessary amendments to the plan, the Commissioner shall adopt and promulgate, after a hearing, such reasonable rules as are necessary to effectuate this chapter. The rules shall continue in force until modified by the Commissioner or superseded by a plan of operation adopted by the pool and approved by the Commissioner.
(c) The plan as provided for in subsection (a) of this Code section shall:
(1) Establish the procedures whereby all the powers and duties of the pool under this chapter will be performed;
(2) Establish procedures for handling assets of the pool;
(3) Mandate that procedures be established for the disposition of liquidating dividends or other moneys received from the estate of the insolvent insurer;
(4) Mandate that procedures be established to designate the amount and method of reimbursing members of the board of trustees under Code Section 33-36-4;
(5) Establish procedures by which claims may be filed with the pool and establish acceptable forms of proof of covered claims. Notice of claims to the receiver or liquidator of the insolvent insurer shall be deemed notice to the pool or its agent and a list of claims shall be periodically submitted to the pool or insolvency fund or its equivalent in another state by the receiver or liquidator;
(6) Establish regular places and times for meetings of the board of trustees;
(7) Mandate that procedures be established for records to be kept of all financial transactions of the pool, its agents, and the board of trustees;
(8) Establish the procedures whereby selections for the board of trustees will be submitted to the Commissioner; and
(9) Contain additional provisions necessary or proper for the execution of the powers and duties of the pool.
(d) In accordance with the plan, the pool may designate insurers to act on behalf of the pool to carry out the purposes of this chapter, but a member may decline such designation. The Commissioner may disapprove such designation. The plan may provide a procedure under which pending claims or judgments against the insolvent insurer or its insureds are assigned to the member companies designated to act for the pool. The assignee-insurer is authorized to appear and defend a claim in a court of competent jurisdiction or otherwise and to investigate, adjust, compromise, and settle a covered claim or to investigate, handle, and deny a noncovered claim, and to do so on behalf of and in the name of the pool. If an assignee-insurer pays the covered claim, it shall be reimbursed by the pool or be entitled to set off said payment against future assessments. The unreimbursed claim of such an insurer against the pool shall be an admitted asset of the insurer. Insureds entitled to protection of this chapter shall cooperate with the pool and the assignee-insurer.
(e) The pool as a legal entity and any of its individual members shall have no cause of action against the insured of the insolvent insurer for any sums it has paid out except such causes of action as the insolvent insurer would have had if such sums had been paid by the insolvent insurer and except as otherwise provided in this chapter. The pool shall be subrogated to the rights of any insured or claimant, to the extent of a covered claim, to participate in the distribution of assets of the insolvent insurer to the extent that the pool has made payment. Any claimant or insured entitled to the benefits of this chapter shall be deemed to have assigned to the pool, to the extent of any payment received, his or her rights against the estate of the insolvent insurer. After determination of insolvency of any insurer, the pool shall be a party in interest in all proceedings involving policies insured or assumed by the pool with the same rights to receive notice and defend, appeal, and review as the insolvent insurer would have had if solvent. All moneys recovered under this Code section or any other Code section shall be added to the assessments collected under Code Section 33-36-7.
(f) Except for actions by member insurers aggrieved by final actions or decisions of the pool pursuant to Code Section 33-36-18, all actions relating to or arising out of this chapter against the pool must be brought in the courts in this state. Such courts shall have exclusive jurisdiction over all actions relating to or arising out of this chapter against the pool.
(g) Exclusive venue in any action by or against the pool is in the Superior Court of DeKalb County. The pool may, at the option of the pool, waive such venue as to specific actions.
(a) For the purposes of administration and assessment under this Code section, the pool shall be divided into three separate accounts: (1) workers' compensation insurance account; (2) automobile insurance account; and (3) all other covered insurance account. Separate assessment shall be made for each account. No assessment shall be levied for any account as long as the assets held in such account are sufficient to cover all estimated payments for liquidation in process under the account.
(b) To the extent necessary to secure the funds for the respective accounts of the pool for the payment of covered claims and also to pay the reasonable costs to administer the pool, the Commissioner, upon certification of the pool, shall levy assessments in the proportion that each insurer's net direct written premiums in this state in the classes protected by the account bear to the total of the net direct written premiums received in this state by all such insurers for the preceding calendar year for the kinds of insurance included within such account. Assessments shall be remitted to and administered by the pool in the manner specified by the approved plan. Each insurer so assessed shall have at least 30 days' written notice as to the date the assessment is due and payable. Every assessment shall be made as a uniform percentage applicable to the net direct written premiums of each insurer in the kinds of insurance included within the account in which the assessment is made. The assessments levied against any insurer shall not exceed in any one year more than 2 percent of that insurer's net direct written premiums in this state for the kinds of insurance included within such account during the calendar year next preceding the date of such assessments. If sufficient funds from the assessments, together with funds previously raised, are not available in any one year in the respective account to make all the payments or reimbursements then owing to insurers designated to act for the pool, the funds available shall be prorated and the unpaid portion shall be paid as soon thereafter as funds become available.
(c) The pool may exempt any insurer from an assessment if an assessment by the pool would result in the insurer's financial statement reflecting an amount of capital or surplus less than the sum of the minimum amount required by any jurisdiction in which the insurer is authorized to transact insurance.
(d) Any necessary and proper expenses incurred by an insurer in the investigation, adjustment, compromise, settlement, denial, or handling of claims assigned to it shall, upon proper verification under the rules of the pool, entitle the insurer to reimbursement. Any insurer whose employee serves on the staff of the pool may set off from its assessment any necessary and proper expenses incurred by the insurer resulting from said service of its employee.
(e) An insurer which ceases to engage in the business of writing property or casualty insurance policies in this state shall have no right to a refund of any assessment previously remitted to the pool.
(a) The plan adopted pursuant to Code Section 33-36-6 shall contain provisions whereby each member insurer is required to recoup over the year following the year of the assessment a sum calculated to recoup the assessments paid by the member insurer under this chapter by way of a surcharge on premiums charged for insurance policies to which this chapter applies. Amounts recouped shall not be considered premiums for any other purpose, including the computation of gross premium tax or agents' commission.
(b) The amount of any surcharge shall be separately stated on either a billing or policy declaration sent to an insured. Member insurers who collect surcharges in excess of assessments paid pursuant to Code Section 33-36-7 for an insolvent insurer shall remit the excess to the pool as an additional assessment within 30 days after the pool has determined the amount of the excess recoupment and given notice to the member of that amount. The excess shall be applied to reduce future assessment charges in the appropriate category.
(c) The plan of operation may permit a member insurer to omit collection of the surcharge from its insureds when the expense of collecting the surcharge would exceed the amount of the surcharge. However, nothing in this Code section shall relieve the member insurer of its obligation to recoup the amount of surcharge otherwise collectable.
Upon the determination of a court of competent jurisdiction of the state of domicile of an insurer that the insurer is insolvent, the Commissioner of this state shall promptly give notice of the insurer's insolvency by first-class mail to all persons known or reasonably expected to have or be interested in claims against the insurer at such person's last known address, all insureds of the insolvent insurer known to the Commissioner at such insured's last known address, and all insurers subject to this chapter. The Commissioner may also require each agent of the insolvent insurer to give prompt written notice by first-class mail at the insured's last known address to each insured of the insolvent insurer for whom he was agent of record. Notice shall also be given by publication in a newspaper of general circulation published in the county where the insurer had its principal office not less than once per week for four weeks and by publication elsewhere in this state as the court may direct.
In the event an insurer is ordered to be liquidated, the coverage afforded by property and casualty insurance policies issued by such insurer shall, with respect to covered claims, become the obligation of the pool for a period of 30 days from the date of such determination or until policy expiration date if less than said 30 days or until the policy has been replaced by the insurer within said 30 days. The pool shall be deemed the insurer only to the extent of its obligation on the covered claims and to such extent, subject to the limitations provided in this chapter, shall have all rights, duties, and obligations of the insolvent insurer as if the insurer had not become insolvent, including, but not limited to, the right to pursue and retain salvage and subrogation recoverable on paid covered claim obligations. The pool shall not be deemed the insolvent insurer for any purpose relating to the issue of whether the pool is amenable to the personal jurisdiction of the courts of any state. The pool is authorized to investigate, adjust, compromise, and settle covered claims or to investigate, handle, and deny noncovered claims. The pool shall have the authority, upon approval of the Commissioner, to borrow funds necessary to effect the purposes of this chapter. The pool shall have the authority to establish procedures for requesting financial information from insureds on a confidential basis for purposes of applying Code sections concerning their net worth, subject to such information being shared with any other association similar to the pool and the liquidator for the insolvent company on the same confidential basis. If the insured refuses to provide the requested financial information and an auditor's certification of the same where requested and available, the pool may deem the net worth of the insured, in the instance of a first-party claim, to be in excess of $10 million at the relevant time or, in the event of a third-party claim, to be in excess of $25 million at the relevant time. In any lawsuit contesting the applicability of subparagraph (G) of paragraph (4) of Code Section 33-36-3 or subsection (d) of Code Section 33-36-14 where the insured has declined to provide financial information under the procedure provided pursuant to this Code section, the insured shall bear the burden of proof concerning its net worth at the relevant time. If the insured fails to prove that its net worth at the relevant time was less than the applicable amount, the court shall award the pool its full costs, expenses, and reasonable attorney's fees in contesting the claim.
(a) It is not the purpose of this chapter to provide or permit duplicate recoveries of covered claims under this chapter and an insolvency fund or its equivalent of any other state. In the construction and application of this chapter with respect to a covered claim which may be recoverable under this chapter and under an insolvency fund or its equivalent in another state, the sole recovery: (1) with respect to a workers' compensation claim, shall be under the insolvency fund or its equivalent of the state of residence of the claimant; (2) with respect to a first-party claim of an insured for damage to or destruction of property with a permanent location, shall be under the insolvency fund or its equivalent of the state where the property is permanently situated; and (3) with respect to any other covered claim, shall be under the insolvency fund or its equivalent of the state of residence of the insured.
(b) Any recovery obtained from the pool pursuant to this chapter shall be reduced by those amounts recovered in any other state from a similar or equivalent insolvency fund in such state when the recovery was obtained by the same claimant for the same claim filed against the pool in this state.
(a) Notwithstanding any other provisions of this chapter, except as provided for in Code Section 33-36-20, a covered claim shall not include a claim filed with the pool after the earlier of (1) 18 months after the date of the order of liquidation, or (2) the final date set by the court for the filing of claims against the liquidator or receiver of an insolvent insurer and shall not include any claim filed with the pool or a liquidator for protection afforded under the insured's policy for incurred but not reported losses.
(b) The pool may not be found in default. No default judgments may be entered against the pool, the insolvent insurer, or the insured of the insolvent insurer after the instigation of an insolvency proceeding prior to an order of liquidation, nor during the pendency of insolvency proceedings, nor during a 120 day stay following an order of liquidation.
(c) In no instance may a finding of default or the entry of a default judgment against an insurer be applicable or enforceable against the pool or the insured of the insolvent insurer.
The Commissioner shall bring an action for and recover, on behalf of the pool, any assessment not paid when due. He may, after notice and hearing, revoke the certificate of authority to transact business in this state of an insurer who is a member of the pool which fails to pay an assessment when due as provided in this chapter and after demand having been made or which otherwise fails to comply with the plan as approved pursuant to Code Section 33-36-6. Any action taken by the Commissioner shall be subject to judicial review as provided in Code Sections 33-2-26 through 33-2-28.
With respect to insolvent insurers incorporated in this state, the receiver, liquidator, or statutory successor shall allow as a proper claim on the assets of the insolvent insurer amounts paid under this chapter by or on behalf of the pool or paid by an insolvency fund or its equivalent in another state on or with respect to covered claims, notwithstanding provisions to the contrary in any statute of this state relating to the rights and duties of such receiver, liquidator, or statutory successor. As a condition of an insurer doing business in this state, all property and casualty insurance policies issued or renewed shall be deemed to provide that the insurer appoints the pool as its agent with respect to investigation, adjustment, compromise, and settlement of covered claims and to reimburse the pool for any payment made under the terms of this chapter, and that such appointment and obligation shall be binding on any receiver, liquidator, or statutory successor appointed to liquidate or wind up its affairs.
(a) Except as provided for in Code Section 33-36-20, any person having a claim against a policy or an insured under a policy issued by an insolvent insurer, which claim is a covered claim and is also a claim within the coverage of any policy issued by a solvent insurer, shall be required to exhaust first his or her rights under such policy issued by the solvent insurer. The policy of the solvent insurer shall be treated as primary coverage and the policy of the insolvent insurer shall be treated as secondary coverage and his or her rights to recover such claim under this chapter shall be reduced by any amounts received from the solvent insurers.
(b) Any amount paid a claimant in excess of the amount authorized by this chapter may be recovered by an action brought by or on behalf of the pool.
(c) To the extent that the pool's obligation is reduced by the application of this Code section, the liability of the person insured by the insolvent insurer's policy for the claim shall be reduced in the same amount.
(d) Except as provided for in Code Section 33-36-20, the pool shall have the right to recover from the following persons all amounts paid by the pool on behalf of such person, whether for indemnity or defense or otherwise:
(1) Any insured whose net worth on December 31 of the year immediately preceding the date the insurer becomes an insolvent insurer exceeds $25 million, provided that an insured's net worth on such date shall be deemed to include the aggregate net worth of the insured and all of its subsidiaries and affiliates as calculated on a consolidated basis; and
(2) Any person who is an affiliate of the insolvent insurer.
(a) To aid in the detection and prevention of insurer insolvencies:
(1) The board of trustees may, upon majority vote, make recommendations to the Commissioner for the detection and prevention of insurer insolvencies;
(2) The board of trustees may, upon majority vote, make recommendations to the Commissioner on matters generally related to improving or enhancing regulation for solvency; and
(3) The board of trustees may, at the conclusion of any domestic insurer insolvency in which the pool was obligated to pay covered claims, prepare a report on the history and causes of such insolvency based on the information available to the pool and submit such report to the Commissioner.
(b) Reports and recommendations made pursuant to this Code section shall not be considered public documents.
The pool shall be deemed a company or insurer within the scope of Code Section 33-2-11 relating to examinations. Notwithstanding the provisions of Code Section 33-2-11 or this Code section, whether such examinations shall be conducted and the frequency of any such examinations shall be at the sole discretion of the Commissioner.
The pool shall be exempt from all license fees, income, franchise, privilege, occupation, or other taxes levied or assessed by the state, any municipality, county, or other political subdivision of the state, except state, county, or municipal taxes upon the real or personal property of the pool, which shall be assessed and taxed in the same manner as real property and personal property of other nonexempt persons.
There shall be no liability on the part of, and no cause of action of any nature shall arise against, any member insurer, the pool or its agents or employees, the board of trustees, or any person serving as a representative of any member of the board of trustees for any action taken or any failure to act by them in the performance of their powers and duties under this chapter.
(a) The Commissioner shall by order terminate the operation of the insolvency pool as to any kind of insurance afforded by property or casualty insurance policies with respect to which he has found, after hearing, that there is in effect a statutory or voluntary plan which:
(1) Is a permanent plan which is adequately funded or for which adequate funding is provided; and
(2) Extends, or will extend to the Georgia policyholders and residents, protection and benefits with respect to insolvent insurers not substantially less favorable and effective to such policyholders and residents than the protection and benefits provided with respect to that kind of insurance under this chapter.
(b) The Commissioner shall by the same order authorize discontinuance of future payments by insurers to the insolvency pool with respect to the same kinds of insurance, provided that assessments and payments shall continue as necessary to liquidate covered claims of insurers adjudged insolvent prior to the order and the related expenses not covered by the other plan.
(c) In the event the operation of any account of the insolvency pool shall be so terminated as to all kinds of insurance otherwise within its scope, the pool as soon as possible after the termination shall distribute the balance of moneys and assets remaining in the account (after discharge of the functions of the pool with respect to prior insurer insolvencies not covered by such other plan, together with related expenses) to the insurers which are then writing in this state policies of the kinds of insurance covered by such account, and which had made payments into such account, pro rata upon the basis of the aggregate of the payments made by the respective insurers to the account during the period of five years preceding the date of the order. Upon completion of such distribution with respect to all of the accounts specified in Code Section 33-36-7, this chapter shall be deemed to have expired.
Any action of the Insurers Solvency Board may be appealed to the Commissioner by any member insurer if such appeal is taken within 30 days of the action being appealed. Any final action or order of the Commissioner shall be subject to judicial review in a court of competent jurisdiction.
(a) No person, including an insurer or agent or affiliate of an insurer, shall make, publish, disseminate, circulate, or place before the public or cause directly or indirectly to be made, published, disseminated, circulated, or placed before the public in any newspaper, magazine, or other publication; in the form of a notice, circular, pamphlet, letter, or poster; over any radio station or television station; or in any other way any advertisement, announcement, or statement which uses the existence of the pool for the purposes of sales, solicitation, or inducement to purchase any form of insurance covered by this chapter. This Code section shall not apply to the pool or any other entity which does not sell or solicit insurance.
(b) Any person who violates subsection (a) of this Code section may, after notice and hearing and upon order of the Commissioner, be subject to one or both of the following:
(1) A monetary penalty of not more than $1,000.00 for each act or violation, but not to exceed an aggregate penalty of $10,000.00; or
(2) Suspension or revocation of his license or certificate of authority.
(a) It is the policy of this state to protect insureds and their claimants from liability as a result of the insolvency of insurers. In furtherance of this policy, it is the intent of the legislature, notwithstanding any provision of law to the contrary, that the Georgia Insurers Insolvency Pool shall be liable to claimants and electing insureds in emergency circumstances.
(b) As used in this Code section, the term:
(1) “Electing insured” means any insured under a workers' compensation insurance policy that is impacted by an emergency circumstance. Such term shall include but not be limited to governmental insureds and other insureds under a workers' compensation insurance policy impacted by an emergency circumstance whose net worth exceeds $25 million as of December 31 of the year preceding the filing of a claim.
(2) “Emergency circumstance” means a circumstance in which an association or industrial insured captive insurance company, including such a captive company that subsequently was authorized to transact business pursuant to Chapter 3 of this title, that is issuing, or which has issued, workers' compensation insurance contracts and has been declared insolvent.
(3) “Emergency claimant” means any third-party claimant, under a workers' compensation insurance policy, who is impacted by an emergency circumstance and whose employer has, by a court of competent jurisdiction, been declared bankrupt or insolvent.
(c) Any electing insured whose net worth is less than $25 million as of December 31 of the year preceding the filing of a claim may be shielded from liability by the pool and have any workers' compensation claims filed against such electing insured covered by the pool, provided said electing insured pays $10,000.00 per claim to the insolvency pool prior to October 1, 2010. Any electing insured whose net worth exceeds $25 million as of December 31 of the year preceding the filing of a claim may be shielded from liability by the pool and have any workers' compensation claims filed against such electing insured covered by the pool, provided said electing insured pays $50,000.00 per claim to the insolvency pool prior to October 1, 2010. Claims of all emergency claimants shall be covered by the insolvency pool.
(d) Claimants shall retain the right to pursue claims against any insured that is not an electing insured.
(a) This chapter shall be known and may be cited as the “Insurers Rehabilitation and Liquidation Act.”
(b) This chapter shall not be interpreted to limit the powers granted the Commissioner by other provisions of law.
(c) This chapter shall be liberally construed to effect the purpose stated in subsection (d) of this Code section.
(d) The purpose of this chapter is the protection of the interests of insureds, claimants, creditors, and the public generally, with minimum interference with the normal prerogatives of the owners and managers of insurers, through:
(1) Early detection of any potentially dangerous condition in an insurer and prompt application of appropriate corrective measures;
(2) Improved methods for rehabilitating insurers, involving the cooperation and management expertise of the insurance industry;
(3) Enhanced efficiency and economy of liquidation, through clarification of the law, to minimize legal uncertainty and litigation;
(4) Equitable apportionment of any unavoidable loss;
(5) Lessening the problems of interstate rehabilitation and liquidation by facilitating cooperation between states in the liquidation process and by extending the scope of personal jurisdiction over debtors of the insurer outside this state;
(6) Regulation of the insurance business by the impact of the law relating to delinquency procedures and substantive rules on the entire insurance business; and
(7) Providing for a comprehensive scheme for the rehabilitation and liquidation of insurance companies and those subject to this chapter as part of the regulation of the business of insurance, insurance industry, and insurers in this state. Proceedings in cases of insurer insolvency and delinquency are deemed an integral aspect of the business of insurance and are of vital public interest and concern.
The proceedings authorized by this chapter may be applied to:
(1) All insurers who are doing or have done an insurance business in this state and against whom claims may arise from such business;
(2) All insurers who purport to do an insurance business in this state;
(3) All insurers who have insureds resident in this state;
(4) All other persons organized or in the process of organizing with the intent to do an insurance business in this state;
(5) All nonprofit service plans and all fraternal benefit societies;
(6) All title insurance companies; and
(7) All prepaid health care delivery plans, health care plans, and health maintenance organizations.
As used in this chapter, the term:
(1) “Ancillary state” means any state other than a domiciliary state.
(2) “Creditor” means a person having any claim, whether matured or unmatured, liquidated or unliquidated, secured or unsecured, absolute, fixed, or contingent.
(3) “Delinquency proceeding” means any proceeding instituted against an insurer for the purpose of liquidating, rehabilitating, reorganizing, or conserving such insurer and any summary proceeding under Code Section 33-37-9. “Formal delinquency proceeding” means any liquidation or rehabilitation proceeding.
(4) “Doing business” includes any of the following acts, whether effected by mail or otherwise:
(A) The issuance or delivery of contracts of insurance to persons resident in this state;
(B) The solicitation of applications for such contracts or other negotiations preliminary to the execution of such contracts;
(C) The collection of premiums, membership fees, assessments, or other consideration for such contracts;
(D) The transaction of matters subsequent to execution of such contracts and arising out of them; or
(E) Operating under a license or certificate of authority, as an insurer, issued by the Department of Insurance.
(5) “Domiciliary state” means the state in which an insurer is incorporated or organized; or, in the case of an alien insurer, its state of entry.
(6) “Fair consideration” means:
(A) When in exchange for property or obligation as a fair equivalent therefor and in good faith, property is conveyed, services are rendered, an obligation is incurred, or an antecedent debt is satisfied; or
(B) When property or obligation is received in good faith to secure a present advance or antecedent, debt in amount not disproportionately small as compared to the value of the property or obligation obtained.
(7) “Federal home loan bank” means a federal home loan bank established under the federal Home Loan Bank Act, 12 U.S.C. Section 1421, et seq.
(8) “Foreign country” means any other jurisdiction not in any state.
(9) “General assets” means all property, real, personal, or otherwise, not specifically mortgaged, pledged, deposited, or otherwise encumbered for the security or benefit of specified persons or classes of persons. As to specifically encumbered property, general assets includes all such property or its proceeds in excess of the amount necessary to discharge the sum or sums secured thereby. Assets held in trust and on deposit for the security or benefit of all policyholders or all policyholders and creditors in more than a single state shall be treated as general assets.
(10) “Guaranty association” means the Georgia Insurers Insolvency Pool created by Chapter 36 of this title, the Georgia Life and Health Insurance Guaranty Association created by Chapter 38 of this title, and any other similar entity now or hereafter created by the General Assembly for the payment of claims of insolvent insurers. “Foreign guaranty association” means any similar entities now in existence in or hereafter created by the legislature of any other state.
(11) “Insolvency” or “insolvent” means:
(A) For an insurer issuing only assessable fire insurance policies:
(i) The inability to pay any obligation within 30 days after it becomes payable; or
(ii) If an assessment is made within 30 days after an obligation becomes payable, the inability to pay such obligation 30 days following the date specified in the first assessment notice issued after the date of loss; and
(B) For any other insurer, the inability to pay its obligations when they are due, or when its admitted assets do not exceed its liabilities plus the greater of:
(i) Any capital and surplus required by law for its organization; or
(ii) The total par or stated value of its authorized and issued capital stock.
For purposes of this paragraph, “liabilities” shall include, but not be limited to, reserves required by statute or by regulations or specific requirements imposed by the Commissioner upon a subject company at the time of admission or subsequent thereto.
(12) “Insurer” means any person who has done, purports to do, is doing, or is licensed to do an insurance business and is or has been subject to liquidation, rehabilitation, reorganization, supervision, the authority of, or conservation by any state insurance regulatory official. For purposes of this chapter, any other persons included under Code Section 33-37-2 shall be deemed to be insurers.
(13) “Insurer-member” means an insurer who is a member of a federal home loan bank.
(14) “Preferred claim” means any claim with respect to which the terms of this chapter accord priority of payment from the general assets of the insurer.
(15) “Receiver” means receiver, liquidator, rehabilitator, or conservator as the context requires.
(16) “Secured claim” means any claim secured by mortgage, trust deed, pledge, deposit as security, escrow, or otherwise, but not including special deposit claims or claims against general assets. The term also includes claims which have become liens upon specific assets by reason of judicial process.
(17) “Special deposit claim” means any claim secured by a deposit made pursuant to statute for the security or benefit of a limited class or classes of persons, but not including any claim secured by general assets.
(18) “State” means any state, district, or territory of the United States.
(19) “Transfer” shall include the sale and every other and different mode, direct or indirect, of disposing of or of parting with property, an interest therein, the possession thereof or of fixing a lien upon property or upon an interest therein, whether absolutely or conditionally, voluntarily, or by or without judicial proceedings. The retention of a security title to property delivered to a debtor shall be deemed a transfer suffered by the debtor.
(a) No delinquency proceeding shall be commenced under this chapter by anyone other than the Commissioner, and no court shall have jurisdiction to entertain, hear, or determine any proceeding commenced by any other person.
(b) No court of this state shall have jurisdiction to entertain, hear, or determine any complaint praying for the dissolution, liquidation, rehabilitation, sequestration, conservation, or receivership of any insurer; or praying for an injunction or restraining order or other relief preliminary to, incidental to, or relating to such proceedings other than in accordance with this chapter.
(c) In addition to other grounds for jurisdiction provided by the law of this state, a court of this state having jurisdiction of the subject matter has jurisdiction over a person served pursuant to Code Section 9-11-4 or other applicable provisions of law in an action brought by the receiver of a domestic insurer or an alien insurer domiciled in this state:
(1) If the person served is an agent, broker, or other person who has at any time written policies of insurance for or has acted in any manner whatsoever on behalf of an insurer against which a delinquency proceeding has been instituted, in any action resulting from or incident to such a relationship with the insurer;
(2) If the person served is a reinsurer who has at any time entered into a contract of reinsurance with an insurer against which a delinquency proceeding has been instituted or is an agent or broker of or for the reinsurer, in any action on or incident to the reinsurance contract;
(3) If the person served is or has been an officer, director, manager, trustee, organizer, promoter, or other person in a position of comparable authority or influence over an insurer against which a delinquency proceeding has been instituted, in any action resulting from or incident to such a relationship with the insurer;
(4) If the person served is or was at the time of the institution of the delinquency proceeding against the insurer holding assets in which the receiver claims an interest on behalf of the insurer, in any action concerning the assets; or
(5) If the person served is obligated to the insurer in any way whatsoever, in any action on or incident to the obligation.
(d) If the court on motion of any party finds that any action should as a matter of substantial justice be tried in a forum outside this state, the court may enter an appropriate order to stay further proceedings on the action in this state.
(e) Any action authorized in this Code section shall be brought in the Superior Court of Fulton County.
(a) Any receiver appointed in a proceeding under this chapter may at any time apply for, and any court of general jurisdiction may grant, such restraining orders, preliminary and permanent injunctions, and other orders as may be deemed necessary and proper to prevent:
(1) The transaction of further business;
(2) The transfer of property;
(3) Interference with the receiver or with a proceeding under this chapter;
(4) Waste of the insurer's assets;
(5) Dissipation and transfer of bank accounts;
(6) The institution or further prosecution of any actions or proceedings;
(7) The obtaining of preferences, judgments, attachments, garnishments, or liens against the insurer, its assets, or its policyholders;
(8) The levying of execution against the insurer, its assets, or its policyholders;
(9) The making of any sale or deed for nonpayment of taxes or assessments that would lessen the value of the assets of the insurer;
(10) The withholding from the receiver of books, accounts, documents, or other records relating to the business of the insurer; or
(11) Any other threatened or contemplated action that might lessen the value of the insurer's assets or prejudice the rights of policyholders, creditors, or shareholders, or the administration of any proceeding under this chapter.
(b) The receiver may apply to any court outside of the state for the relief described in subsection (a) of this Code section.
(c)(1) After the seventh day following the filing of a delinquency proceeding, a federal home loan bank shall not be stayed or prohibited from exercising its rights regarding collateral pledged by an insurer-member.
(2) If a federal home loan bank exercises its rights regarding collateral pledged by an insurer-member who is subject to a delinquency proceeding, the federal home loan bank shall repurchase any outstanding capital stock that is in excess of that amount of federal home loan bank stock that the insurer-member is required to hold as a minimum investment to the extent the federal home loan bank in good faith determines the repurchase to be permissible under applicable laws, regulations, regulatory obligations, and the federal home loan bank's capital plan and consistent with the federal home loan bank's current capital stock practices applicable to its entire membership.
(d) Following the appointment of a receiver for an insurer-member, the federal home loan bank shall, within ten business days after a request from the receiver, provide a process and establish a timeline for all of the following:
(1) The release of collateral that exceeds the amount required to support secured obligations remaining after any repayment of loans as determined in accordance with the applicable agreements between the federal home loan bank and the insurer-member;
(2) The release of any of the insurer-member's collateral remaining in the federal home loan bank's possession following repayment of all outstanding secured obligations of the insurer-member in full;
(3) The payment of fees owed by the insurer-member and the operation of deposits and other accounts of the insurer-member with the federal home loan bank; and
(4) The possible redemption or repurchase of federal home loan bank stock or excess stock of any class that an insurer-member is required to own.
(e) Upon request from a receiver, the federal home loan bank shall provide any available options for an insurer-member subject to a delinquency proceeding to renew or restructure a loan to defer associated prepayment fees, subject to market conditions, the terms of any loans outstanding to the insurer-member, the applicable policies of the federal home loan bank, and the federal home loan bank's compliance with federal laws and regulations.
(a) Any officer, manager, director, trustee, owner, employee, or agent of any insurer or any other persons with authority over or in charge of any segment of the insurer's affairs shall cooperate with the Commissioner in any proceeding under this chapter or any investigation preliminary to the proceeding. The term “person” as used in this Code section shall include any person who exercises control directly or indirectly over activities of the insurer through any holding company or other affiliate of the insurer. “To cooperate” shall include, but shall not be limited to, the following:
(1) To reply promptly in writing to any inquiry from the Commissioner requesting such a reply; and
(2) To make available to the Commissioner any books, accounts, documents, or other records or information or property of or pertaining to the insurer and in his possession, custody, or control.
(b) No person shall obstruct or interfere with the Commissioner in the conduct of any delinquency proceeding or any investigation preliminary or incidental thereto.
(c) This Code section shall not be construed to abridge otherwise existing legal rights, including the right to resist a petition for liquidation or other delinquency proceedings or other orders.
(d) Any person included within subsection (a) of this Code section who fails to cooperate with the Commissioner, or any person who obstructs or interferes with the Commissioner in the conduct of any delinquency proceeding or any investigation preliminary or incidental thereto, or who violates any order the Commissioner issued validly under this chapter may:
(1) Be sentenced to pay a fine not exceeding $10,000.00 or to undergo imprisonment for a term of not more than one year, or both; or
(2) After a hearing, be subject to the imposition by the Commissioner of a civil penalty not to exceed $10,000.00 and shall be subject further to the revocation or suspension of any insurance licenses issued by the Commissioner.
No insurer that is subject to any delinquency proceedings, whether formal or informal, administrative or judicial, shall:
(1) Be released from such proceeding, unless such proceeding is converted into a judicial rehabilitation or liquidation proceeding;
(2) Be permitted to solicit or accept new business or request or accept the restoration of any suspended or revoked license or certificate of authority;
(3) Be returned to the control of its shareholders or private management; or
(4) Have any of its assets returned to the control of its shareholders or private management
until all payments of or on account of the insurer's contractual obligations by all guaranty associations, along with all expenses thereof and interest on all such payments and expenses, shall have been repaid to the guaranty associations or a plan of repayment by the insurer shall have been approved by the guaranty association.
(a) For the purposes of this Code section, the persons entitled to protection under this Code section are:
(1) All receivers responsible for the conduct of a delinquency proceeding under this chapter, including present and former receivers; and
(2) Their employees, meaning all present and former special deputies and assistant special deputies appointed by the Commissioner and all persons whom the Commissioner, special deputies, or assistant special deputies have employed to assist in a delinquency proceeding under this chapter. Attorneys, accountants, auditors, and other professional persons or firms who are retained by the receiver as independent contractors and their employees shall not be considered employees of the receiver for purposes of this Code section.
(b) The receiver and his or her employees shall have official immunity and shall be immune from suit and liability, both personally and in their official capacities, for any claim for damage to or loss of property, personal injury, or other civil liability caused by or resulting from any alleged act, error, or omission of the receiver or any employee arising out of or by reason of their duties or employment, provided that nothing in this subsection shall be construed to hold the receiver or any employee immune from suit or liability for any damage, loss, injury, or liability caused by the intentional or willful and wanton misconduct of the receiver or any employee.
(c) If any legal action is commenced against the receiver or any employee, whether against him or her personally or in his or her official capacity, alleging property damage, property loss, personal injury, or other civil liability caused by or resulting from any alleged act, error, or omission of the receiver or any employee arising out of or by reason of their duties or employment, the receiver and any employee shall be indemnified from the assets of the insurer for all expenses, attorneys' fees, judgments, settlements, decrees, or amounts due and owing or paid in satisfaction of or incurred in the defense of such legal action unless it is determined upon a final adjudication on the merits that the alleged act, error, or omission of the receiver or employee giving rise to the claim did not arise out of or by reason of his or her duties or employment or was caused by intentional or willful and wanton misconduct.
(d)(1) Attorneys' fees and any and all related expenses incurred in defending a legal action for which immunity or indemnity is available under this Code section shall be paid from the assets of the insurer, as they are incurred, in advance of the final disposition of such action upon receipt of an undertaking by or on behalf of the receiver or employee to repay the attorneys' fees and expenses if it shall ultimately be determined upon a final adjudication on the merits that the receiver or employee is not entitled to immunity or indemnity under this Code section.
(2) Any indemnification for expense payments, judgments, settlements, decrees, attorneys' fees, surety bond premiums, or other amounts paid or to be paid from the insurer's assets pursuant to this Code section shall be an administrative expense of the insurer.
(3) In the event of any actual or threatened litigation against a receiver or any employee for which immunity or indemnity may be available under this Code section, a reasonable amount of funds which in the judgment of the Commissioner may be needed to provide immunity or indemnity shall be segregated and reserved from the assets of the insurer as security for the payment of indemnity until such time as all applicable statutes of limitation shall have run, and all actual or threatened actions against the receiver or any employee shall have been completely and finally resolved, and all obligations of the insurer and the Commissioner under this Code section shall have been satisfied.
(4) In lieu of the segregation and reserving of funds, the Commissioner may, in his or her discretion, obtain a surety bond or make other arrangements which will enable the Commissioner to fully secure the payment of all obligations under this Code section.
(e) If any legal action against an employee for which indemnity may be available under this Code section is settled prior to final adjudication on the merits, the insurer must pay the settlement amount on behalf of the employee or indemnify the employee for the settlement amount unless the Commissioner determines:
(1) That the claim did not arise out of or by reason of the employee's duties or employment; or
(2) That the claim was caused by the intentional or willful and wanton misconduct of the employee.
(f) In any legal action in which the receiver is a defendant, that portion of any settlement relating to the alleged act, error, or omission of the receiver shall be subject to the approval of the court before which the delinquency proceeding is pending. The court shall not approve that portion of the settlement if it determines:
(1) That the claim did not arise out of or by reason of the receiver's duties or employment; or
(2) That the claim was caused by the intentional or willful and wanton misconduct of the receiver.
(g) Nothing contained or implied in this Code section shall operate or be construed or applied to deprive the receiver or any employee of any immunity, indemnity, benefits of law, rights, or any defense otherwise available.
(a) The Commissioner may file in the superior court of the county in which the insurer is domiciled or in the Superior Court of Fulton County a petition alleging, with respect to a domestic insurer:
(1) That there exists any grounds that would justify a court order for a formal delinquency proceeding against an insurer under this chapter;
(2) That the interests of policyholders, creditors, or the public will be endangered by delay; and
(3) The contents of an order deemed necessary by the Commissioner.
(b) Upon a filing under subsection (a) of this Code section, the court may issue forthwith, ex parte, and without a hearing the requested order which shall direct the Commissioner to take possession and control of all or a part of the property, books, accounts, documents, and other records of an insurer and of the premises occupied by it for transaction of its business and until further order of the court, enjoin the insurer and its officers, managers, agents, and employees from disposition of its property and from the transaction of its business except with the written consent of the Commissioner.
(c) The court shall specify in the order what its duration shall be which shall be such time as the court deems necessary for the Commissioner to ascertain the condition of the insurer. On motion of either party or on its own motion, the court may from time to time hold such hearings as it deems desirable after such notice as it deems appropriate and may extend, shorten, or modify the terms of the seizure order. The court shall vacate the seizure order if the Commissioner fails to commence a formal proceeding under this chapter after having had a reasonable opportunity to do so. An order of the court pursuant to a formal proceeding under this chapter shall ipso facto vacate the seizure order.
(d) Entry of a seizure order under this Code section shall not constitute an anticipatory breach of any contract of the insurer.
(e) An insurer subject to an ex parte order under this Code section may petition the court at any time after the issuance of such order for a hearing and review of the order. The court shall hold such a hearing and review not more than 15 days after the request. A hearing under this subsection may be held privately in chambers and it shall be so held if the insurer proceeded against so requests.
(f) If, at any time after the issuance of such an order, it appears to the court that any person whose interest is or will be substantially affected by the order did not appear at the hearing and has not been served, the court may order that notice be given. An order that notice be given shall not stay the effect of any order previously issued by the court.
In all proceedings and judicial reviews thereof under Code Section 33-37-9, all records of the insurer, other documents, and all Department of Insurance files and court records and papers, so far as they pertain to or are a part of the record of the proceedings, shall be and remain confidential except as is necessary to obtain compliance therewith, unless and until the court, after hearing arguments from the parties in chambers, shall order otherwise or unless the insurer requests that the matter be made public. Until such court order, all papers filed with the clerk of the superior court shall be held by him in a confidential file.
The Commissioner may apply by petition to the Superior Court of Fulton County for an order authorizing him to rehabilitate a domestic insurer or an alien insurer domiciled in this state on any one or more of the following grounds:
(1) The insurer is in such condition that the further transaction of business would be hazardous financially to its policyholders, creditors, or the public;
(2) There is reasonable cause to believe that there has been embezzlement from the insurer, wrongful sequestration or diversion of the insurer's assets, forgery or fraud affecting the insurer, or other illegal conduct in, by, or with respect to the insurer that if established would endanger assets in an amount threatening the solvency of the insurer;
(3) The insurer has failed to remove any person who in fact has executive authority in the insurer, whether an officer, manager, general agent, employee, or other person, if the person has been found after notice and hearing by the Commissioner to be dishonest or untrustworthy in a way affecting the insurer's business;
(4) Control of the insurer, whether by stock ownership or otherwise, and whether direct or indirect, is in a person or persons found after notice and hearing to be untrustworthy;
(5) Any person who in fact has executive authority in the insurer, whether an officer, manager, general agent, director, trustee, employee, or other person, has refused to be examined under oath by the Commissioner concerning its affairs, whether in this state or elsewhere, and after reasonable notice of the fact, the insurer has failed promptly and effectively to terminate the employment and status of the person and all his influence on management;
(6) After demand by the Commissioner under Code Section 33-2-11 or under this chapter, the insurer has failed promptly to make available for examination any of its own property, books, accounts, documents, or other records or those of any subsidiary or related company within the control of the insurer or those of any person having executive authority in the insurer so far as they pertain to the insurer;
(7) Without first obtaining the written consent of the Commissioner, the insurer has transferred, or attempted to transfer, in a manner contrary to Chapter 13 of this title, substantially its entire property or business or has entered into any transaction the effect of which is to merge, consolidate, or reinsure substantially its entire property or business in or with the property or business of any other person;
(8) The insurer or its property has been or is the subject of an application for the appointment of a receiver, trustee, custodian, conservator, or sequestrator, or similar fiduciary of the insurer or its property otherwise than as authorized under the insurance laws of this state, and such appointment has been made or is imminent, and such appointment might oust the courts of this state of jurisdiction or might prejudice orderly delinquency proceedings under this chapter;
(9) Within the previous four years the insurer has willfully violated its charter or articles of incorporation, its bylaws, any provision of this title, or any valid order of the Commissioner;
(10) The insurer has failed to pay within 60 days after due date any obligation to any state or any subdivision thereof or any judgment entered in any state, if the court in which such judgment was entered had jurisdiction over such subject matter except that such nonpayment shall not be a ground until 60 days after any good faith effort by the insurer to contest the obligation has been terminated, whether it is before the Commissioner or in the courts, or the insurer has systematically attempted to compromise or renegotiate previously agreed settlements with its creditors on the ground that it is financially unable to pay its obligations in full;
(11) The insurer has failed to file its annual report or other financial report required by statute within the time allowed by law and, after written demand by the Commissioner, has failed to give an adequate explanation immediately; or
(12) The board of directors or the holders of a majority of the shares entitled to vote or a majority of those individuals entitled to the control of the insurer request or consent to rehabilitation under this chapter.
(a) An order to rehabilitate the business of a domestic insurer, or an alien insurer domiciled in this state, shall appoint the Commissioner and his successors in office the rehabilitator and shall direct the rehabilitator forthwith to take possession of the assets of the insurer and to administer them under the general supervision of the court. The filing or recording of the order with the clerk of the superior court or recorder of deeds of the county in which the principal business of the company is conducted, or the county in which its principal office or place of business is located, shall impart the same notice as a deed, bill of sale, or other evidence of title duly filed or recorded with that recorder of deeds would have imparted. The order to rehabilitate the insurer shall by operation of law vest title to all assets of the insurer in the rehabilitator.
(b) Any order issued under this Code section shall require accountings to the court by the rehabilitator. Accountings shall be at such intervals as the court specifies in its order, but no less frequently than semiannually. Each accounting shall include a report concerning the rehabilitator's opinion as to the likelihood that a plan under subsection (d) of Code Section 33-37-13 will be prepared by the rehabilitator and the timetable for doing so.
(c) Entry of an order of rehabilitation shall not constitute an anticipatory breach of any contracts of the insurer nor shall it be grounds for retroactive revocation or retroactive cancellation of any contracts of the insurer, unless such revocation or cancellation is done by the rehabilitator pursuant to Code Section 33-37-13.
(a) The Commissioner as rehabilitator may appoint one or more special deputies who shall have all the powers and responsibilities of the rehabilitator granted under this Code section, and the Commissioner may employ such clerks and assistants as deemed necessary. The compensation of the special deputy, clerks, and assistants and all expenses of taking possession of the insurer and of conducting the proceedings shall be fixed by the Commissioner with the approval of the court and shall be paid out of the funds or assets of the insurer. The persons appointed under this Code section shall serve at the pleasure of the Commissioner. The Commissioner, as rehabilitator, may, with the approval of the court, appoint an advisory committee of policyholders, claimants, or other creditors including guaranty associations should such a committee be deemed necessary. Such committee shall serve at the pleasure of the Commissioner and shall serve without compensation other than reimbursement for reasonable travel and per diem living expenses. No other committee of any nature shall be appointed by the Commissioner or the court in rehabilitation proceedings conducted under this chapter.
(b) In the event that the property of the insurer does not contain sufficient cash or liquid assets to defray the costs incurred, the Commissioner may advance the costs so incurred out of any appropriation for the maintenance of the Department of Insurance. Any amounts so advanced for expenses of administration shall be repaid to the Commissioner for the use of the Department of Insurance out of the first available money of the insurer.
(c) The rehabilitator may take such action as he deems necessary or appropriate to reform and revitalize the insurer. He shall have all the powers of the directors, officers, and managers whose authority shall be suspended, except as they are redelegated by the rehabilitator. He shall have full power to direct and manage, to hire and discharge employees subject to any contract rights they may have, and to deal with the property and business of the insurer.
(d) If it appears to the rehabilitator that there has been criminal or tortious conduct, or breach of any contractual or fiduciary obligation detrimental to the insurer by any officer, manager, agent, broker, employee, or other person, he may pursue all appropriate legal remedies on behalf of the insurer.
(e) If the rehabilitator determines that reorganization, consolidation, conversion, reinsurance, merger, or other transformation of the insurer is appropriate, he shall prepare a plan to effect such changes. Upon application of the rehabilitator for approval of the plan, and after such notice and hearings as the court may prescribe, the court may either approve or disapprove the plan proposed, or may modify it and approve it as modified. Any plan approved under this Code section shall be, in the judgment of the court, fair and equitable to all parties concerned. If the plan is approved, the rehabilitator shall carry out the plan. In the case of a life insurer, the plan proposed may include the imposition of liens upon the policies of the company if all rights of shareholders are first relinquished. A plan for a life insurer may also propose imposition of a moratorium upon loan and cash surrender rights under policies for such period and to such an extent as may be necessary.
(f) The rehabilitator shall have the power under Code Sections 33-37-25 and 33-37-26 to avoid fraudulent transfers.
(a) Any court in this state before which any action or proceeding in which the insurer is a party, or is obligated to defend a party, is pending when a rehabilitation order against the insurer is entered shall stay the action or proceeding for 90 days and such additional time as is necessary for the rehabilitator to obtain proper representation and prepare for further proceedings. The rehabilitator shall take such action respecting the pending litigation as he deems necessary in the interests of justice and for the protection of creditors, policyholders, and the public. The rehabilitator shall immediately consider all litigation pending outside this state and shall petition the courts having jurisdiction over that litigation for stays whenever necessary to protect the estate of the insurer.
(b) No statute of limitations or defense of laches shall run with respect to any action by or against an insurer between the filing of a petition for appointment of a rehabilitator for that insurer and the order granting or denying that petition. Any action against the insurer that might have been commenced when the petition was filed may be commenced for at least 60 days after the order of rehabilitation is entered or the petition is denied. The rehabilitator may, upon an order for rehabilitation, within one year or such other longer time as applicable law may permit, institute an action or proceeding on behalf of the insurer upon any cause of action against which the period of limitation fixed by applicable law has not expired at the time of the filing of the petition upon which such order is entered.
(c) Any guaranty association or foreign guaranty association covering life or health insurance or annuities shall have standing to appear in any court proceeding concerning the rehabilitation of a life or health insurer if such association is or may become liable to act as a result of the rehabilitation.
(a) Whenever the Commissioner believes further attempts to rehabilitate an insurer would substantially increase the risk of loss to creditors, policyholders, or the public or would be futile the Commissioner may petition the superior court for an order of liquidation. A petition under this subsection shall have the same effect as a petition under Code Section 33-37-16. The superior court shall permit the directors of the insurer to take such actions as are reasonably necessary to defend against the petition and may order payment from the estate of the insurer or such costs and other expenses of defense as justice may require.
(b) The protection of the interests of insureds, claimants, and the public requires the timely performance of all insurance policy obligations. If the payment of policy obligations is suspended in substantial part for a period of six months at any time after the appointment of the rehabilitator and the rehabilitator has not filed an application for approval of a plan under subsection (d) of Code Section 33-37-13, the rehabilitator shall petition the court for an order of liquidation on grounds of insolvency.
(c) The rehabilitator may at any time petition the superior court for an order terminating rehabilitation of an insurer. The court shall also permit the directors of the insurer to petition the court for an order terminating rehabilitation of the insurer and may order payment from the estate of the insurer of such costs and other expenses of such petition as justice may require. If the superior court finds that rehabilitation has been accomplished and that grounds for rehabilitation under Code Section 33-37-11 no longer exist, it shall order that the insurer be restored to possession of its property and the control of the business. The superior court may also make that finding and issue that order at any time upon its own motion.
The Commissioner may petition the superior court for an order directing him to liquidate a domestic insurer or an alien insurer domiciled in this state on the basis:
(1) Of any ground for an order of rehabilitation as specified in Code Section 33-37-11, whether or not there has been a prior order directing the rehabilitation of the insurer;
(2) That the insurer is insolvent; or
(3) That the insurer is in such condition that the further transaction of business would be hazardous, financially or otherwise, to its policyholders, its creditors, or the public.
(a) An order to liquidate the business of a domestic insurer shall appoint the Commissioner and his successors in office liquidator and shall direct the liquidator forthwith to take possession of the assets of the insurer and to administer them under the general supervision of the court. The liquidator shall be vested by operation of law with the title to all of the property, contracts, and rights of action, and all of the books and records of the insurer ordered liquidated, wherever located, as of the entry of the final order of liquidation. The filing or recording of the order with the clerk of the superior court and the recorder of deeds of the county in which its principal office or place or business is located, or, in the case of real estate, with the recorder of deeds of the county where the property is located, shall impart the same notice as a deed, bill of sale, or other evidence of title duly filed or recorded with that recorder of deeds would have imparted.
(b) Upon issuance of the order, the rights and liabilities of any such insurer and of its creditors, policyholders, shareholders, members, and all other persons interested in its estate shall become fixed as of the date of entry of the order of liquidation, except as provided in Code Sections 33-37-18 and 33-37-36.
(c) An order to liquidate the business of an alien insurer domiciled in this state shall be in the same terms and have the same legal effect as an order to liquidate a domestic insurer, except that the assets and the business in the United States shall be the only assets and business included therein.
(d) At the time of petitioning for an order of liquidation, or at any time thereafter, the Commissioner, after making appropriate findings of an insurer's insolvency, may petition the court for a judicial declaration of such insolvency. After providing such notice and hearing as it deems proper, the court may make the declaration.
(e) Any order issued under this Code section shall require financial reports to the court by the liquidator. Financial reports shall include at a minimum the assets and liabilities of the insurer and all funds received or disbursed by the liquidator during the current period. Financial reports shall be filed within one year of the liquidation order and at least annually thereafter.
(f)(1) Within five days after the initiation of an appeal of an order of liquidation, which order has not been stayed, the Commissioner shall present for the court's approval a plan for the continued performance of the defendant company's policy claims obligations, including the duty to defend insureds under liability insurance policies, during the pendency of an appeal. Such plan shall provide for the continued performance and payment of policy claims obligations in the normal course of events, notwithstanding the grounds alleged in support of the order of liquidation including the ground of insolvency. In the event the defendant company's financial condition will not, in the judgment of the Commissioner, support the full performance of all policy claims obligations during the appeal pendency period, the plan may prefer the claims of certain policyholders and claimants over creditors and interested parties as well as other policyholders and claimants as the Commissioner finds to be fair and equitable considering the relative circumstances of such policyholders and claimants. The court shall examine the plan submitted by the Commissioner and if it finds the plan to be in the best interests of the parties, the court shall approve the plan. No action shall lie against the Commissioner or any of his or her deputies, agents, clerks, assistants, or attorneys by any party based on preference in an appeal pendency plan approved by the court.
(2) The appeal pendency plan shall not supersede or affect the obligations of any insurance guaranty association.
(3) Any such plans shall provide for equitable adjustments to be made by the liquidator to any distributions of assets to guaranty associations, in the event that the liquidator pays claims from assets of the estate, which would otherwise be the obligations of any particular guaranty association but for the appeal of the order of liquidation, such that all guaranty associations equally benefit on a pro rata basis from the assets of the estate. Further, in the event an order of liquidation is set aside upon any appeal, the company shall not be released from delinquency proceedings unless and until all funds advanced by any guaranty association, including reasonable administrative expenses in connection therewith relating to obligations of the company, shall be repaid in full, together with interest at the judgment rate of interest or unless an arrangement for repayment thereof has been made with the consent of all applicable guaranty associations.
(a) All policies, including bonds and other noncancelable business, other than life or accident and sickness insurance or annuities, in effect at the time of issuance of an order of liquidation shall continue in force only for the lesser of:
(1) A period of 30 days from the date of entry of the liquidation orders;
(2) The expiration of the policy coverage;
(3) The date when the insured has replaced the insurance coverage with equivalent insurance in another insurer or otherwise terminated the policy;
(4) The date on which the liquidator effects a transfer of the policy obligation pursuant to paragraph (9) or (10) of subsection (a) of Code Section 33-37-20; or
(5) The date proposed by the liquidator and approved by the court to cancel coverage.
(b) An order of liquidation under Code Section 33-37-17 shall terminate coverages at the time specified in subsection (a) of this Code section for purposes of any other statute.
(c) Policies of life or accident and sickness insurance or annuities shall continue in force for such period and under such terms as is provided for by any applicable guaranty association or foreign guaranty association.
(d) Policies of life or accident and sickness insurance or annuities or any period or coverage of such policies not covered by a guaranty association or foreign guaranty association shall terminate under subsections (a) and (b) of this Code section.
The Commissioner may petition for an order dissolving the corporate existence of a domestic insurer or the United States branch of an alien insurer domiciled in this state at the time he applies for a liquidation order. The court shall order dissolution of the corporation upon petition by the Commissioner upon or after the granting of a liquidation order. If the dissolution has not previously been ordered, it shall be effected by operation of law upon the discharge of the liquidator if the insurer is insolvent but may be ordered by the court upon the discharge of the liquidator if the insurer is under a liquidation order for some other reason.
(a) The liquidator shall have the power:
(1) To appoint a special deputy or deputies to act for him under this chapter and to determine his reasonable compensation. The special deputy shall have all powers of the liquidator granted by this Code section. The special deputy shall serve at the pleasure of the liquidator;
(2) To employ employees and agents, actuaries, accountants, appraisers, consultants, and such other personnel as he may deem necessary to assist in the liquidation;
(3) To appoint, with the approval of the court, an advisory committee of policyholders, claimants, or other creditors including guaranty associations should such a committee be deemed necessary. Such committee shall serve at the pleasure of the Commissioner and shall serve without compensation other than reimbursement for reasonable travel and per diem living expenses. No other committee of any nature shall be appointed by the Commissioner or the court in liquidation proceedings conducted under this chapter;
(4) To fix the reasonable compensation of employees and agents, actuaries, accountants, appraisers, and consultants with the approval of the court;
(5) To pay reasonable compensation to persons appointed and to defray from the funds or assets of the insurer all expenses of taking possession of, conserving, conducting, liquidating, disposing of, or otherwise dealing with the business and property of the insurer. In the event that the property of the insurer does not contain sufficient cash or liquid assets to defray the costs incurred, the Commissioner may advance the costs so incurred out of any appropriation for the maintenance of the Department of Insurance. Any amounts so advanced for expenses of administration shall be repaid to the Commissioner for the use of the Department of Insurance out of the first available moneys of the insurer;
(6) To hold hearings, to subpoena witnesses to compel their attendance, to administer oaths, to examine any person under oath, and to compel any person to subscribe to his testimony after it has been correctly reduced to writing and, in connection therewith, to require the production of any books, papers, records, or other documents which he deems relevant to the inquiry;
(7) To audit the books and records of all agents of the insurer insofar as those records relate to the business activities of the insurer;
(8) To collect all debts and moneys due and claims belonging to the insurer, wherever located, and for this purpose:
(A) To institute timely action in other jurisdictions, in order to forestall garnishment and attachment proceedings against such debts;
(B) To do such other acts as are necessary or expedient to collect, conserve, or protect its assets or property, including the power to sell, compound, compromise, or assign debts for purposes of collection upon such terms and conditions as he deems best; and
(C) To pursue any creditor's remedies available to enforce his claims;
(9) To conduct public and private sales of the property of the insurer;
(10) To use assets of the estate of an insurer under a liquidation order to transfer policy obligations to a solvent assuming insurer, if the transfer can be arranged without prejudice to applicable priorities under Code Section 33-37-41;
(11) To acquire, hypothecate, encumber, lease, improve, sell, transfer, abandon, or otherwise dispose of or deal with any property of the insurer at its market value or upon such terms and conditions as are fair and reasonable. He shall also have power to execute, acknowledge, and deliver any and all deeds, assignments, releases, and other instruments necessary or proper to effectuate any sale of property or other transaction in connection with the liquidation;
(12) To borrow money on the security of the insurer's assets or without such security and to execute and deliver all documents necessary to that transaction for the purpose of facilitating the liquidation. Any such funds borrowed may be repaid as an administrative expense and have priority over any other claims in Class 1 under the priority of distribution;
(13) To enter into such contracts as are necessary to carry out the order to liquidate and to affirm or disavow any contracts to which the insurer is a party;
(14) To continue to prosecute and to institute in the name of the insurer or in his own name any and all suits and other legal proceedings, in this state or elsewhere, and to abandon the prosecution of claims he deems unprofitable to pursue further. If the insurer is dissolved under Code Section 33-37-19, he shall have the power to apply to any court in this state or elsewhere for leave to substitute himself for the insurer as plaintiff;
(15) To prosecute any action which may exist in behalf of the creditors, members, policyholders, or shareholders of the insurer against any officer of the insurer or any other person;
(16) To remove any or all records and property of the insurer to the offices of the Commissioner or to such other place as may be convenient for the purposes of efficient and orderly execution of the liquidation. Guaranty associations and foreign guaranty associations shall have such reasonable access to the records of the insurer as is necessary for them to carry out their statutory obligations;
(17) To deposit in one or more banks in this state such sums as are required for meeting current administration expenses and dividend distributions;
(18) To invest all sums not currently needed, unless the court orders otherwise;
(19) To file any necessary documents for record in the office of the clerk of the superior court or any other recorder of deeds or record office in this state or elsewhere where property of the insurer is located;
(20) To assert all defenses available to the insurer as against third persons, including statutes of limitation, statutes of frauds, and the defense of usury. A waiver of any defense by the insurer after a petition in liquidation has been filed shall not bind the liquidator. Whenever a guaranty association or foreign guaranty association has an obligation to defend any suit, the liquidator shall give precedence to such obligation and may defend only in the absence of a defense by such guaranty associations;
(21) To exercise and enforce all the rights, remedies, and powers of any creditor, shareholder, policyholder, or member, including any power to avoid any transfer or lien that may be given by the general law and that is not included within Code Sections 33-37-25 through 33-37-27;
(22) To intervene in any proceeding wherever instituted that might lead to the appointment of a receiver or trustee and to act as the receiver or trustee whenever the appointment is offered;
(23) To enter into agreements with any receiver or commissioner of any other state relating to the rehabilitation, liquidation, conservation, or dissolution of an insurer doing business in both states; and
(24) To exercise all powers now held or hereafter conferred upon receivers by the laws of this state not inconsistent with the provisions of this chapter.
(b)(1) If a company placed in liquidation issued liability policies on a claims made basis, which provided an option to purchase an extended period to report claims, then the liquidator may make available to holders of such policies, for a charge, an extended period in which to report claims. The extended reporting period shall be made available only to those insureds who are unable to secure substitute coverage at a cost not in excess of that charged by the liquidator. The extended period made available by the liquidator shall begin upon termination of any extended period to report claims in the basic policy and shall end at the earlier of the final date for filing of claims in the liquidation proceeding or 18 months from the order of liquidation.
(2) The extended period to report claims made available by the liquidator shall be subject to the terms of the policy to which it relates. The liquidator shall make available such extended period within 60 days after the order of liquidation at a charge to be determined by the liquidator subject to approval of the court. Such offer shall be deemed rejected unless the offer is accepted in writing and the charge is paid within 90 days after the order of liquidation. No commissions, premium taxes, assessments, or other fees shall be due on the charge pertaining to the extended period to report claims.
(c) The enumeration, in this Code section, of the powers and authority of the liquidator shall not be construed as a limitation upon him, nor shall it exclude in any manner his right to do such other acts not specifically enumerated or otherwise provided, as may be necessary or appropriate for the accomplishment of or in aid of the purpose of liquidation.
(d) Notwithstanding the powers of the liquidator as stated in subsections (a) and (b) of this Code section, the liquidator shall have no obligation to defend claims or to continue to defend claims subsequent to the entry of a liquidation order.
(a) Unless the court otherwise directs, the liquidator shall give or cause to be given notice of the liquidation order as soon as possible:
(1) By first-class mail and either by telegram or telephone to the commissioner of insurance of each jurisdiction in which the insurer is doing business;
(2) By first-class mail to any guaranty association or foreign guaranty association which is or may become obligated as a result of the liquidation;
(3) By first-class mail to all insurance agents of the insurer;
(4) By first-class mail to all persons known or reasonably expected to have claims against the insurer, including all policyholders, at their last known address as indicated by the records of the insurer; and
(5) By publication in a newspaper of general circulation in the county in which the insurer has its principal place of business and in such other locations as the liquidator deems appropriate.
(b) Notice to potential claimants under subsection (a) of this Code section shall require claimants to file with the liquidator their claims together with proper proofs thereof under Code Section 33-37-35, on or before a date the liquidator shall specify in the notice. Although an earlier date may be set by the liquidator, the last day to file claims shall be no later than 18 months following the order of liquidation. The liquidator need not require persons claiming cash surrender values or other investment values in life insurance and annuities to file a claim. All claimants shall have a duty to keep the liquidator informed of any changes of address.
(c)(1) Notice under subsection (a) of this Code section to agents of the insurer and to potential claimants who are policyholders shall include, where applicable, notice that coverage by state guaranty associations may be available for all or part of policy benefits in accordance with applicable state guaranty laws.
(2) The liquidator shall promptly provide to the guaranty associations such information concerning the identities and addresses of such policyholders and their policy coverages as may be within the liquidator's possession or control and otherwise cooperate with guaranty associations to assist them in providing to such policyholders timely notice of the guaranty associations' coverage of policy benefits, including, as applicable, coverage of claims and continuation or termination of coverages.
(d) If notice is given in accordance with this Code section, the distribution of assets of the insurer under this chapter shall be conclusive with respect to all claimants, whether or not they received notice.
(a) Every person who receives notice in the form prescribed in Code Section 33-37-21 that an insurer which he represents as an agent is the subject of a liquidation order, shall within 30 days of such notice provide to the liquidator, in addition to the information he may be required to provide pursuant to Code Section 33-37-6, the information in the agent's records related to any policy issued by the insurer through the agent and, if the agent is a general agent, the information in the general agent's record related to any policy issued by the insurer through an agent under contract to him, including the name and address of such subagent. A policy shall be deemed issued through an agent if the agent has a property interest in the expiration of the policy or if the agent has had in his possession a copy of the declarations of the policy at any time during the life of the policy, except where the ownership of the expiration of the policy has been transferred to another.
(b) Any agent failing to provide information to the liquidator as required in subsection (a) of this Code section may be subject to payment of a penalty of not more than $1,000.00 and may have his licenses suspended, said penalty to be imposed after a hearing held by the Commissioner.
(a) Upon issuance of an order appointing a liquidator of a domestic insurer or of an alien insurer domiciled in this state, no action at law or equity or in arbitration shall be brought against the insurer or liquidator, whether in this state or elsewhere, nor shall any such existing actions be maintained or further presented after issuance of such order. The courts of this state shall give full faith and credit to injunctions against the liquidator or the company or the continuation of existing actions against the liquidator or the company, when such injunctions are included in an order to liquidate an insurer issued pursuant to corresponding provisions in other states. Whenever, in the liquidator's judgment, protection of the estate of the insurer necessitates intervention in an action against the insurer that is pending outside this state, he may intervene in the action. The liquidator may defend any action in which he intervenes under this Code section at the expense of the estate of the insurer.
(b) The liquidator may, upon or after an order for liquidation, within two years or such other longer time as applicable law may permit, institute an action or proceeding on behalf of the estate of the insurer upon any cause of action against which the period of limitation fixed by applicable law has not expired at the time of the filing of the petition upon which such order is entered. Where, by any agreement, a period of limitation is fixed for instituting a suit or proceeding upon any claim, or for filing any claim, proof of claim, proof of loss, demand, notice, or the like or where in any proceeding, judicial or otherwise, a period of limitation is fixed, either in the proceeding or by applicable law, for taking any action, filing any claim or pleading, or doing any act and where in any such case the period had not expired at the date of the filing of the petition, the liquidator may, for the benefit of the estate, take any such action or do any such act required of or permitted to the insurer within a period of 180 days subsequent to the entry of an order for liquidation or within such further period as is shown to the satisfaction of the court not to be unfairly prejudicial to the other party.
(c) No statute of limitation or defense of laches shall run with respect to any action against an insurer between the filing of a petition for liquidation against an insurer and the denial of the petition. Any action against the insurer that might have been commenced when the petition was filed may be commenced for at least 60 days after the petition is denied.
(d) Any guaranty association or foreign guaranty association shall have standing to appear in any court proceeding concerning the liquidation of an insurer if such association is or may become liable to act as a result of the liquidation.
(a) As soon as practicable after the liquidation order but not later than 120 days thereafter, the liquidator shall prepare in duplicate a list of the insurer's assets. The list shall be amended or supplemented from time to time as the liquidator may determine. One copy shall be filed in the office of the clerk of the superior court and one copy shall be retained for the liquidator's files. All amendments and supplements shall be similarly filed.
(b) The liquidator shall reduce the assets to a degree of liquidity that is consistent with the effective execution of the liquidation.
(c) A submission to the court for disbursement of assets in accordance with Code Section 33-37-33 fulfills the requirements of subsection (a) of this Code section.
(a) Every transfer made or suffered and every obligation incurred by an insurer within one year prior to the filing of a successful petition for rehabilitation or liquidation under this chapter is fraudulent as to then existing and future creditors if made or incurred without fair consideration or with actual intent to hinder, delay, or defraud either existing or future creditors. A transfer made or an obligation incurred by an insurer ordered to be rehabilitated or liquidated under this chapter which is fraudulent under this Code section may be avoided by the receiver, except as to a person who in good faith is a purchaser, lienor, or obligee for a present fair equivalent value, and except that any purchaser, lienor, or obligee, who in good faith has given a consideration less than fair for such transfer, lien, or obligation, may retain the property, lien, or obligation as security for repayment. The court may, on due notice, order any such transfer or obligation to be preserved for the benefit of the estate, and, in that event, the receiver shall succeed to and may enforce the rights of the purchaser, lienor, or obligee.
(b)(1) A transfer of property other than real property shall be deemed to be made or suffered when it becomes so far perfected that no subsequent lien obtainable by legal or equitable proceedings on a simple contract could become superior to the rights of the transferee under subsection (c) of Code Section 33-37-27.
(2) A transfer of real property shall be deemed to be made or suffered when it becomes so far perfected that no subsequent bona fide purchaser from the insurer could obtain rights superior to the rights of the transferee.
(3) A transfer which creates an equitable lien shall not be deemed to be perfected if there are available means by which a legal lien could be created.
(4) Any transfer not perfected prior to the filing of a petition for liquidation shall be deemed to be made immediately before the filing of the successful petition.
(5) The provisions of this subsection apply whether or not there are or were creditors who might have obtained any liens or persons who might have become bona fide purchasers.
(c) Any transaction of the insurer with a reinsurer shall be deemed fraudulent and may be avoided by the receiver under subsection (a) of this Code section if:
(1) The transaction consists of the termination, adjustment, or settlement of a reinsurance contract in which the reinsurer is released from any part of its duty to pay the originally specified share of losses that had occurred prior to the time of the transaction, unless the reinsurer gives a present fair equivalent value for the release; and
(2) Any part of the transaction took place within one year prior to the date of filing of the petition through which the receivership was commenced.
(d) Every person receiving any property from the insurer or any benefit thereof which is a fraudulent transfer under subsection (a) of this Code section shall be personally liable therefor and shall be bound to account to the liquidator.
(a) After a petition for rehabilitation or liquidation has been filed, a transfer of any of the real property of the insurer made to a person acting in good faith shall be valid against the receiver if made for a present fair equivalent value or, if not made for a present fair equivalent value, then to the extent of the present consideration actually paid therefor, for which amount the transferee shall have a lien on the property so transferred. The commencement of a proceeding in rehabilitation or liquidation shall be constructive notice upon the recording of a copy of the petition for or order of rehabilitation or liquidation with the recorder of deeds in the county where any real property in question is located. The exercise by a court of the United States or any state or jurisdiction to authorize or effect a judicial sale of real property of the insurer within any county in any state shall not be impaired by the pendency of such a proceeding unless the copy is recorded in the county prior to the consummation of the judicial sale.
(b) After a petition for rehabilitation or liquidation has been filed and before either the receiver takes possession of the property of the insurer or an order of rehabilitation or liquidation is granted:
(1) A transfer of any of the property of the insurer, other than real property, made to a person acting in good faith shall be valid against the receiver if made for a present fair equivalent value or, if not made for a present fair equivalent value, then to the extent of the present consideration actually paid therefor, for which amount the transferee shall have a lien on the property so transferred;
(2) A person indebted to the insurer or holding property of the insurer may, if acting in good faith, pay the indebtedness or deliver the property, or any part thereof, to the insurer or upon his order, with the same effect as if the petition were not pending;
(3) A person having actual knowledge of the pending rehabilitation or liquidation shall be deemed not to act in good faith; and
(4) A person asserting the validity of a transfer under this Code section shall have the burden of proof. Except as elsewhere provided in this Code section, no transfer by or on behalf of the insurer after the date of the petition for liquidation by any person other than the liquidator shall be valid against the liquidator.
(c) Every person receiving any property from the insurer or any benefit thereof which is a fraudulent transfer under subsection (a) of this Code section shall be personally liable therefor and shall be bound to account to the liquidator.
(d) Nothing in this chapter shall impair the negotiability of currency or negotiable instruments.
The receiver for an insurer shall not void any transfer of, or any obligation to transfer, money or any other property arising under or in connection with any federal home loan bank security agreement; any pledge, security, collateral, or guarantee agreement; or any other similar arrangement or credit enhancement relating to a federal home loan bank security agreement made in the ordinary course of business and in compliance with the applicable federal home loan bank agreement. However, a transfer may be avoided under this Code section if the transfer was made with intent to hinder, delay, or defraud the insurer, the receiver for the insurer, or existing or future creditors. This Code section shall not affect a receiver's rights regarding advances to an insurer in delinquency proceedings pursuant to 12 C.F.R. Section 1266.4.
(a)(1) A preference is a transfer of any of the property of an insurer to or for the benefit of a creditor for or on account of an antecedent debt made or suffered by the insurer within one year before the filing of a successful petition for liquidation under this chapter, the effect of which transfer may be to enable the creditor to obtain a greater percentage of this debt than another creditor of the same class would receive. If a liquidation order is entered while the insurer is already subject to a rehabilitation order, then such transfers shall be deemed preferences if made or suffered within one year before the filing of the successful petition for rehabilitation or within two years before the filing of the successful petition for liquidation, whichever time is shorter.
(2) Any preference may be avoided by the liquidator if:
(A) The insurer was insolvent at the time of the transfer;
(B) The transfer was made within four months before the filing of the petition;
(C) The creditor receiving it or to be benefited thereby or his agent acting with reference thereto had, at the time when the transfer was made, reasonable cause to believe that the insurer was insolvent or was about to become insolvent; or
(D) The creditor receiving it was an officer, any employee, attorney, or other person who was in fact in a position of comparable influence on the insurer to an officer whether or not he held such position or any shareholder holding directly or indirectly more than 5 percent of any class of any equity security issued by the insurer or any other person, firm, corporation, association, or aggregation of persons with whom the insurer did not deal at arm's length.
(3) Where the preference is voidable, the liquidator may recover the property or, if it has been converted, its value from any person who has received or converted the property, except where a bona fide purchaser or lienor has given less than fair equivalent value he shall have a lien upon the property to the extent of the consideration actually given by him. Where a preference by way of lien or security title is voidable, the court may on due notice order the lien or title to be preserved for the benefit of the estate in which event the lien or title shall pass to the liquidator.
(b)(1) A transfer of property other than real property shall be deemed to be made or suffered when it becomes so far perfected that no subsequent lien obtainable by legal or equitable proceedings on a simple contract could become superior to the rights of the transferee.
(2) A transfer of real property shall be deemed to be made or suffered when it becomes so far perfected that no subsequent bona fide purchaser from the insurer could obtain rights superior to the rights of the transferee.
(3) A transfer which creates an equitable lien shall not be deemed to be perfected if there are available means by which a legal lien could be created.
(4) A transfer not perfected prior to the filing of a petition for liquidation shall be deemed to be made immediately before the filing of the successful petition.
(5) The provisions of this subsection apply whether or not there are or were creditors who might have obtained liens or persons who might have become bona fide purchasers.
(c)(1) A lien obtainable by legal or equitable proceedings upon a simple contract is one arising in the ordinary course of such proceedings upon the entry or docketing of a judgment or decree or upon attachment, garnishment, execution, or like process whether before, upon, or after judgment or decree and whether before or upon levy. It does not include liens which under applicable law are given a special priority over other liens which are prior in time.
(2) A lien obtainable by legal or equitable proceedings could become superior to the rights of a transferee, or a purchaser could obtain rights superior to the rights of a transferee within the meaning of subsection (b) of this Code section if such consequences would follow only from the lien or purchase itself or from the lien or purchase followed by any step wholly within the control of the respective lienholder or purchaser with or without the aid of ministerial action by public officials. Such a lien could not, however, become superior and such a purchase could not create superior rights for the purpose of subsection (b) of this Code section through any acts subsequent to the obtaining of such a lien or subsequent to such a purchase which require the agreement or concurrence of any third party or which require any further judicial action or ruling.
(d) A transfer of property for or on account of a new and contemporaneous consideration which is deemed under subsection (b) of this Code section to be made or suffered after the transfer because of delay in perfecting it does not thereby become a transfer for or on account of an antecedent debt if any acts required by the applicable law to be performed in order to perfect the transfer as against liens or bona fide purchasers' rights are performed within 21 days or any period expressly allowed by the law, whichever is less. A transfer to secure a future loan, if such a loan is actually made, or a transfer which becomes security for a future loan shall have the same effect as a transfer for or on account of a new and contemporaneous consideration.
(e) If any lien deemed voidable under paragraph (2) of subsection (a) of this Code section has been dissolved by the furnishing of a bond or other obligation, the surety on which has been indemnified directly or indirectly by the transfer of or the creation of a lien upon any property of an insurer before the filing of a petition under this chapter which results in a liquidation order, the indemnifying transfer or lien shall also be deemed voidable.
(f) The property affected by any lien deemed voidable under subsections (a) and (e) of this Code section shall be discharged from such lien, and that property and any of the indemnifying property transferred to or for the benefit of a surety shall pass to the liquidator, except that the court may on due notice order any such lien to be preserved for the benefit of the estate and the court may direct that such conveyance be executed as may be proper or adequate to evidence the title of the liquidator.
(g) The superior court shall have summary jurisdiction of any proceeding by the liquidator to hear and determine the rights of any parties under this Code section. Reasonable notice of any hearing in the proceeding shall be given to all parties in interest, including the obligee of a releasing bond or other like obligation. Where an order is entered for the recovery of indemnifying property in kind or for the avoidance of an indemnifying lien, the court, upon application of any party in interest, shall in the same proceeding ascertain the value of the property or lien, and if the value is less than the amount for which the property is indemnity or than the amount of the lien, the transferee or lienholder may elect to retain the property or lien upon payment of its value, as ascertained by the court, to the liquidator within such reasonable times as the court shall fix.
(h) The liability of the surety under a releasing bond or other like obligation shall be discharged to the extent of the value of the indemnifying property recovered or the indemnifying lien nullified and voided by the liquidator or where the property is retained under subsection (g) of this Code section to the extent of the amount paid to the liquidator.
(i) If a creditor has been preferred and afterward in good faith gives the insurer further credit without security of any kind for property which becomes a part of the insurer's estate, the amount of the new credit remaining unpaid at the time of the petition may be set off against the preference which would otherwise be recoverable from him.
(j) If an insurer shall, directly or indirectly, within four months before the filing of a successful petition for liquidation under this chapter, or at any time in contemplation of a proceeding to liquidate it, pay money or transfer property to an attorney for services rendered or to be rendered, the transactions may be examined by the court on its own motion or shall be examined by the court on petition of the liquidator and shall be held valid only to the extent of a reasonable amount to be determined by the court, and the excess may be recovered by the liquidator for the benefits of the estate, provided that where the attorney is in a position of influence in the insurer or an affiliate thereof, payment of any money or the transfer of any property to the attorney for services rendered or to be rendered shall be governed by the provision of subparagraph (a)(2)(D) of this Code section.
(k)(1) Every officer, manager, employee, shareholder, member, subscriber, attorney, or any other person acting on behalf of the insurer who knowingly participates in giving any preference when he has reasonable cause to believe the insurer is or is about to become insolvent at the time of the preference shall be personally liable to the liquidator for the amount of the preference. It is permissible to infer that there is a reasonable cause to so believe if the transfer was made within four months before the date of filing of this successful petition for liquidation.
(2) Every person receiving any property from the insurer or the benefit thereof as a preference voidable under subsection (a) of this Code section shall be personally liable therefor and shall be bound to account to the liquidator.
(3) Nothing in this subsection shall prejudice any other claim by the liquidator against any person.
(a) No claims of a creditor who has received or acquired a preference, lien, conveyance, transfer, assignment, or encumbrance voidable under this chapter shall be allowed unless he surrenders the preference, lien, conveyance, transfer, assignment, or encumbrance. If the avoidance is effected by a proceeding in which a final judgment has been entered, the claim shall not be allowed unless the money is paid or the property is delivered to the liquidator within 30 days from the date of the entering of the final judgment, except that the court having jurisdiction over the liquidation may allow further time if there is an appeal or other continuation of the proceeding.
(b) A claim allowable under subsection (a) of this Code section by reason of the avoidance, whether voluntary or involuntary, a preference, lien, conveyance, transfer, assignment, or encumbrance, may be filed as an excused late filing under Code Section 33-37-34 if filed within 30 days from the date of the avoidance, or within the further time allowed by the court under subsection (a) of this Code section.
(a) In all cases of mutual debts or mutual credits between the insurer and another person in connection with any action or proceeding under this chapter, such credits and debts shall be set off and the balance only shall be allowed or paid, except as provided in subsection (b) of this Code section.
(b) No setoff shall be allowed in favor of any person where:
(1) The obligation of the insurer to the person would not, at the date of the entry of any liquidation order or otherwise, as provided in Code Section 33-37-17, entitle him to share as a claimant in the assets of the insurer;
(2) The obligation of the insurer to the person was purchased by or transferred to the person with a view of its being used as a setoff; or
(3) The obligation of the person is to pay an assessment levied against the members of a mutual insurer or against the subscribers of a reciprocal insurer or is to pay a balance upon the subscription to the capital stock of a stock insurer.
(a) As soon as practicable but not more than two years from the date of an order of liquidation under Code Section 33-37-17 of an insurer issuing assessable policies, the liquidator shall make a report to the court setting forth:
(1) The reasonable value of the assets of the insurer;
(2) The insurer's probable total liabilities;
(3) The probable aggregate amount of the assessment necessary to pay all claims of creditors and expenses in full, including expenses of administration and costs of collecting the assessment; and
(4) A recommendation as to whether or not an assessment should be made and in what amount.
(b)(1) Upon the basis of the report provided in subsection (a) of this Code section, including any supplements and amendments thereto, the superior court may levy one or more assessments against all members of the insurer who are subject to assessment.
(2) Subject to any applicable legal limits on assessability, the aggregate assessment shall be for the amount that the sum of the probable liabilities, the expenses of administration, and the estimated cost of collection of the assessment exceeds the value of existing assets, with due regard being given to assessments that cannot be collected economically.
(c) After levy of assessment under subsection (b) of this Code section, the liquidator shall issue an order directing each member who has not paid the assessment pursuant to the order to show cause why the liquidator should not pursue a judgment therefor.
(d) The liquidator shall give notice of the order to show cause by publication and by first-class mail to each member liable thereunder mailed to his last known address as it appears on the insurer's records, at least 20 days before the return date of the order to show cause.
(e)(1) If a member does not appear and serve duly verified objections upon the liquidator on or before the return date of the order to show cause under subsection (c) of this Code section, the court shall make an order adjudging the member liable for the amount of the assessment against him pursuant to subsection (c) of this Code section, together with costs, and the liquidator shall have a judgment against the member therefor.
(2) If on or before such return date the member appears and serves duly verified objections upon the liquidator, the Commissioner may hear and determine the matter or may appoint a referee to hear it and make such order as the facts warrant. In the event that the Commissioner determines that such objections do not warrant relief from assessment, the member may request the court to review the matter and vacate the order to show cause.
(f) The liquidator may enforce any order or collect any judgment under subsection (e) of this Code section by any lawful means.
The amount recoverable by the liquidator from reinsurers shall not be reduced as a result of the delinquency proceedings regardless of any provision in the reinsurance contract or other agreement. The reinsurance shall be payable under a contract or contracts reinsured by the assuming insurer on the basis of reported claims allowed by the liquidation court, without diminution because of the insolvency of the ceding insurer. Such payments shall be made directly to the ceding insurer or to its domiciliary liquidator except:
(1) Where the contract or other written agreement specifically provides for another payee of such reinsurance in the event of the insolvency of the ceding insurer; or
(2) Where the assuming insurer, with the consent of the direct insured or insureds, has assumed such policy obligations of the ceding insurer as direct obligations of the assuming insurer to the payees under such policies and in substitution for the obligation of the ceding insurer to such payees.
(a)(1) For purposes of this Code section, “guaranty association” means the Georgia Life and Health Insurance Guaranty Association created by Chapter 38 of this title or any foreign guaranty association as defined in paragraph (10) of Code Section 33-37-3, unless context clearly requires a different construction.
(2) Contracts reinsuring life, disability income, health, or long-term care insurance policies or annuities issued by a ceding insurer that has been placed into liquidation pursuant to this chapter shall be continued, subject to the provisions of this Code section; provided, however, that, contracts terminated pursuant to contractual terms prior to the date of the order of liquidation or terminated pursuant to the order of liquidation shall be subject to the provisions of subsection (i) of this Code section.
(b)(1) At any time within 180 days of the date of the order of liquidation, a guaranty association covering life, disability income, health, or long-term care insurance policies or annuities, in whole or in part, may elect to assume the rights and obligations of the ceding insurer related to such policies under any one or more reinsurance contracts between the ceding insurer and its reinsurers. Any such assumption shall be effective as of the date of the order of liquidation. The election shall be made by a guaranty association or the National Organization of Life and Health Insurance Guaranty Associations on its behalf by sending written notice, return receipt requested, to the affected reinsurers.
(2) To facilitate the decision, the receiver and each affected reinsurer shall make available upon request to any affected guaranty association or to the National Organization of Life and Health Insurance Guaranty Associations on their behalf copies of in-force reinsurance contracts and all related files and records relevant to the determination of whether such contracts should be assumed, and notices of any defaults under the reinsurance contracts or any known event or condition which with the passage of time may become a default under the reinsurance contracts.
(3) For reinsurance contracts assumed by a guaranty association, the following provisions shall apply:
(A) The guaranty association shall be responsible for all unpaid premiums due under the reinsurance contracts, for periods both before and after the date of the order of liquidation and shall be responsible for the performance of all other obligations to be performed after the date of the order of liquidation;
(B) The guaranty association shall be entitled to any amounts payable by the reinsurer under the reinsurance contracts with respect to losses or events that occur in periods on or after the date of the order of liquidation;
(C) The guaranty association and the reinsurer shall, within 30 days following the date of such guaranty association's election to assume a reinsurance contract, calculate the balance due to or from such association under each reinsurance contract as of the date of such election, and such association or reinsurer shall pay any remaining balance due the other within 35 days of the date of such election. Any disputes over the amounts due to such association or reinsurer shall be resolved by arbitration pursuant to the terms of the affected reinsurance contract, or, if the contract contains no arbitration clause, pursuant to the provisions of paragraph (3) of subsection (i) of this Code section; and
(D) If the guaranty association or receiver on behalf of such association, within 60 days of the date such association's election to assume a reinsurance contract, pays the unpaid premiums due for periods both before and after the date of such election that are due pursuant to the reinsurance contract, the reinsurer shall not be entitled to terminate the reinsurance contract for failure to pay premiums and shall not be entitled to set off any unpaid amounts due under other contracts, or unpaid amounts due from parties other than such association, against amounts due the such association.
(c) When, pursuant to court approval provided for in Code Section 33-37-17, a receiver continues insurance policies or annuities following an order of liquidation, and the policies or annuities are not covered in whole or in part by one or more guaranty associations, the receiver may, within 180 days of the date of the order of liquidation, elect to assume the rights and obligations of the ceding insurer under any one or more of the reinsurance contracts that relate to the policies or annuities; provided, however, that the contracts have not been terminated as provided for in subsection (a) of this Code section. Such election shall be made by sending written notice, return receipt requested, to the affected reinsurers. After such notification to affected reinsurers has been made, payment of premiums on the reinsurance contracts for the policies and annuities, for periods both before and after the date of the order of liquidation, shall be chargeable against the estate as a Class 1 administrative expense. Amounts paid by the reinsurer on account of losses on the policies and annuities shall be to the estate of the ceding insurer.
(d) During the period from the date of the order of liquidation until the date a guaranty association or the receiver elects to assume the rights and obligations of the ceding insurer under any one or more of the reinsurance contracts that relate to the policies or annuities as provided for in subsection (b) or (c) of this Code section, the guaranty association, the receiver, and the reinsurer shall not have any rights or obligations under any reinsurance contract that is eligible for assumption by such association or the receiver.
(e) When a guaranty association or the receiver timely elected to assume a reinsurance contract as provided for in subsection (b) or (c) of this Code section, the parties' rights and obligations shall be governed by subsection (b) or (c) of this Code section as applicable.
(f) When a guaranty association or the receiver does not timely elect to assume a reinsurance contract pursuant to subsection (b) or (c) of this Code section, the reinsurance contract shall be terminated retroactively effective on the date of the order of liquidation and subsection (i) of this Code section shall apply.
(g) When policies of life, disability income, health, or long-term care insurance or annuities, or the guaranty association's obligations with respect thereto, are transferred to an assuming insurer, reinsurance on the policies or annuities may also be transferred by such association for contracts assumed as provided for in subsection (b) of this Code section, or by the receiver for contracts assumed as provided for in subsection (c) of this Code section; provided, however, that all of the following conditions are met:
(1) Unless the reinsurer and the assuming insurer agree otherwise, the reinsurance contract transferred shall not cover any new policies or annuities in addition to those transferred;
(2) The obligations described in subsections (b) and (c) of this Code section shall no longer apply with respect to matters arising after the effective date of the transfer; and
(3) Notice shall be given in writing, return receipt requested, by the transferring party to the affected reinsurer not less than 30 days prior to the effective date of the transfer.
(h) The provisions of this Code section shall, to the extent provided in this Code section, supersede the provisions of law or of any affected reinsurance contract that provides for or requires any payment of reinsurance proceeds, on account of losses or events that occur in periods after the date of the order of liquidation, to the receiver of the ceding insurer or any other person. The receiver shall remain entitled to any amounts payable by the reinsurer under the reinsurance contracts with respect to losses or events that occur in periods prior to the date of the order of liquidation, subject to provisions of this chapter including applicable setoff provisions.
(i) When a reinsurance contract is terminated pursuant to this Code section, the reinsurer and the receiver shall commence a mandatory negotiation procedure in accordance with the following procedures:
(1) No later than 30 days after the date of termination, each party shall appoint an actuary to determine an estimated sum due as a result of the termination of the reinsurance contract calculated in a way expected to make the parties economically indifferent as to whether the reinsurance contract continues or terminates, giving due regard to the economic effects of the insolvency. The sum shall take into account the present value of future cash flows expected under the reinsurance contract and be based on a gross premium valuation of net liability using current assumptions that reflect post-insolvency experience expectations, with no additional margins, net of any amounts payable and receivable, with a market value adjustment to reflect premature sale of assets to fund the settlement;
(2) Within 90 days of the date of termination, each party shall provide the other party with its estimate of the sum due as a result of the termination of the reinsurance contract, together with all relevant documents and other information supporting the estimate. The parties shall make a good faith effort to reach an agreement on the sum due;
(3) If the parties are unable to reach agreement within 90 days following the submission of materials as provided for in paragraph (2) of this subsection, either party may initiate arbitration proceedings as provided in the reinsurance contract. When the reinsurance contract does not contain an arbitration clause, either party may initiate arbitration pursuant to this paragraph by providing the other party with a written demand for arbitration. Such arbitration shall be conducted pursuant to the following procedures:
(A) Venue for the arbitration shall be within the county of the court's jurisdiction or another location agreed to by the parties;
(B) Within 30 days of the responding party's receipt of the arbitration demand, each party shall appoint an arbitrator who is a disinterested active or retired officer or executive of a life or health insurance or reinsurance company, or other professional with no less than ten years' experience in or relating to the field of life or health insurance or reinsurance. The two arbitrators shall appoint an independent, impartial, disinterested umpire who is an active or retired officer or executive of a life or health insurance or reinsurance company, or other professional with no less than ten years' experience in the field of life or health insurance or reinsurance. If the arbitrators are unable to agree on an umpire, each arbitrator shall provide the other with the names of three qualified individuals, each arbitrator shall strike two names from the other's list, and the umpire shall be chosen by drawing lots from the remaining individuals;
(C) Within 60 days following the appointment of the umpire, the parties shall submit to the arbitration panel, unless otherwise order by the panel, their estimates of the sum due as a result of the termination of the reinsurance contract, together with all relevant documents and other information supporting the estimate;
(D) The time periods set forth in these subsections may be extended upon mutual agreement of the parties; and
(E) The panel shall have all powers necessary to conduct the arbitration proceedings in a fair and appropriate manner, including the power to request additional information from the parties, authorize discovery, hold hearings and hear testimony. The panel also may appoint independent actuarial experts, the expense of which shall be shared equally between the parties;
(4) An arbitration panel considering the matters set forth in this subsection shall apply the standards set forth in this subsection and shall issue a written award specifying a net settlement amount due from one party or the other as a result of the termination of the reinsurance contract. The receivership court shall confirm that award absent proof of statutory grounds for vacating or modifying arbitration awards under the Federal Arbitration Act, P.L. 68-401; and
(5) If the net settlement amount agreed or awarded as provided for in this subsection is payable by the reinsurer, the reinsurer shall pay the amount due to the estate, subject to any applicable setoff as provided for in Code Section 33-37-29. If the net settlement amount agreed or awarded pursuant to this subsection is payable by the ceding insurer, the reinsurer shall be deemed to have a timely filed claim against the estate for that amount, which claim shall be paid pursuant to the priority provided for in Code Section 33-37-41. The guaranty associations shall not be entitled to receive the net settlement amount, except to the extent they are entitled to share in the estate assets as creditors of the estate, and shall have no responsibility for the net settlement amount.
(j) Except as otherwise provided in this Code section, nothing in this Code section shall alter or modify the terms and conditions of any reinsurance contract. Nothing in this Code section shall abrogate or limit any rights of any reinsurer to claim that it is entitled to rescind a reinsurance contract. Nothing in this Code section shall give a policyholder or beneficiary an independent cause of action against a reinsurer that is not otherwise set forth in the reinsurance contract. Nothing in this Code section shall limit or affect any guaranty association's rights as a creditor of the estate against the assets of the estate. Nothing in this Code section shall apply to reinsurance contracts covering property or casualty risks.
(k) This Code section and paragraph (20) of Code Section 33-38-7 shall be construed together in a manner that is consistent with each other and with the purpose provided for in Code Section 33-38-1.
(a)(1) An agent, broker, premium finance company, or any other person, other than the insured, responsible for the payment of a premium shall be obligated to pay any unpaid premium for the full policy term due the insurer at the time of the declaration of insolvency, whether earned or unearned, as shown on the records of the insurer. The liquidator shall also have the right to recover from such person any part of an unearned premium that represents commission of such person. Credits or setoffs or both shall not be allowed to an agent, broker, or premium finance company for any amounts advanced to the insurer by the agent, broker, or premium finance company on behalf of, but in the absence of a payment by, the insured.
(2) An insured shall be obligated to pay any unpaid earned premium due the insurer at the time of the declaration of insolvency, as shown on the records of the insurer.
(b) Upon satisfactory evidence of a violation of this Code section, the Commissioner may pursue either one or both of the following courses of action:
(1) Suspend, revoke, or refuse to renew the licenses of such offending party or parties; or
(2) Impose a penalty of not more than $5,000.00 for each and every act in violation of this Code section by said party or parties.
(c) Before the Commissioner shall take any action as provided in subsection (b) of this Code section, written notice shall be provided to the person, company, association, or exchange accused of violating the law, stating specifically the nature of the alleged violation and fixing a time and place, at least ten days thereafter, when a hearing on the matter shall be held. After such hearing, or upon failure of the accused to appear at such hearing, the Commissioner, if he shall find such violation, shall impose such of the penalties under subsection (b) of this Code section as he deems advisable.
(d) When the Commissioner shall take action in any or all of the ways set out in subsection (b) of this Code section, the party aggrieved may appeal from said action to the superior court.
(a) Within 120 days of a final determination of insolvency of an insurer by a court of competent jurisdiction of this state, the liquidator shall make application to the court for approval of a proposal to disburse assets out of marshaled assets, from time to time as such assets become available, to a guaranty association or foreign guaranty association having obligations because of such insolvency. If the liquidator determines that there are insufficient assets to disburse, the application required by this Code section shall be considered satisfied by a filing by the liquidator stating the reasons for this determination.
(b) Such proposal shall at least include provisions for:
(1) Reserving amounts for the payment of expenses of administration and the payment of claims of secured creditors, to the extent of the value of the security held, and claims falling within the priorities established in Classes 1 and 2 as provided in Code Section 33-37-41;
(2) Disbursement of the assets marshaled to date and subsequent disbursement of assets as they become available;
(3) Equitable allocation of disbursements to each of the guaranty associations and foreign guaranty associations entitled thereto;
(4) The securing by the liquidator from each of the associations entitled to disbursements pursuant to this Code section of an agreement to return to the liquidator such assets, together with income earned on assets previously disbursed, as may be required to pay claims of secured creditors and claims falling within the priorities established in Code Section 33-37-41 in accordance with such priorities. No bond shall be required of any such association; and
(5) A full report to be made by each association to the liquidator accounting for all assets so disbursed to the association, all disbursements made therefrom, any interest earned by the association on such assets, and any other matter as the court may direct.
(c) The liquidator's proposal shall provide for disbursements to the associations in amounts estimated at least equal to the claim payments under or to be made thereby for which such associations could assert a claim against the liquidator and shall further provide that if the assets available for disbursement from time to time do not equal or exceed the amount of such claim payments made or to be made by the association then disbursements shall be in the amount of available assets.
(d) The liquidator's proposal shall, with respect to an insolvent insurer writing life or accident and sickness insurance or annuities, provide for disbursements of assets to any guaranty association or any foreign guaranty association covering life or accident and sickness insurance or annuities or to any other entity or organization reinsuring, assuming, or guaranteeing policies or contracts of insurance under the acts creating such associations.
(e) Notice of such application shall be given to the association in and to the commissioners of insurance of each of the states. Any such notice shall be deemed to have been given when deposited in the United States mail to be dispatched by certified mail or first-class mail at least 30 days prior to submission of such application to the court. Action on the application may be taken by the court provided the above-required notice has been given and, provided, further, that the liquidator's proposal complies with paragraphs (1) and (2) of subsection (b) of this Code section.
(a) Proof of all claims shall be filed with the liquidator in the form required by Code Section 33-37-35 on or before the last day for filing specified in the notice required under Code Section 33-37-21, except that proof of claims for cash surrender values or other investment values in life insurance and annuities need not be filed unless the liquidator expressly so requires.
(b) The liquidator may permit a claimant making a late filing to share in distributions, whether past or future, as if he were not late, to the extent that any such payment will not prejudice the orderly administration of the liquidation, under the following circumstances:
(1) The existence of the claim was not known to the claimant and that he filed his claim as promptly thereafter as reasonably possible after learning of it;
(2) A transfer to a creditor was avoided under Code Sections 33-37-25 through 33-37-27 or was voluntarily surrendered under Code Section 33-37-28, and that the filing satisfies the conditions of Code Section 33-37-28; and
(3) The valuation under Code Section 33-37-40 of security held by a secured creditor shows a deficiency, which is filed within 30 days after the valuation.
(c) The liquidator shall permit late filing claims to share in distributions, whether past or future, as if they were not late, if such claims are claims of a guaranty association or foreign guaranty association for reimbursement of covered claims paid or expenses incurred, or both, subsequent to the last day for filing where such payments were made and expenses incurred as provided by law.
(d) The liquidator may consider any claim filed late which is not covered by subsection (b) of this Code section and permit it to receive distributions which are subsequently declared on any claims of the same or lower priority if the payment does not prejudice the orderly administration of the liquidation. The late-filing claimant shall receive, at each distribution, the same percentage of the amount allowed on his claim as is then being paid to claimants of any lower priority. This shall continue until his claim has been paid in full.
(a) Proof of claim shall consist of a statement signed by the claimant that includes all of the following that are applicable:
(1) The particulars of the claim including the consideration given for it;
(2) The identity and amount of the security on the claim;
(3) The payments made on the debt, if any;
(4) That the sum claimed is justly owing and that there is no setoff, counterclaim, or defense to the claim;
(5) Any right of priority of payment or other specific right asserted by the claimants;
(6) A copy of the written instrument which is the foundation of the claim; and
(7) The name and address of the claimant and the attorney who represents him, if any.
(b) No claim need be considered or allowed if it does not contain all the information in subsection (a) of this Code section which may be applicable. The liquidator may require that a prescribed form be used, and may require that other information and documents be included.
(c) At any time the liquidator may request the claimant to present information or evidence supplementary to that required under subsection (a) of this Code section and may take testimony under oath, require production of affidavits or depositions, or otherwise obtain additional information or evidence.
(d) No judgment or order against an insured or the insurer entered after the date of filing of a successful petition for liquidation, and no judgment or order against an insured or the insurer entered at any time by default or by collusion need be considered as evidence of liability or of quantum of damages. No judgment or order against an insured or the insurer entered within four months before the filing of the petition need be considered as evidence of liability or of the quantum of damages.
(e) All claims of a guaranty association or foreign guaranty association shall be in such form and contain such substantiation as may be agreed to by the association and the liquidator.
(a) The claim of a third party which is contingent only on his first obtaining a judgment against the insured shall be considered and allowed as if there were no such contingency.
(b) A claim may be allowed, even if contingent, if it is filed in accordance with Code Section 33-37-34. It may be allowed and may participate in all distributions declared after it is filed to the extent that it does not prejudice the orderly administration of the liquidation.
(c) Claims that are due except for the passage of time shall be treated as absolute claims are treated, except that such claims may be discounted at the legal rate of interest.
(d) Claims made under employment contracts by directors, principal officers, or persons in fact performing similar functions or having similar powers are limited to payment for services rendered prior to the issuance of any order of rehabilitation or liquidation under Code Section 33-37-12 or 33-37-17.
(a) Whenever any third party asserts a cause of action against an insured of an insurer in liquidation, the third party may file a claim with the liquidator.
(b) Whether or not the third party files a claim, the insured may file a claim on his own behalf in the liquidation. If the insured fails to file a claim by the date for filing claims specified in the order of liquidation or within 60 days after mailing of the notice required by Code Section 33-37-21, whichever is later, he is an unexcused late filer.
(c) The liquidator shall make his recommendations to the court under Code Section 33-37-41 for the allowance of an insured's claim under subsection (b) of this Code section after consideration of the probable outcome of any pending action against the insured on which the claim is based, the probable damages recoverable in the action and the probable costs and expenses of defense. After allowance by the court, the liquidator shall withhold any dividends payable on the claim pending the outcome of litigation and negotiation with the insured. Whenever it seems appropriate, he shall reconsider the claim on the basis of additional information and amend his recommendations to the court. The insured shall be afforded the same notice and opportunity to be heard on all changes in the recommendation as in its initial determination. The court may amend its allowance as it thinks appropriate. As claims against the insured are settled or barred, the insured shall be paid from the amount withheld the same percentage dividend as was paid on other claims of like property based on the lesser of the amount actually recovered from the insured by action or paid by agreement plus the reasonable costs and expense of defense or the amount allowed on the claims by the court. After all claims are settled or barred, any sum remaining from the amount withheld shall revert to the undistributed assets of the insurer. Delay in final payment under this subsection shall not be a reason for unreasonable delay of final distribution and discharge of the liquidator.
(d) If several claims founded upon one policy are filed, whether by third parties or as claims by the insured under this Code section, and the aggregate allowed amount of the claims to which the same limit of liability in the policy is applicable exceeds that limit, each claim as allowed shall be reduced in the same proportion so that the total equals the policy limit. Claims by the insured shall be evaluated as in subsection (c) of this Code section. If any insured's claim is subsequently reduced under subsection (c) of this Code section, the amount thus freed shall be apportioned ratably among the claims which have been reduced under this subsection.
(e) No claim may be presented under this Code section if it is or may be covered by any guaranty association or foreign guaranty association.
(a) When a claim is denied in whole or in part by the liquidator, written notice of the determination shall be given to the claimant or his attorney by first-class mail at the address shown in the proof of claim. Within 60 days from the mailing of the notice, the claimant may file his objections with the liquidator. If no such filing is made, the claimant may not further object to the determination.
(b) Whenever objections are filed with the liquidator and the liquidator does not alter his denial of the claim as a result of the objections, the liquidator shall ask the court for a hearing as soon as practicable and give notice of the hearing by first-class mail to the claimant or his attorney and to any other persons directly affected, not less than ten nor more than 30 days before the date of the hearing. The matter may be heard by the court or by a court appointed referee who shall submit findings of fact along with his recommendation.
Whenever a creditor whose claim against an insurer is secured, in whole or in part, by the undertaking of another person fails to prove and file that claim, the other person may do so in the creditor's name, and shall be subrogated to the rights of the creditor, whether the claim has been filed by the creditor or by the other person in the creditor's name, to the extent that he discharges the undertaking. In the absence of an agreement with the creditor to the contrary, the other person shall not be entitled to any distribution; however, until the amount paid to the creditor on the undertaking plus the distributions paid on the claim from the insurer's estate to the creditor equals the amount of the entire claim of the creditor. Any excess received by the creditor shall be held by him in trust for such other person. The term “other person,” as used in this Code section, is not intended to apply to a guaranty association or foreign guaranty association.
(a) The value of any security held by a secured creditor shall be determined in one of the following ways, as the court may direct:
(1) By converting the same into money according to the terms of the agreement pursuant to which the security was delivered to such creditors; or
(2) By agreement, arbitration, compromise, or litigation between the creditor and the liquidator.
(b) The determination shall be under the supervision and control of the court with due regard for the recommendation of the liquidator. The amount so determined shall be credited upon the secured claim, and any deficiency shall be treated as an unsecured claim. If the claimant shall surrender his security to the liquidator, the entire claim shall be allowed as if unsecured.
For all claims in insolvencies, the priority of distribution of claims from the insurer's estate shall be in accordance with the order as set forth in this Code section. Every claim in each class shall be paid in full or adequate funds retained for such payment before the members of the next class receive any payment. No subclasses shall be established within any class. The order of distribution of claims shall be:
(1) CLASS 1. The costs and expenses of administration during rehabilitation and liquidation, including, but not limited to, the following:
(A) The actual and necessary costs of preserving or recovering the assets of the insurer;
(B) Compensation for all authorized services rendered in the rehabilitation and liquidation;
(C) Any necessary filing fees;
(D) The fees and mileage payable to witnesses;
(E) Authorized reasonable attorney's fees and other professional services rendered in the rehabilitation and liquidation; and
(F) The reasonable expenses of a guaranty association or foreign guaranty association for unallocated loss adjustment expenses;
(2) CLASS 2. All claims under policies, including third-party claims and all claims of a guaranty association or foreign guaranty association. All claims under life insurance and annuity policies, whether for death proceeds, annuity proceeds, or investment values, shall be treated as loss claims. That portion of any loss, indemnification for which is provided by other benefits or advantages recovered by the claimant, shall not be included in this class other than benefits or advantages recovered or recoverable in discharge of familial obligation of support or by way of succession at death or as proceeds of life insurance or as gratuities. No payment by an employer to his or her employee shall be treated as a gratuity;
(3) CLASS 3. Claims of the federal government except those under Class 2;
(4) CLASS 4. Reasonable compensation to employees for services performed to the extent that such compensation does not exceed two months of monetary compensation and represents payment for services performed within one year before the filing of the petition for liquidation or, if rehabilitation preceded liquidation, within one year before the filing of the petition for rehabilitation. Principal officers and directors shall not be entitled to the benefit of this priority except as otherwise approved by the liquidator and the court. Such priority shall be in lieu of any other similar priority which may be authorized by law as to wages or compensation of employees;
(5) CLASS 5. Claims under nonassessable policies for unearned premium or other premium refunds and claims of general creditors, including claims of ceding and assuming companies in their capacity as such;
(6) CLASS 6. Claims of any state or local government except those under Class 2. Claims, including those of any governmental body for a penalty or forfeiture, shall be allowed in this class only to the extent of the pecuniary loss sustained from the act, transaction, or proceeding out of which the penalty or forfeiture arose with reasonable and actual costs occasioned thereby. The remainder of such claims shall be postponed to the class of claims established under paragraph (9) of this Code section;
(7) CLASS 7. Claims filed late or any other claims other than claims under paragraphs (8) and (9) of this Code section;
(8) CLASS 8. Surplus or contribution notes or similar obligations and premium refunds on assessable policies. Payments to members of domestic mutual insurance companies shall be limited in accordance with law; and
(9) CLASS 9. The claims of shareholders or other owners in their capacity as shareholders.
(a) The liquidator shall review all claims duly filed in the liquidation and shall make such further investigation as he shall deem necessary. He may compound, compromise, or in any other manner negotiate the amount for which claims will be recommended to the court except where the liquidator is required by law to accept claims as settled by any person or organization, including any guaranty association or foreign guaranty association. Unresolved disputes shall be determined under Code Section 33-37-38. As soon as practicable, he shall present to the court a report of the claims against the insurer with his recommendations. The report shall include the name and address of each claimant and the amount of the claim finally recommended, if any. If the insurer has issued annuities or life insurance policies, the liquidator shall report the persons to whom, according to the records of the insurer, amounts are owed as cash surrender values or other investment value and the amounts owed.
(b) The court may approve, disapprove, or modify the report on claims by the liquidator. Such reports as are not modified by the court within a period of 60 days following submission by the liquidator shall be treated by the liquidator as allowed claims subject thereafter to later modification or to rulings made by the court pursuant to Code Section 33-37-38. No claim under a policy of insurance shall be allowed for an amount in excess of the applicable policy limits.
Under the direction of the court, the liquidator shall pay distributions in a manner that will assure the proper recognition of priorities and a reasonable balance between the expeditious completion of the liquidation and the protection of unliquidated and undetermined claims, including third-party claims. Distribution of assets in kind may be made at valuations set by agreement between the liquidator and the creditor and approved by the court.
(a) All unclaimed funds subject to distribution remaining in the liquidator's hands when he is ready to apply to the court for discharge, including the amount distributable to any creditor, shareholder, member, or other person who is unknown or cannot be found shall be maintained by the Commissioner and shall be paid without interest except in accordance with Code Section 33-37-41 to the person entitled thereto or his legal representative upon proof satisfactory to the Commissioner of his right thereto. Any amount on deposit not claimed within six years from the discharge of the liquidator shall be deemed to have been abandoned and shall be escheated without formal escheat proceedings and be deposited in the general fund of the state.
(b) All funds withheld under Code Section 33-37-36 and not distributed shall upon discharge of the liquidator be maintained by the Commissioner and paid by him in accordance with Code Section 33-37-41. Any sums remaining which under Code Section 33-37-41 would revert to the undistributed assets of the insurer shall be transferred to the general fund of the state under subsection (a) of this Code section, unless the Commissioner in his discretion petitions the court to reopen the liquidation under Code Section 33-37-46.
(a) When all assets justifying the expense of collection and distribution have been collected and distributed under this chapter, the liquidator shall apply to the court for discharge. The court may grant the discharge and make any other orders, including an order to transfer any remaining funds that are uneconomic to distribute as may be deemed appropriate.
(b) Any other person may apply to the court at any time for an order under subsection (a) of this Code section. If the application is denied, the applicant shall pay the costs and expenses of the liquidator in resisting the application, including a reasonable attorney's fee.
After the liquidation proceeding has been terminated and the liquidator discharged, the Commissioner or other interested party may at any time petition the superior court to reopen the proceedings for good cause, including the discovery of additional assets. If the court is satisfied that there is justification for reopening, it shall so order.
Whenever it shall appear to the Commissioner that the records of any insurer in process of liquidation or completely liquidated are no longer useful, he may recommend to the court and the court shall direct what records should be retained for future reference and what should be destroyed.
The superior court may, as it deems desirable, cause audits to be made of the books of the Commissioner relating to any receivership established under this chapter, and a report of each audit shall be filed with the Commissioner and with the court. The books, records, and other documents of the receivership shall be made available to the auditor at any time without notice. The expense of each audit shall be considered a cost of administration of the receivership.
(a) If a domiciliary liquidator has not been appointed, the Commissioner may apply to the superior court by verified petition for an order directing him to act as conservator to conserve the property of an alien insurer not domiciled in this state or a foreign insurer on any one or more of the following grounds:
(1) Any of the grounds provided in Code Section 33-37-11;
(2) That any of its property has been sequestered by official action in its domiciliary state or in any other state;
(3) That enough of its property has been sequestered in a foreign country to give reasonable cause to fear that the insurer is or may become insolvent; or
(4)(A) That its certificate of authority to do business in this state has been revoked or that none was ever issued; and
(B) That there are residents of this state with outstanding claims or outstanding policies.
(b) When an order is sought under subsection (a) of this Code section, the court shall cause the insurer to be given such notice and time to respond thereto as is reasonable under the circumstances.
(c) The court may issue the order in whatever terms it shall deem appropriate. The filing or recording of the order with the clerk of superior court of the county in which the principal business of the company is located shall impart the same notice as a deed, bill of sale, or other evidence of title duly filed or recorded with the clerk would have imparted.
(d) The conservator may at any time petition for and the court may grant an order under Code Section 33-37-50 to liquidate assets of a foreign or alien insurer under conservation or, if appropriate, for an order under Code Section 33-37-52 to be appointed ancillary receiver.
(e) The conservator may at any time petition the court for an order terminating conservation of an insurer. If the court finds that the conservation is no longer necessary, it shall order that the insurer be restored to possession of its property and the control of its business. The court may also make such finding and issue such order at any time upon motion of any interested party but, if such motion is denied, all costs shall be assessed against such party.
(a) If no domiciliary receiver has been appointed, the Commissioner may apply to the superior court by verified petition for an order directing him to liquidate the assets found in this state of a foreign insurer or an alien insurer not domiciled in this state, on any of the following grounds:
(1) Any of the grounds provided in Code Section 33-37-11 or 33-37-16; or
(2) Any of the grounds specified in paragraphs (2) through (4) of subsection (a) of Code Section 33-37-49.
(b) When an order is sought under subsection (a) of this Code section, the court shall cause the insurer to be given such notice and time to respond thereto as is reasonable under the circumstances.
(c) If it shall appear to the court that the best interests of creditors, policyholders, and the public require, the court may issue an order to liquidate in whatever terms it shall deem appropriate. The filing or recording of the order with the clerk of the superior court of the county in which the principal business of the company is located or the county in which its principal office or place of business is located shall impart the same notice as a deed, bill of sale, or other evidence of title duly filed or recorded with the clerk would have imparted.
(d) If a domiciliary liquidator is appointed in another state while a liquidation is proceeding under this Code section, the liquidator under this Code section shall thereafter act as ancillary receiver under Code Section 33-37-52.
(e) On the same grounds as are specified in subsection (a) of this Code section, the Commissioner may petition any appropriate federal district court to be appointed receiver to liquidate that portion of the insurer's assets and business over which the court will exercise jurisdiction or any lesser part thereof that the Commissioner deems desirable for the protection of the policyholders and creditors in this state.
(f) The court may order the Commissioner, when he has liquidated the assets of a foreign or alien insurer under this Code section, to pay claims of residents of this state against the insurer under such rules as to the liquidation of insurers under this chapter as are otherwise compatible with the provisions of this Code section.
(a) The domiciliary liquidator of an insurer domiciled in another state shall, except as to special deposits and security on secured claims under subsection (c) of Code Section 33-37-52, be vested by operation of law with the title to all of the assets, property, contracts and rights of action, agents' balances, and all of the books, accounts, and other records of the insurer located in this state. The date of vesting shall be the date of the filing of the petition, if that date is specified by the domiciliary law for the vesting of property in the domiciliary state. Otherwise, the date of vesting shall be the date of entry of the order directing possession to be taken. The domiciliary liquidator shall have the immediate right to recover balances due from agents and to obtain possession of the books, accounts, and other records of the insurer located in this state. He or she also shall have the right to recover all other assets of the insurer located in this state, subject to the provisions of Code Section 33-37-52.
(b) Claimants residing in this state may file claims with the liquidator or ancillary receiver, if any, in this state or with the domiciliary liquidator if the domiciliary law permits. The claims must be filed on or before the last date fixed for the filing of claims in the domiciliary liquidation proceedings.
(a) If a domiciliary liquidator has been appointed for an insurer not domiciled in this state, the Commissioner may file a petition with the superior court requesting appointment as ancillary receiver in this state:
(1) If he or she finds that there are sufficient assets of the insurer located in this state to justify the appointment of an ancillary receiver; or
(2) If the protection of creditors or policyholders in this state so requires.
(b) The court may issue an order appointing an ancillary receiver in whatever terms it shall deem appropriate. The filing or recording of the order with the appropriate clerk of the superior court in this state imparts the same notice as a deed, bill of sale, or other evidence of title duly filed or recorded with the clerk.
(c) When a domiciliary liquidator has been appointed in another state, then the ancillary receiver appointed in this state may, whenever necessary, aid and assist the domiciliary liquidator in recovering assets of the insurer located in this state. The ancillary receiver shall, as soon as practicable, liquidate from their respective securities those special deposit claims and secured claims which are proved and allowed in the ancillary proceedings in this state and shall pay the necessary expenses of the proceedings. He or she shall promptly transfer all remaining assets, books, accounts, and records to the domiciliary liquidator or his or her designee, at the direction of the domiciliary liquidator. Subject to this Code section, the ancillary receiver and his or her deputies shall have the same powers and be subject to the same duties with respect to the administration of assets as a liquidator of an insurer domiciled in this state.
(d) When a domiciliary liquidator has been appointed in this state, ancillary receivers appointed in other states shall have, as to assets and books, accounts, and other records in their respective states, corresponding rights, duties, and powers to those provided in subsection (c) of this Code section for ancillary receivers appointed in this state.
(e) If the Commissioner elects not to file a petition with the superior court requesting appointment as ancillary receiver in this state pursuant to subsection (a) of this Code section, the Commissioner may, notwithstanding the provisions of Code Sections 33-3-8 through 33-3-10 and Code Sections 33-12-8 and 33-12-9, transfer title and possession of all special deposits under his or her control to the domiciliary liquidator or his or her designee, at the direction of the domiciliary liquidator. Prior to transferring title and possession of such special deposits, the Commissioner may require the domiciliary liquidator to agree, in writing, to handle such deposits and special deposit claims in accordance with the statutes pursuant to which the special deposits were required and to any other requirements deemed necessary by the Commissioner.
The Commissioner in his sole discretion may institute proceedings under Code Sections 33-37-9 and 33-37-10 at the request of the commissioner or other appropriate insurance official of the domiciliary state of any foreign or alien insurer having property located in this state.
(a) In a liquidation proceeding begun in this state against an insurer domiciled in this state, claimants residing in foreign countries or in other states where an ancillary receiver has not been appointed must file claims in this state, and claimants residing in other states where an ancillary receiver has been appointed may file claims either with the ancillary receivers in their respective states or with the domiciliary liquidator. Claims must be filed on or before the last date fixed for the filing of claims in the domiciliary liquidation proceeding.
(b) Claims belonging to claimants residing in other states where an ancillary receiver has been appointed may be proved either in the liquidation proceeding in this state as provided in this chapter or in ancillary proceedings in the other states. If notice of the claims and opportunity to appear and be heard is afforded the domiciliary liquidator of this state as provided in subsection (b) of Code Section 33-37-55 with respect to ancillary proceedings, the final allowance of claims by the courts in ancillary proceedings in other states shall be conclusive as to amount and as to priority against special deposits or other security located in such ancillary states, but shall not be conclusive with respect to priorities against general assets under Code Section 33-37-41.
(a) In a liquidation proceeding in another state against an insurer domiciled in that state, claimants against the insurer who reside within this state may file claims either with the ancillary receiver, if any, in this state or with the domiciliary liquidator. Claims must be filed on or before the last dates fixed for the filing of claims in the domiciliary liquidation proceeding.
(b) Claims belonging to claimants residing in this state may be proved either in the domiciliary state under the law of that state or in ancillary proceedings, if any, in this state. If a claimant elects to prove his or her claim in this state, he or she shall file such claim with the ancillary receiver in the manner provided in Code Sections 33-37-34 and 33-37-35. The ancillary receiver shall make his or her recommendation to the court as under Code Section 33-37-42. He or she shall also arrange a date for hearing if necessary under Code Section 33-37-38 and shall give notice to the liquidator in the domiciliary state, either by certified mail or statutory overnight delivery or by personal service at least 40 days prior to the date set for hearing. If the domiciliary liquidator, within 30 days after the giving of such notice, gives notice in writing to the ancillary receiver and to the claimant, either by certified mail or statutory overnight delivery or by personal service, of his or her intention to contest the claim, he or she shall be entitled to appear or to be represented in any proceeding in this state involving the adjudication of the claim.
(c) If a claimant files a claim in this state with the ancillary receiver, the final allowance of the claim by the courts of this state shall be accepted as conclusive as to amount and as to priority against special deposits or other security located in this state.
During the pendency in this or any other state of a liquidation proceeding, whether called by that name or not, no action or proceeding in the nature of an attachment, garnishment, or levy of execution shall be commenced or maintained in this state against the delinquent insurer or its assets.
(a) In a liquidation proceeding in this state involving one or more other states, the order of distribution of the domiciliary state shall control as to all claims of residents of this and other states. All claims of residents of other states shall be given equal priority of payment from general assets regardless of where such assets are located.
(b) The owners of special deposit claims against an insurer for which a liquidator is appointed in this or any other state shall be given priority against the special deposits in accordance with the statutes governing the creation and maintenance of the deposits. If there is a deficiency in any deposit, so that the claims secured by it are not fully discharged from it, the claimants may share in the general assets, but the sharing shall be deferred until general creditors, and also claimants against other special deposits who have received smaller percentages from their respective special deposits, have been paid percentages of their claims equal to the percentage paid from the special deposit.
(c) The owner of a secured claim against an insurer for which a liquidator has been appointed in this or any other state may surrender his security and file his claim as a general creditor, or the claim may be discharged by resort to the security in accordance with Code Section 33-37-40, in which case the deficiency, if any, shall be treated as a claim against the general assets of the insurer on the same basis as claims of unsecured creditors.
If an ancillary receiver in another state or foreign country, whether called by that name or not, fails to transfer to the domiciliary liquidator in this state any assets within his control other than special deposits, diminished only by the expenses of the ancillary receivership, if any, the claims filed in the ancillary receivership, other than special deposit claims or secured claims, shall be placed in the class of claims under paragraph (7) of Code Section 33-37-41.
The purpose of this chapter is to protect the persons specified in subsection (b) of Code Section 33-38-2, subject to certain limitations, against failure in the performance of contractual obligations, under life, health, and annuity policies, plans, or contracts specified in subsection (a) of Code Section 33-38-2, due to the impairment or insolvency of the member insurer issuing such policies, plans, or contracts. To provide this protection: (1) an association of member insurers is created to enable the guaranty of payment of benefits and continuation of coverages as limited by this chapter; (2) members of the association are subject to assessment to provide funds to carry out the purpose of this chapter; and (3) the association is authorized to assist the Commissioner, in the prescribed manner, in the detection and prevention of insurer impairments or insolvencies.
(a) This chapter shall provide coverage to the persons specified in subsection (b) of this Code section for policies or contracts of direct, nongroup life insurance; health insurance which for the purposes of this chapter includes health maintenance organization subscriber contracts and certificates and health care plans issued by health care corporations; annuities; for certificates under direct group policies and contracts and supplemental contracts to any of these; and for unallocated annuity contracts, in each case issued by member insurers, except as limited by this chapter. Annuity contracts and certificates under group annuity contracts include, but are not limited to, guaranteed investment contracts, deposit administration contracts, unallocated funding agreements, allocated funding agreements, structured settlement annuities, annuities issued to or in connection with government lotteries, and any immediate or deferred annuity contracts.
(b)(1) Coverage under this chapter shall be provided only:
(A) To persons who, regardless of where they reside, except for nonresident certificate holders under group policies or contracts, are the beneficiaries, assignees, or payees, including health care providers rendering services covered under health insurance policies or certificates, of the persons covered under subparagraph (B) of this paragraph; and
(B) To persons who are owners of or certificate holders or enrollees under such policies or contracts, other than unallocated annuity contracts and structured settlement annuities, to the persons who are the contract holders and who:
(i) Are residents; or
(ii) Are not residents, but the member insurers which issued such policies or contracts are domiciled in this state; the states in which such persons reside have associations similar to the association created by this chapter; and such persons are not eligible for coverage by an association in any other state due to the fact that the insurer, health maintenance organization, or health care corporation was not licensed in the state at the time specified in the state's guaranty association law.
(2) For unallocated annuity contracts specified in subsection (a) of this Code section, subparagraphs (A) and (B) of paragraph (1) of this subsection shall not apply, and this chapter shall, except as provided in paragraphs (4) and (5) of this subsection, provide coverage to:
(A) Persons who are the owners of the unallocated annuity contracts if the contracts are issued to or in connection with a specific benefit plan whose plan sponsor has its principal place of business in this state; and
(B) Persons who are owners of unallocated annuity contracts issued to or in connection with government lotteries if the owners are residents.
(3) For structured settlement annuities specified in subsection (a) of this Code section, subparagraphs (A) and (B) of paragraph (1) of this subsection shall not apply, and this chapter shall, except as provided in paragraphs (4) and (5) of this subsection, provide coverage to a person who is a payee under a structured settlement annuity, or beneficiary of a payee if the payee is deceased, if the payee:
(A) Is a resident, regardless of where the contract owner resides; or
(B) Is not a resident, but only under both of the following conditions:
(i)(I) The contract owner of the structured settlement annuity is a resident; or
(II) The contract owner of the structured settlement annuity is not a resident, but the insurer that issued the structured settlement annuity is domiciled in this state and the state in which the contract owner resides has an association similar to the association created by this chapter; and
(ii) Neither the payee or beneficiary nor the contract owner is eligible for coverage by the association of the state in which the payee or contract owner resides.
(4) This chapter shall not provide coverage to:
(A) A person who is a payee or beneficiary of a contract owner who is a resident of this state, if the payee or beneficiary is afforded any coverage by the association of another state;
(B) A person covered under paragraph (2) of this subsection, if any coverage is provided by the association of another state to that person; or
(C) A person who acquires rights to receive payments through a structured settlement factoring transaction, as such term is defined in 26 U.S.C. Section 5891(c)(3)(A) as such term existed on January 23, 2002, regardless of whether the transaction occurred before or after such date.
(5) This chapter is intended to provide coverage to a person who is a resident of this state and, in special circumstances, to a nonresident. In order to avoid duplicate coverage, if a person who would otherwise receive coverage under this chapter is provided coverage under the laws of any other state, the person shall not be provided coverage under this chapter. In determining the application of the provisions of this subsection in situations where a person could be covered by the association of more than one state, whether as an owner, payee, enrollee, beneficiary, or assignee, this chapter shall be construed in conjunction with other state laws to result in coverage by only one association.
(c) Except as otherwise provided in subsection (d) of this Code section, this chapter shall not provide coverage to:
(1) That portion or part of a policy or contract not guaranteed by a member insurer, or under which the risk is borne by the policy or contract owner;
(2) A policy or contract of reinsurance or any policy or contract or part thereof assumed by the impaired or insolvent insurer under a contract of reinsurance, unless assumption certificates have been issued pursuant to the reinsurance policy or contract;
(3) A portion of a policy or contract to the extent that the rate of interest on which it is based, or the interest rate, crediting rate, or similar factor determined by use of an index or other external reference stated in the policy or contract employed in calculating returns or changes in value:
(A) Averaged over the period of four years prior to the date on which the member insurer becomes an impaired or insolvent insurer under this chapter, whichever is earlier, exceeds the rate of interest determined by subtracting two percentage points from Moody's Corporate Bond Yield Average averaged for that same four-year period or for such lesser period if the policy or contract was issued less than four years before the member insurer becomes an impaired or insolvent insurer under this chapter, whichever is earlier; and
(B) On and after the date on which the member insurer becomes an impaired or insolvent insurer under this chapter, whichever is earlier, exceeds the rate of interest determined by subtracting three percentage points from Moody's Corporate Bond Yield Average as most recently available;
(4) Any prepaid legal services plan, as defined in Code Section 33-35-2;
(5) Any policy, contract, or certificate issued by a fraternal benefit society, as defined in Code Section 33-15-1;
(6) Accident and sickness insurance as defined in Code Section 33-7-2 when written by a property and casualty insurer as part of an automobile insurance contract;
(7) A portion of a policy or contract issued to a plan or program of an employer, association, or other person to provide life, health, or annuity benefits to its employees, members, or others, to the extent that the plan or program is self-funded or uninsured, including, but not limited to, benefits payable by an employer, association, or other person under:
(A) A multiple employer welfare arrangement as defined in 29 U.S.C. Section 1002(40);
(B) A minimum premium group insurance plan;
(C) A stop-loss insurance policy; or
(D) An administrative services only contract;
(8) A portion of a policy or contract to the extent that it provides for:
(A) Dividends or experience rating credits;
(B) Voting rights; or
(C) Payment of any fees or allowances to any person, including the policy or contract owner, in connection with the service to or administration of the policy or contract;
(9) A policy or contract issued in this state by a member insurer at a time when it was not licensed or did not have a certificate of authority to issue the policy or contract in this state;
(10) Any unallocated annuity contract issued to an employee benefit plan protected under the federal Pension Benefit Guaranty Corporation, regardless of whether the federal Pension Benefit Guaranty Corporation has yet become liable to make any payments with respect to the benefit plan;
(11) Any portion of any unallocated annuity contract which is not issued to or in connection with a specific employee, union, or association of natural persons benefit plan or a government lottery;
(12) A portion of a policy or contract to the extent that the assessments required by Code Section 33-38-15 with respect to the policy or contract are preempted by federal or state law;
(13) An obligation that does not arise under the express written terms of the policy or contract issued by the member insurer to the enrollee, certificate holder, contract owner or policy owner, including without limitation:
(A) Claims based on marketing materials;
(B) Claims based on side letters, riders, or other documents that were issued by the member insurer without meeting applicable policy or contract form filing or approval requirements;
(C) Misrepresentations of or regarding policy or contract benefits;
(D) Extra-contractual claims; or
(E) A claim for penalties or consequential or incidental damages;
(14) A contractual agreement that establishes the member insurer's obligations to provide a book value accounting guaranty for defined contribution benefit plan participants by reference to a portfolio of assets that is owned by the benefit plan or its trustee, which in each case is not an affiliate of the member insurer;
(15) A portion of a policy or contract to the extent it provides for interest or other changes in value to be determined by the use of an index or other external reference stated in the policy or contract, but which have not been credited to the policy or contract, or as to which the policy or contract owner's rights are subject to forfeiture, as of the date the member insurer becomes an impaired or insolvent insurer under this chapter, whichever is earlier. If a policy's or contract's interest or changes in value are credited less frequently than annually, then for purposes of determining the values that have been credited and are not subject to forfeiture under this paragraph, the interest or change in value determined by using the procedures defined in the policy or contract will be credited as if the contractual date of crediting interest or changing values was the date of impairment or insolvency, whichever is earlier, and will not be subject to forfeiture;
(16) A policy or contract providing any hospital, medical, prescription drug, or other health care benefits pursuant to Part C or Part D of Subchapter XVIII, Chapter 7 of Title 42 of the United States Code, commonly known as Medicare Part C & D, Subchapter XIX, Chapter 7 of Title 42 of the United States Code (commonly known as Medicaid), or any regulations issued pursuant thereto; or
(17) Structured settlement annuity benefits to which a payee or beneficiary has transferred his or her rights in a structured settlement factoring transaction, as such term is defined in 26 U.S.C. Section 5891(c)(3)(A) as such term existed on January 23, 2002, regardless of whether the transaction occurred before or after such date.
(d) The exclusion from coverage referenced in paragraph (3) of subsection (c) of this Code section shall not apply to any portion of a policy or contract, including a rider, that provides long-term care for any other health insurance benefit.
(e) The provisions of this Code section shall apply only to coverage the Georgia Life and Health Insurance Guaranty Association provides in connection with any member insurer that is placed under an order of liquidation with a finding of insolvency on or after July 1, 2020.
This chapter shall be construed to effect the purpose set forth in Code Section 33-38-1.
As used in this chapter, the term:
(1) “Account” means any of the two accounts created under Code Section 33-38-5.
(2) “Affiliate” means any person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the person specified.
(3) “Association” means the Georgia Life and Health Insurance Guaranty Association created under Code Section 33-38-5.
(4) “Authorized assessment,” or “authorized” when used in the context of assessments, means a resolution by the board of directors of the association has been passed whereby an assessment will be called immediately or in the future from member insurers for a specified amount. An assessment is authorized when the resolution is passed.
(5) “Benefit plan” means a specific employee, union, or association of natural persons benefit plan.
(6) “Called assessment,” or “called” when used in the context of assessments, means that a notice has been issued by the association to member insurers requiring that an authorized assessment be paid within the time frame set forth within the notice. An authorized assessment becomes a called assessment when notice is mailed by the association to member insurers.
(7) “Contractual obligation” means any obligation under a covered policy, contract, or certificate under a group policy or contract, or portion thereof for which coverage is provided under Code Section 33-38-2.
(8) “Control” or “controlled” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise.
(9) “Covered contract” or “covered policy” means a policy or contract or portion of a policy or contract for which coverage is provided under Code Section 33-38-2.
(10) “Extra-contractual claims” shall include, for example, any claim not authorized by, or outside the scope of, the underlying policy or contract to include any claim based on bad faith, punitive or exemplary damages, treble damages, prejudgment or postjudgment interest, attorney's fees, or costs of litigation.
(11) “Health benefit plan” means any hospital or medical expense policy or certificate, health maintenance organization subscriber contract, or any other similar health contract. This term does not include:
(A) Accident only insurance;
(B) Credit insurance;
(C) Dental only insurance;
(D) Vision only insurance;
(E) Medicare supplement insurance;
(F) Benefits for long-term care, home health care, community based care, or any combination thereof;
(G) Disability income insurance;
(H) Coverage for on-site medical clinics; or
(I) Specified disease, hospital confinement indemnity, or limited benefit health insurance if the types of coverage do not provide coordination of benefits and are provided under separate policies or certificates.
(12) “Health care corporation” means a corporation established in accordance with the provisions of Chapter 20 of Title 33 to administer one or more health care plans as defined in Code Section 33-20-3(4).
(13) “Impaired insurer” means a member insurer which is not an insolvent insurer and is placed under an order of rehabilitation or conservation by a court of competent jurisdiction.
(14) “Insolvent insurer” means a member insurer against which an order of liquidation containing a finding of insolvency has been entered by a court of competent jurisdiction.
(15) “Member insurer” means any insurer, health maintenance organization, or health care corporation which is licensed or which holds a certificate of authority to transact in this state any kind of insurance, health care plan, or health maintenance organization business for which coverage is provided under Code Section 33-38-2 and includes any insurer, health care corporation, or health maintenance organization whose license or certificate of authority in this state may have been suspended, revoked, not renewed, or voluntarily withdrawn, but does not include:
(A) A fraternal benefit society;
(B) A mandatory state pooling plan;
(C) A mutual assessment company or any entity that operates on an assessment basis;
(D) An insurance exchange;
(E) An organization that has a certificate or license limited to the issuance of charitable gift annuities under Code Sections 33-58-1 through 33-58-6; or
(F) Any entity similar to those described in subparagraphs (A) through (E) of this paragraph.
(16) “Moody's Corporate Bond Yield Average” means the Monthly Average Corporates as published by Moody's Investors Service, Inc., or any successor thereto.
(17) “Owner” of a policy or contract, “policyholder,” “policy owner,” and “contract owner” mean the person who is identified as the legal owner under the terms of the policy or contract or who is otherwise vested with legal title to the policy or contract through a valid assignment completed in accordance with the terms of the policy or contract and properly recorded as the owner on the books of the member insurer. The terms “owner,” “contract owner,” “policyholder,” and “policy owner” shall not include persons with a mere beneficial interest in a policy or contract.
(18) “Person” means any individual, corporation, limited liability company, partnership, association, governmental body or entity, or voluntary organization.
(19) “Plan sponsor” means:
(A) The employer in the case of a benefit plan established or maintained by a single employer;
(B) The employee organization in the case of a benefit plan established or maintained by an employee organization; or
(C) In a case of a benefit plan established or maintained by two or more employers or jointly by one or more employers and one or more employee organizations, the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the benefit plan.
(20) “Premiums” means amounts or considerations, by whatever name called, received on covered policies or contracts, less returned premiums, considerations and deposits thereon and less dividends and experience credits. The term “premiums” shall not include:
(A) Amounts or considerations received for policies or contracts or for the portions of policies or contracts for which coverage is not provided under this chapter except that assessable premium shall not be reduced on account of paragraph (3) of subsection (c) of Code Section 33-38-2, relating to interest limitations, and paragraph (12) of Code Section 33-38-7, relating to limitations with respect to one individual, one participant, and one policy or contract owner;
(B) Premiums in excess of $5 million on an unallocated annuity contract; or
(C) With respect to multiple nongroup policies of life insurance owned by one owner, whether the policy or contract owner is an individual, firm, corporation, or other person, and whether the persons insured are officers, managers, employees, or other persons, premiums in excess of $5 million with respect to these policies or contracts, regardless of the number of policies or contracts held by the owner.
(21)(A) “Principal place of business” of a plan sponsor or a person other than a natural person means the single state in which the natural persons who establish policy for the direction, control, and coordination of the operations of the entity as a whole primarily exercise that function, determined by the association in its reasonable judgment by considering the following factors:
(i) The state in which the primary executive and administrative headquarters of the entity is located;
(ii) The state in which the principal office of the chief executive officer of the entity is located;
(iii) The state in which the board of directors, or similar governing person or persons, of the entity conducts the majority of its meetings;
(iv) The state in which the executive or management committee of the board of directors, or similar governing person or persons, of the entity conducts the majority of its meetings;
(v) The state from which the management of the overall operations of the entity is directed; and
(vi) In the case of a benefit plan sponsored by affiliated companies comprising a consolidated corporation, the state in which the holding company or controlling affiliate has its principal place of business as determined using the above factors.
However, in the case of a plan sponsor, if more than 50 percent of the participants in the benefit plan are employed in a single state, that state shall be deemed to be the principal place of business of the plan sponsor.
(B) The principal place of business of a plan sponsor of a benefit plan described in subparagraph (C) of paragraph (19) of this Code section shall be deemed to be the principal place of business of the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the benefit plan that, in lieu of a specific or clear designation of a principal place of business, shall be deemed to be the principal place of business of the employer or employee organization that has the largest investment in the benefit plan in question.
(22) “Receivership court” means the court in the insolvent or impaired insurer's state having jurisdiction over the conservation, rehabilitation, or liquidation of the member insurer.
(23) “Resident” means any person who resides in this state at the time a member insurer is determined to be an impaired or insolvent insurer and to whom contractual obligations are owed. A person may be a resident of only one state, which, in the case of a person other than a natural person, shall be its principal place of business. Citizens of the United States who are either residents of foreign countries or residents of United States possessions, territories, or protectorates that do not have an association similar to the association created by this chapter shall be deemed residents of the state of domicile of the member insurer that issued the policies or contracts.
(24) “State” means a state, the District of Columbia, Puerto Rico, and a United States possession, territory, or protectorate.
(25) “Structured settlement annuity” means an annuity purchased in order to fund periodic payments for a plaintiff or other claimant in payment for or with respect to personal injury suffered by the plaintiff or other claimant.
(26) “Supplemental contract” means a written agreement entered into for the distribution of proceeds under a life, health, or annuity policy or contract.
(27) “Unallocated annuity contract” means an annuity contract or group annuity certificate which is not issued to and owned by an individual, except to the extent of any annuity benefits guaranteed to an individual by an insurer under the contract or certificate.
(a) There is created a nonprofit, unincorporated association to be known as the Georgia Life and Health Insurance Guaranty Association. All member insurers shall be and remain members of the association as a condition of their authority to transact insurance, a health maintenance organization business, or a health care corporation business in this state. The association shall perform its functions under the plan of operation established and approved under Code Section 33-38-8 and shall exercise its powers through a board of directors established under Code Section 33-38-6.
(b) The association shall come under the immediate supervision of the Commissioner and shall be subject to the applicable provisions of the insurance laws of this state.
(c) For purposes of administration and assessment, the association shall maintain two accounts: (1) the health insurance account; and (2) the life insurance and annuity account. The life insurance and annuity account shall contain three subaccounts: (A) the life insurance account; (B) the annuity account; and (C) the unallocated annuity account.
(d) For purposes of assessment, supplemental contracts shall be covered under the account in which the basic policy is covered.
(a) The board of directors of the association shall consist of not less than seven nor more than 11 member insurers serving terms as established in the plan of operation. The members of the board shall be selected by the Commissioner from a list provided to the Commissioner from the board. Vacancies on the board shall be filled for the remaining period of the term by a majority vote of the remaining board members, subject to the approval of the Commissioner.
(b) In approving selections of members to the board, the Commissioner shall consider, among other things, whether all member insurers are fairly represented.
(c) Members of the board may be reimbursed from the assets of the association for reasonable expenses incurred by them in their capacity as members of the board of directors, but members of the board shall not otherwise be compensated by the association for their services.
(a) In addition to the powers and duties enumerated elsewhere in this chapter, the association shall have the following powers and duties:
(1) If a member insurer is an impaired insurer, the association, subject to any conditions, other than those conditions which impair the contractual obligations of the impaired insurer, imposed by the association and approved by the Commissioner, may, in its discretion:
(A) Guarantee, assume, reissue, or reinsure, or cause to be guaranteed, assumed, reissued, or reinsured, any or all of the covered policies or contracts of the impaired insurer; and
(B) Provide such moneys, pledges, loans, notes, guarantees, or other means as are proper to effectuate subparagraph (A) of this paragraph and assure payment of the contractual obligations of the impaired insurer pending action under subparagraph (A) of this paragraph; and
(2) If a member insurer is an insolvent insurer, the association shall, in its discretion, either:
(A)(i)(I) Guarantee, assume, reissue, or reinsure, or cause to be guaranteed, assumed, reissued, or reinsured, the covered policies or contracts of the insolvent insurer; or
(II) Assure payment of the contractual obligations of the insolvent insurer; and
(ii) Provide moneys, pledges, loans, notes, guarantees, or other means as are reasonably necessary to discharge the association's duties; or
(B) Provide benefits and coverages in accordance with the following provisions:
(i) With respect to policies and contracts, assure payment of benefits that would have been payable under the policies or contracts of the insolvent insurer, for claims incurred:
(I) With respect to group policies and contracts, not later than the earlier of the next renewal date under those policies or contracts or 45 days, but in no event less than 30 days, after the date on which the association becomes obligated with respect to the policies and contracts; and
(II) With respect to nongroup policies, contracts, and annuities, not later than the earlier of the next renewal date, if any, under the policies or contracts or one year, but in no event less than 30 days, from the date on which the association becomes obligated with respect to the policies or contracts;
(ii) Make diligent efforts to provide all known insureds, enrollees, or annuitants, for nongroup policies and contracts, or group policy or contract owners with respect to group policies and contracts, 30 days' notice of the termination, pursuant to division (i) of this subparagraph, of the benefits provided;
(iii) With respect to nongroup policies and contracts covered by the association, make available to each known insured, enrollee, or annuitant, or owner if other than the insured or annuitant, and with respect to an individual formerly an insured, enrollee, or annuitant under a group policy or contract who is not eligible for replacement group coverage, make available substitute coverage on an individual basis in accordance with the provisions of division (iv) of this subparagraph, if the insureds, enrollees, or annuitants had a right under law or the terminated policy, contract, or annuity to convert coverage to individual coverage or to continue an individual policy, contract, or annuity in force until a specified age or for a specified time, during which the insurer, health maintenance organization, or health care corporation had no right unilaterally to make changes in any provision of the policy, contract, or annuity or had a right only to make changes in premium by class;
(iv) In providing the substitute coverage required under division (iii) of this subparagraph, the association may offer either to reissue the terminated coverage or to issue an alternative policy or contract at actuarially justified rates, subject to the prior approval of the Commissioner. Alternative or reissued policies or contracts shall be offered without requiring evidence of insurability and shall not provide for any waiting period or exclusion that would not have applied under the terminated policy or contract. The association may reinsure any alternative or reissued policy or contract;
(v)(I) Alternative policies or contracts adopted by the association shall be subject to the approval of the Commissioner. The association may adopt alternative policies or contracts of various types for future issuance without regard to any particular impairment or insolvency.
(II) Alternative policies or contracts shall contain at least the minimum statutory provisions required in this state and provide benefits that shall not be unreasonable in relation to the premium charged. The association shall set the premium in accordance with a table of rates that it shall adopt. The premium shall reflect the amount of insurance to be provided and the age and class of risk of each insured, but shall not reflect any changes in the health of the insured after the original policy was last underwritten.
(III) Any alternative policy or contract issued by the association shall provide coverage of a type similar to that of the policy or contract issued by the impaired or insolvent insurer, as determined by the association;
(vi) If the association elects to reissue terminated coverage at a premium rate different from that charged under the terminated policy or contract, the premium shall be actuarially justified and set by the association in accordance with the amount of insurance or coverage provided and the age and class of risk, subject to prior approval of the Commissioner;
(vii) The association's obligations with respect to coverage under any policy or contract of the impaired or insolvent insurer or under any reissued or alternative policy or contract shall cease on the date the coverage, policy, or contract is replaced by another similar policy or contract by the policy or contract owner, the insured, the enrollee, or the association; and
(viii) When proceeding under this subparagraph with respect to a policy or contract carrying guaranteed minimum interest rates, the association shall assure the payment or crediting of a rate of interest consistent with paragraph (3) of subsection (c) of Code Section 33-38-2;
(3) Nonpayment of premiums within 31 days after the date required under the terms of any guaranteed, assumed, alternative, or reissued policy or contract or substitute coverage shall terminate the association's obligations under the policy, contract or coverage under this chapter with respect to the policy, contract, or coverage, except with respect to any claims incurred or any net cash surrender value which may be due in accordance with the provisions of this chapter;
(4) Premiums due for coverage after entry of an order of liquidation of an insolvent insurer shall belong to and be payable at the direction of the association. The association shall be liable for unearned premiums due to policy or contract owners arising after the entry of the order;
(5) The protection provided by this chapter shall not apply where any guaranty protection is provided to residents of this state by the laws of the domiciliary state or jurisdiction of the impaired or insolvent insurer other than this state;
(6) In carrying out its duties under paragraph (2) of this Code section, the association may:
(A) Subject to approval by a court in this state, impose permanent policy or contract liens in connection with a guarantee, assumption, or reinsurance agreement, if the association finds that the amounts which can be assessed under this chapter are less than the amounts needed to assure full and prompt performance of the association's duties under this chapter, or that the economic or financial conditions as they affect member insurers are sufficiently adverse to render the imposition of such permanent policy or contract liens, to be in the public interest; and
(B) Subject to approval by a court in this state, impose temporary moratoriums or liens on payments of cash values and policy loans, or any other right to withdraw funds held in conjunction with policies or contracts, in addition to any contractual provisions for deferral of cash or policy loan value. In addition, in the event of a temporary moratorium or moratorium charge imposed by the receivership court on payment of cash values or policy loans, or on any other right to withdraw funds held in conjunction with policies or contracts, out of the assets of the impaired or insolvent insurer, the association may defer the payment of cash values, policy loans, or other rights by the association for the period of the moratorium or moratorium charge imposed by the receivership court, except for claims covered by the association to be paid in accordance with a hardship procedure established by the liquidator or rehabilitator and approved by the receivership court;
(7) A deposit in this state, held pursuant to law or required by the Commissioner for the benefit of creditors, including policy or contract owners, not turned over to the domiciliary liquidator upon the entry of a final order of liquidation or order approving a rehabilitation plan of an insurer domiciled in this state or in a reciprocal state, pursuant to Code Sections 33-3-8 through 33-3-10, shall be promptly paid to the association. The association shall be entitled to retain a portion of any amount so paid to it equal to the percentage determined by dividing the aggregate amount of policy or contract owners' claims related to that insolvency for which the association has provided statutory benefits by the aggregate amount of all policy or contract owners' claims in this state related to that insolvency and shall remit to the domiciliary receiver the amount so paid to the association less the amount retained pursuant to this paragraph. Any amount so paid to the association and retained by it shall be treated as a distribution of estate assets pursuant to applicable state receivership law dealing with early access disbursements.
(8) If the association fails to act within a reasonable period of time with respect to an insolvent insurer, as provided in paragraph (2) of this Code section, the Commissioner shall have the powers and duties of the association under this chapter with respect to the insolvent insurers;
(9) Upon the Commissioner's request, the association may render assistance and advice to the Commissioner concerning rehabilitation, payment of claims, continuance of coverage, or the performance of other contractual obligations of any impaired or insolvent insurer;
(10) The association shall have standing to appear or intervene before any court or agency in this state with jurisdiction over an impaired or insolvent insurer concerning which the association is or may become obligated under this chapter or with jurisdiction over any person or property against which the association may have rights through subrogation or otherwise. Such standing shall extend to all matters germane to the powers and duties of the association, including but not limited to proposals for reinsuring, reissuing, modifying, or guaranteeing the policies or contracts of the impaired or insolvent insurer and the determination of the policies or contracts and contractual obligations. The association shall also have the right to appear or intervene before a court or agency in another state with jurisdiction over an impaired or insolvent insurer for which the association is or may become obligated or with jurisdiction over any person or property against whom the association may have rights through subrogation or otherwise;
(11)(A) Any person receiving benefits under this chapter shall be deemed to have assigned the rights under, and any causes of action against any person for losses arising under, resulting from, or otherwise relating to, the covered policy or contract to the association to the extent of the benefits received because of this chapter, whether the benefits are payments of or on account of contractual obligations, continuation of coverage, or provision of substitute or alternative policies, contracts, or coverages. The association may require an assignment to it of such rights and causes of action by any enrollee, payee, policy or contract owner, beneficiary, insured, or annuitant as a condition precedent to the receipt of any rights or benefits conferred by this chapter upon such person. The association shall be subrogated to these rights against the assets of any impaired or insolvent insurer.
(B) The subrogation rights of the association under this paragraph shall have the same priority against the assets of the impaired or insolvent insurer as that possessed by the person entitled to receive benefits under this chapter.
(C) In addition to subparagraphs (A) and (B) of this paragraph, the association shall have all common law rights of subrogation and any other equitable or legal remedy that would have been available to the impaired or insolvent insurer or owner, beneficiary, enrollee, or payee of a policy or contract with respect to the policy or contracts.
(D) If subparagraphs (A) through (C) of this paragraph are invalid or ineffective with respect to any person or claim for any reason, the amount payable by the association with respect to the related covered obligations shall be reduced by the amount realized by any other person with respect to the person or claim that is attributable to the policies or contracts, or portion thereof, covered by the association.
(E) If the association has provided benefits with respect to a covered obligation and a person recovers amounts as to which the association has rights as described in this paragraph, the person shall pay to the association the portion of the recovery attributable to the policies or contracts, or portion thereof, covered by the association;
(12) The benefits that the association may become obligated to cover shall in no event exceed the lesser of:
(A) The contractual obligations for which the member insurer is liable or would have been liable if it were not an impaired or insolvent insurer;
(B) With respect to one life, regardless of the number of policies or contracts:
(i) The amount of $300,000.00 in life insurance death benefits, but not more than $100,000.00 in net cash surrender and net cash withdrawal values for life insurance;
(ii) For health insurance benefits, $300,000.00 for disability income insurance; $300,000.00 for long-term care insurance; $300,000.00 for health insurance other than disability income insurance as referenced above, long-term care insurance as referenced above or health benefit plans as referenced below, including any net cash surrender and net cash withdrawal values; and $500,000.00 for health benefit plans; and
(iii) The amount of $300,000.00 in the present value of annuity benefits, but not more than $250,000.00 in net cash surrender and net cash withdrawal values for an annuity;
(C) With respect to each payee of a structured settlement annuity, or beneficiary or beneficiaries of the payee if deceased, $300,000.00 in present value annuity benefits, in the aggregate, including net cash surrender and net cash withdrawal values, if any;
(D) However, in no event shall the association be obligated to cover more than:
(i) An aggregate of $300,000.00 in benefits with respect to any one life under subparagraphs (B) and (C) of this paragraph except with respect to benefits for health benefit plans under division (ii) of this subparagraph, in which case the aggregate liability of the association shall not exceed $500,000.00 with respect to any one individual; or
(ii) With respect to one owner of multiple nongroup policies of life insurance, whether the policy or contract owner is an individual, firm, corporation, or other person, and whether the persons insured are officers, managers, employees, or other persons, more than $5 million in benefits, regardless of the number of policies and contracts held by the owner;
(E) With respect to either one contract owner provided coverage under subparagraph (b)(2)(B) of Code Section 33-38-2 or one plan sponsor whose plans own directly or in trust one or more unallocated annuity contracts, $5 million in benefits, regardless of the number of contracts with respect to the contract owner or plan sponsor. However, in the case where one or more unallocated annuity contracts are covered contracts under this chapter and are owned by a trust or other entity for the benefit of two or more plan sponsors, coverage shall be afforded by the association if the largest interest in the trust or entity owning the contract or contracts is held by a plan sponsor whose principal place of business is in this state and in no event shall the association be obligated to cover more than $5 million in benefits with respect to all these unallocated contracts;
(F) The limitations set forth in this paragraph are limitations on the benefits for which the association is obligated before taking into account either its subrogation and assignment rights or the extent to which those benefits could be provided out of the assets of the impaired or insolvent insurer attributable to covered policies. The costs of the association's obligations under this chapter may be met by the use of assets attributable to covered policies or reimbursed to the association pursuant to its subrogation and assignment rights; and
(G) For purposes of this chapter, benefits provided by a long-term care rider to a life insurance policy or annuity contract shall be considered the same type of benefits as the base life insurance policy or annuity contract to which it relates.
(13) In performing its obligations to provide coverage under this Code section, the association shall not be required to guarantee, assume, reinsure, reissue, or perform, or cause to be guaranteed, assumed, reinsured, reissued, or performed, the contractual obligations of the insolvent or impaired insurer under a covered policy or contract that does not materially affect the economic values or economic benefits of the covered policy or contract;
(14) In addition to the rights and powers elsewhere in this chapter, the association may:
(A) Enter into such contracts as are necessary or proper to carry out the provisions and purposes of this chapter;
(B) Sue or be sued, including the right to seek a declaratory judgment in any superior court of this state as to uncertainties with respect to the payment of benefits under this Code section. The association may also take any legal actions necessary or proper for recovery of any unpaid assessments under Code Section 33-38-15 and may settle claims or potential claims against it;
(C) Borrow money to effect the purposes of this chapter. Any notes or other evidence of indebtedness of the association not in default shall be legal investments for domestic member insurers and may be carried as admitted assets;
(D) Employ or retain such persons as are necessary to handle the financial transactions of the association and to perform such other functions as become necessary or proper under this chapter;
(E) Negotiate and contract with any liquidator, rehabilitator, conservator, or ancillary receiver to carry out the powers and duties of the association;
(F) Take such legal action as may be necessary to avoid payment of improper claims; and
(G) Exercise, for the purposes of this chapter and to the extent approved by the Commissioner, the powers of a domestic life insurer, health insurer, health maintenance organization or health care corporation; but in no case may the association issue policies or contracts other than those issued to perform its obligations under this chapter;
(15) Organize itself as a corporation or in other legal form permitted by the laws of the state;
(16) Request information from a person seeking coverage from the association in order to aid the association in determining its obligations under this chapter with respect to the person, and the person shall promptly comply with the request;
(17) Unless prohibited by law, in accordance with the terms and conditions of the policy or contract, file for actuarially justified rate or premium increases for any policy or contract for which it provides coverage under this chapter;
(18) Take other necessary or appropriate action to discharge its duties and obligations under this chapter or to exercise its powers under this chapter;
(19) The association may join an organization of one or more other state associations of similar purposes, to further the purposes and administer the powers and duties of the association;
(20) With respect to covered policies for which the association becomes obligated after an entry of an order of liquidation, the association may elect to succeed to the rights of the insolvent insurer arising after the order of liquidation under any contract of reinsurance to which the insolvent insurer was a party, to the extent such contract provides coverage for losses occurring after the date of the order of liquidation. As a condition to making such election, the association must pay all unpaid premiums due under the contract for coverage relating to periods before and after the date on which the order of liquidation was entered;
(21) The board of directors shall have discretion and may exercise reasonable business judgment to determine the means by which the association is to provide the benefits of this chapter in an economical and efficient manner;
(22) Where the association has arranged or offered to provide the benefits of this chapter to a covered person under a plan or arrangement that fulfills the association's obligations under this chapter, the person shall not be entitled to benefits from the association in addition to or other than those provided under the plan or arrangement;
(23) Exclusive venue in any action by or against the association is in the Superior Court of DeKalb County. The association may, at its option, waive such venue as to specific actions. The association shall not be required to give an appeal bond in an appeal that relates to a cause of action arising under this chapter; and
(24) In carrying out its duties in connection with guaranteeing, assuming, reissuing, or reinsuring policies or contracts under paragraph (1) or (2) of this Code section, the association may issue substitute coverage for a policy or contract that provides an interest rate, crediting rate, or similar factor determined by use of an index or other external reference stated in the policy or contract employed in calculating returns or changes in value by issuing an alternative policy or contract in accordance with the following provisions:
(A) In lieu of the index or other external reference provided for in the original policy or contract, the alternative policy or contract provides for a fixed interest rate, payment of dividends with minimum guarantees, or a different method for calculating interest or changes in value;
(B) There is no requirement for evidence of insurability, waiting period, or other exclusion that would not have applied under the replaced policy or contract; and
(C) The alternative policy or contract is substantially similar to the replaced policy or contract in all other material terms.
(b) The provisions of this Code section shall apply only to coverage the Georgia Life and Health Insurance Guaranty Association provides in connection with any member insurer that is placed under an order of liquidation with a finding of insolvency on or after July 1, 2020.
(a) The association shall submit to the Commissioner a plan of operation and any amendments thereto necessary or suitable to assure the fair, reasonable, and equitable administration of the association. The plan of operation and any amendments thereto shall become effective upon approval in writing by the Commissioner. If the association fails to submit a suitable plan of operation or, if at any time thereafter the association fails to submit suitable amendments to the plan, the Commissioner shall, after notice and hearing, adopt and promulgate such reasonable rules as are necessary or advisable to effectuate the provisions of this chapter. Such rules shall continue in force until modified by the Commissioner or superseded by a plan submitted by the association and approved in writing by the Commissioner.
(b) All member insurers shall comply with the plan of operation.
(c) The plan of operation shall, in addition to requirements enumerated elsewhere in this chapter:
(1) Establish procedures for handling the assets of the association;
(2) Establish the amount and method of reimbursing members of the board of directors under Code Section 33-38-6;
(3) Establish regular places and times for meetings of the board of directors;
(4) Establish procedures for records to be kept of all financial transactions of the association, its agents, and the board of directors;
(5) Establish any additional procedures for assessments under Code Section 33-38-15; and
(6) Contain additional provisions necessary or proper for the execution of the powers and duties of the association.
The plan of operation described in Code Section 33-38-8 may provide that any or all powers and duties of the association, except those under subparagraph (a)(14)(C) of Code Section 33-38-7 and Code Section 33-38-15, shall be delegated to a corporation, association, or other organization which performs or will perform functions similar to those of this association or its equivalent in two or more states. Such a corporation, association, or organization shall be reimbursed for any payments made on behalf of the association and shall be paid for its performance of any function of the association. A delegation under this Code section shall take effect only with the approval of both the board of directors and the Commissioner and may be made only to a corporation, association, or organization which extends protection not substantially less favorable and effective than that provided for by this chapter.
In addition to the duties and powers enumerated elsewhere in this chapter:
(1) The Commissioner shall:
(A) Upon request of the board of directors, provide the association with a statement of the premiums in the appropriate states for each member insurer; and
(B) When an impairment is declared and the amount of the impairment is determined, serve a demand upon the impaired insurer to make good the impairment within a reasonable time. Notice to the impaired insurer shall constitute notice to its shareholders, if any. The failure of the impaired insurer to comply promptly with such demand shall not excuse the association from the performance of its powers and duties under this chapter; and
(2) The Commissioner may suspend or revoke, after notice and hearing, the certificate of authority to transact business in this state of any member insurer which fails to pay an assessment when due or fails to comply with the plan of operation.
Records shall be kept of all negotiations and meetings in which the association or its representatives are involved to discuss the activities of the association in carrying out its powers and duties under Code Section 33-38-7. The records of the association with respect to an impaired or insolvent insurer shall not be disclosed prior to the termination of a liquidation, rehabilitation, or conservation proceeding involving the impaired or insolvent insurer, except (a) upon the termination of the impairment or insolvency of the insurer, or (b) upon the order of a court of competent jurisdiction. Nothing in this Code section shall limit the duty of the association to render a report of its activities under Code Section 33-38-12.
The association shall be subject to examination and regulation by the Commissioner. Notwithstanding the foregoing, whether such examinations shall be conducted and the frequency of any such examination shall be at the sole discretion of the Commissioner. The board of directors shall submit to the Commissioner not later than May 1 of each year a financial report and a report of its activities for the preceding calendar year on forms approved by the Commissioner.
The association shall be exempt from all taxation in this state based upon income or gross receipts and shall likewise be exempt from all state and local occupation license and business fees and occupation license and business taxes.
There shall be no liability on the part of and no cause of action of any nature shall arise against any member insurer or its agents or employees, the association or its agents or employees, members of the board of directors, or the Commissioner or his or her representatives, for any action or omission by them in the performance of their powers and duties under this chapter. This immunity shall extend to the participation in any organization of one or more other state associations of similar purposes and to any such organization and its agents or employees.
(a) For the purpose of providing the funds necessary to carry out the powers and duties of the association, the board of directors shall assess the member insurers separately for the health account and for each subaccount of the life insurance and annuity account at such time and for such amounts as the board finds necessary. Assessment shall be due not less than 30 days after prior written notice to the member insurers.
(b) There shall be two classes of assessments, as follows:
(1) Class A assessments shall be authorized and called for the purpose of meeting administrative costs and legal and other general expenses not related to a particular impaired or insolvent insurer, and examinations conducted under the authority of subsection (c) of Code Section 33-38-16; and
(2) Class B assessments shall be authorized and called to the extent necessary to carry out the powers and duties of the association under Code Section 33-38-7 with regard to an impaired or insolvent insurer.
(c)(1) The amount of any Class A assessment shall be determined by the board of directors and may be made on a pro rata or non-pro rata basis. If a Class A assessment is made on a pro rata basis, the board may provide that it be credited against future Class B assessments. The amount of any Class B assessment except for assessments related to long-term care insurance, shall be allocated for assessment purposes between the accounts and among the subaccounts in subsection (c) of Code Section 33-38-5 pursuant to an allocation formula which may be based on the premiums or reserves of the impaired or insolvent insurer or any other standard deemed by the board in its sole discretion as being fair and reasonable under the circumstances. The amount of the Class B assessment for long-term care insurance written by the impaired or insolvent insurer shall be allocated according to a method included in the plan of operation and approved by the Commissioner. Such method shall provide for 50 percent of the assessment to be allocated to accident and health member insurers and 50 percent to be allocated to life and annuity member insurers.
(2) Class B assessments against member insurers for each account or subaccount shall be in the proportion that the premiums received on business in this state by each assessed member insurer on policies or contracts covered by each account or subaccount for the three most recent calendar years for which information is available preceding the year in which the member insurer became impaired or insolvent, as the case may be, bears to such premiums received on business in this state for such calendar years by all assessed member insurers.
(3) Assessments for funds to meet the requirements of the association with respect to an impaired or insolvent insurer shall not be authorized or called until necessary to implement the purposes of this chapter. Classification of assessments under subsection (b) of this Code section and computation of assessments under this subsection shall be made with a reasonable degree of accuracy, recognizing that exact determinations may not always be possible. The association shall notify each member insurer of its anticipated pro rata share of an authorized assessment not yet called within 180 days after the assessment is authorized.
(d) The association may abate or defer in whole or in part the assessment of a member insurer if, in the opinion of the board of directors, payment of the assessment would endanger the ability of the member insurer to fulfill its contractual obligations. In the event an assessment against a member insurer is abated or deferred in whole or in part, the amount by which such assessment is abated or deferred may be assessed against the other member insurers in a manner consistent with the basis for assessments set forth in this Code section. Once the conditions that caused a deferral have been removed or rectified, the member insurer shall pay all assessments that were deferred pursuant to a repayment plan approved by the association.
(e)(1) The total of all assessments upon a member insurer for each account shall not in any one calendar year exceed 2 percent of such member insurer's premiums received in this state on the policies covered by the account during the calendar year preceding the assessment. If the maximum assessment in any account, together with the other assets of the association, does not provide in any one year in such account an amount sufficient to carry out the responsibilities of the association, the necessary additional funds shall be assessed as soon thereafter as permitted by this chapter.
(2) The total of all assessments upon a member insurer for each subaccount of the life insurance and annuity account shall not in any one calendar year exceed 2 percent of such insurer's premiums received in this state on the policies covered by the subaccount during the calendar year preceding the assessment. If the maximum assessment for any subaccount of the life insurance and annuity account in any one year does not provide an amount sufficient to carry out the responsibilities of the association, then the board shall assess the other subaccounts of the life insurance and annuity account for the necessary additional amount up to the maximum assessment level provided in paragraph (1) of this subsection.
(f) The board may, by an equitable method as established in the plan of operation, refund to member insurers, in proportion to the contribution of each member insurer to that account or subaccount, the amount by which the assets of the account or subaccount exceed the amount the board finds is necessary to carry out the obligations of the association during the coming year with regard to that account or subaccount, including assets accruing from net realized gains and income from investments. A reasonable amount may be retained in any account or subaccount to provide funds for the continuing expenses of the association and for future losses if the board determines that refunds are impractical.
(g) It shall be proper for any member insurer in determining its premium rates and policy owner dividends as to any kind of insurance health maintenance organization business or health care corporation business within the scope of this chapter to consider the amount reasonably necessary to meet its assessment obligations under this chapter.
(h) The association shall issue to each member insurer paying an assessment under this chapter, other than a Class A assessment, a certificate of contribution, in a form prescribed by the Commissioner for the amount of the assessment paid. All outstanding certificates shall be of equal dignity and priority without reference to amounts or dates of issue. A certificate of contribution may be shown by the member insurer in its financial statement as an asset in such form, for such an amount and for such period of time, not to exceed five years from the date of assessment, as the Commissioner may approve.
(i)(1) A member insurer that wishes to protest all or part of an assessment shall pay when due the full amount of the assessment as set forth in the notice provided by the association. The payment shall be available to meet association obligations during the pendency of the protest or any subsequent appeal. Payment shall be accompanied by a statement in writing that the payment is made under protest and setting forth a brief statement of the grounds for the protest.
(2) Within 60 days following the payment of an assessment under protest by a member insurer, the association shall notify the member insurer in writing of its determination with respect to the protest unless the association notifies the member insurer that additional time is required to resolve the issues raised by the protest.
(3) Within 30 days after a final decision has been made, the association shall notify the protesting member insurer in writing of that final decision. Within 60 days of receipt of notice of the final decision, the protesting member insurer may appeal that final action to the Commissioner.
(4) In the alternative to rendering a final decision with respect to a protest based on a question regarding the assessment base, the association may refer protests to the Commissioner for a final decision, with or without a recommendation from the association.
(5) If the protest or appeal on the assessment is upheld, the amount paid in error or excess shall be returned to the member insurer. Interest on a refund due a protesting member insurer shall be paid at the rate actually earned by the association.
(j) The association may request information of member insurers in order to aid in the exercise of its power under this Code section, and member insurers shall promptly comply with a request.
(a) The board of directors may, upon majority vote, make reports and recommendations to the Commissioner upon any matter germane to the solvency, liquidation, rehabilitation, or conservation of any member insurer, or to the solvency of any health maintenance organization, insurer, or health care corporation seeking to do business in this state. Such reports and recommendations shall not be considered public documents.
(b) The board of directors may, upon majority vote, notify the Commissioner of any information indicating any member insurer may be an impaired or insolvent insurer.
(c) The board of directors may, upon majority vote, request that the Commissioner order an examination of any member insurer which the board in good faith believes may be an impaired or insolvent insurer. Within 30 days of the receipt of such request, the Commissioner shall begin such examination. The examination may be conducted as a National Association of Insurance Commissioners' examination or may be conducted by such persons as the Commissioner designates. The cost of such examination shall be paid by the association, and the examination report shall be treated the same as other examination reports. In no event shall such examination report be released to the board of directors prior to its release to the public, but this shall not preclude the Commissioner from complying with subsection (a) of this Code section. The Commissioner shall notify the board of directors when the examination is completed. The request for an examination shall be kept on file by the Commissioner, but it shall not be open to public inspection prior to the release of the examination report to the public.
(d) The board of directors may, upon majority vote, make recommendations to the Commissioner for the detection and prevention of member insurer insolvencies.
(e) The board of directors shall, at the conclusion of any insurer insolvency in which the association was obligated to pay covered claims, prepare a report to the Commissioner containing such information as it may have in its possession bearing on the history and causes of such insolvency. The board shall cooperate with the board of directors of guaranty associations in other states in preparing a report on the history and causes of insolvency of a particular insurer and may adopt by reference any report prepared by such other associations.
(a) This chapter shall not be construed to reduce the liability for unpaid assessments of the insureds of an impaired or insolvent insurer operating under a plan with assessment liability.
(b) For the purpose of carrying out its obligations under this chapter, the association shall be deemed to be a creditor of the impaired or insolvent insurer to the extent of the assets attributable to covered policies, reduced by any amounts to which the association is entitled as subrogee pursuant to paragraph (11) of Code Section 33-38-7. The assets of the impaired or insolvent insurer attributable to covered policies shall be used by the association to continue the covered policies and pay the contractual obligations of the impaired or insolvent insurer as required by this chapter. For purposes of this subsection, that portion of the total assets of an impaired or insolvent insurer that is attributable to covered policies or contracts shall be determined by using the same proportion as the reserves that should have been established for such policies or contracts bears to the reserves that should have been established for all policies of insurance or health benefit plans written by the impaired or insolvent insurer.
(c) As a creditor of the impaired or insolvent insurer as established in subsection (b) of this Code section and consistent with Code Section 33-37-33, the association and other similar associations shall be entitled to receive a disbursement of assets out of the marshaled assets, from time to time as the assets become available to reimburse it, as a credit against contractual obligations under this chapter. If the liquidator has not, within 120 days of a final determination of insolvency of a member insurer by the receivership court, made an application to the court for the approval of a proposal to disburse assets out of marshaled assets to guaranty associations having obligations because of the insolvency, then the association shall be entitled to make application to the receivership court for approval of its own proposal to disburse these assets.
(d)(1) Prior to the termination of any liquidation, rehabilitation, or conservation proceeding, the court may take into consideration the contributions of the respective parties, including the association, the shareholders, contract owners, certificate holders, enrollees, and policy owners of the insolvent insurer, and any other party with a bona fide interest, in making an equitable distribution of the ownership rights of such insolvent insurer. In such a determination, consideration shall be given to the welfare of the policyholders, contract owners, certificate holders, and enrollees of the continuing or successor member insurer.
(2) No distribution to stockholders of an impaired or insolvent insurer shall be made until and unless the total amount of valid claims of the association with interest thereon for funds expended in carrying out its powers and duties under Code Section 33-38-7, with respect to such member insurer, has been fully recovered by the association.
(3) No insurer that is subject to any delinquency proceedings, whether formal or informal, administrative or judicial, shall have any of its assets returned to the control of its shareholders or private management until all payments of or on account of the insurer's contractual obligations by all guaranty associations, along with all expenses thereof and interest on all such payments and expenses, shall have been repaid to the guaranty associations or a plan of repayment by the insurer shall have been approved by the guaranty association.
(e)(1) If an order for liquidation or rehabilitation of a member insurer domiciled in this state has been entered, the receiver appointed under such order shall have a right on behalf of the member insurer to recover from any affiliate the amount of distributions, other than stock dividends paid by the member insurer on its capital stock, made at any time during the five years preceding the petition for liquidation or rehabilitation, subject to the limitations of this Code section.
(2) No such distribution shall be recoverable if the member insurer shows that the distribution was lawful and reasonable when paid and that the member insurer did not know and could not reasonably have known that the distribution might adversely affect the ability of the member insurer to fulfill its contractual obligations.
(3) Any person who was an affiliate that controlled the member insurer at the time the distributions were paid shall be liable to the extent of the distributions received. Any person who was an affiliate that controlled the member insurer at the time the distributions were declared shall be liable to the extent of the distributions that would have been received if such distributions had been paid immediately. Whenever two persons are liable with respect to the same distribution, they shall be jointly and severally liable.
(4) The maximum amount recoverable under this subsection shall be the amount needed, in excess of all other available assets of the insolvent insurer, to pay the contractual obligations of the insolvent insurer.
(5) Whenever any person liable under paragraph (3) of this subsection is insolvent, all affiliates that controlled it at the time the distribution was paid shall be jointly and severally liable for any resulting deficiency in the amount recovered from the insolvent affiliate.
All proceedings in any court in this state in which the insolvent insurer is a party shall be stayed 180 days from the date of a final order of liquidation, rehabilitation, or conservation to permit proper legal action by the association on any matters germane to its powers or duties. As to judgment entered under any decision, order, verdict, or finding based on default, the association may apply to have such judgment set aside by the same court that made such judgment and shall be permitted to defend against such action on the merits.
The liquidator, rehabilitator, or conservator of any impaired insurer may notify all interested persons of the effect of this chapter.
Any action of the board of directors may be appealed to the Commissioner by any member insurer if such appeal is taken within 60 days of its receipt of notice of the action being appealed. Any final action or order of the Commissioner shall be subject to judicial review in a court of competent jurisdiction in accordance with the laws of this state that may apply to the actions or orders of the Commissioner.
(a) No person, including a member insurer or agent or affiliate of a member insurer, shall make, publish, disseminate, circulate, or place before the public or cause directly or indirectly to be made, published, disseminated, circulated, or placed before the public, in any newspaper, magazine, or other publication; in the form of a notice, circular, pamphlet, letter, or poster; over any radio station or television station; or in any other way, any advertisement, announcement, or statement which uses the existence of the association for the purposes of sales, solicitation, or inducement to purchase any form of insurance or other coverage covered by this chapter. This Code section shall not apply to the association or any other entity which does not sell or solicit insurance or coverage provided by a health maintenance organization or a health care corporation.
(b) Any person who violates subsection (a) of this Code section may, after notice and hearing and upon order of the Commissioner, be subject to one or more of the following:
(1) A monetary penalty of not more than $1,000.00 for each act or violation, but not to exceed an aggregate penalty of $10,000.00; or
(2) Suspension or revocation of his or her license or certificate of authority.
(a) A member insurer may offset against its premium tax liability to this state an assessment described in Code Section 33-38-15 to the extent of 20 percent of the amount of such assessment for each of the five calendar years following the year in which such assessment was paid. In the event a member insurer should cease doing business, all uncredited assessments may be credited against its premium tax liability for the year it ceases doing business.
(b) A member insurer that is exempt from taxes referenced in subsection (a) of this Code section may recoup its assessments by a surcharge on its premiums in a sum reasonably calculated to recoup the assessments over a reasonable period of time, as approved by the Commissioner. Amounts recouped shall not be considered premiums for any other purpose, including the computation of gross premium tax, the medical loss ratio, or agent commission. If a member insurer collects excess surcharges, the insurer shall remit the excess amount to the association, and the excess amount shall be applied to reduce future assessments in the appropriate account.
(c) Any sums which are acquired by refund, pursuant to subsection (f) of Code Section 33-38-15, from the association by member insurers and which have theretofore been offset against premium taxes as provided in subsection (a) of this Code section shall be paid by such member insurers to this state in such manner as the Commissioner may require. The association shall notify the Commissioner that such refunds have been made.
The purpose of this chapter is to establish standards for the collection, use, and disclosure of information gathered in connection with insurance transactions by insurance institutions, agents, or insurance-support organizations; to maintain a balance between the need for information by those conducting the business of insurance and the public's need for fairness in insurance information practices, including the need to minimize intrusiveness; to establish a regulatory mechanism to enable natural persons to ascertain what information is being or has been collected about them in connection with insurance transactions and to have access to such information for the purpose of verifying or disputing its accuracy; to limit the disclosure of information collected in connection with insurance transactions; and to enable insurance applicants and policyholders to obtain the reasons for any adverse underwriting decision.
(a) The obligations imposed by this chapter shall apply to those insurance institutions, agents, or insurance-support organizations which:
(1) In the case of life, health, or disability insurance:
(A) Collect, receive, or maintain information which pertains to natural persons who are residents of this state in connection with insurance transactions; or
(B) Engage in insurance transactions with applicants, individuals, or policyholders who are residents of this state; and
(2) In the case of property or casualty insurance:
(A) Collect, receive, or maintain information in connection with insurance transactions involving policies, contracts, or certificates of insurance delivered, issued for delivery, or renewed in this state; or
(B) Engage in insurance transactions involving policies, contracts, or certificates of insurance delivered, issued for delivery, or renewed in this state.
(b) The rights granted by this chapter shall extend to:
(1) In the case of life, health, or disability insurance, the following persons who are residents of this state:
(A) Natural persons who are the subject of information collected, received, or maintained in connection with insurance transactions; and
(B) Applicants, individuals, or policyholders who engage in or seek to engage in insurance transactions; and
(2) In the case of property or casualty insurance, the following persons:
(A) Natural persons who are the subject of information collected, received, or maintained in connection with insurance transactions involving policies, contracts, or certificates of insurance delivered, issued for delivery, or renewed in this state; and
(B) Applicants, individuals, or policyholders who engage in or seek to engage in insurance transactions involving policies, contracts, or certificates of insurance delivered, issued for delivery, or renewed in this state.
(c) For purposes of this Code section, a person shall be considered a resident of this state if the person's last known mailing address, as shown in the records of the insurance institution, agent, or insurance-support organization, is located in this state.
(d) Notwithstanding subsections (a) and (b) of this Code section, this chapter shall not apply to information collected from the public records of a governmental authority and maintained by an insurance institution or its representatives for the purpose of insuring the title to real property located in this state.
As used in this chapter:
(1) “Adverse underwriting decision” means:
(A) Any of the following actions with respect to insurance transactions involving insurance coverage which is individually underwritten:
(i) A declination of insurance coverage;
(ii) A termination of insurance coverage;
(iii) Failure of an agent to apply for insurance coverage with a specific insurance institution which the agent represents and which is requested by an applicant;
(iv) In the case of property or casualty insurance coverage:
(I) Placement by an insurance institution or agent of a risk with a residual market mechanism or an unauthorized insurer; or
(II) The charging of a higher rate on the basis of information which differs from that which the applicant or policyholder furnished;
(v) In the case of a life, health, or disability insurance coverage, an offer to insure at higher than standard rates; or
(B) Notwithstanding subparagraph (A) of this paragraph, the following actions shall not be considered adverse underwriting decisions but the insurance institution or agent responsible for their occurrence shall nevertheless provide the applicant or policyholder with the specific reason or reasons for their occurrence:
(i) The termination of an individual policy form on a class or state-wide basis;
(ii) A declination of insurance coverage solely because such coverage is not available on a class or state-wide basis;
(iii) The rescission of a policy; or
(iv) The accommodation of an insured by an agent who places insurance for such insured with any insurer, residual market mechanism, or unauthorized insurer which is satisfactory to such insured when such insured has been canceled, nonrenewed, declined, or otherwise unable to obtain coverage for any reason.
(2) “Affiliate” or “affiliated” means a person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with another person.
(3) “Agent” means any agent, broker, subagent, counselor, adjustor, solicitor, or service representative as defined in Code Sections 33-23-1 and 33-23-40.
(4) “Applicant” means any person who seeks to contract for insurance coverage other than a person seeking insurance coverage that is not individually underwritten.
(5) “Consumer report” means any written, oral, or other communication of information bearing on a natural person's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used in connection with an insurance transaction.
(6) “Consumer reporting agency” means any person who:
(A) Regularly engages, in whole or in part, in the practice of assembling or preparing consumer reports for a monetary fee;
(B) Obtains information primarily from sources other than insurance institutions; and
(C) Furnishes consumer reports to other persons.
(7) “Control” including the term “controlled by” or “under common control with,” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person.
(8) “Declination of insurance coverage” means a denial, in whole or in part, by an insurance institution or agent of requested insurance coverage.
(9) “Individual” means any natural person who:
(A) In the case of property or casualty insurance, is a past, present, or proposed named insured or certificate holder;
(B) In the case of life, health, or disability insurance, is a past, present, or proposed principal insured or certificate holder;
(C) Is a past, present, or proposed policyowner;
(D) Is a past or present applicant;
(E) Is a past or present claimant; or
(F) Derived, derives, or is proposed to derive insurance coverage under an insurance policy or certificate subject to this chapter.
(10) “Institutional source” means any person or governmental entity that provides information about an individual to an agent, insurance institution, or insurance-support organization other than:
(A) An agent;
(B) The individual who is the subject of the information; or
(C) A natural person acting in a personal capacity rather than in a business or professional capacity.
(11) “Insurance institution” means any corporation, association, partnership, reciprocal exchange, interinsurer, Lloyd's insurer, fraternal benefit society, or other person engaged in the business of insurance, including health care plans and health maintenance organizations as defined in Chapters 20 and 21 of this title. “Insurance institution” shall not include agents or insurance-support organizations.
(12) “Insurance-support organization” means:
(A) Any person who regularly engages, in whole or in part, in the practice of assembling or collecting information about natural persons for the primary purpose of providing the information to an insurance institution or agent for insurance transactions, including:
(i) The furnishing of consumer reports or investigative consumer reports to an insurance institution or agent for use in connection with an insurance transaction; or
(ii) The collection of personal information from insurance institutions, agents, or other insurance-support organizations for the purpose of detecting or preventing fraud, material misrepresentation, or material nondisclosure in connection with insurance underwriting or insurance claim activity.
(B) Notwithstanding subparagraph (A) of this paragraph, the following persons shall not be considered “insurance-support organizations” for purposes of this chapter: agents, government institutions, insurance institutions, medical care institutions, and medical professionals.
(13) “Insurance transaction” means any transaction involving insurance primarily for personal, family, or household needs rather than business or professional needs which entails:
(A) The individual determination of an individual's eligibility for an insurance coverage, benefit, or payment; or
(B) The servicing of an insurance application, policy, contract, or certificate.
(14) “Investigative consumer report” means a consumer report or portion thereof in which information about a natural person's character, general reputation, personal characteristics, or mode of living is obtained through personal interviews with the person's neighbors, friends, associates, acquaintances, or others who may have knowledge concerning such items of information.
(15) “Medical-care institution” means any facility or institution that is licensed to provide health care services to natural persons, including but not limited to: health maintenance organizations, home health agencies, hospitals, medical clinics, public health agencies, rehabilitation agencies, and skilled nursing facilities.
(16) “Medical professional” means any person licensed or certified to provide health care services to natural persons, including but not limited to, a chiropractor, clinical dietitian, clinical psychologist, dentist, nurse, occupational therapist, optometrist, pharmacist, physical therapist, physician, podiatrist, psychiatric social worker, or speech therapist.
(17) “Medical-record information” means personal information which:
(A) Relates to an individual's physical or mental condition, medical history, or medical treatment; and
(B) Is obtained from a medical professional or medical-care institution, from the individual, or from the individual's spouse, parent, or legal guardian.
(18) “Person” means any natural person, corporation, association, partnership, or other legal entity.
(19) “Personal information” means any individually identifiable information gathered in connection with an insurance transaction from which judgments can be made about an individual's character, habits, avocations, finances, occupation, general reputation, credit, health, or any other personal characteristics. “Personal information” does not include an individual's name, address, and age when no other underwriting information is gathered on that individual nor does it include any “privileged information.”
(20) “Policyholder” means any person who:
(A) In the case of individual property or casualty insurance, is a present named insured;
(B) In the case of individual life, health, or disability insurance, is a present policyholder; or
(C) In the case of group insurance which is individually underwritten, is a present group certificate holder.
(21) “Pretext interview” means an interview whereby a person, in an attempt to obtain information about a natural person, performs one or more of the following acts:
(A) Pretends to be someone he or she is not;
(B) Pretends to represent a person he or she is not in fact representing;
(C) Misrepresents the true purpose of the interview; or
(D) Refuses to identify himself or herself upon request.
(22) “Privileged information” means any individually identifiable information that:
(A) Relates to a claim for insurance benefits or a civil or criminal proceeding involving an individual; and
(B) Is collected in connection with or in reasonable anticipation of a claim for insurance benefits or civil or criminal proceeding involving an individual;
provided, however, that information otherwise meeting the requirements of this paragraph shall nevertheless be considered “personal information” under this chapter if it is disclosed in violation of Code Section 33-39-14.
(23) “Residual market mechanism” means an association, organization, or other entity defined or described in Code Sections 33-9-7, 33-9-8, and 33-9-10.
(24) “Termination of insurance coverage” or “termination of an insurance policy” means either a cancellation or nonrenewal of an insurance policy, in whole or in part, for any reason other than the failure to pay a premium as required by the policy.
(25) “Unauthorized insurer” means an insurance institution that has not been granted a certificate of authority by the Commissioner to transact the business of insurance in this state.
No insurance institution, agent, or insurance-support organization shall use or authorize the use of pretext interviews to obtain information in connection with an insurance transaction; provided, however, a pretext interview may be undertaken to obtain information from a person or institution that does not have a generally or statutorily recognized privileged relationship with the person about whom the information relates for the purpose of investigating a claim where, based upon specific information available for review by the Commissioner, there is a reasonable basis for suspecting criminal activity, fraud, material misrepresentation, or material nondisclosure in connection with the claim.
(a) An insurance institution or agent shall provide a notice of information practices to all applicants or policyholders in connection with insurance transactions as provided below:
(1) In the case of an application for insurance, a notice shall be provided no later than:
(A) At the time of the delivery of the insurance policy or certificate when personal information is collected only from the applicant or from public records; or
(B) At the time the collection of personal information is initiated when personal information is collected from a source other than the applicant or public records;
(2) In the case of a policy renewal, a notice shall be provided no later than the policy renewal date, except that no notice shall be required in connection with a policy renewal if:
(A) Nonpublic personal information is provided to nonaffiliated third parties only in accordance with this chapter; and
(B) The information collection or sharing practices of the insurance institution or agent relating to nonpublic personal information have not changed since the last notice of such information practices was given to the policyholder in accordance with this chapter;
(3) In the case of a policy reinstatement or change in insurance benefits, a notice shall be provided no later than the time a request for a policy reinstatement or change in insurance benefits is received by the insurance institution, except that no notice shall be required if personal information is collected only from the policyholder or from public records.
(b) The notice required by subsection (a) of this Code section shall be in writing and shall state:
(1) Whether personal information may be collected from persons other than the individual or individuals proposed for coverage;
(2) The types of personal information that may be collected and the types of sources and investigative techniques that may be used to collect such information;
(3) The types of persons identified in paragraphs (2), (3), (4), (5), (6), (9), (11), (12), and (14) of Code Section 33-39-14 and the circumstances under which such disclosures may be made without prior authorization; provided, however, only those circumstances need be described which occur with such frequency as to indicate a general business practice;
(4) A description of the rights established under Code Sections 33-39-9 and 33-39-10 and the manner in which such rights may be exercised; and
(5) That information obtained from a report prepared by an insurance-support organization may be retained by the insurance-support organization and disclosed to other persons.
(c) In lieu of the notice prescribed in subsection (b) of this Code section, the insurance institution or agent may provide an abbreviated notice informing the applicant or policyholder that:
(1) Personal information may be collected from persons other than the individual or individuals proposed for coverage;
(2) Such information as well as other personal or privileged information subsequently collected by the insurance institution or agent may in certain circumstances be disclosed to third parties without authorization;
(3) A right of access and correction exists with respect to all personal information collected; and
(4) The notice prescribed in subsection (b) of this Code section will be furnished to the applicant or policyholder upon request.
(d) The obligations imposed by this Code section upon an insurance institution or agent may be satisfied by another insurance institution or agent authorized to act on its behalf.
An insurance institution or agent shall clearly specify those questions designed to obtain information solely for marketing or research purposes from an individual in connection with an insurance transaction.
Notwithstanding any other provision of law of this state, no insurance institution, agent, or insurance-support organization may utilize as its disclosure authorization form in connection with insurance transactions a form or statement which authorizes the disclosure of personal or privileged information about an individual to the insurance institution, agent, or insurance-support organization unless the form or statement:
(1) Is written in plain language;
(2) Is dated;
(3) Specifies the types of persons authorized to disclose information about the individual;
(4) Specifies the nature of the information authorized to be disclosed;
(5) Names the insurance institution or agent and identifies by generic reference representatives of the insurance institution to whom the individual is authorizing information to be disclosed;
(6) Specifies the purposes for which the information is collected;
(7) Specifies the length of time such authorization shall remain valid, which shall be no longer than:
(A) In the case of authorizations signed for the purpose of collecting information in connection with an application for an insurance policy, a policy reinstatement or a request for change in policy benefits:
(i) Thirty months from the date the authorization is signed if the application or request involves life, health, or disability insurance;
(ii) One year from the date the authorization is signed if the application or request involves property or casualty insurance; or
(B) In the case of authorizations signed for the purpose of collecting information in connection with a claim for benefits under an insurance policy:
(i) The term of coverage of the policy if the claim is for a health insurance benefit;
(ii) The duration of the claim if the claim is not for a health insurance benefit; and
(8) Advises the individual or person authorized to act on behalf of the individual that the individual or the individual's authorized representative is entitled to receive a copy of the authorization form.
(a) No insurance institution, agent, or insurance-support organization may prepare or request an investigative consumer report about an individual in connection with an insurance transaction involving an application for insurance, a policy renewal, a policy reinstatement, or a change in insurance benefits unless the insurance institution or agent informs the individual:
(1) That he or she may request to be interviewed in connection with the preparation of the investigative consumer report; and
(2) That upon a request pursuant to Code Section 33-39-9, he or she is entitled to receive a copy of the investigative consumer report.
(b) If an investigative consumer report is to be prepared by an insurance institution or agent, the insurance institution or agent shall institute reasonable procedures to conduct a personal interview requested by an individual.
(c) If an investigative consumer report is to be prepared by an insurance-support organization, the insurance institution or agent desiring such report shall inform the insurance-support organization whether a personal interview has been requested by the individual. The insurance-support organization shall institute reasonable procedures to conduct such interviews, if requested.
(a) If any individual, after proper identification, submits a written request to an insurance institution, agent, or insurance-support organization for access to recorded personal information about the individual which is reasonably described by the individual and reasonably locatable and retrievable by the insurance institution, agent, or insurance-support organization, the insurance institution, agent, or insurance-support organization shall within 30 business days from the date such request is received:
(1) Inform the individual of the nature and substance of such recorded personal information in writing, by telephone, or by other oral communication, whichever the insurance institution, agent, or insurance-support organization prefers;
(2) Permit the individual to see and copy, in person, such recorded personal information pertaining to him or her or to obtain a copy of such recorded personal information by mail, whichever the individual prefers, unless such recorded personal information is in coded form, in which case an accurate translation in plain language shall be provided in writing;
(3) Disclose to the individual the identity, if recorded, of those persons to whom the insurance institution, agent, or insurance-support organization has disclosed such personal information within two years prior to such request and, if the identity is not recorded, the names of those insurance institutions, agents, insurance-support organizations, or other persons to whom such information is normally disclosed; and
(4) Provide the individual with a summary of the procedures by which he or she may request correction, amendment, or deletion of recorded personal information.
(b) Any personal information provided pursuant to subsection (a) of this Code section shall identify the source of the information if such source is an institutional source.
(c) Medical-record information supplied by a medical-care institution or medical professional and requested under subsection (a) of this Code section, together with the identity of the medical professional or medical-care institution which provided such information, shall be supplied either directly to the individual or to a medical professional designated by the individual and licensed to provide medical care with respect to the condition to which the information relates, whichever the insurance institution, agent, or insurance-support organization prefers. If it elects to disclose the information to a medical professional designated by the individual, the insurance institution, agent, or insurance-support organization shall notify the individual, at the time of the disclosure, that it has provided the information to the medical professional.
(d) Except for personal information provided under Code Section 33-39-11, an insurance institution, agent, or insurance-support organization may charge a reasonable fee to cover the costs incurred in providing a copy of recorded personal information to individuals.
(e) The obligations imposed by this Code section upon an insurance institution or agent may be satisfied by another insurance institution or agent authorized to act on its behalf. With respect to the copying and disclosure of recorded personal information pursuant to a request under subsection (a) of this Code section, an insurance institution, agent, or insurance-support organization may make arrangements with an insurance-support organization or a consumer reporting agency to copy and disclose recorded personal information on its behalf.
(f) The rights granted to individuals in this Code section shall extend to all natural persons to the extent information about them is collected and maintained by an insurance institution, agent, or insurance-support organization in connection with an insurance transaction. The rights granted to all natural persons by this subsection shall not extend to information about them that relates to and is collected in connection with or in reasonable anticipation of a claim or civil or criminal proceeding involving them.
(g) For purposes of this Code section, the term “insurance-support organization” does not include “consumer reporting agency.”
(a) Within 30 business days from the date of receipt of a written request from an individual to correct, amend, or delete any recorded personal information about the individual within its possession, an insurance institution, agent, or insurance-support organization shall either:
(1) Correct, amend, or delete the portion of the recorded personal information in dispute; or
(2) Notify the individual of:
(A) Its refusal to make such correction, amendment, or deletion;
(B) The reasons for the refusal; and
(C) The individual's right to file a statement as provided in subsection (c) of this Code section.
(b) If the insurance institution, agent, or insurance-support organization corrects, amends, or deletes recorded personal information in accordance with paragraph (1) of subsection (a) of this Code section, the insurance institution, agent, or insurance-support organization shall so notify the individual in writing and furnish the correction, amendment, or fact of deletion to:
(1) Any person specifically designated by the individual who may have, within the preceding two years, received such recorded personal information;
(2) Any insurance-support organization whose primary source of personal information is insurance institutions if the insurance-support organization has systematically received such recorded personal information from the insurance institution within the preceding seven years; provided, however, that the correction, amendment, or fact of deletion need not be furnished if the insurance-support organization no longer maintains recorded personal information about the individual; and
(3) Any insurance-support organization that furnished the personal information that has been corrected, amended, or deleted.
(c) Whenever an individual disagrees with an insurance institution's, agent's, or insurance-support organization's refusal to correct, amend, or delete recorded personal information, the individual shall be permitted to file with the insurance institution, agent, or insurance-support organization:
(1) A concise statement setting forth what the individual thinks is the correct, relevant, or fair information; and
(2) A concise statement of the reasons why the individual disagrees with the insurance institution's, agent's, or insurance-support organization's refusal to correct, amend, or delete recorded personal information.
(d) In the event an individual files either statement as described in subsection (c) of this Code section, the insurance institution, agent, or support organization shall:
(1) File the statement with the disputed personal information and provide a means by which anyone reviewing the disputed personal information will be made aware of the individual's statement and have access to it;
(2) In any subsequent disclosure by the insurance institution, agent, or support organization of the recorded personal information that is the subject of disagreement, clearly identify the matter or matters in dispute and provide the individual's statement along with the recorded personal information being disclosed; and
(3) Furnish the statement to the persons and in the manner specified in subsection (b) of this Code section.
(e) The rights granted to individuals in this Code section shall extend to all natural persons to the extent information about them is collected and maintained by an insurance institution, agent, or insurance-support organization in connection with an insurance transaction. The rights granted to all natural persons by this subsection shall not extend to information about them that relates to and is collected in connection with or in reasonable anticipation of a claim or civil or criminal proceeding involving them.
(f) For purposes of this Code section, the term “insurance-support organization” does not include “consumer reporting agency.”
(a) In the event of an adverse underwriting decision the insurance institution or agent responsible for the decision shall:
(1) Either provide the applicant, policyholder, or individual proposed for coverage with the specific reason or reasons for the adverse underwriting decision in writing or advise such person that upon written request he or she may receive the specific reason or reasons in writing; and
(2) Provide the applicant, policyholder, or individual proposed for coverage with a summary of the rights established under subsection (b) of this Code section and Code Sections 33-39-9 and 33-39-10.
(b) Upon receipt of a written request within 90 business days from the date of the mailing of notice or other communication of an adverse underwriting decision to an applicant, policyholder, or individual proposed for coverage, the insurance institution or agent shall furnish to such person within 21 business days from the date of receipt of such written request:
(1) The specific reason or reasons for the adverse underwriting decision, in writing, if such information was not initially furnished in writing pursuant to paragraph (1) of subsection (a) of this Code section.
(2) The specific items of personal and privileged information that support those reasons; provided, however:
(A) The insurance institution or agent shall not be required to furnish specific items of privileged information if it has a reasonable suspicion, based upon specific information available for review by the Commissioner, that the applicant, policyholder, or individual proposed for coverage has engaged in criminal activity, fraud, material misrepresentation, or material nondisclosure; and
(B) Specific terms of medical-record information supplied by a medical-care institution or medical professional shall be disclosed either directly to the individual about whom the information relates or to a medical professional designated by the individual and licensed to provide medical care with respect to the condition to which the information relates, whichever the insurance institution or agent prefers; and
(3) The names and addresses of the institutional sources that supplied the specific items of information pursuant to paragraph (2) of subsection (b) of this Code section; provided, however, that the identity of any medical professional or medical-care institution shall be disclosed either directly to the individual or to the designated medical professional, whichever the insurance institution or agent prefers.
(c) The obligations imposed by this Code section upon an insurance institution or agent may be satisfied by another insurance institution or agent authorized to act on its behalf.
(d) When an adverse underwriting decision results solely from an oral request or inquiry, the explanation of reasons and summary of rights required by subsection (a) of this Code section may be given orally.
No insurance institution, agent, or insurance-support organization may seek information in connection with an insurance transaction concerning:
(1) Any previous adverse underwriting decision experienced by an individual; or
(2) Any previous insurance coverage obtained by an individual through a residual market mechanism,
unless such inquiry also requests the reasons for any previous adverse underwriting decision or the reasons why insurance coverage was previously obtained through a residual market mechanism.
(a) No insurance institution or agent may base an adverse underwriting decision in whole or in part:
(1) On the fact of a previous adverse underwriting decision or on the fact that an individual previously obtained insurance coverage through a residual market mechanism; provided, however, an insurance institution or agent may base an adverse underwriting decision on further information obtained from an insurance institution or agent responsible for a previous adverse underwriting decision;
(2) On personal information received from an insurance-support organization whose primary source of information is insurance institutions; provided, however, an insurance institution or agent may base an adverse underwriting decision on further personal information obtained as the result of information received from such insurance-support organization.
(b) With respect to a personal or family type policy of motor vehicle insurance, no insurance institution or agent may base an adverse underwriting decision solely on the fact that the applicant has never purchased such a policy of motor vehicle insurance or has not owned or been covered by such a policy of motor vehicle insurance during any specified period immediately preceding the date of application.
An insurance institution, agent, or insurance-support organization shall not disclose any personal or privileged information about an individual collected or received in connection with an insurance transaction unless the disclosure is:
(1) With the written authorization of the individual, provided:
(A) If such authorization is submitted by another insurance institution, agent, or insurance-support organization, the authorization meets the requirement of Code Section 33-39-7; or
(B) If such authorization is submitted by a person other than an insurance institution, agent, or insurance-support organization, the authorization is:
(i) Dated;
(ii) Signed by the individual; and
(iii) Obtained one year or less prior to the date a disclosure is sought pursuant to this subsection; or
(2) To a person other than an insurance institution, agent, or insurance-support organization, provided such disclosure is reasonably necessary:
(A) To enable such person to perform a business, professional, or insurance function for the disclosing insurance institution, agent, or insurance-support organization and such person agrees not to disclose the information further without the individual's written authorization unless the further disclosure:
(i) Would otherwise be permitted by this Code section if made by an insurance institution, agent, or insurance-support organization; or
(ii) Is reasonably necessary for such person to perform its function for the disclosing insurance institution, agent, or insurance-support organization; or
(B) To enable such person to provide information to the disclosing insurance institution, agent, or insurance-support organization for the purpose of:
(i) Determining an individual's eligibility for an insurance benefit or payment; or
(ii) Detecting or preventing criminal activity, fraud, material misrepresentation, or material nondisclosure in connection with an insurance transaction; or
(3) To an insurance institution, agent, insurance-support organization, or self-insurer, provided the information disclosed is limited to that which is reasonably necessary:
(A) To detect or prevent criminal activity, fraud, material misrepresentation, or material nondisclosure in connection with insurance transactions; or
(B) For either the disclosing or receiving insurance institution, agent, or insurance-support organization to perform its function in connection with an insurance transaction involving the individual;
(4) To a medical-care institution or medical professional for the purpose of:
(A) Verifying insurance coverage or benefits;
(B) Informing an individual of a medical problem of which the individual may not be aware; or
(C) Conducting an operations or services audit;
provided only such information is disclosed as is reasonably necessary to accomplish the foregoing purposes;
(5) To an insurance regulatory authority;
(6) To a law enforcement or other governmental authority:
(A) To protect the interests of the insurance institution, agent, or insurance-support organization in preventing or prosecuting the perpetration of fraud upon it; or
(B) If the insurance institution, agent, or insurance-support organization reasonably believes that illegal activities have been conducted by the individual;
(7) Otherwise permitted or required by law;
(8) In response to a facially valid administrative or judicial order, including a search warrant or subpoena;
(9) Made for the purpose of conducting actuarial or research studies, provided:
(A) No individual may be identified in any actuarial or research report;
(B) Materials allowing the individual to be identified are returned or destroyed as soon as they are no longer needed; and
(C) The actuarial or research organization agrees not to disclose the information unless the disclosure would otherwise be permitted by this Code section if made by an insurance institution, agent, or insurance-support organization;
(10) To a party or a representative of a party to a proposed or consummated sale, transfer, merger, or consolidation of all or part of the business of the insurance institution, agent, or insurance-support organization, provided:
(A) Prior to the consummation of the sale, transfer, merger, or consolidation only such information is disclosed as is reasonably necessary to enable the recipient to make business decisions about the purchase, transfer, merger, or consolidation; and
(B) The recipient agrees not to disclose the information unless the disclosure would otherwise be permitted by this Code section if made by an insurance institution, agent, or insurance-support organization;
(11) To a person whose only use of such information will be in connection with the marketing of a product or service, provided:
(A) No medical-record information, privileged information, or personal information relating to an individual's character, personal habits, mode of living, or general reputation is disclosed, and no classification derived from such information is disclosed;
(B) The individual has been given an opportunity to indicate that he or she does not want personal information disclosed for marketing purposes and has given no indication that he or she does not want the information disclosed; and
(C) The person receiving such information agrees not to use it except in connection with the marketing of a product or service;
(12) To an affiliate whose only use of the information will be in connection with an audit of the insurance institution or agent or the marketing of an insurance product or service, provided the affiliate agrees not to disclose the information for any other purpose or to unaffiliated persons;
(13) By a consumer reporting agency, provided the disclosure is to a person other than an insurance institution or agent;
(14) To a group policyholder for the purpose of reporting claims experience or conducting an audit of the insurance institution's or agent's operations or services, provided the information disclosed is reasonably necessary for the group policyholder to conduct the review or audit;
(15) To a professional peer review organization for the purpose of reviewing the service or conduct of a medical-care institution or medical professional;
(16) To a governmental authority for the purpose of determining the individual's eligibility for health benefits for which the governmental authority may be liable;
(17) To a certificate holder or policyholder for the purpose of providing information regarding the status of an insurance transaction; or
(18) To a lienholder, mortgagee, assignee, lessor, or other person shown on the records of an insurance institution or agent as having legal or beneficial interest in a policy of insurance, provided that:
(A) No medical-record information is disclosed unless the disclosure would otherwise be permitted by this Code section; and
(B) The information disclosed is limited to that which is reasonably necessary to permit such person to protect its interest in such policy.
(a) The Commissioner shall have power to examine and investigate into the affairs of every insurance institution or agent doing business in this state to determine whether the insurance institution or agent has been or is engaged in any conduct in violation of this chapter.
(b) The Commissioner shall have the power to examine and investigate into the affairs of every insurance-support organization acting on behalf of an insurance institution or agent which either transacts business in this state or transacts business outside this state that has an effect on a person residing in this state in order to determine whether such insurance-support organization has been or is engaged in any conduct in violation of this chapter.
(a) Whenever the Commissioner has reason to believe that an insurance institution, agent, or insurance-support organization has been or is engaged in conduct in this state which violates this chapter, or if the Commissioner believes that an insurance-support organization has been or is engaged in conduct outside this state which has an effect on a person residing in this state and which violates this chapter, the Commissioner shall issue and serve upon such insurance institution, agent, or insurance-support organization a statement of charges and notice of hearing to be held at a time and place fixed in the notice. The date for such hearing shall be not less than 30 days after the date of service.
(b) At the time and place fixed for such hearing the insurance institution, agent, or insurance-support organization charged shall have an opportunity to answer the charges against it and present evidence on its behalf. Upon good cause shown, the Commissioner shall permit any adversely affected person to intervene, appear, and be heard at such hearing by counsel or in person.
(c) At any hearing conducted pursuant to this Code section, the Commissioner may administer oaths, examine and cross-examine witnesses, and receive oral and documentary evidence. The Commissioner shall have the power to subpoena witnesses, compel their attendance, and require the production of books, papers, records, correspondence, and other documents which are relevant to the hearing. A stenographic record of the hearing shall be made upon the request of any party or at the discretion of the Commissioner. If no stenographic record is made and if judicial review is sought, the Commissioner shall prepare a statement of the evidence for use on review. Hearings conducted under this Code section shall be governed by the same rules of evidence and procedure as set forth in Chapter 2 of this title.
(d) Statements of charges, notices, orders, and other processes of the Commissioner under this chapter may be served by anyone duly authorized to act on behalf of the Commissioner. Service of process may be completed in the manner provided by law for service of process in civil actions or by registered mail or statutory overnight delivery. A copy of the statement of charges, notice, order, or other process shall be provided to the person or persons whose rights under this chapter have been allegedly violated. A verified return setting forth the manner of service, or return postcard receipt in the case of registered mail or statutory overnight delivery shall be sufficient proof of service.
For the purpose of this chapter, an insurance-support organization transacting business outside this state which has an effect on a person residing in this state shall be deemed to have appointed the Commissioner to accept service of process on its behalf, provided the Commissioner causes a copy of such service to be mailed forthwith by registered mail or statutory overnight delivery to the insurance-support organization at its last known principal place of business. The return postcard receipt for such mailing shall be sufficient proof that the same was properly mailed by the Commissioner.
(a) If, after a hearing pursuant to Code Section 33-39-16, the Commissioner determines that the insurance institution, agent, or insurance-support organization charged has engaged in conduct or practices in violation of this chapter, the Commissioner shall reduce his or her findings to writing and shall issue and cause to be served upon such insurance institution, agent, or insurance-support organization a copy of such findings and an order requiring such insurance institution, agent, or insurance-support organization to cease and desist from the conduct or practices constituting violation of this chapter.
(b) If, after a hearing pursuant to Code Section 33-39-16, the Commissioner determines that the insurance institution, agent, or insurance-support organization charged has not engaged in conduct or practices in violation of this chapter, the Commissioner shall prepare a written report which sets forth findings of fact and conclusions of law. Such report shall be served upon the insurance institution, agent, or insurance-support organization charged and upon the person or persons, if any, whose rights under this chapter were allegedly violated.
(c) Until the expiration of the time allowed under Code Section 33-39-20 for filing a petition for review or until such petition is actually filed, whichever occurs first, the Commissioner may modify or set aside any order or report issued under this Code section. After the expiration of the time allowed under Code Section 33-39-20 for filing a petition for review, if no such petition has been duly filed, the Commissioner may, after notice and opportunity for hearing, alter, modify, or set aside, in whole or in part, any order or report issued under this Code section whenever conditions of fact or law warrant such action or if the public interest so requires.
(a) In any case where a hearing pursuant to Code Section 33-39-16 results in the finding of a knowing violation of this chapter, the Commissioner may, in addition to the issuance of a cease and desist order as prescribed in Code Section 33-39-18, order payment of a monetary penalty of not more than $500.00 for each violation but not to exceed $10,000.00 in the aggregate for multiple violations.
(b) Any person who violates a cease and desist order of the Commissioner under Code Section 33-39-18 may, after notice and hearing and upon order of the Commissioner, be subject to one or more of the following penalties, at the discretion of the Commissioner:
(1) A monetary fine of not more than $10,000.00 for each violation;
(2) A monetary fine of not more than $50,000.00 if the Commissioner finds that violations have occurred with such frequency as to constitute a general business practice; or
(3) Suspension or revocation of an insurance institution's or agent's license.
(a) Any person subject to an order of the Commissioner under Code Section 33-39-18 or Code Section 33-39-19 or any person whose rights under this chapter were allegedly violated may obtain a review of any order or report of the Commissioner by filing in the Superior Court of Fulton County, within 30 days from the date of the service of such order or report, a written petition requesting that the order or report of the Commissioner be set aside. A copy of such petition shall be simultaneously served upon the Commissioner, who shall forthwith certify and file in such court a transcript of the entire record of the proceeding giving rise to the order or report which is the subject of the petition. Upon filing of the petition and transcript the court shall have jurisdiction to make and enter a decree modifying, affirming, or reversing any order or report of the Commissioner, in whole or in part. The findings of the Commissioner as to the facts supporting any order or report, if supported by any evidence, shall be conclusive.
(b) To the extent an order or report of the Commissioner is affirmed, the court shall issue its own order commanding obedience to the terms of the order or report of the Commissioner. If any party affected by an order or report of the Commissioner shall apply to the court for leave to produce additional evidence and shall show to the satisfaction of the court that such additional evidence is material and that there are reasonable grounds for the failure to produce such evidence in prior proceedings, the court may order such additional evidence to be taken before the Commissioner in such manner and upon such terms and conditions as the court may deem proper. The Commissioner may modify his or her findings of fact or make new findings by reason of the additional evidence so taken and shall file such modified or new findings along with any recommendation, if any, for the modification or revocation of a previous order or report. If supported by clear and convincing evidence, the modified or new findings shall be conclusive as to the matters contained therein.
(c) An order or report issued by the Commissioner under Code Section 33-39-18 or 33-39-19 shall become final:
(1) Upon the expiration of the time allowed for the filing of a petition for review, if no such petition has been duly filed except that the Commissioner may modify or set aside an order or report to the extent provided in subsection (c) of Code Section 33-39-18; or
(2) Upon a final decision of the superior court if it directs that the order or report of the Commissioner be affirmed or the petition for review dismissed.
(d) No order or report of the Commissioner under this chapter or order of the court to enforce the same shall in any way relieve or absolve any person affected by such order or report from any liability under any law of this state.
(a) If any insurance institution, agent, or insurance-support organization fails to comply with Code Section 33-39-9, 33-39-10, or 33-39-11 with respect to the rights granted under those Code sections, any person whose rights are violated may apply to any superior court of this state, having jurisdiction over the defendant, for appropriate equitable relief.
(b) An insurance institution, agent, or insurance-support organization which discloses information in violation of Code Section 33-39-14 shall be liable for damages sustained by the individual about whom the information relates; provided, however, that no individual shall be entitled to a monetary award which exceeds the actual damages sustained by the individual as a result of a violation of Code Section 33-39-14.
(c) In any action brought pursuant to this Code section, the court may award the cost of the action and reasonable attorney's fees to the prevailing party.
(d) An action under this Code section must be brought within two years from the date the alleged violation is or should have been discovered.
(e) Except as specifically provided in this Code section, there shall be no remedy or recovery available to individuals, in law or in equity, for occurrences constituting a violation of any provision of this chapter.
No cause of action in the nature of defamation, invasion of privacy, or negligence shall arise against any person for disclosing personal or privileged information in accordance with this chapter, nor shall such a cause of action arise against any person for furnishing personal or privileged information to an insurance institution, agent, or insurance-support organization; provided, however, this Code section shall provide no immunity for disclosing or furnishing false information with malice or willful intent to injure any person.
Any person who knowingly and willfully obtains information about an individual from an insurance institution, agent, or insurance-support organization under false pretenses shall be guilty of a misdemeanor.
The purpose of this chapter is to regulate the formation and operation of risk retention groups in this state formed pursuant to the provisions of the federal Liability Risk Retention Act of 1986 (RRA 1986). 1
1 15 U.S.C.A. § 3901 et seq.
As used in this chapter, the term:
(1) “Commissioner” means the Commissioner of Insurance of the State of Georgia or the commissioner, director, or superintendent of insurance in any other state.
(2) “Completed operations liability” means liability arising out of the installation, maintenance, or repair of any product at a site which is not owned or controlled by any person who performs that work or any person who hires an independent contractor to perform that work and shall include liability for activities which are completed or abandoned before the date of the occurrence giving rise to the liability.
(3) “Domicile,” for purposes of determining the state in which a purchasing group is domiciled, means the state in which the purchasing group is incorporated if it is a corporation or, if the purchasing group is an unincorporated entity, the state of its principal place of business.
(4) “Hazardous financial condition” means that, based on its present or reasonably anticipated financial condition, a risk retention group, although not yet financially impaired or insolvent, is unlikely to be able to meet obligations to policyholders with respect to known claims and reasonably anticipated claims or is unlikely to be able to pay other obligations in the normal course of business.
(5) “Insurance” means primary insurance, excess insurance, reinsurance, surplus lines insurance, and any other arrangement for shifting and distributing risk which is determined to be insurance under the laws of this state.
(6) “Liability” means:
(A) Legal liability for damages, including costs of defense; legal costs and fees; and other claims expenses, because of injuries to other persons, damage to their property, or other damage or loss to such other persons resulting from or arising out of any nonprofit or for profit business, trade, product, services, including professional services, premises, or operations or any activity of any state or local government or any agency or political subdivision thereof; and
(B) Does not include personal risk liability and an employer's liability with respect to its employees other than legal liability under the federal Employers' Liability Act, 45 U.S.C. Section 51, et seq.
(7) “Personal risk liability” means liability for damages because of injury to any person, damage to property, or other loss or damage resulting from any personal, familial, or household responsibilities or activities, rather than from responsibilities or activities referred to in paragraph (6) of this Code section.
(8) “Plan of operation or a feasibility study” means an analysis which presents the expected activities and results of a risk retention group, including, at a minimum, the following:
(A) The coverages, deductibles, coverage limits, rates, and rating classification systems for each line of insurance the group intends to offer;
(B) Historical and expected loss experience of the proposed members and national experience of similar exposures;
(C) Pro forma financial statements and projections;
(D) Appropriate opinions by a qualified, independent casualty actuary, including a determination of minimum premium or participation levels required to commence operations and to prevent a hazardous financial condition;
(E) Identification of management, underwriting procedures, managerial oversight methods, and investment policies; and
(F) Such other matters as may be prescribed by the Commissioner for casualty or liability insurance companies authorized by this title.
(9) “Product liability” means liability for damages because of any personal injury, death, emotional harm, consequential economic damage, or property damage, including damages resulting from the loss of use of property, arising out of the manufacture, design, importation, distribution, packaging, labeling, lease, or sale of a product, but does not include the liability of any person for those damages if the product involved was in the possession of such a person when the incident giving rise to the claim occurred.
(10) “Purchasing group” means any group which:
(A) Has as one of its purposes the purchase of liability insurance on a group basis;
(B) Purchases such insurance only for its group members and only to cover their similar or related liability exposure, as described in subparagraph (C) of this paragraph;
(C) Is composed of members whose businesses or activities are similar or related with respect to the liability to which members are exposed by virtue of any related, similar, or common business, trade, product, services, premises, or operations; and
(D) Is domiciled in any state.
(11) “Risk retention group” means any corporation or other limited liability association formed under the laws of any state, Bermuda, or the Cayman Islands:
(A) Whose primary activity consists of assuming and spreading all, or any portion, of the liability exposure of its group members;
(B) Which is organized for the primary purpose of conducting the activity described under subparagraph (A) of this paragraph;
(C) Which:
(i) Is chartered and licensed as a liability insurance company and authorized to engage in the business of insurance under the laws of any state; or
(ii) Before January 1, 1985, was chartered or licensed and authorized to engage in the business of insurance under the laws of Bermuda or the Cayman Islands and, before such date, had certified to the insurance commissioner of at least one state that it satisfied the capitalization requirements of such state, except that any such group shall be considered to be a risk retention group only if it has been engaged in business continuously since such date and only for the purpose of continuing to provide insurance to cover product liability or completed operations liability as such terms were defined in the federal Product Liability Risk Retention Act of 1981 1 as such act existed prior to October 27, 1986;
(D) Which does not exclude any person from membership in the group solely to provide for members of such a group a competitive advantage over such a person;
(E) Which has as its members only persons who have an ownership interest in the group and has as its owners only persons who are members who are provided insurance by the risk retention group or which has as its sole member and sole owner an organization which is owned by persons who are provided insurance by the risk retention group;
(F) Whose members are engaged in businesses or activities similar or related with respect to the liability to which such members are exposed by virtue of any related, similar, or common business trade, product, services, premises, or operations;
(G) Whose activities do not include the provision of insurance other than:
(i) Liability insurance for assuming and spreading all or any portion of the liability of its group members; and
(ii) Reinsurance with respect to the liability of any other risk retention group which is engaged in businesses or activities so that such group or member meets the requirement described in subparagraph (F) of this paragraph for membership in the risk retention group which provides such reinsurance; and
(H) The name of which includes the phrase “risk retention group.”
(12) “State” means any state of the United States or the District of Columbia.
1 15 U.S.C.A. § 3901 et seq.
A risk retention group seeking to be chartered in this state must be chartered and licensed as a casualty or liability insurance company as provided in this title or as a risk retention group captive insurance company under Chapter 41 of this title and, except as provided elsewhere in this chapter or in Chapter 41, as applicable, must comply with all of the laws, rules, regulations, and requirements applicable to such insurers chartered and licensed in this state and with Code Section 33-40-4 to the extent such requirements are not a limitation on laws, rules, regulations, or requirements of this state. Before it may offer insurance in any state, each risk retention group shall also submit for approval to the Commissioner a plan of operation or a feasibility study and revisions of such plan or study if the group intends to offer any additional lines of casualty or liability insurance.
(a) Risk retention groups chartered in states other than this state and seeking to do business as a risk retention group in this state must observe and abide by the laws of this state as provided in this Code section.
(b) Before offering insurance in this state, a risk retention group shall submit to the Commissioner:
(1) A statement identifying the state or states in which the risk retention group is chartered and licensed as a casualty or liability insurance company, date of chartering, its principal place of business, and such other information, including information on its membership, as the Commissioner may require to verify that the risk retention group is qualified under this chapter;
(2) A copy of its plan of operations or a feasibility study and revisions of such plan or study submitted to its state of domicile; provided, however, that the provision relating to the submission of a plan of operation or a feasibility study shall not apply with respect to any line or classification of liability insurance which was defined in the Product Liability Risk Retention Act of 1981 before October 27, 1986, and which was offered before such date by any risk retention group which had been chartered and operating for not less than three years before such date;
(3) A statement of registration which designates the Commissioner as its agent for the purpose of receiving service of legal documents or process; and
(4) A fee or fees as provided in Code Section 33-8-1, which shall accompany such statements and plans required under paragraphs (1), (2), and (3) of this subsection.
(c) Any risk retention group doing business in this state shall submit to the Commissioner:
(1) A copy of the group's financial statement submitted to its state of domicile, which shall be certified by an independent public accountant and contain a statement of opinion on loss and loss adjustment expense reserves made by a member of the American Academy of Actuaries or a qualified loss reserve specialist approved by the Commissioner;
(2) A copy of each examination of the risk retention group as certified by the Commissioner or public official conducting the examination;
(3) Upon request by the Commissioner, a copy of any audit performed with respect to the risk retention group;
(4) Such information as may be required to verify its continuing qualification as a risk retention group under this chapter; and
(5) A fee or fees as provided in Code Section 33-8-1, which shall accompany such copies required under paragraphs (1) and (2) of this subsection.
(a) All premiums paid for coverages within this state to risk retention groups shall be subject to taxation at the rate of 4 percent on all premiums paid or due and payable during the preceding quarter, less return premium. Risk retention groups shall be subject to interest, fines, and penalties for nonpayment or nonreporting as provided in Code Section 33-5-32 for surplus lines brokers.
(b) To the extent agents or brokers are utilized, they shall report and pay the taxes for the premiums for risks which they have placed with or on behalf of a risk retention group not chartered in this state.
(c) To the extent agents or brokers are not utilized or fail to pay the tax, each risk retention group shall pay the tax for risks insured within the state. Further, each risk retention group shall report all premiums paid to it for risks insured within the state.
Any risk retention group and its agents and representatives shall comply with Chapter 6 of this title and all rules and regulations promulgated pursuant to such chapter.
Any risk retention group must submit to an examination by the Commissioner to determine its financial condition if the commissioner of the jurisdiction in which the group is chartered has not initiated an examination or does not initiate an examination within 60 days after a request by the Commissioner of this state. Any such examination shall be coordinated to avoid unjustified repetition and conducted in an expeditious manner and in accordance with the Examiner Handbook of the National Association of Insurance Commissioners.
Any policy issued by a risk retention group shall contain in ten-point type on the front page and the declaration page the following notice:
NOTICE
This policy is issued by your risk retention group. Your risk retention group may not be subject to all of the insurance laws and regulations of your state. State insurance insolvency guaranty funds are not available for your risk retention group.
The following acts by a risk retention group are prohibited:
(1) The solicitation or sale of insurance by a risk retention group to any person who is not eligible for membership in such group; and
(2) The solicitation or sale of insurance by, or operation of, a risk retention group that is in a hazardous financial condition or is financially impaired.
No risk retention group shall be allowed to do business in this state if an insurance company is directly or indirectly a member or owner of such risk retention group, other than in the case of a risk retention group comprised solely of insurance companies.
A risk retention group not chartered in this state and doing business in this state must comply with a lawful order issued in a voluntary dissolution proceeding or in a delinquency proceeding commenced by a state insurance commissioner if there has been a finding of financial impairment after an examination under Code Section 33-40-7.
No risk retention group shall be permitted to join or contribute financially to the Georgia Insurers Insolvency Pool under Chapter 36 of this title nor shall any risk retention group or its insureds receive any benefit from the Georgia Insurers Insolvency Pool for claims arising out of the operations of such risk retention group.
Any purchasing group meeting the criteria established under the provisions of the federal Liability Risk Retention Act of 1986 1 shall be exempt from any law of this state relating to the creation of groups for the purchase of insurance, prohibition of group purchasing, or any law that would discriminate against a purchasing group or its members. In addition, an insurer shall be exempt from any law of this state which prohibits providing or offering to provide to a purchasing group or its members advantages based on their loss and expense experience not afforded to other persons with respect to rates, policy forms, coverages, or other matters. A purchasing group shall be subject to all other applicable laws of this state.
1 15 U.S.C.A. § 3901 et seq.
(a) A purchasing group which intends to do business in this state shall furnish to the Commissioner notice which shall:
(1) Identify the state in which the group is domiciled;
(2) Specify the lines and classifications of casualty or liability insurance which the purchasing group intends to purchase;
(3) Identify the insurance company from which the group intends to purchase its insurance and the domicile of such company;
(4) Identify the principal place of business of the group; and
(5) Provide such other information as may be required by the Commissioner to verify that the purchasing group is qualified under Code Section 33-40-2.
(b) The purchasing group shall register with and designate the Commissioner as its agent solely for the purpose of receiving service of legal documents or process, except that such requirements shall not apply in the case of a purchasing group:
(1) Which was domiciled before April 2, 1986, and is domiciled on and after October 27, 1986, in any state of the United States;
(2) Which, before October 27, 1986, purchased insurance from an insurance carrier licensed in any state and since October 27, 1986, has purchased its insurance from an insurance carrier licensed in any state;
(3) Which was a purchasing group under the requirements of the Product Liability Retention Act of 1981 1 before October 27, 1986; and
(4) Which does not purchase insurance that was not authorized for purposes of an exemption under that act, as in effect before October 27, 1986.
(c) The notice and registration required by subsections (a) and (b) of this Code section shall be accompanied by a fee or fees as provided in Code Section 33-8-1.
1 15 U.S.C.A. § 3901 et seq.
A purchasing group may not purchase insurance from a risk retention group that is not chartered in a state or from an insurer not admitted in the state in which the purchasing group is located, unless the purchase is effected through a licensed agent or broker acting pursuant to the surplus lines laws and regulations of such state.
The Commissioner is authorized to make use of any of the powers established under this title to enforce the laws of this state so long as those powers are not specifically preempted by the federal Product Liability Risk Retention Act of 1981, 1 as amended by the Risk Retention Amendments of 1986. This includes, but is not limited to, the Commissioner's administrative authority to investigate, issue subpoenas, conduct depositions and hearings, issue orders, and impose penalties. With regard to any investigation, administrative proceedings, or litigation, the Commissioner can rely on the procedural law and regulations of this state. The injunctive authority of the Commissioner in regard to risk retention groups is restricted by the requirement that any injunction be issued by a court of competent jurisdiction.
1 15 U.S.C.A. § 3901 et seq.
Any risk retention group which violates any provision of this chapter will be subject to fines and penalties applicable to licensed insurers generally, including revocation of its license or the right to do business in this state.
Any person acting or offering to act as an agent or broker for a risk retention group or purchasing group which solicits members, sells insurance coverage, purchases coverage for its members located within the state, or otherwise does business in this state shall, before commencing any such activity, obtain a license from the Commissioner.
An order issued by any district court of the United States enjoining a risk retention group from soliciting or selling insurance, or operating, in any state, in all states, or in any territory or possession of the United States upon a finding that such a group is in a hazardous financial condition shall be enforceable in the courts of this state.
This chapter shall be known and may be cited as the “Georgia Captive Insurance Company Act.”
Terms not defined in this chapter shall have the same meaning ascribed to them in this title. As used in this chapter, unless the context otherwise requires, the term:
(1) “Affiliate” means any person in the same corporate system as a parent, an industrial insured, or a member organization by virtue of common ownership, control, operation, or management.
(2) “Agency captive insurance company” means:
(A) Any domestic insurance company granted a certificate of authority pursuant to this chapter that is owned or controlled by an insurance agency, brokerage, managing general agent, or reinsurance intermediary, or an affiliate thereof, or under common ownership or control with such agency, brokerage, managing general agent, or reinsurance intermediary, and that only reinsures the risk of insurance or annuity contracts placed by or through such agency, brokerage, managing general agent, or reinsurance intermediary; or
(B) Any domestic insurance company granted a certificate of authority pursuant to this chapter that is owned or controlled by a marketer, producer, administrator, issuer, or provider of service contracts or warranties and that only reinsures the contractual liability arising out of such service contracts or warranties sold through such marketer, producer, administrator, issuer, or provider.
(3) “Association” means any membership organization whose members consist of a group of individuals, corporations, partnerships, or other entities or associations who engage in similar or related professional, trade, or business activities and who collectively own, control, or hold with power to vote all of the outstanding voting interests of an association captive insurance company or of a person that is the sole shareholder of an association captive insurance company.
(4) “Association captive insurance company” means any domestic insurance company granted a certificate of authority pursuant to this chapter to insure or reinsure the similar or related risks of members and affiliates of members of its association.
(5) “Captive insurance company” means any pure captive insurance company, association captive insurance company, agency captive insurance company, industrial insured captive insurance company, sponsored captive insurance company, or risk retention group captive insurance company.
(6) “Controlled unaffiliated business” means:
(A) Any person:
(i) That is not in the corporate system of a parent and its affiliated companies;
(ii) That has an existing contractual relationship with a parent or one of its affiliated companies; and
(iii) Whose risks are managed by a captive insurance company in accordance with this chapter and approved by the Commissioner; or
(B) A reinsurance arrangement with other captive insurance companies that is approved by the Commissioner.
(7) “Dormant captive insurance company” means a captive insurance company that:
(A) Has ceased transacting the business of insurance, including the issuance of insurance policies; and
(B) Has no remaining liabilities associated with insurance business transactions, or insurance policies issued prior to the filing of its application for a certificate of dormancy pursuant to this chapter.
(8) “Formation documents” means articles of incorporation, if the captive insurance company or the prospective captive insurance company is a stock insurer, stock corporation, or a mutual insurer, or articles of organization, if the captive insurance company or the prospective captive insurance company is a limited liability company, and any amendments or restatements of the same. For purposes of this term, an incorporated protected cell, as defined in Article 2 of this chapter, shall be included in the definition of “captive insurance company.”
(9) “Industrial insured” means an insured:
(A) Who procures the insurance of any risk or risks through the use of the services of a full-time employee who acts as an insurance manager, risk manager, or insurance buyer or through the services of a person licensed as a property and casualty agent, broker, or counselor in such person's state of domicile;
(B) Whose aggregate annual premiums for insurance on all risks total at least $25,000.00; and
(C) Who either:
(i) Has at least 25 full-time employees;
(ii) Has gross assets in excess of $3 million; or
(iii) Has annual gross revenues in excess of $5 million.
(10) “Industrial insured captive insurance company” means any domestic insurance company granted a certificate of authority pursuant to this chapter to insure or reinsure the risks of industrial insureds and their affiliates and which has as its shareholders or members only industrial insureds that are insured or reinsured by the industrial insured captive insurance company or which has as its sole shareholder or sole member an entity whose only owners are industrial insureds that are insured or reinsured by the industrial insured captive insurance company.
(11) “Mutual insurer” means an incorporated insurer without capital stock or shares that is owned and governed by its policyholders.
(12) “Parent” means an entity which directly or indirectly owns, controls, or holds with power to vote more than 50 percent of the total outstanding voting:
(A) Securities of a pure captive insurance company organized as a stock corporation; or
(B) Membership interests of a pure captive insurance company organized as a limited liability company.
(13) “Pure captive insurance company” means any domestic insurance company granted a certificate of authority under this chapter to insure or reinsure the risks of its parent and affiliates of its parent, and controlled unaffiliated business.
(14) “Risk retention group captive insurance company” is any domestic insurance company granted a certificate of authority pursuant to this chapter and determined by the Commissioner to be established and maintained as a “risk retention group” as defined under the federal Liability Risk Retention Act of 1986 1, as amended.
(15) “Stock insurer” means an incorporated insurer with capital divided into shares and owned by its shareholders.
(16) “Transact,” as used in this chapter, shall not include the organizational activities associated with the preliminary formation, incorporation, petitioning for a certificate of authority, and initial capitalization of a captive insurance company.
1 15 U.S.C.A. § 3901 et seq.
(a) Subject to the provisions of subsection (c) of this Code section and the other provisions of this chapter, a captive insurance company, where permitted by its formation documents, may engage in the business of any of the following kinds of insurance or reinsurance:
(1) Casualty, as described in Code Section 33-7-3 but excluding accident and sickness insurance as defined in Code Section 33-7-2, except for a pure captive insurance company, which may engage in the business of accident and sickness insurance as defined in Code Section 33-7-2;
(2) Marine and transportation, as described in Code Section 33-7-5;
(3) Property, as described in Code Section 33-7-6; and
(4) Surety, as described in Code Section 33-7-7.
(b) Insurance policies and bonds issued by a captive insurance company for workers' compensation insurance and motor vehicle accident insurance shall be in conformity with all minimum requirements for coverages and coverage amounts established by this state for such types of insurance. Such insurance policies and bonds issued by a captive insurance company shall constitute satisfactory proof that the motor vehicle owners or employers, as applicable, insured under such policies or bonds have satisfied the requirements for motor vehicle accident insurance prescribed by Code Section 33-34-4 and for workers' compensation insurance prescribed by Code Section 34-9-121.
(c) Except as otherwise provided in this Code section:
(1) A captive insurance company shall not insure any risks resulting from:
(A) Any personal, familial, or household responsibilities; or
(B) Activities other than risks resulting from responsibilities arising out of any business, whether profit or nonprofit; trade; product; services, including professional or fiduciary services; or commercial premises or commercial operations;
(2) A captive insurance company may only cede reinsurance as provided in Code Section 33-41-14;
(3) A pure captive insurance company may only insure or reinsure the risks of its parent, affiliates of its parent, and controlled unaffiliated business;
(4) An association captive insurance company may only insure or reinsure the risks of the members of its association and their affiliates;
(5) An industrial insured captive insurance company may only insure or reinsure the risks of the industrial insureds, and their affiliates, that are its shareholders or shareholders of its sole shareholder;
(6) A risk retention group captive insurance company may only insure or reinsure the risks of its group members; and
(7) An agency captive insurance company may only reinsure:
(A) The risk of insurance or annuity contracts placed by or through the agency, brokerage, managing general agent, or reinsurance intermediary by which it is owned or controlled; or
(B) The contractual liability arising out of service contracts or warranties sold through a marketer, producer, administrator, issuer, or provider of service contracts or warranties by which it is owned or controlled.
(d) A captive insurance company may, with prior written approval from the Commissioner, reinsure the risks insured or reinsured either directly or indirectly by:
(1) Any other captive insurance company; or
(2) Any foreign or alien insurance company which satisfies the ownership or membership requirements of a captive insurance company under this chapter; provided, however, that the risks insured or reinsured from the foreign or alien insurance company are solely those of its owners or members or their affiliates.
No captive insurance company may transact any insurance in this state unless:
(1) It first obtains from the Commissioner a certificate of authority authorizing it to transact insurance in this state;
(2) It maintains its principal place of business in this state;
(3) Any organization providing the principal administrative or management services to such captive insurance company shall be approved by the Commissioner;
(4) Its board of directors or board of managers holds at least one meeting each year in this state; and
(5) It appoints a registered agent to accept service of process in this state, provided that, whenever such registered agent cannot with reasonable diligence be found at the registered office of the captive insurance company, the Commissioner shall be an agent of such captive insurance company upon whom any process, notice, or demand may be served.
(a) For purposes of this Code section, an incorporated protected cell, as defined in Article 2 of this chapter, shall be included in the definition of “captive insurance company.”
(a.1)(1) A pure captive insurance company or an agency captive insurance company may be incorporated as a stock insurer or organized as a manager-managed limited liability company.
(2) An association captive insurance company, an industrial insured captive insurance company, a sponsored captive insurance company, or a risk retention group captive insurance company may be incorporated as a stock insurer, incorporated as a mutual insurer, or organized as a manager-managed limited liability company.
(b)(1) Captive insurance companies formed as corporations pursuant to this chapter shall be subject to the provisions of Chapter 2 of Title 14, other applicable statutes, and the applicable provisions of this chapter. Such captive insurance companies are also subject to regulations promulgated hereunder, which the Commissioner has the authority to establish regarding the formation, organization, operations, merger, and dissolution of captive insurance companies formed as corporations. In the event of any conflict between statutes or regulations of this state that are applicable to such captive insurance companies, the provisions of this chapter or regulations promulgated hereunder shall control.
(2) Captive insurance companies formed as limited liability companies pursuant to this chapter shall be subject to the provisions of Chapter 11 of Title 14, other applicable statutes, and the applicable provisions of this chapter. Such captive insurance companies are also subject to regulations promulgated hereunder, which the Commissioner has the authority to establish regarding the formation, organization, operations, merger, and dissolution of captive insurance companies formed as limited liability companies. In the event of any conflict between statutes or regulations of this state that are applicable to such captive insurance companies, the provisions of this chapter or regulations promulgated hereunder shall control.
(3) Captive insurance companies shall be exempt from all applicable publishing and probate court certification requirements set forth in Title 14 or this title.
(4) The provisions of Chapter 14 of this title shall not apply to captive insurance companies except as specifically set forth herein or by the Commissioner through regulation.
(c)(1)(A) To form a captive insurance company in this state, formation documents and a fee of $100.00 shall be submitted to the Commissioner, who shall pay such fee into the state treasury. The Commissioner shall examine the formation documents to determine whether such documents will enable the captive insurance company to comply with the applicable insurance laws of this state; and, if the Commissioner finds that the formation documents, if approved, will enable the captive insurance company to do so, the Commissioner shall issue under his or her hand and official seal a certificate approving the formation documents and shall transmit a copy of such documents and the certificate of approval to the Secretary of State for recording.
(B) The articles of incorporation of a captive insurance company must be signed by the incorporator and shall contain the following:
(i) The name of the captive insurance company;
(ii) The number of shares the captive insurance company is authorized to issue, which must be greater than zero;
(iii) The street address and county of the initial registered office and the name of the initial registered agent at that office;
(iv) The name and address of each incorporator, of which there must be at least one;
(v) The street address of the captive insurance company's principal office;
(vi) The number of directors, which number shall not be less than three, who shall conduct the affairs of the captive insurance company; and
(vii) Such other provisions not inconsistent with law deemed appropriate by the incorporator.
(C) The articles of organization of a captive insurance company must be signed by the organizer and must contain the following:
(i) The name of the captive insurance company;
(ii) The street address and county of the initial registered office and the name of the initial registered agent at that office;
(iii) The name and address of each organizer, of which there must be at least one;
(iv) The street address of the captive insurance company's principal office;
(v) The number of managers, which number shall not be less than three, who shall conduct the affairs of the captive insurance company; and
(vi) Such other provisions not inconsistent with law deemed appropriate by the organizer.
(2) All corporate powers and privileges to captive insurance companies shall be issued and granted by the Secretary of State upon the terms, liabilities, and restrictions of and subject to this title and the laws and Constitution of this state. If for any reason the Secretary of State is disqualified or unable to issue or grant said powers, the duties required by this chapter, or regulations promulgated hereunder, to be performed by the Secretary of State shall be performed by the Commissioner.
(3) When the certificate of the Commissioner as to his or her approval of the formation documents have been received in the office of the Secretary of State, the Secretary of State shall issue to the captive insurance company under the seal of this state a certificate of incorporation or organization. The captive insurance company shall not transact business as an insurer until it has applied for and received from the Commissioner a certificate of authority as provided by this chapter.
(d)(1) A captive insurance company may amend its formation documents for any lawful purpose in accordance with the provisions of Chapter 2 of Title 14 if it is a corporation or Chapter 11 of Title 14 if it is a limited liability company.
(2) The captive insurance company shall submit to the Commissioner any proposed amendment to its formation documents and a fee of $50.00, which the Commissioner shall transmit into the state treasury.
(3) The Commissioner shall examine the proposed amendment to its formation documents to determine whether such documents will enable the captive insurance company to comply with the applicable insurance laws of this state; and, if the Commissioner finds that such documents, if approved, will enable the captive insurance company to do so, the Commissioner shall issue under his or her hand and official seal a certificate approving amended formation documents and shall transmit a copy of such documents and the certificate of approval to the Secretary of State for recording.
(e)(1) A captive insurance company may merge with or into one or more business entities in accordance with the provisions of Chapter 2 of Title 14 if it is a corporation or Chapter 11 of Title 14 if it is a limited liability company, but shall submit to the Commissioner all required merger documents set forth therein.
(2) The Commissioner shall examine all required merger documents to determine whether such documents will enable the captive insurance company to comply with the applicable insurance laws of this state; and, if the Commissioner finds that such documents, if approved, will enable the captive insurance company to do so, the Commissioner shall issue under his or her hand and official seal a certificate approving the merger documents and shall transmit a copy of such documents and the certificate of approval to the Secretary of State for recording.
(f)(1) A captive insurance company that was formed as a stock corporation may elect to convert to a manager-managed limited liability company pursuant to Title 14, but shall submit to the Commissioner all required conversion documents set forth therein and a fee of $100.00, which the Commissioner shall transmit to the state treasury.
(2) The Commissioner shall examine the required conversion documents to determine whether such documents will enable the captive insurance company to comply with the applicable laws of this state; and, if the Commissioner finds that such documents, if approved, will enable the captive insurance company to do so, the Commissioner shall issue under his or her hand and official seal a certificate approving the conversion documents and shall transmit a copy of such documents and the certificate of approval to the Secretary of State for recording.
(g)(1) A captive insurance company may dissolve in accordance with the provisions of Chapter 2 of Title 14 if it is a corporation, or Chapter 11 of Title 14 if it is a limited liability company, but shall submit to the Commissioner all required dissolution documents set forth therein.
(2) The Commissioner shall examine the required dissolution documents to determine whether such documents will enable the captive insurance company to dissolve in compliance with the applicable insurance laws of this state; and, if the Commissioner finds that such documents, if approved, will enable the captive insurance company to do so, the Commissioner shall issue under his or her hand and official seal a certificate approving the dissolution and shall transmit a copy of such documents and the certificate of approval to the Secretary of State for recording.
(h) The effective date of each document set forth in this Code section, including but not limited to formation documents, amendments to formation documents, merger documents, conversion documents, and dissolution documents shall be:
(1) The date on which the document is filed with the Commissioner; or
(2) A date specified by the Commissioner, which shall not precede the date on which the document was filed with the Commissioner.
(a) A captive insurance company shall not use any name which is either similar, misleading, or confusing with respect to any other name already in use by any other captive insurance company, domestic mutual or stock insurance company, corporation, or association organized or doing business in this state. The Commissioner shall not approve the formation documents of an applicant attempting to use such a name nor shall the Commissioner approve an application for a certificate of authority from such applicant.
(b) The name of a risk retention group captive insurance company shall include the words “risk retention group captive insurance company.”
(c) If the captive insurance company is a mutual insurer, the word “mutual” shall be a part of its name.
(a) The affairs of every captive insurance company shall be managed by not less than three directors or managers.
(b) At least one of the directors or managers of every captive insurance company shall be a resident of this state.
(c) Every captive insurance company shall report to the Commissioner within 30 days after any change in its directors or managers including in its report a statement of the business and professional background and affiliations of any new director or manager.
(a) The amount of minimum capital or surplus required for each captive insurance company shall be determined on an individual basis, however:
(1) A pure captive insurance company shall maintain at least $250,000.00 in surplus;
(2) An association captive insurance company shall maintain at least $500,000.00 in surplus;
(3) An agency captive insurance company shall maintain at least $250,000.00 in surplus;
(4) An industrial insured captive insurance company shall maintain at least $500,000.00 in surplus;
(5) A risk retention group shall maintain at least $500,000.00 in surplus; and
(6) A sponsored captive insurance company shall maintain at least $250,000.00 in surplus.
The Commissioner may require additional capital or surplus of any captive insurance company in an amount he or she deems appropriate under the circumstances based on the captive insurance company's business plan as described in Code Section 33-41-10. Additional capital or surplus may be required if the captive insurance company's business plan indicates that an increase is required in order for the captive insurance company to meet its contractual obligations to its policyholders or to maintain its solvency.
(b) Minimum capital or surplus of up to $500,000.00 shall be maintained in any of the following:
(1) Cash;
(2) Certificates of deposit or similar certificates or evidences of deposits in banks or trust companies but only to the extent that the certificates or deposits are insured by the Federal Deposit Insurance Corporation;
(3) Savings accounts, certificates of deposit, or similar certificates or evidences of deposit in savings and loan associations and building and loan associations but only to the extent that the same are insured by the Federal Savings and Loan Insurance Corporation; or
(4) One or more letters of credit, so long as they are in conformance with Code Section 33-41-9.
(c) Each association captive insurance company, industrial insured captive insurance company, and risk retention group captive insurance company must deposit with the state prior to the issuance of a certificate of authority.
(d) Any additional capital or surplus in excess of $500,000.00 required by the Commissioner pursuant to subsection (a) of this Code section may be provided and maintained in any of the following:
(1) Any eligible investments of minimum capital or surplus authorized under Code Section 33-11-5;
(2) Promissory notes or other obligations of shareholders secured by one or more letters of credit, as described in Code Section 33-41-9; or
(3) Any other investments approved by the Commissioner that do not impair the financial solvency of the captive insurance company.
(a) Any letter of credit used to meet the requirements set forth in this chapter shall be:
(1) Clean, irrevocable, and unconditional;
(2) Issued by a bank approved by the Commissioner, which is either a bank chartered by the State of Georgia or a national bank which is a member of the Federal Reserve System;
(3) Presentable and payable within the State of Georgia; and
(4) Provided in conformity with any other requirements established by the Commissioner.
(b) The Commissioner may require any captive insurance company to draw upon its letters of credit at any time, in amounts determined by the Commissioner, if the Commissioner determines that such action is necessary for the protection of the interests of the captive insurance company's policyholders.
(a) The application for an original certificate of authority for a captive insurance company must be filed with the Commissioner and shall contain the following:
(1) A copy of the captive insurance company's adopted or proposed articles of incorporation and bylaws or articles of organization and operating agreement; and
(2) A business plan which shall contain the following:
(A) A plan of operation or a feasibility study describing the anticipated activities and results of the captive insurance company which shall include:
(i) A description of the coverages, coverage limits and deductibles, and premium rating systems for the lines of insurance or reinsurance that the captive insurance company intends to offer;
(ii) Historical and expected loss experience of the risks to be insured or reinsured by the captive insurance company;
(iii) Pro forma financial statements and projections of the proposed business operations of the captive insurance company;
(iv) An analysis of the adequacy of the captive insurance company's proposed premiums and capital and surplus levels relative to the risks to be insured or reinsured by the captive insurance company;
(v) A statement of the captive insurance company's net retained limit of liability on any contract of insurance or reinsurance it intends to issue and the nature of any reinsurance it intends to cede;
(vi) A statement certifying that the captive insurance company's investment policy is in compliance with this title and specifying the type of investments to be made pursuant to Code Section 33-41-18;
(vii) A statement identifying the geographic areas in which the captive insurance company intends to operate;
(viii) A statement identifying the persons or organizations who will perform the captive insurance company's major operational functions, including management, underwriting, accounting, investment of assets, claims adjusting and loss control, and the adequacy of the expertise, experience, and character of such persons or organizations; and
(ix) Whenever required by the Commissioner, an appropriate opinion by a qualified independent casualty actuary regarding the adequacy of the captive insurance company's proposed capital, surplus, and premium levels; and
(B) Such other items deemed relevant by the Commissioner in ascertaining whether the proposed captive insurance company will be able to meet its contractual obligations.
(b) In determining whether to approve an application for an original or renewal certificate of authority to a captive insurance company, the Commissioner shall examine the applicable items submitted to him or her pursuant to this Code section. The Commissioner may rely upon and accept the reports of independent agents who may include licensed insurance counselors, brokers, agents, or adjusters discussed under Chapter 23 of this title, certified actuarial consultants, certified public accountants, risk managers, and examiners of insurance companies in order to facilitate his or her examination of the application for a certificate of authority by a captive insurance company. The expenses and charges of such independent agents shall be paid directly by the captive insurance company.
(c) Each captive insurance company shall pay to the Commissioner an amount equal to all costs of examining, investigating, and processing its application for an original or renewal certificate of authority. In addition, it shall pay a fee for the initial year of licensure and a renewal fee for each year thereafter in the amount periodically imposed under this title upon captive insurance companies.
(d) Pursuant to Code Section 33-3-15, if the Commissioner is satisfied that the documents and statements filed by the captive insurance company in its application for a certificate of authority comply with the provisions of this chapter, the Commissioner shall promptly issue a certificate of authority authorizing the captive insurance company to transact insurance in this state until the thirtieth day of June thereafter. The effective date of such certificate of authority shall be:
(1) The date on which the Commissioner is satisfied that the documents and statements filed by the captive insurance company in its application for a certificate of authority comply with the provisions of this chapter; or
(2) A date specified by the Commissioner, which shall not precede the date on which the application for a certificate of authority was first filed with the Commissioner.
(e) The captive insurance company shall provide the Commissioner with the following documentation as soon as practicable:
(1) Evidence satisfactory to the Commissioner that the minimum capital or surplus required for the particular captive insurance company under Code Section 33-41-8 has been paid in and that the appropriate amount thereof has been deposited with the state; and
(2) A financial statement showing the assets and liabilities of the captive insurance company which is certified by its president and calculated in accordance with the accounting standards set forth in Chapter 10 of this title, except as modified by this chapter.
Notwithstanding subsection (d) of this Code section, the Commissioner may require that the captive insurance company submit the documentation required by this subsection prior to issuing the captive insurance company a certificate of authority.
(f) Any material change in the items required under subsection (a) of this Code section shall require the prior approval of the Commissioner. Any material change which is not disapproved by the Commissioner within 30 days after its submission shall be deemed approved.
(a) The certificate of authority of a captive insurance company to transact insurance in this state may be refused or suspended or not be renewed pursuant to Code Sections 33-3-17 through 33-3-19, inclusive.
(b) A certificate of authority shall expire, be renewed, and be amended by the Commissioner pursuant to Code Section 33-3-16; provided, however, that captive insurance companies shall not be subject to the publishing requirements of such Code section.
For the purposes of determining the financial condition of a captive insurance company, including, but not limited to, the maintenance of adequate reserves pursuant to Code Section 33-41-13, the reporting of business affairs pursuant to Code Section 33-41-15, and the examinations and investigations pursuant to Code Section 33-41-16, there shall be allowed as assets of a captive insurance company:
(1) Those assets described in Code Section 33-10-1;
(2) Those assets otherwise authorized by Code Sections 33-41-8 and 33-41-14;
(3) Obligations for premium payments, provided that such obligations are secured by letters of credit, as described in Code Section 33-41-9; and
(4) Assets that are approved by the Commissioner as admitted assets under rules adopted pursuant to this chapter.
(a) Every captive insurance company shall maintain reserves in an amount estimated in the aggregate to provide for the payment of all unpaid losses and claims incurred, whether reported or unreported, for which such captive insurance company may be liable, together with the expenses of adjustment or settlement of such losses and claims. Every captive insurance company shall keep a complete and itemized record, in a form satisfactory to the Commissioner, showing all losses and claims on which it has received notice.
(b) If the loss experience of a captive insurance company shows that its loss reserves, however estimated, are inadequate, the Commissioner shall require the captive insurance company to maintain increased amounts of loss reserves as are needed to make its loss reserves adequate.
(c) Every captive insurance company shall maintain an unearned premium reserve on all policies in force which shall never be less in the aggregate than the captive insurance company's actual liability to all its insureds for the return of gross unearned premiums computed pursuant to the method commonly referred to as the monthly pro rata method.
(a) A captive insurance company may cede any part of its risks to a reinsurer pursuant to a written reinsurance agreement and may take credit as an asset or a deduction from its liabilities for the amount of reinsurance premiums recoverable under such reinsurance agreement:
(1) If the reinsurer is in compliance with Code Section 33-7-14;
(2) To the extent that assets are deposited or withheld from the reinsurer under a written trust or escrow agreement approved by the Commissioner pursuant to an express provision in the reinsurance agreement as security for the payment of the reinsurer's obligations thereunder, provided that:
(A) The assets deposited or withheld are held subject to withdrawal by, and under the control of, the ceding captive insurance company; or
(B) The assets deposited or withheld are placed in a trust or escrow account for such purposes in a bank which is either chartered by the State of Georgia or a national bank which is a member of the Federal Reserve System and withdrawals cannot be made without the express written consent of the ceding captive insurance company;
(3) To the extent of the amount of a letter of credit, as described in Code Section 33-41-9, given pursuant to an express provision in the reinsurance agreement as security for the payment of the reinsurer's obligations thereunder; or
(4) When the Commissioner shall otherwise authorize such credits or deductions.
(b) Any assets deposited or withheld under paragraph (2) of subsection (a) of this Code section must be in the form of cash, as defined in Code Section 33-11-6, or securities which must have a market value equal to or greater than the credit taken and are qualified as allowed assets for a domestic insurer under Chapter 11 of this title.
(c) No credit shall be allowed for reinsurance in any unauthorized assuming reinsurer unless such reinsurer designates the Commissioner as agent for service of process in any action arising out of, or in connection with, such reinsurance.
Each captive insurance company shall be required to file annual and other reports of its business affairs and operations as prescribed by Code Section 33-3-21.
(a) The Commissioner or his or her designated agent may visit each captive insurance company at any time and examine its affairs in order to ascertain its financial condition, its ability to fulfill its contractual obligations, and its compliance with this chapter. For these purposes, the Commissioner or his or her designated agent shall have free access to all of the books and records relating to the business of the captive insurance company. The expenses and charges of any examination conducted pursuant to this Code section shall be paid directly by the captive insurance company examined.
(b) When necessary or desirable to assist in any examination under this Code section, the Commissioner may retain such independent agents as described in subsection (b) of Code Section 33-41-10, as the Commissioner deems appropriate, in order to facilitate his or her examination under this Code section. The expenses and charges of such persons so retained or designated shall be paid directly by the captive insurance company. The provision of subsection (g) of Code Section 33-2-14 shall apply to examinations of any captive insurance company.
(c) All portions of license applications reasonably designated confidential by or on behalf of an applicant pure or agency captive insurance company, all information and documents, and any copies of the foregoing, produced or obtained by or submitted or disclosed to the Commissioner pursuant to this chapter that are reasonably designated confidential by a pure or agency captive insurance company, and all examination reports, preliminary examination reports, working papers, recorded information, other documents, and any copies of any of the foregoing, produced or obtained by or submitted or disclosed to the Commissioner pursuant to this chapter shall be given confidential treatment, except as to disclosures consented to by the pure or agency captive insurance company, and shall not be subject to subpoena, shall not be made public by the Commissioner, and shall not be provided or disclosed to any other person at any time except to:
(1) Insurance commissioners of any state or of any foreign country or jurisdiction, provided that:
(A) Such receiving party shall agree in writing to maintain the confidentiality of such information; and
(B) The laws of the receiving party require such information to be and to remain confidential; or
(2) A law enforcement official or agency of this state, any other state, or the United States of America so long as such official or agency agrees in writing to hold it confidential and in a manner consistent with this Code section.
The Commissioner may impose fines as prescribed by Code Section 33-3-20.
Except as provided in Code Section 33-41-8:
(1) Risk retention group captive insurance companies, industrial insured captive insurance companies, and association captive insurance companies shall comply with the investment requirements contained in Article 2 of Chapter 11 of this title; and
(2) Pure captive insurance companies and agency captive insurance companies shall not be subject to any restrictions on eligible investments whatever, including those limitations contained in Chapter 11 of this title; provided, however, that the Commissioner may prohibit or limit any investment that threatens the solvency or liquidity of any such captive insurance company.
(a) No captive insurance company shall be required to join or use the rates, rating systems, underwriting rules, or policy or bond forms of a rating or advisory organization as defined in Code Section 33-9-2.
(b) No captive insurance company shall be required to file its premium rates or policy forms with, or seek approval of such rates or forms from, the Commissioner or any other authority of this state. However, the Commissioner shall impose minimum premiums upon association captive insurance companies which write motor vehicle liability insurance coverage required by law and do not participate in the Georgia Insurers Insolvency Pool.
(a)(1) No captive insurance company other than an association or industrial insured captive insurance company issuing workers' compensation insurance contracts shall be permitted to join or contribute financially to the Georgia Insurers Insolvency Pool under Chapter 36 of this title or any other plan, pool, or association guaranty or insolvency fund in this state. Other than an association or industrial insured captive insurance company issuing workers' compensation insurance contracts, no captive insurance company, or its insureds or claimants against its insureds, nor its parent or any affiliated company shall receive any benefit from the Georgia Insurers Insolvency Pool or any other plan, pool, or association guaranty or insolvency fund for claims arising out of the operations of such captive insurance company.
(2) No captive insurance company shall be required to participate in any FAIR Plan established and maintained in this state under Chapter 33 of this title.
(3) No captive insurance company shall be required to participate in any joint underwriting association established and maintained in this state under Chapter 9 of this title.
(b) Captive insurance companies shall be assessed on the same basis as self-insurers for the purpose of payments to the Subsequent Injury Trust Fund as described in Chapter 9 of Title 34.
(a) Every association and industrial insured captive insurance company issuing workers' compensation insurance contracts shall become a member of the Georgia Insurers Insolvency Pool under Chapter 36 of this title as to workers' compensation only. Such captive insurance companies shall be liable for assessments pursuant to Code Section 33-36-7 and for all other obligations imposed pursuant to Chapter 36 of this title as to workers' compensation only.
(b) Except as provided for in Code Section 33-36-20, the Georgia Insurers Insolvency Pool shall not be liable for any claims incurred by any captive insurance company before January 1, 2008.
The provisions of Chapter 37 of this title shall apply to and govern the rehabilitation, reorganization, conservation, and liquidation of captive insurance companies.
In lieu of any other taxes imposed by this title, all captive insurance companies licensed under this chapter shall pay the following taxes:
(1) A tax at the rate of 0.4 percent on the first $20 million and 0.3 percent on each dollar thereafter on its direct premiums collected, after deducting from the direct premiums subject to the tax the amounts paid to policyholders as return premiums which must include dividends on unabsorbed premiums or premium deposits returned or credited to policyholders. However, risk retention group captive insurance companies shall only be subject to such taxes on direct premiums collected for coverages within the State of Georgia;
(2) A tax at the rate of 0.225 percent on the first $20 million of assumed reinsurance premium, and 0.150 percent on the next $20 million and 0.050 percent on the next $20 million, and 0.025 percent of each dollar thereafter. However, no reinsurance tax applies to premiums for risks or portions of risks that are subject to taxation on a direct basis pursuant to this title. No reinsurance premium tax shall be payable in connection with the receipt of assets in exchange for the assumption of loss reserves and other liabilities of another insurer under common ownership and control, provided that the Commissioner verifies that such transaction is part of a plan to discontinue the operations of such other insurer, and if the intent of the parties to such transaction is to renew or maintain such business with the captive insurance company;
(3) If the aggregate taxes to be paid by a captive insurance company calculated under paragraphs (1) and (2) of this Code section amount to more than $100,000.00 in any year, the captive insurance company shall pay a maximum tax of $100,000.00 for that year;
(4) Two or more captive insurance companies under common ownership and control, other than sponsored captive insurance companies, shall be taxed as though they were a single captive insurance company. For the purposes of this Code section, the term “common ownership and control” shall mean the direct or indirect ownership, control or hold with power to vote more than 50 percent of the outstanding voting securities or membership interests of two or more such captive insurance companies;
(5) The tax provided for in paragraphs (1) and (2) of this Code section shall be calculated on an annual basis, notwithstanding policies or contracts of insurance or contracts of reinsurance issued on a multiyear basis. In the case of multiyear policies or contracts, the premium shall be prorated for purposes of determining the tax due; and
(6)(A) For purposes of this Code section, a protected cell, as defined in Article 2 of this chapter, shall be included in the definition of a “captive insurance company.”
(B) The common ownership and control aggregation rules set forth in paragraph (4) of this Code section shall apply to each individual protected cell with respect to the participant or participants of such individual protected cell.
(C) Notwithstanding any other provision of this Code section, a sponsored captive insurance company shall be responsible for collecting and remitting taxes due from its protected cells.
(a) A captive insurance company that meets the definition of a dormant captive insurance company set forth in this chapter may apply to the Commissioner for a certificate of dormancy on a form or forms as may be prescribed by the Commissioner.
(b) A dormant captive insurance company that has been issued a certificate of dormancy pursuant to this Code section shall:
(1) Possess and thereafter maintain unimpaired, paid-in-capital and surplus of at least $25,000.00;
(2) Submit to the Commissioner a report of its financial condition on or before March 1 of each year on a form or in a manner as prescribed by the Commissioner;
(3) Renew such certificate every five years by submitting documentation as prescribed by the Commissioner and paying a renewal fee of $500.00; and
(4) Be subject to an examination pursuant to Code Section 33-41-16 in the discretion of the Commissioner.
(c) A dormant captive insurance company that has been issued a certificate of dormancy pursuant to this Code section shall not:
(1) Be subject to or liable for the payment of any tax pursuant to Code Section 33-41-22; or
(2) Be required to submit any annual forms, fees, or documents that are otherwise required by this chapter, other than those required pursuant to this Code section.
(d) The Commissioner may, upon written request, declare a captive insurance company to be dormant for purposes of this Code section even if such captive insurance company retains liabilities associated with policies written or assumed, provided that such captive insurance company has otherwise ceased the transaction of insurance business. However, in this case, the Commissioner may, in his or her discretion, require such captive insurance company to possess and maintain unimpaired, paid-in-capital and surplus and reserves greater than that required by this Code section.
(e) A certificate of dormancy shall be revoked if a captive insurance company no longer meets the definition of a dormant captive insurance company or fails to meet the requirements as set forth in this Code section.
(f) A dormant captive insurance company shall apply to the Commissioner for approval and shall be granted such approval to surrender its certificate of dormancy and resume conducting the business of insurance prior to issuing any insurance policies and shall pay an application fee as prescribed by the Commissioner.
(g) Any provisions of this title which are inconsistent with the provisions of this Code section shall not apply to dormant captive insurance companies.
The Commissioner may adopt rules establishing standards to ensure that a pure captive insurance company's parent or any of its affiliated companies is able to exercise control of the risk management function of any controlled unaffiliated business to be insured by the pure captive insurance company; provided, however, that, until such time as rules under this Code section are adopted, the Commissioner may approve or deny the coverage of such risks by a pure captive insurance company on a case by case basis.
The Commissioner may establish such rules and regulations and issue such interpretive rulings as may be necessary to carry out the provisions of this chapter.
Any provisions of this title which are inconsistent with the provisions of this chapter shall not apply to captive insurance companies; provided, however, that pure and agency captive insurance companies shall not be subject to the requirements of Chapter 13 of this title.
In addition to the general provisions of Article 1 of this chapter, the provisions of this article shall apply to sponsored captive insurance companies.
As used in this article, the term:
(1) “General account” means all the assets and liabilities of a sponsored captive insurance company that are not attributable to a protected cell.
(2) “Incorporated protected cell” means a protected cell that is established as a stock corporation or manager-managed limited liability company separate from the sponsored captive insurance company of which it is a part.
(3) “Participant” means a person, and any affiliates thereof, that is insured or reinsured by a sponsored captive insurance company, where the losses of the participant are limited through a participant contract to such participant's protected cell assets or to the pro rata share of the assets of one or more protected cells that are identified in such participant contract.
(4) “Participant contract” means a contract by which a sponsored captive insurance company insures or reinsures the risks of a participant, or the controlled unaffiliated business thereof, and limits the losses to the participant's protected cell assets or to the pro rata share of the assets of one or more protected cells that are identified in such participant contract.
(5) “Protected cell” means a separate and distinct account or accounts established by a sponsored captive insurance company in which an identified pool of assets are maintained for one or more participants in accordance with the terms of one or more participant contracts to fund the liability of the sponsored captive insurance company insured or assumed on behalf of such participants as set forth in such participant contracts. A protected cell may be an incorporated protected cell or an unincorporated protected cell.
(6) “Protected cell assets” means all assets, contract rights, and general intangibles identified with and attributable to a specific protected cell that may not be used to pay any expenses or claims other than those attributable to such protected cell.
(7) “Protected cell liability” means all liabilities and other obligations identified with and attributable to a specific protected cell.
(8) “Sponsor” means any person, other than a risk retention group, that is approved by the Commissioner, in the exercise of his or her sole discretion, to organize and operate a sponsored captive insurance company and to provide all or part of its required capital and surplus.
(9) “Sponsored captive insurance company” means any domestic stock insurer or manager-managed limited liability company formed by one or more sponsors having been granted a certificate of authority pursuant to this chapter that:
(A) May only be owned by its participants and sponsors, unless the Commissioner has authorized the issuance of nonvoting securities to other persons:
(B) Maintains at least $250,000.00 in capital and surplus subject to Code Section 33-41-8, which shall at all times be available to pay any expenses of or claims against it;
(C) May only insure or reinsure the risks of its participants, or the controlled unaffiliated business thereof, in accordance with separate participant contracts;
(D) Funds its liabilities to each participant through one or more protected cells and keeps the protected cell assets and protected cell liabilities of each protected cell segregated from the general account and from the protected cell assets and protected cell liabilities of other protected cells; and
(E) Establishes administrative and accounting procedures necessary to allocate, identify, separate, and segregate the protected cell assets, protected cell liabilities, insurance and reinsurance obligations, assets, credits, liabilities, losses, tax benefits and refunds attributable to the protected cells.
(10) “Unincorporated protected cell” means a protected cell that is not itself a legal entity separate from the sponsored captive insurance company of which it is a part.
(a) A sponsored captive insurance company may establish one or more protected cells if the Commissioner has approved in writing a business plan, or an amendment to such plan, with respect to each protected cell that includes information about the participant, the associated participant contract or contracts, and any other information requested by the Commissioner.
(b) No participant contract shall take effect without the Commissioner's prior written approval. The addition of each new protected cell, the withdrawal of any current participant, or the termination of any existing protected cell shall constitute a change in the business plan of the sponsored captive insurance company and shall require the Commissioner's prior written approval.
(c) Each sponsored captive insurance company shall annually file with the Commissioner such financial reports as he or she shall require. Any such financial report shall include, without limitation, accounting statements detailing the financial experience of each protected cell.
(d) Each sponsored captive insurance company shall notify the Commissioner in writing within ten business days of any protected cell becoming insolvent or otherwise unable to meet its claim, expense, insurance, or reinsurance obligations.
(a) A sponsored captive insurance company licensed under this chapter may establish and maintain one or more protected cells to insure or reinsure risks subject to the provisions, terms, and conditions set forth in this chapter, and it is the intent of the General Assembly to provide sponsored captive insurance companies with the option to establish one or more protected cells as incorporated protected cells without limiting any rights or protections applicable to unincorporated protected cells.
(b) The creation of a protected cell pursuant to this chapter does not create, with respect to such protected cell, a legal person separate from the sponsored captive insurance company of which it is a part unless such protected cell is an incorporated protected cell.
(c) In addition to the provisions required by subparagraphs (c)(1)(B) and (c)(1)(C) of Code Section 33-41-5, an incorporated protected cell must also include the following in its formation documents:
(1) A reference to the sponsored captive insurance company of which it will be a part; and
(2) A statement that the entity is a protected cell incorporated for the limited purposes authorized by the sponsored captive insurance company's certificate of authority.
(d) An incorporated protected cell shall not use any name that is either similar, misleading, or confusing with respect to any other name already in use by any other entity doing business in this state.
(e) An incorporated protected cell shall be entitled to enter into contracts and undertake obligations in its own name and for its own account unless prohibited by an applicable participant contract. In the case of a contract or obligation undertaken directly by an incorporated protected cell to which the sponsored captive insurance company is not a party, either in its own name and for its own account or on behalf of a protected cell, the counterparts to the contract or obligation shall have no right or recourse against the sponsored captive insurance company, any other protected cell not a party to such contract or obligation or any assets other than against assets properly attributable to the incorporated protected cell that is a party to the contract or obligation.
(a) All attributions of assets and liabilities to the protected cells and the general account shall be made by the sponsored captive insurance company in accordance with the business plan and applicable participant contracts as approved by the Commissioner, and unless the sponsor consents and the Commissioner has granted prior written approval, the general account shall not be used to pay any expenses or claims attributed solely to a protected cell.
(b) When establishing a protected cell, the sponsored captive insurance company shall attribute to the protected cell assets with a value at least equal to the reserves and other insurance liabilities attributable to such protected cell in cash or in readily marketable securities with established market value.
(c) Amounts attributable to a protected cell under this chapter are owned by the protected cell. No sponsored captive insurance company shall be, or hold itself out to be, a trustee with respect to those protected cell assets of such protected cell account. Notwithstanding this subsection, the sponsored captive insurance company may allow for a security interest to attach to protected cell assets when in favor of a creditor of the protected cell and otherwise allowable under applicable law.
(d) Each protected cell shall be accounted for separately on the books and records of the sponsored captive insurance company to reflect each protected cell's financial condition and results of operations, net income or loss, dividends or other distributions to participants, and such other factors regarding each protected cell as may be provided in the applicable participant contract or required by the Commissioner.
(e) The assets of a protected cell shall not be chargeable with liabilities of any other protected cell or, unless otherwise agreed in the applicable participant contract, of the sponsored captive insurance company generally.
(f) No sale, exchange, transfer of assets, dividend, or distribution, other than a transaction in accordance with the applicable participant contract, may be made with respect to a protected cell by or to a sponsored captive insurance company or participant without the Commissioner's written approval. In no event shall such approval be given if the sale, exchange, transfer, dividend, or distribution would result in the insolvency or impairment of a protected cell.
(g) The remedy of tracing is applicable to protected cell assets if they are commingled with protected cell assets of other protected cells or the general account in violation of this article and any applicable participant contracts. The remedy of tracing shall not be construed as an exclusive remedy.
(h) The sponsored captive insurance company shall attribute all insurance obligations, assets, and liabilities relating to a reinsurance contract entered into with respect to a protected cell to such protected cell as set forth in the business plan and participant contracts approved by the Commissioner, which may include a tax allocation agreement to which the sponsored captive insurance company is a party.
(i) Notwithstanding any other provision of this chapter, the assets of two or more protected cells may be combined for purposes of investment, and such combination shall not be construed as defeating the segregation of such assets for accounting or other purposes.
(j) Notwithstanding any other provisions of this title, sponsored captive insurance companies shall not be subject to any restrictions on eligible investments whatever; however, the Commissioner may prohibit or limit any investment that threatens the solvency or liquidity of any sponsored captive insurance company.
(k) If required by the Commissioner, in his or her discretion, the business written by a sponsored captive insurance company, with respect to each protected cell, shall be:
(1) Fronted by an insurance company licensed pursuant to the laws of any state;
(2) Reinsured by a reinsurer authorized or approved by the Commissioner; or
(3) Secured by a trust fund in the United States for the benefit of participants, policyholders, and claimants or funded by an irrevocable letter of credit or other arrangement that is acceptable to the Commissioner. The Commissioner, in his or her sole discretion, shall approve the form, terms, and funding amount of any trust, and may require the sponsored captive insurance company to increase the funding of any security arrangement established under this chapter. If the form of security is a letter of credit, the letter of credit must be in conformance with Code Section 33-41-9 and approved by the Commissioner.
(a) In connection with the conservation, rehabilitation, or liquidation of captive insurance companies set forth in Code Section 33-41-21, including sponsored captive insurance companies, the assets and liabilities of a protected cell shall at all times be kept separate from, and shall not be commingled with, those of other protected cells and the sponsored captive insurance company except to the extent that the assets and liabilities of any one or more protected cells are determined to have not been allocated, segregated, and separated pursuant to the business plan and participant contracts approved by the Commissioner, and which are subject to the tracing provisions set forth in this article.
(b) Notwithstanding the provisions of this title, in the event of the insolvency of a sponsored captive insurance company where the Commissioner determines that one or more protected cells remain solvent, the Commissioner may separate such cells from the sponsored captive insurance company and may allow, on application of the sponsored captive insurance company or participant, for the conversion of such protected cells into one or more new or existing other captive insurance companies.
All provisions set forth in subsection (c) of Code Section 33-41-16 shall also apply to sponsored captive insurance companies in the same manner.
This chapter may be known and cited as the “Long-term Care Insurance Act.”
The purpose of this chapter is to promote the public interest, to promote the availability of long-term care insurance policies, to protect applicants for long-term care insurance as defined from unfair or deceptive sales or enrollment practices, to establish standards for long-term care insurance, to facilitate public understanding and comparison of long-term care insurance policies, and to facilitate flexibility and innovation in the development of long-term care insurance coverage.
The requirements of this chapter shall apply to long-term care insurance policies issued, delivered, or issued for delivery in this state. This chapter is not intended to supersede the obligations of entities subject to this chapter to comply with the substance of other applicable provisions of this title insofar as they do not conflict with this chapter, except that laws and regulations designed and intended to apply to medicare supplement insurance policies shall not be applied to long-term care insurance. A policy which is not advertised, marketed, or offered as long-term care insurance need not meet the requirements of this chapter.
As used in this chapter, the term:
(1) “Applicant” means:
(A) In the case of an individual long-term care insurance policy, the person who seeks to contract for such benefits; and
(B) In the case of a group long-term care insurance policy, the proposed certificate holder.
(2) “Certificate” means any certificate issued under a group long-term care insurance policy, which policy has been delivered or issued for delivery in this state.
(3) “Group long-term care insurance” means a long-term care insurance policy which is issued, delivered, or issued for delivery in this state and issued to:
(A) Any eligible group as defined in Code Section 33-30-1; or
(B) A group other than as described in Code Section 33-30-1, subject to a finding by the Commissioner that:
(i) The issuance of the group policy is not contrary to the best interest of the public;
(ii) The issuance of the group policy would result in economies of acquisition or administration; and
(iii) The benefits are reasonable in relation to the premiums charged.
(4) “Long-term care insurance” means any accident and sickness insurance policy or rider advertised, marketed, offered, or designed primarily to provide coverage for not less than 12 consecutive benefit months or which provides coverage for recurring confinements separated by a period not to exceed six months with a minimum aggregate period of one year for each covered person on an expense incurred, indemnity, prepaid, or other basis, for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services, provided in a setting other than an acute care unit of a hospital. Such term includes group and individual accident and sickness policies or riders whether issued by insurers, fraternal benefit societies, health care plans, health maintenance organizations, or any other similar organizations. Long-term care insurance shall not include any accident and sickness insurance policy which is offered primarily to provide basic medicare supplement coverage, basic hospital expense coverage, basic medical-surgical expense coverage, hospital confinement indemnity coverage, major medical expense coverage, disability income protection coverage, catastrophic coverage, comprehensive coverage, accident only coverage, specified disease or specified accident coverage, or limited benefit health coverage. Long-term care insurance may be provided through an individual or group life insurance policy by attachment of a long-term care rider or by the automatic inclusion of a long-term care provision which, notwithstanding Code Section 33-42-3, must meet the requirements of this chapter and regulations promulgated by the Commissioner. Any such long-term care riders or policy provisions shall not be exempt from filing requirements and must be filed with the department for approval before being used in this state.
(5) “Policy” means any policy, contract, or subscriber agreement or any rider or endorsement attached thereto, issued, delivered, issued for delivery, or renewed in this state by an insurer, fraternal benefit society, health care plan, health maintenance organization, or any other similar organization. Such term shall also include a Georgia Qualified Long-term Care Partnership Program approved policy, as defined in paragraph (4) of Code Section 49-4-161, meeting the requirements of the Georgia Qualified Long-term Care Partnership Program as enacted in subsection (a) of Code Section 49-4-162.
No group long-term care insurance coverage may be offered to a resident of this state under a group policy issued in another state to a group described in subparagraph (B) of paragraph (3) of Code Section 33-42-4 unless this state or another state having statutory and regulatory long-term care insurance requirements substantially similar to those adopted in this state has made a determination that such requirements have been met.
(a) The Commissioner may adopt regulations that include standards for full and fair disclosure setting forth the manner, content, and required disclosures for the sale of long-term care insurance policies and for any applicable terms of renewability, initial and subsequent conditions of eligibility, nonduplication of coverage provisions, coverage of dependents, preexisting conditions, termination of insurance, probationary periods, limitations, exceptions, reductions, elimination periods, requirements for replacement, recurrent conditions, and definition of terms.
(b) No long-term care insurance policy may:
(1) Be canceled, nonrenewed, or otherwise terminated on the grounds of the age or the deterioration of the mental or physical health of the insured individual or certificate holder;
(2) Contain a provision establishing a new waiting period in the event existing coverage is converted to or replaced by a new policy or other form of policy within the same company, except with respect to an increase in benefits voluntarily selected by the insured individual or group policyholder; or
(3) Provide coverage for skilled nursing care only or provide coverage for other levels of care which is unreasonably lower than the coverage provided for skilled nursing care in a facility.
(c)(1) No long-term care insurance policy or certificate shall use a definition of “preexisting condition” which is more restrictive than the following: Preexisting condition means the existence of symptoms which would cause an ordinarily prudent person to seek diagnosis, care, or treatment, or a condition for which medical advice or treatment was recommended by or received from a provider of health care services, within six months preceding the effective date of coverage of an insured person.
(2) No long-term care insurance policy may exclude coverage for a loss or confinement which is the result of a preexisting condition unless such loss or confinement begins within six months following the effective date of coverage of an insured person.
(3) The Commissioner may extend the limitation periods set forth in paragraphs (1) and (2) of this subsection as to specific age group categories or specific policy forms upon findings that the extension is in the best interest of the public.
(4) The definition of “preexisting condition” shall not prohibit an insurer from using an application form designed to elicit the complete health history of an applicant and, on the basis of the answers on that application, from underwriting in accordance with that insurer's established underwriting standards. Unless otherwise provided in the policy or certificate, a preexisting condition, regardless of whether it is disclosed on the application, need not be covered until the waiting period provided in paragraph (2) of this subsection expires. No long-term care insurance policy or certificate may exclude or use waivers or riders of any kind to exclude, limit, or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditions beyond the waiting period described in paragraph (2) of this subsection.
(d)(1) No long-term care insurance policy which provides benefits only following institutionalization shall condition such benefits upon admission to a facility for the same or related condition within a period of less than 30 days after discharge from the institution.
(2) Notwithstanding paragraph (1) of this subsection, no long-term care insurance policy which conditions the eligibility of benefits on prior hospitalization may be delivered or issued for delivery in this state unless the insurer or other entity offering that policy also offers a long-term care insurance policy which does not condition eligibility of benefits on such a requirement.
(e) The Commissioner may adopt regulations establishing loss ratio standards for long-term care insurance policies, provided that a specific reference to long-term care insurance policies is contained in the regulation.
(f) Individual long-term care insurance policyholders shall have the right to return the policy within 30 days of its delivery and to have the premium refunded if, after examination of the policy, the policyholder is not satisfied for any reason. Individual long-term care insurance policies shall have a notice prominently printed on the first page of the policy or attached thereto stating in substance that the policyholder shall have the right to return the policy within 30 days of its delivery and to have the premium refunded if, after examination of the policy, the policyholder is not satisfied for any reason. Long-term care insurance policies or certificates issued pursuant to a direct response solicitation shall have a notice prominently printed on the first page or attached thereto stating in substance that the insured person shall have the right to return the policy within 30 days of its delivery and to have the premium refunded if, after examination of the policy or certificate, the insured person is not satisfied for any reason.
(g) An outline of coverage shall be delivered to an applicant for an individual long-term care insurance policy at the time of application for an individual policy. In the case of direct response solicitations, the insurer shall deliver the outline of coverage upon the applicant's request, but regardless of request shall make such delivery no later than at the time of policy delivery. Such outline of coverage shall comply with the applicable provisions of Code Section 33-29-13.
(h) A certificate issued pursuant to a group long-term care insurance policy, which policy is issued, delivered, issued for delivery, or renewed in this state, shall include:
(1) A description of the principal benefits and coverage provided in the policy;
(2) A statement of the principal exclusions, reductions, and limitations contained in the policy;
(3) A statement that the group master policy determines governing contractual provisions; and
(4) Such other provisions as the Commissioner may reasonably require.
(i) No policy may be advertised, marketed, or offered as long-term care insurance unless it complies with the provisions of this chapter.
As used in this chapter, the term:
(1) “Applicant” means:
(A) In the case of an individual medicare supplement policy or subscriber contract, the person who seeks to contract for insurance benefits; and
(B) In the case of a group medicare supplement policy, the proposed certificate holder.
(1.1) “Bankruptcy” means when a Medicare+Choice organization that is not an issuer has filed, or has had filed against it, a petition for declaration of bankruptcy and has ceased doing business in the state.
(2) “Certificate” means any certificate delivered or issued for delivery in this state under a group medicare supplement policy.
(3) “Certificate form” means the form on which the certificate is delivered or issued for delivery by the issuer.
(3.1) “Continuous period of creditable coverage” means the period during which an individual was covered by creditable coverage if during the period of the coverage the individual had no breaks in coverage greater than 63 days.
(3.2)(A) “Creditable coverage” means, with respect to an individual, coverage of the individual provided under any of the following:
(i) A group health plan;
(ii) Health insurance coverage;
(iii) Part A or Part B of Title XVIII of the Social Security Act 1 (medicare);
(iv) Title XIX of the Social Security Act 2 (Medicaid), other than coverage consisting solely of benefits under Section 1928; 3
(v) Chapter 5 of Title 10 of the United States Code (CHAMPUS);
(vi) A medical care program of the Indian Health Service or of a tribal organization;
(vii) A state health benefits risk pool;
(viii) A health plan offered under Chapter 89 of Title 5 of the United States Code (Federal Employees Health Benefits Program);
(ix) A public health plan as defined in federal regulation; or
(x) A health benefit plan under Section 5(e) of the Peace Corps Act (22 U.S.C. Section 2504(e)).
(B) Creditable coverage shall not include one or more, or any combination of, the following:
(i) Coverage only for accident or disability income insurance, or any combination thereof;
(ii) Coverage issued as a supplement to liability insurance;
(iii) Liability insurance, including general liability insurance and automobile liability insurance;
(iv) Workers' compensation or similar insurance;
(v) Automobile medical payment insurance;
(vi) Credit only insurance;
(vii) Coverage for on-site medical clinics; or
(viii) Other similar insurance coverage, specified in the Code of Federal Regulations as of July 1, 2000, under which benefits for medical care are secondary or incidental to other insurance benefits.
(C) Creditable coverage shall not include the following benefits if they are provided under a separate policy, certificate, or contract of insurance or are otherwise not an integral part of the plan:
(i) Limited scope dental or vision benefits;
(ii) Benefits for long-term care, nursing home care, home health care, community based care, or any combination thereof; or
(iii) Such other similar, limited benefits as are specified in the Code of Federal Regulations as of July 1, 2000.
(D) Creditable coverage shall not include the following benefits if offered as independent, noncoordinated benefits:
(i) Coverage only for a specified disease or illness; or
(ii) Hospital indemnity or other fixed indemnity insurance.
(E) Creditable coverage shall not include the following if offered as a separate policy, certificate, or contract of insurance:
(i) Medicare supplemental health insurance as defined under Section 1882(g)(1) of the Social Security Act; 4
(ii) Coverage supplemental to the coverage provided under Chapter 55 of Title 10 of the United States Code; or
(iii) Similar supplemental coverage provided to coverage under a group health plan.
(3.3) “Employee welfare benefit plan” means a plan, fund, or program of employee benefits as defined in 29 U.S.C. Section 1002 (Employee Retirement Income Security Act).
(3.4) “Insolvency” means when an issuer, licensed to transact the business of insurance in this state, has had a final order of liquidation entered against it with a finding of insolvency by a court of competent jurisdiction in the issuer's state of domicile.
(4) “Issuer” includes insurance companies, fraternal benefit societies, health care service plans, health maintenance organizations, and any other entity delivering or issuing for delivery in this state medicare supplement policies or certificates.
(5) “Medicare” means the “Health Insurance for the Aged Act,” Title XVIII of the Social Security Act Amendments of 1965, as then constituted or later amended.
(6) “Medicare supplement policy” means a group or individual policy of accident and sickness insurance or a subscriber contract of hospital and medical service associations or health maintenance organizations, other than a policy issued pursuant to a contract under Section 1876 of the federal Social Security Act (42 U.S.C. Section 1395, et seq.) or an issued policy under a demonstration project specified in 42 U.S.C. Section 1395ss(g) (1), which is advertised, marketed, or designed primarily as a supplement to reimbursements under medicare for the hospital, medical, or surgical expenses of persons eligible for medicare.
(6.1) “Medicare+Choice plan” means a plan of coverage for health benefits under medicare Part C as defined in P.L. 105-33, and includes:
(A) Coordinated care plans which provide health care services, including but not limited to health maintenance organization plans (with or without a point-of-service option), plans offered by provider sponsored organizations, and preferred provider organization plans;
(B) Medical savings account plans coupled with a contribution into a Medicare+Choice medical savings account; and
(C) Medicare+Choice private fee-for-service plans.
(7) “Policy form” means the form on which the policy is delivered or issued for delivery by the issuer.
(8) “Secretary” means the secretary of the United States Department of Health and Human Services.
1 42 U.S.C.A. § 1395 et seq.
2 42 U.S.C.A. § 1396 et seq.
3 42 U.S.C.A. § 1396s.
4 42 U.S.C.A. § 1395ss.
(a) Except as otherwise specifically provided, this chapter shall apply to:
(1) All medicare supplement policies delivered or issued for delivery in this state; and
(2) All certificates issued under group medicare supplement policies, which certificates have been delivered or issued for delivery in this state.
(b) This chapter shall not apply to a policy of one or more employers or labor organizations, or of the trustees of a fund established by one or more employers or labor organizations or a combination thereof, for employees or former employees or a combination thereof, or for members or former members or a combination thereof of the labor organizations.
(c) Except as provided under subsection (d) of Code Section 33-43-5, the provisions of this chapter shall not be construed to prohibit or apply to insurance policies or health care benefit plans, including group conversion policies, provided to medicare eligible persons, which policies are not marketed or held to be medicare supplement policies or benefit plans.
(a) No medicare supplement insurance policy or certificate in force in this state shall contain benefits which duplicate benefits provided by medicare.
(b) Notwithstanding any other provision of Georgia law, a medicare supplement policy or certificate shall not exclude or limit benefits for losses incurred more than six months from the effective date of coverage because it involved a preexisting condition. The policy or certificate shall not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six months before the effective date of coverage.
(c) The Commissioner shall adopt reasonable regulations to establish specific standards for policy provisions of medicare supplement policies and certificates. Such standards shall be in addition to and in accordance with applicable laws of this state. No requirement of this title relating to minimum required policy benefits, other than the minimum standards contained in this chapter, shall apply to medicare supplement policies and certificates. The standards shall cover, but shall not be limited to:
(1) Terms of renewability;
(2) Initial and subsequent conditions of eligibility;
(3) Nonduplication of coverage;
(4) Probationary periods;
(5) Benefit limitations, exceptions, and reductions;
(6) Elimination periods;
(7) Requirements for replacement;
(8) Recurrent conditions; and
(9) Definitions of terms.
(d) The Commissioner shall adopt reasonable regulations to establish minimum standards for benefits, claims payment, marketing practices, compensation arrangements, and reporting practices for medicare supplement policies and certificates.
(e) The Commissioner may adopt from time to time such reasonable regulations as are necessary to conform medicare supplement policies and certificates to the requirements of federal law and regulations promulgated thereunder, including, but not limited to:
(1) Requiring refunds or credits if the policies or certificates do not meet loss ratio requirements;
(2) Establishing a uniform methodology for calculating and reporting loss ratios;
(3) Assuring public access to policies, premiums, and loss ratio information of issuers of medicare supplement insurance;
(4) Establishing a process for approving or disapproving policy forms, certificate forms, and proposed premium increases;
(5) Establishing a policy for holding public hearings prior to approval of premium increases; and
(6) Establishing standards for medicare select policies and certificates.
(f) The Commissioner may adopt reasonable regulations that specify prohibited policy provisions not otherwise specifically authorized by statute which, in the opinion of the Commissioner, are unjust, unfair, or unfairly discriminatory to any person insured or proposed to be insured under a medicare supplement policy or certificate.
(g) Insurers offering medicare supplement policies in this state to persons 65 years of age or older shall also offer medicare supplement policies to persons in this state who are eligible for and enrolled in medicare by reason of disability or end-stage renal disease. Except as otherwise provided in this Code section, all benefits, protections, policies, and procedures that apply to persons 65 years of age or older shall also apply to persons who are eligible for and enrolled in medicare by reason of disability or end-stage renal disease.
(h) Persons may enroll in a medicare supplement policy at any time authorized or required by the federal government or within six months of:
(1) Enrolling in medicare Part B for an individual who is under 65 years of age and is eligible for medicare because of disability or end-stage renal disease, whichever is later;
(2) Receiving notice that such person has been retroactively enrolled in medicare Part B due to a retroactive eligibility decision made by the Social Security Administration; or
(3) Experiencing a qualifying event identified in regulations adopted pursuant to subsection (c) of this Code section.
(i) No policy or certificate issued pursuant to this chapter shall prohibit payment made by third parties on behalf of individual applicants or individuals within a group applicant so long as:
(1) The third party is an immediate family member of a person lawfully exercising an in-force power of attorney or legal guardianship; or
(2) The third party is a nonprofit, charitable organization that:
(A) Is the named requestor of an advisory opinion issued by the United States Department of Health and Human Services (HHS) Office of Inspector General under the requirements of 42 C.F.R. Part 1008; and
(B) Provides, upon request by the medicare supplement issuer, the specific advisory opinion relied upon by the third party to make such payment and a written certification that the advisory opinion is in full force and effect and has not been rescinded, modified, or terminated by the United States Department of Health and Human Services (HHS) Office of Inspector General.
(j) Premiums for medicare supplemental insurance policies may differ between persons who qualify for medicare who are 65 years of age or older and those who qualify for medicare who are younger than 65 years of age; provided, however, that such differences in premiums shall not be excessive, inadequate, or unfairly discriminatory and shall be based on sound actuarial principles and reasonable in relation to the benefits provided.
Medicare supplement policies shall return to policyholders benefits which are reasonable in relation to the premium charged. The Commissioner shall issue reasonable regulations to establish minimum standards for loss ratios of medicare supplement policies on the basis of incurred claims experience, or incurred health care expenses where coverage is provided by a health maintenance organization on a service rather than reimbursement basis, and earned premiums in accordance with accepted actuarial principles and practices.
(a) In order to provide for full and fair disclosure in the sale of medicare supplement policies, no medicare supplement policy or certificate shall be delivered in this state unless an outline of coverage is delivered to the applicant at the time application is made.
(b) The Commissioner shall prescribe the format and content of the outline of coverage required by subsection (a) of this Code section. For purposes of this Code section, “format” means style, arrangements, and overall appearance, including such items as the size, color, and prominence of type and arrangement of text and captions. Such outline of coverage shall include:
(1) A description of the principal benefits and coverage provided in the policy;
(2) A statement of the exceptions, reductions, and limitations contained in the policy;
(3) A statement of the renewal provisions, including any reservation by the issuer of a right to change premiums; and
(4) A statement that the outline of coverage is a summary of the policy issued or applied for and that the policy should be consulted to determine governing contractual provisions.
(c) The Commissioner may prescribe by regulation a standard form and the contents of an informational brochure for persons eligible for medicare, which is intended to improve the buyer's ability to select the most appropriate coverage and improve the buyer's understanding of medicare. Except in the case of direct response insurance policies, the Commissioner may require by regulation that the informational brochure be provided to any prospective insureds eligible for medicare concurrently with delivery of the outline of coverage. With respect to direct response insurance policies, the Commissioner may require by regulation that the prescribed brochure be provided upon request to any prospective insureds eligible for medicare, but in no event shall the brochure be provided later than the time of policy delivery.
(d) The Commissioner may prescribe by regulation for captions or notice requirements, determined to be in the public interest and designed to inform prospective insureds that particular insurance coverages are not medicare supplement coverages for all accident and sickness insurance policies sold to persons eligible for medicare, other than:
(1) Medicare supplement policies; or
(2) Disability income policies.
(e) The Commissioner may adopt reasonable regulations to govern the full and fair disclosure of the information in connection with the replacement of accident and sickness policies, subscriber contracts, or certificates by persons eligible for medicare.
Medicare supplement policies or certificates shall have a notice prominently printed on the first page of the policy or certificate stating in substance that the applicant shall have the right to return the policy or certificate within 30 days of its delivery and to have the premium refunded if, after examination of the policy or certificate, the applicant is not satisfied for any reason. Any refund made pursuant to this Code section shall be paid directly to the applicant by the issuer in a timely manner.
Every issuer of medicare supplement insurance in this state shall provide a copy of any medicare supplement advertisement intended for use in this state whether through written, radio, or television medium to the Commissioner for review and approval by the Commissioner.
Regulations adopted pursuant to this chapter shall be subject to the provisions of this chapter and Code Section 33-2-9.
In addition to any other applicable penalties for violations of this title, the Commissioner may require issuers violating any provision of this chapter or regulations promulgated pursuant to this chapter to cease marketing any medicare supplement policy or certificate in this state which is related directly or indirectly to a violation or may require such issuer to take such actions as are necessary to comply with the provisions of this chapter, or both.
As used in this chapter, the term:
(1) “Continuing care” means furnishing pursuant to a continuing care agreement:
(A) Lodging that is not:
(i) In a skilled nursing facility, as such term is defined in Code Section 31-6-2;
(ii) An intermediate care facility, as such term is defined in Code Section 31-6-2;
(iii) An assisted living community, as such term is defined in Code Section 31-7-12.2; or
(iv) A personal care home, as such term is defined in Code Section 31-7-12;
(B) Food; and
(C) Nursing care provided in a facility or in another setting designated by the agreement for continuing care to an individual not related by consanguinity or affinity to the provider furnishing such care upon payment of an entrance fee including skilled or intermediate nursing services and, at the discretion of the continuing care provider, personal care services including, without limitation, assisted living care services designated by the continuing care agreement, including such services being provided pursuant to a contract to ensure the availability of such services to an individual not related by consanguinity or affinity to the provider furnishing such care upon payment of an entrance fee.
Such term shall not include continuing care at home.
(2) “Continuing care agreement” means a contract or agreement to provide continuing care, continuing care at home, or limited continuing care. Continuing care agreements include agreements to provide care for any duration, including agreements that are terminable by either party.
(3) “Continuing care at home” means the furnishing of services pursuant to a continuing care agreement at a location other than at a facility and which includes the obligation to provide nursing care, assisted living care, or personal care home services. A continuing care at home agreement may, but is not required to, include an obligation to provide food.
(4) “Entrance fee” means an initial or deferred payment of a sum of money or property made as full or partial payment to assure the resident continuing care, limited continuing care, or continuing care upon the purchase of a resident owned living unit; provided, however, that any such initial or deferred payment which is greater than or equal to 12 times the monthly care fee shall be presumed to be an entrance fee so long as such payment is intended to be a full or partial payment to assure the resident lodging in a residential unit. An accommodation fee, admission fee, or other fee of similar form and application greater than or equal to 12 times the monthly care fee shall be considered to be an entrance fee. Such term shall not include any portion of the purchase or sale of a resident owned living unit.
(5) “Facility” means a place which is owned or operated by a provider and provides continuing care or limited continuing care. Such term includes a facility which contains resident owned living units.
(6) “Licensed” means that the provider has obtained a certificate of authority from the department.
(7) “Life plan community” means a licensed provider furnishing continuing care or limited continuing care which has been issued a certificate of authority pursuant to this chapter.
(8) “Limited continuing care” means furnishing pursuant to a continuing care agreement:
(A) Lodging that is not:
(i) In a skilled nursing facility, as such term is defined in Code Section 31-6-2;
(ii) An intermediate care facility, as such term is defined in Code Section 31-6-2;
(iii) An assisted living community, as such term is defined in Code Section 31-7-12.2; or
(iv) A personal care home, as such term is defined in Code Section 31-7-12;
(B) Food; and
(C) Personal services, whether such personal services are provided in a facility such as a personal care home or an assisted living community or in another setting designated by the continuing care agreement, to an individual not related by consanguinity or affinity to the provider furnishing such care upon payment of an entrance fee.
Such term shall not include continuing care at home.
(9) “Monthly care fee” means the fee charged to a resident for continuing care or limited continuing care on a monthly or periodic basis. Monthly care fees may be increased by the provider to provide care to the resident as outlined in the continuing care agreement. Periodic fee payments or other prepayments shall not be monthly care fees.
(10) “Nursing care” means services which are provided to residents of skilled nursing facilities or intermediate care facilities.
(11) “Personal services” means, but is not limited to, such services as individual assistance with eating, bathing, grooming, dressing, ambulation, and housekeeping; supervision of self-administered medication; arrangement for or provision of social and leisure services; arrangement for appropriate medical, dental, nursing, or mental health services; and other similar services which the department may define. Personal services may be provided at a facility or at a home on or off site of a facility. Personal services shall not be construed to mean the provision of medical, nursing, dental, or mental health services. Personal services provided, if any, shall be designated in the continuing care agreement.
(12) “Provider” means the owner or operator, whether a natural person, partnership, or other unincorporated association, however organized, trust, or corporation, of an institution, building, residence, or other place, whether operated for profit or not, which owner or operator undertakes to provide continuing care, limited continuing care, or continuing care at home for a fixed or variable fee, or for any other remuneration of any type for the period of care, payable in a lump sum or lump sum and monthly maintenance charges or in installments.
(13) “Resident” means a purchaser of or a nominee of or a subscriber to a continuing care agreement. Such an agreement may permit a resident to live at a home on or off site of a facility but shall not be construed to give the resident a part ownership of the facility in which the resident is to reside unless expressly provided for in the agreement.
(14) “Resident owned living unit” means a residence or apartment, the purchase or sale of which is not included in an entrance fee, which is a component part of a facility and in which the resident has an individual real property ownership interest.
(15) “Residential unit” means a residence or apartment in which a resident lives that is not a skilled nursing facility as defined in Code Section 31-6-2, an intermediate care facility as defined in Code Section 31-6-2, an assisted living community as defined in Code Section 31-7-12.2, or a personal care home as defined in Code Section 31-7-12.
(a) For the purpose of enforcing the requirements of this chapter, the Commissioner and the department shall be authorized to use the powers granted in Chapters 1 and 2 of this title.
(b) A provider or facility which charges a resident an entrance fee for lodging in a residential unit and provides limited continuing care shall not call itself nor be considered a provider of continuing care, but such provider or facility shall otherwise be subject to the requirements imposed upon the providers and facilities regulated by this chapter; provided, however, that a facility that has received a certificate of authority and has been in conformance with the provisions of this chapter prior to July 1, 2011, may continue to call and present itself to the public as a provider of continuing care.
(a) Nothing in this title or chapter shall be deemed to authorize any provider to transact any insurance business other than that of continuing care insurance or limited continuing care insurance or otherwise to engage in any other type of insurance unless it is authorized under a certificate of authority issued by the department under this title. Nothing in this chapter shall be construed so as to interfere with the jurisdiction of the Department of Community Health or any other regulatory body exercising authority over providers regulated by this chapter or real property law related to the purchase and sale of resident owned living units.
(b) Nothing in this chapter shall be construed so as to modify or limit in any way:
(1) Provisions of Article 3 of Chapter 6 of Title 31 and any rules and regulations promulgated by the Department of Community Health pursuant to such article relating to certificates of need for life plan communities or home health agencies, as such terms are defined in Code Section 31-6-2; or
(2) Provisions of Chapter 7 of Title 31 relating to licensure or permit requirements and any rules and regulations promulgated by the Department of Community Health pursuant to such chapter, including, without limitation, licensure or permit requirements for nursing home care, assisted living care, personal care home services, home health services, and private home care services.
(c) Nothing in this chapter shall be construed so as to allow private home care services to be provided by any person or entity other than a licensed private home care provider.
(d) A provider of continuing care at home may contract with a licensed home health agency to provide home health services to a resident. In order to provide home health services directly, a provider of continuing care at home shall obtain a certificate of need for a home health agency, as such term is defined in Code Section 31-6-2, pursuant to the same criteria and rules as are applicable to freestanding home health agencies that are not components of life plan communities.
The administration of this chapter is vested in the department, which shall:
(1) Prepare and furnish all forms necessary under the provisions of this chapter;
(2) Collect in advance, and the applicant shall pay in advance at the time of filing, a fee for an application for a certificate of authority or a renewal of a certificate of authority, both as provided in Code Section 33-8-1, and a late fee to be determined by the department. The department may also levy a fine not to exceed $50.00 a day for each day of noncompliance; and
(3) Adopt rules, within the standards of this chapter, necessary to effect the purposes of this chapter. Specific provisions in this chapter relating to any subject shall not preclude the department from adopting rules concerning such subject if such rules are within the standards and purposes of this chapter.
No person may engage in the business of providing continuing care or limited continuing care or issuing continuing care agreements in this state without a certificate of authority therefor obtained from the department as provided in this chapter. For purposes of this Code section, the term “engage in the business of” shall include the development or construction of a facility subject to regulation under this chapter or the holding of oneself out to the public as a provider. The application for approval or renewal of a certificate of authority shall be on such forms as provided by the department. The department shall issue such certificate of authority if the applicant pays the required fees, and the continuing care agreement for the applicant meets the requirements of Code Section 33-45-7. The department shall renew a certificate of authority if the provider pays the required fees and furnishes the annual disclosure statement required by Code Section 33-45-6 and is otherwise not in violation of this chapter.
(a) Annually, on or before June 1, the provider shall file a revised disclosure statement and such other information and data showing its condition as of the last day of the preceding calendar year or fiscal year of the provider. If the department does not receive the required information on or before June 1, a late fee may be charged. The department may approve an extension of up to 30 days.
(b)(1) The provider shall also make the revised disclosure statement available to all the residents of the facility.
(2) A provider shall also revise its disclosure statement and have the revised disclosure statement recorded at any other time if revision is necessary to prevent an otherwise current disclosure statement from containing a material misstatement of fact or omitting a material fact required to be stated therein. Only the most recently recorded disclosure statement, with respect to a facility, and in any event, only a disclosure statement dated within one year plus 120 days prior to the due date of the time of renewal of a certificate of authority required by this chapter, shall be considered current.
(c) Notwithstanding the provisions of Code Section 33-45-9, the Commissioner may require a provider to submit such other information as he or she deems necessary to enforce this chapter.
(a) In addition to other provisions considered proper to effectuate any continuing care agreement, addendum, or amendment, each such agreement, addendum, or amendment shall be in writing and shall:
(1) Provide for the continuing care or limited continuing care of only one resident, or for two persons occupying space designed for double occupancy under appropriate regulations established by the provider, and shall state the total consideration to be paid, including a list of all properties transferred and their market value at the time of transfer, including donations, subscriptions, fees, and any other amounts paid or payable by, or on behalf of, the resident or residents;
(2) Specify all services which are to be provided by the provider to each resident, including, in detail, all items which each resident will receive, whether the items will be provided for a designated time period or for life, and whether the services will be available on the premises or at another specified location. The provider shall indicate which services or items are included in the monthly care fee and which services or items are made available at or by the facility at extra charge. Such items may include, but are not limited to, food, lodging, personal services or nursing care, drugs, burial, and incidentals;
(3) Describe the terms and conditions under which the continuing care agreement may be canceled by the provider or by a resident and the conditions, if any, under which all or any portion of the entrance fee will be refunded in the event of cancellation of the continuing care agreement by the provider or by the resident, including the effect of death of or any change in the health or financial condition of a person between the date of entering a continuing care agreement and the date of initial occupancy of a residential unit by that person;
(4) Describe:
(A) The residential unit;
(B) Any property rights of the resident;
(C) The health and financial conditions required for a person to be accepted as a resident and to continue as a resident, once accepted, including the effect of any change in the health or financial condition of a person between the date of entering into a continuing care agreement and the date of taking occupancy in a residential unit;
(D) The conditions under which a residential unit occupied by a resident may be made available by the provider to a different or new resident other than on the death of the prior resident;
(E) The policies to be implemented and the circumstances under which the resident will be permitted to remain in the facility in the event of financial difficulties of the resident; and
(F) The procedures the provider shall follow to change the resident's accommodation if necessary for the protection of the health or safety of the resident or of the general and economic welfare of the facility;
(5) State the fees that will be charged if the resident marries while at the designated facility, the terms concerning the entry of a spouse to the facility, and the consequences if the spouse does not meet the requirements for entry;
(6) State whether the funds or property transferred for the care of the resident is:
(A) Nonrefundable, in which event the continuing care agreement shall comply with this subparagraph. Such continuing care agreement shall allow a 90 day trial period of residency in the facility during which time the provider, resident, or person who provided the transfer of funds or property for the care of such resident may cancel the agreement after written notice. A refund shall be made of such funds, property, or both within 120 days after the receipt of such notice and shall be calculated on a pro rata basis with the provider retaining no more than 10 percent of the amount of the entry fee. Notwithstanding the provisions of this subparagraph, the provisions of paragraph (7) of this subsection and the provisions of subsections (b) and (e) of this Code section shall apply to nonrefundable continuing care agreements; or
(B) Refundable, in which event the continuing care agreement shall comply with this subparagraph. Such continuing care agreement may be canceled upon the giving of written notice of cancellation of at least 30 days by the provider, the resident, or the person who provided the transfer of property or funds for the care of such resident; provided, however, that if a continuing care agreement is canceled because there has been a good faith determination that a resident is a threat to his or her health or safety or to the health or safety of others, only such notice as is reasonable under the circumstances shall be required. The continuing care agreement shall further provide in clear and understandable language, in print no smaller than the largest type used in the body of the continuing care agreement, the terms governing the refund of any portion of the entrance fee, which terms shall include a provision that all refunds be made within 120 days of notification. The moneys refunded to the resident may be from the escrow account required by Code Section 33-45-8 or from other funds available to the provider, and the continuing care agreement shall further comply with the following requirements:
(i) For a resident whose continuing care agreement with the facility provides that the resident does not receive a transferable membership or ownership right in the facility and who has occupied his or her residential unit, the refund shall be calculated on a pro rata basis with the facility retaining no more than 2 percent per month of occupancy by the resident and no more than a 4 percent fee for processing. Such refund shall be paid no later than 120 days after the giving of notice of intention to cancel; or
(ii) If the continuing care agreement provides for the facility to retain no more than 1 percent per month of occupancy by the resident, it may provide that such refund will be payable upon receipt by the provider of the next entrance fee for any comparable residential unit upon which there is no prior claim by any resident; provided, however, that the agreement may define the term “comparable residential unit upon which there is no prior claim”; specifically delineate when such refund is due; and establish the order of priority of refunds to residents. Unless the provisions of subsection (e) of this Code section apply, for any prospective resident, except when such resident receives a transferable membership or ownership right in a resident owned living unit, who cancels the agreement prior to occupancy of the residential unit, the refund shall be the entire amount paid toward the entrance fee, less a processing fee not to exceed 4 percent of the entire entrance fee, but in no event shall such processing fee exceed the amount paid by the prospective resident. Such refund shall be paid no later than 60 days after the giving of notice of intention to cancel. For a resident who has occupied his or her residential unit and who has received a transferable membership or ownership right in the facility, the foregoing refund provisions shall not apply but shall be deemed satisfied by the acquisition or receipt of a transferable membership or an ownership right in the facility. The provider shall not charge any fee for the transfer of membership or sale of an ownership right. Nothing in this paragraph shall be construed to require a continuing care agreement to provide a refund to more than one resident at a time upon the vacation of a specific comparable residential unit;
(7) State the terms under which a continuing care agreement is canceled by the death of the resident. These terms may contain a provision that, upon the death of a resident, the entrance fee of such resident shall be considered earned and shall become the property of the provider. When the unit is shared, the conditions with respect to the effect of the death or removal of one of the residents shall be included in the continuing care agreement;
(8) Require:
(A) The continuing care agreement to provide for advance notice to the resident, of not less than 60 days, before any change in fees or charges or the scope of care or services may be effective, except for changes required by state or federal assistance programs;
(B) A description of the manner by which the provider may adjust periodic charges or other recurring fees and the limitations on these adjustments, if any; and
(C) A description of any policy regarding fee adjustments if the resident is voluntarily absent from the facility;
(9) Provide that charges for care paid in one lump sum shall not be increased or changed during the duration of the agreed upon care, except for changes required by state or federal assistance programs; and
(10) Describe the policy of the provider regarding reserve funding.
(b) Notwithstanding the provisions of subparagraph (a)(6)(A) of this Code section, a resident has the right to rescind a continuing care agreement, without penalty or forfeiture, within seven days after executing such continuing care agreement. During the seven-day period, the resident's funds shall be retained in an escrow account in accordance with the provisions of subsection (a) of Code Section 33-45-8. A resident shall not be required to move into the facility designated in the continuing care agreement before the expiration of the seven-day period. In the event that the prospective resident exercises his or her right to rescind the continuing care agreement within seven days of executing such continuing care agreement, the facility shall return any portion of the entrance fee paid by the resident within 30 days of receipt of the prospective resident's notice of rescission.
(c) The continuing care agreement shall include or shall be accompanied by a statement, printed in boldface type, which reads: “This facility and all continuing care agreements in this state are regulated by Chapter 45 of Title 33 of the Official Code of Georgia Annotated. A copy of the law is on file in this facility. The law gives you or your legal representative the right to inspect our most recent disclosure statement before signing the agreement.”
(d) Before the transfer of any money or other property, other than an application fee which shall not exceed $1,500.00, to a provider by or on behalf of a prospective resident, the provider shall present a typewritten or printed copy of the continuing care agreement and the disclosure statement required pursuant to Code Section 33-45-10 to the prospective resident and all other parties to the agreement. The provider shall secure a signed, dated statement from each party to the contract certifying that a copy of the continuing care agreement and the disclosure statement was received.
(e) If a resident dies before occupying the facility or, through illness, injury, or incapacity, is precluded from becoming a resident under the terms of the continuing care agreement, the agreement shall be automatically canceled, and the resident or his or her legal representative shall receive a full refund of all moneys paid to the facility, except those costs specifically incurred by the facility at the request of the resident and set forth in writing in a separate addendum, signed by both parties, to the agreement.
(f) In order to comply with this Code section, a provider may furnish information not contained in the continuing care agreement through an addendum.
(g) The Commissioner may also require the provider to submit to him or her a copy of the continuing care agreement generally used by the provider; provided, however, that nothing in this subsection shall prohibit the department from requiring the submission of an individual contract between the provider and the resident.
A provider which has obtained a certificate of authority pursuant to Code Section 33-45-5 and the written approval of the Commissioner is authorized to offer, as a part of the continuing care agreement, continuing care at home or continuing care in which the resident purchases a resident owned living unit, subject to the provisions of Chapters 6 and 7 of Title 31 and rules and regulations promulgated by the Department of Community Health pursuant to such chapters relating to certificate of need and licensure requirements.
(a) Any portion of the entrance fee paid by a resident to the provider shall be held in an escrow account. The escrow agreement shall state that its purpose is to protect the resident or the prospective resident. Escrow funds may be released to the resident, prospective resident, or provider in accordance with the provisions of this Code section.
(b) Entrance fees placed in escrow may be released in accordance with the provisions of this subsection as follows:
(1) Escrow funds may be released to the resident during or following the seven-day right of rescission period required in subsection (b) of Code Section 33-45-7. Such release shall be in accordance with the provisions of that Code section;
(2) When a continuing care agreement between a resident and provider is nonrefundable, escrow funds or a portion thereof may be released to the resident if the resident exercises his or her right to receive a refund as provided in subparagraph (a)(6)(A) of Code Section 33-45-7. The amount and timing of the release of funds to the resident shall be in compliance with the provisions of that subparagraph;
(3) When the continuing care agreement between a provider and resident or prospective resident is refundable, escrow funds may be released by the provider to such resident or prospective resident. The amount and timing of the release of funds to the resident shall be in compliance with the provisions of subparagraph (a)(6)(B) of Code Section 33-45-7;
(4) For a facility under construction or in development, escrow funds may be released to the provider when:
(A) The provider has presold at least 50 percent of the residential units, having received a minimum 10 percent deposit on each of the presold residential units;
(B) The provider has received a commitment for any first mortgage loan or other financing, and any conditions of the commitment prior to disbursement of funds thereunder have been substantially satisfied; and
(C) Aggregate entrance fees received or receivable by the provider pursuant to binding continuing care agreements, plus the anticipated proceeds of any first mortgage loan or other financing commitment, are equal to not less than 90 percent of the aggregate cost of constructing or purchasing, equipping, and furnishing the facility, and not less than 90 percent of the funds estimated in the statement of cash flows submitted by the provider as that part of the disclosure statement required by this chapter, to be necessary to fund start-up losses and assure full performance of the obligations of the provider pursuant to continuing care contracts shall be on hand;
(5) At the time a new project is financed or after the opening of a facility by a provider, escrow funds may be released to the provider, so long as the provider is in compliance with the financial reserves required by Code Section 33-45-11 and sufficient funds are maintained in escrow to meet the provider's obligations under subparagraphs (1) and (2) of this subsection; or
(6) Escrow funds may be released to the provider under terms submitted to and approved by the Commissioner.
No act, agreement, or statement of any resident, or of an individual purchasing continuing care or limited continuing care for a resident, under any continuing care agreement to furnish care to the resident shall constitute a valid waiver of any provision of this chapter intended for the benefit or protection of the resident or the individual purchasing care for the resident; provided, however, that nothing in this Code section shall be construed to prohibit a continuing care agreement from providing for a resident or prospective resident to agree to arbitration prior to bringing any action pursuant to Code Section 33-45-12.
(a) Each facility shall maintain as public information, available upon request, a copy of its current disclosure statement and the disclosure and all previous disclosure statements that have been filed with the department. Each facility shall post in a prominent position in the facility, so as to be accessible to all residents and to the general public, a notice explaining where such disclosure statements may be viewed. In conjunction with the disclosure statement, the facility shall notify residents of any proposed changes in policies, programs, and services.
(b) Each facility shall post in a prominent position in the facility so as to be accessible to all residents and to the general public a brief summary of the disclosure statement required pursuant to subsection (a) of this Code section, indicating in the summary where the full disclosure statement may be inspected in the facility. A listing of any proposed changes in policies, programs, and services shall also be posted.
(c) Before entering into a continuing care agreement to furnish continuing care or at the time of, or prior to, the transfer of any money or other property to a provider by or on behalf of a prospective resident, whichever occurs first, the provider undertaking to furnish the care, or the agent of the provider, shall provide the current disclosure statement required pursuant to subsection (a) of this Code section and copies to the prospective resident, or his or her legal representative, of the continuing care agreement.
(d) The text of the disclosure statement required by this Code section shall contain at least:
(1) The name and business address of the provider and a statement as to whether the provider is a partnership, corporation, or other type of legal entity;
(2) The names and business addresses and description of the business experience of the person, if any, in the operation or management of similar facilities of the officers, directors, trustees, managing or general partners, any person having a 10 percent or greater equity or beneficial interest in the provider, and any person who will be managing the facility on a day to day basis and a description of these persons' interests in or occupations with the provider;
(3) Information on all persons named in response to paragraph (2) of this subsection which details:
(A) Any conflict or potential conflict of interest; and
(B) Any relevant criminal record, including a plea of nolo contendere, background on relevant civil judicial proceedings, and relevant action brought by a governmental agency or department, if the order or action arose out of or related to business activity of health care;
(4) A statement as to whether the provider is or is not affiliated with a religious, charitable, or other nonprofit organization; the extent of the affiliation, if any; the extent to which the affiliate organization will be responsible for the financial and contract obligations of the provider; and the provision of the federal Internal Revenue Code, if any, under which the provider or affiliate is exempt from the payment of income tax;
(5) An estimate of the number of residents of the facility to be provided services;
(6) The location and description of the physical property or properties of the facility, existing or proposed, and to the extent proposed, the estimated completion date or dates, whether construction has begun, and the contingencies subject to which construction may be deferred;
(7) The location of other facilities, if any, which the provider owns or operates;
(8) A statement that the provider maintains financial reserves in conformance with the requirements of Code Section 33-45-11 or otherwise meets the requirements of that Code section; the provisions that the provider has made or will make to provide reserve funding or security to enable the provider to perform its obligations fully under continuing care agreements to provide continuing care or limited continuing care at the facility, including the establishment of escrow accounts, trusts, or reserve funds, together with the manner in which these funds will be invested; and the names and experience of any individuals in the direct employment of the provider who will make the investment decisions;
(9) A financial statement audited by an independent certified public accountant which shall provide the information required by this Code section for two or more fiscal years if the facility has been in existence that long. If the facility has been in existence for a lesser length of time, the financial statements of the provider shall be for the most recent fiscal year or such shorter period of time as the provider shall have been in existence. If the provider's fiscal year ended more than 120 days prior to the date the disclosure statement is recorded, interim financial statements as of a date not more than 90 days prior to the date of recording the statement shall also be included but need not be certified to by an independent certified public accountant. The financial statement shall contain the following:
(A) An accountant's opinion and, in accordance with generally accepted accounting principles:
(i) A balance sheet;
(ii) A statement of income and expenses;
(iii) A statement of equity or fund balances; and
(iv) A statement of changes in financial position; and
(B) Notes to the financial statements considered customary or necessary for full disclosure or adequate understanding of the financial statements, financial condition, and operation and additional costs to the resident;
(10) The level of participation in medicare or Medicaid programs, or both; and
(11) A statement concerning all fees required of residents, including, but not limited to:
(A) A statement of the entrance fee charged, the monthly service charges, the proposed application of the proceeds of the entrance fee by the provider, and the plan by which the amount of the entrance fee is determined if the entrance fee is not the same in all cases; and
(B) A record of past increases in entrance fees and monthly care fees and other similar charges during the previous three years;
(12) If a facility is in a stage of being proposed or developed, it shall additionally provide:
(A) The summary of the report of an actuary estimating the capacity of the provider to meet its contractual obligation to the residents; and
(B) A statement of cash flows and narrative disclosure detailing all significant assumptions used in the preparation of the statement of cash flows. The Commissioner may establish by rule or regulation the necessary and significant assumptions used in the preparation of the statements of cash flow; and
(13) Any additional costs to the resident.
(e) The cover page of the disclosure statement shall state, in a prominent location and in boldface type, the date of the disclosure statement, the last date through which the disclosure statement may be delivered if not earlier revised, and that the delivery of the disclosure statement to a contracting party before the execution of a continuing care agreement is required by this chapter, but that the disclosure statement has not been reviewed or approved by any government agency or representative to ensure accuracy or completeness of the information set out.
(f) A copy of the continuing care agreement generally used by the provider shall be attached to each disclosure statement.
(g) The Commissioner may prescribe a standardized format for the disclosure statement required by this Code section.
(h) The department may require a provider to alter or amend its disclosure statement in order to provide full and fair disclosure to prospective residents. The department may also require the revision of a disclosure statement which it finds to be unnecessarily complex, confusing, or illegible.
(a) A provider or facility shall maintain financial reserves equal to 25 percent of the total operating costs of the facility projected for the 12 month period following the period covered by the most recent audited financial statements included in the disclosure statement required by Code Section 33-45-10. In addition to total operating expenses, total operating costs shall include debt service, consisting of principal and interest payments, along with taxes and insurance on any mortgage loan or other financing, but shall exclude depreciation, amortized expenses, and extraordinary items as approved by the Commissioner. If the debt service portion is accounted for by way of another reserve account, the debt service portion may be excluded.
(b) A provider or facility which has opened but not yet achieved full occupancy, as defined by its lender or financing documents, if any, or 95 percent occupancy of its residential units; or a provider or facility that has received a certificate of authority and has been in conformance with the provisions of this chapter shall be required to achieve the level of financial reserves required by subsection (a) of this Code section as follows:
(1) The provider or facility shall submit a plan to the Commissioner the terms of which assure that the provider or facility shall maintain sufficient progress to achieving the level of financial reserves required by this Code section; and
(2) The plan demonstrates that the provider or facility is substantially likely to achieve the required level of financial reserves within five years of opening. For purposes of this paragraph, the term “substantially likely” means a provider or facility shall meet the level of financial reserves required by subsection (a) of this Code section at a minimum rate of 20 percent per year as of the end of each fiscal year after the date the facility opens, up to a total of 100 percent as of the end of the fifth fiscal year.
(c) The financial reserves required by this Code section may be funded by cash, by invested cash, or by investment grade securities, including bonds, stocks, United States Treasury obligations, obligations of United States government agencies, any reserves required by lenders or established by the facility, or any other financial resources approved by the Commissioner that can be used by the facility to meet its operating reserve.
(d) The provider or facility shall notify the Commissioner as soon as the provider or facility has knowledge of the need to expend any funds which reduce the balance in the financial reserves to an amount less than the amount required by this Code section. Such notice shall be made within at least 30 business days of the provider or facility having such knowledge. If the provider or facility does not have such knowledge within 30 business days, the provider or facility shall notify the Commissioner as soon as possible, but not more than 30 business days after the expenditure of such funds. In the event that the amount in the reserves falls to an amount less than the amount required by this Code section, the Commissioner:
(1) Shall require that the provider or facility submit a corrective action plan to be approved by the department such that the Commissioner finds that the provider or facility can be reasonably expected to be able to reinstate the level of financial reserves required by this Code section within sufficient time to ensure that the contractual liabilities of the provider and the best interests of the residents of the facility will be adequately protected; and
(2) May require the provider or facility to make additional financial arrangements to ensure that the contractual liabilities of the provider and the best interests of the residents of the facility are adequately protected. Such arrangements may include:
(A) The posting of a security bond;
(B) Requiring that the proceeds from any entrance fees from new residents be placed in escrow. Any requirement to escrow funds shall not be applied to funds which are subject to prior claims by a resident of the facility;
(C) Any other security which the Commissioner determines provides adequate assurance that the provider or facility will be able to fulfill its obligations to its residents to the same extent as it would be if the financial reserves were funded at the amount required by this Code section; or
(D) Requiring the provider or facility to work with lenders to refinance or reevaluate the current debt of the provider or facility.
(e) Upon written application by a provider, the Commissioner may authorize a facility to maintain financial reserves in an amount less than the amount set forth in this Code section, or at a lesser rate than the minimum rate of 20 percent per year as of the end of each fiscal year set forth in paragraph (2) of subsection (b) of this Code section, if the Commissioner determines that the contractual liabilities of the provider and the best interests of the residents of the facility may be adequately protected by the financial reserves in a lesser amount or by achieving the required financial reserves at a lesser rate than 20 percent per year.
Any resident injured by a violation of this chapter may bring an action for the recovery of damages plus reasonable attorney's fees.
(a) Any person who knowingly maintains, enters into, performs, or, as manager or officer or in any other administrative capacity, assists in entering into, maintaining, or performing any continuing care agreement subject to this chapter without a valid certificate of authority or renewal thereof, as contemplated by or provided in this chapter, or who otherwise violates any provision of this chapter, is guilty of a misdemeanor. Each violation of this chapter constitutes a separate offense.
(b) In addition to the powers granted pursuant to Chapters 1 and 2 of this title, the department may bring an action to enjoin a violation, threatened violation, or continued violation of this chapter in the superior court of the county in which the violation occurred, is occurring, or is about to occur.
(c) If, after a period of 180 days, or such additional time as the department shall deem appropriate, the corrective action plan required by paragraph (1) of subsection (d) of Code Section 33-45-11 has been submitted and approved by the department and the department deems the facility or provider to be unable to achieve the necessary financial reserves or is not making substantial progress toward achieving the required financial reserves, the department shall be authorized to take immediate action against the facility or provider's certificate of authority, including suspension or revocation of the certificate of authority; provided, however, that before the Commissioner suspends or revokes a certificate of authority, the Commissioner shall conduct a hearing in accordance with Chapter 2 of this title.
(d) Any action brought by the department against a provider shall not abate by reason of a sale or other transfer of ownership of the facility used to provide care, which provider is a party to the action, except with the express written consent of the Commissioner.
Any contract or continuing care agreement executed before July 1, 1991, which is amended or renewed subsequent to July 1, 1991, and any contract or continuing care agreement executed on or after July 1, 1991, shall be subject to this chapter.
This chapter shall be construed liberally to promote consumer protection.
(a) This chapter applies to:
(1) Private review agents;
(2) Utilization review entities;
(3) All health insurers and stand-alone dental plans that provide accident and sickness insurance products whether on an individual, group, or blanket basis as provided in this title;
(4) All administrators of such products licensed in accordance with Article 2 of Chapter 23 of this title;
(5) All pharmacy benefits managers;
(6) All contracts entered into or renewed by the Department of Community Health with a contracted entity to provide healthcare coverage or services pursuant to the state health benefit plan; and
(7) All contracts entered into or renewed by the Department of Community Health and care management organizations to provide or arrange for healthcare coverage or services on a prepaid, capitated basis to members.
(a) The purpose of this chapter is to promote the delivery of quality healthcare in Georgia. Furthermore, it is to foster the delivery of such care in a cost-effective manner through greater coordination between healthcare providers, claim administrators, insurers, employers, patients, private review agents, and utilization review entities; to improve communication and knowledge of healthcare benefits among all parties; to protect patients, claim administrators, insurers, private review agents, employers, and healthcare providers by ensuring that utilization review activities are based upon accepted standards of treatment and patient care; to ensure that such treatment is accessible and done in a timely and effective manner; and to ensure that private review agents and utilization review entities maintain confidentiality of information obtained in the course of utilization review.
(b) In order to carry out the intent and purposes of this chapter, it is declared to be the policy of this chapter to protect Georgia residents by imposing minimum standards on private review agents and utilization review entities who engage in utilization review with respect to healthcare services provided in Georgia, such standards to include regulations concerning certification of private review agents and utilization review entities, disclosure of utilization review standards and appeal procedures, minimum qualifications for utilization review personnel, minimum standards governing accessibility of utilization review, and such other standards, requirements, and rules or regulations promulgated by the Commissioner which are not inconsistent with the foregoing. Notwithstanding the foregoing, it is neither the policy nor the intent of the General Assembly to regulate the terms of self-insured employee welfare benefit plans as defined in Section 31(I) of the Employee Retirement Income Security Act of 1974, as amended, and therefore any regulations promulgated pursuant to this chapter shall relate only to persons subject to this chapter.
As used in this chapter, the term:
(1) “Adverse determination” means a determination based on medical necessity made by a private review agent or utilization review entity not to grant authorization to a hospital, surgical, or other facility or to a healthcare provider's office for admission, extension of an inpatient stay, or a healthcare service or procedure.
(2) “Authorization” means a determination by a private review agent or utilization review entity that a healthcare service has been reviewed and, based on the information provided, satisfies the utilization review entity's requirements for medical necessity.
(3) “Care management organization” means an entity that is organized for the purpose of providing or arranging healthcare, which has been granted a certificate of authority by the Commissioner of Insurance as a health maintenance organization pursuant to Chapter 21 of this title and which has entered into a contract with the Department of Community Health to provide or arrange for healthcare services on a prepaid, capitated basis to members.
(4) “Certificate” means a certificate of registration granted by the Commissioner to a private review agent.
(5) “Claim administrator” means any entity that reviews and determines whether to pay claims to covered persons on behalf of the healthcare plan. Such payment determinations are made on the basis of contract provisions including medical necessity and other factors. Claim administrators may be insurers or their designated review organization, self-insured employers, management firms, third-party administrators, or other private contractors.
(6) “Clinical criteria” means the written policies, decisions, rules, medical protocols, or guidelines used by a private review agent or utilization review entity to determine medical necessity.
(7) “Clinical peer” means a healthcare provider who is licensed without restriction or otherwise legally authorized and currently in active practice in the same or similar specialty as that of the treating provider, and who typically manages the medical condition or disease at issue and has knowledge of and experience providing the healthcare service or treatment under review.
(8) “Covered person” means an individual, including, but not limited to, any subscriber, enrollee, member, beneficiary, participant, or his or her dependent, eligible to receive healthcare benefits by a health insurer pursuant to a healthcare plan or other health insurance coverage.
(9) “Emergency healthcare services” means healthcare services rendered after the recent onset of a medical or traumatic condition, sickness, or injury exhibiting acute symptoms of sufficient severity, including, but not limited to, severe pain, that would lead a prudent layperson possessing an average knowledge of medicine and health to believe that his or her condition, sickness, or injury is of such a nature that failure to obtain immediate medical care could result in:
(A) Placing the patient's health in serious jeopardy;
(B) Serious impairment to bodily functions; or
(C) Serious dysfunction of any bodily organ or part.
(10) “Facility” means a hospital, ambulatory surgical center, birthing center, diagnostic and treatment center, hospice, or similar institution. Such term shall not mean a healthcare provider's office.
(11) “Health insurer” or “insurer” means an accident and sickness insurer, care management organization, healthcare corporation, health maintenance organization, provider sponsored healthcare corporation, or any similar entity regulated by the Commissioner.
(12) “Healthcare plan” means any hospital or medical insurance policy or certificate, qualified higher deductible health plan, stand-alone dental plan, health maintenance organization or other managed care subscriber contract, the state health benefit plan, or any plan entered into by a care management organization as permitted by the Department of Community Health for the delivery of healthcare services.
(13) “Healthcare provider” means any person, corporation, facility, or institution licensed by this state or any other state to provide or otherwise lawfully providing healthcare services, including but not limited to a doctor of medicine, doctor of osteopathy, hospital or other healthcare facility, dentist, nurse, optometrist, podiatrist, physical therapist, psychologist, occupational therapist, professional counselor, pharmacist, chiropractor, marriage and family therapist, or social worker.
(14) “Healthcare service” means healthcare procedures, treatments, or services provided by a facility licensed in this state or provided within the scope of practice of a doctor of medicine, a doctor of osteopathy, or another healthcare provider licensed in this state. Such term includes but is not limited to the provision of pharmaceutical products or services or durable medical equipment.
(15) “Medical necessity” or “medically necessary” means healthcare services that a prudent physician or other healthcare provider would provide to a patient for the purpose of preventing, diagnosing, or treating an illness, injury, or disease or its symptoms in a manner that is:
(A) In accordance with generally accepted standards of medical or other healthcare practice;
(B) Clinically appropriate in terms of type, frequency, extent, site, and duration;
(C) Not primarily for the economic benefit of the health insurer or for the convenience of the patient, treating physician, or other healthcare provider; and
(D) Not primarily custodial care, unless custodial care is a covered service or benefit under the covered person's healthcare plan.
(16) “Member” means a Medicaid or PeachCare for Kids recipient who is currently enrolled in a care management organization plan.
(17) “Pharmacy benefits manager” means a person, business entity, or other entity that performs pharmacy benefits management. Such term includes a person or entity acting for a pharmacy benefits manager in a contractual or employment relationship in the performance of pharmacy benefits management for a healthcare plan. Such term shall not include services provided by pharmacies operating under a hospital pharmacy license. Such term shall not include health systems while providing pharmacy services for their patients, employees, or beneficiaries, for indigent care, or for the provision of drugs for outpatient procedures. Such term shall not include services provided by pharmacies affiliated with a facility licensed under Code Section 31-44-4 or a licensed group model health maintenance organization with an exclusive medical group contract and which operates its own pharmacies which are licensed under Code Section 26-4-110.
(18) “Prior authorization” means any written or oral determination made at any time by a claim administrator or an insurer, or any agent thereof, that a covered person's receipt of healthcare services is a covered benefit under the applicable plan and that any requirement of medical necessity or other requirements imposed by such plan as prerequisites for payment for such services have been satisfied. The term “agent” as used in this paragraph shall not include an agent or agency as defined in Code Section 33-23-1.
(19) “Private review agent” means any person or entity which performs utilization review for:
(A) An employer with employees who are treated by a healthcare provider in this state;
(B) An insurer; or
(C) A claim administrator.
(20) “State health benefit plan” means the health insurance plan or plans established pursuant to Part 6 of Article 17 of Chapter 2 of Title 20 and Article 1 of Chapter 18 of Title 45 for state and public employees, dependents, and retirees.
(21) “Urgent healthcare service” means a healthcare service with respect to which the application of the time periods for making a nonexpedited prior authorization, which, in the opinion of a physician or other healthcare provider with knowledge of the covered person's medical condition:
(A) Could seriously jeopardize the life or health of the covered person or the ability of such person to regain maximum function; or
(B) Could subject the covered person to severe pain that cannot be adequately managed without the care or treatment that is the subject of the utilization review.
Such term shall include services provided for the treatment of substance use disorders which otherwise qualify as an urgent healthcare service.
(22) “Utilization review” means a system for reviewing the appropriate and efficient allocation or charges of hospital, outpatient, medical, or other healthcare services given or proposed to be given to a patient or group of patients for the purpose of advising the claim administrator who determines whether such services or the charges therefor should be covered, provided, or reimbursed by an insurer according to the benefits plan. Prior authorization is a type of utilization review. Utilization review shall not include the review or adjustment of claims or the payment of benefits arising under liability, workers' compensation, or malpractice insurance policies as defined in Code Section 33-7-3.
(23) “Utilization review entity” means an insurer or other entity that performs prior authorization for one or more of the following entities:
(A) An insurer that writes health insurance policies;
(B) A preferred provider organization or health maintenance organization; or
(C) Any other individual or entity that provides, offers to provide, or administers hospital, outpatient, medical, behavioral health, prescription drug, or other health benefits to a person treated by a healthcare provider in this state under a health insurance policy, plan, or contract.
(24) “Utilization review plan” means a reasonable description of the standards, criteria, policies, procedures, reasonable target review periods, and reconsideration and appeal mechanisms governing utilization review activities performed by a private review agent or utilization review entity.
(a) A private review agent or utilization review entity may not conduct utilization review of healthcare provided in this state unless the Commissioner has granted the private review agent or utilization review entity a certificate pursuant to this chapter. No individual conducting utilization review shall require certification if such utilization review is performed within the scope of such person's employment with an entity already certified pursuant to this Code section.
(b) The Commissioner shall issue a certificate to an applicant that has met all the requirements of this chapter and all applicable regulations of the Commissioner.
(c) A certificate issued under this chapter is not transferable without the prior approval of the Commissioner.
(a) As a condition of certification or renewal thereof, a private review agent or utilization review entity shall be required to maintain compliance with the following:
(1) Where not otherwise addressed in this chapter or department regulations, the medical protocols including reconsideration and appeal processes as well as other relevant medical issues used in the private review or utilization review program shall be established with input from healthcare providers who are from a major area of specialty and certified by the boards of the American medical specialties selected by a private review agency or utilization review entity and documentation of such protocols shall be made available upon request of healthcare providers; or, where not so addressed, protocols, including reconsideration and appeal processes as well as other relevant healthcare issues used in such program, shall be established based on input from persons who are licensed in the appropriate healthcare provider's specialty recognized by a licensure agency of such a healthcare provider;
(2) All preadmission review programs shall provide for immediate hospitalization of any patient for whom the treating healthcare provider determines the admission to be of an emergency nature, so long as medical necessity is subsequently documented;
(3) In the absence of any contractual agreement between the healthcare provider and the insurer, the responsibility for obtaining prior authorization as well as concurrent review required by the insurer shall be the responsibility of the covered person pursuant to Chapter 20E of this title;
(4) In cases where a private review agent or utilization review entity is responsible for utilization review for an insurer or claim administrator, such agent or entity should respond promptly and efficiently in accordance with this chapter to all requests including concurrent review in a timely method, and a method for an expedited authorization process shall be available in the interest of efficient patient care;
(5) In any instances where the private review agent or utilization review entity is questioning the medical necessity of care, the treating health care provider, or such provider's appropriately qualified designee, shall be able to discuss the plan of treatment with a clinical peer trained in a related specialty and no adverse determination shall be made by the private review agent or utilization review entity until an effort has been made to discuss the patient's care with the patient's treating provider, or such provider's appropriately qualified designee who shall be familiar with the patient's case, during normal working hours. In the event of an adverse determination, notice to the provider will specify the reasons for the review determination;
(6) A private review agent or utilization review entity shall assign a reasonable target review period in accordance with this chapter for each admission promptly upon notification by the healthcare provider. Once a target length of stay has been agreed upon with the healthcare provider, the utilization review agent or utilization review entity will not attempt to contact the healthcare provider or patient for further information until the end of that target review period except for discharge planning purposes or in response to a contact by a patient or healthcare provider. The provider or the healthcare facility will be responsible for alerting the utilization review agent or utilization review entity in the event of a change in proposed treatment. At the end of the target period, the private review agent or utilization review entity will review the care for a continued stay;
(7) A private review agent or utilization review entity shall not enter into any incentive payment provision contained in a contract or agreement with an insurer which is based on reduction of services or the charges thereof, reduction of length of stay, or utilization of alternative treatment settings;
(8) Any healthcare provider may designate one or more individuals to be contacted by the private review agent or utilization review entity for information or data. In the event of any such designation, the private review agent or utilization review entity shall not contact other employees or personnel of the healthcare provider except with prior consent to the healthcare provider. An alternate will be available during normal business hours if the designated individual is absent or unavailable; and
(9) Private review agents and utilization review entities shall develop applicable utilization review plans and conduct utilization review in accordance with standards as set forth under this chapter and rules and regulations adopted by the Commissioner.
(b) The Commissioner may consider nationally recognized accreditation standards for utilization review and may adopt by rule or regulation any such standards for the purposes of enforcing this chapter, to the extent such standards do not conflict with this chapter.
(c) The Commissioner may maintain on the department website a list of nationally recognized accreditation entities.
(a) An applicant for a certificate shall submit an application on a form prescribed by the Commissioner and pay an application fee and a certificate fee as provided in Code Section 33-8-1. The application shall be signed and verified by the applicant.
(b) In conjunction with the application, the private review agent or utilization review entity shall submit such information that the Commissioner requires, including but not limited to:
(1) A utilization review plan;
(2) The type and qualifications of the personnel either employed or under contract to perform the utilization review;
(3) A copy of the materials designed to inform applicable patients and healthcare providers of the requirements of the utilization review plan; and
(4) A signed attestation by the chief medical officer or chief executive officer of the applicant that such entity's utilization review activities comply with the standards required by this chapter.
The information provided must demonstrate to the satisfaction of the Commissioner that the applicant will comply with the requirements of this chapter.
(a) A certificate shall expire on the second anniversary of its effective date unless the certificate is renewed for a two-year term as provided in this Code section.
(b) Before the certificate expires but no sooner than 90 days prior to such expiration, a certificate may be renewed for an additional two-year term if the applicant:
(1) Otherwise is entitled to the certificate;
(2) Pays to the Commissioner the renewal fee as provided in Code Section 33-8-1;
(3) Submits to the Commissioner:
(A) A renewal application on the form that the Commissioner requires; and
(B) Satisfactory evidence of compliance with any requirements established by the Commissioner for certificate renewal; and
(4)(A) Establishes and maintains a complaint system which has been approved by the Commissioner and which provides reasonable procedures for the resolution of written complaints initiated by covered persons or healthcare providers concerning utilization review;
(B) Maintains records of such written complaints for five years from the time the complaints are filed and submits to the Commissioner a summary report at such times and in such format as the Commissioner may require; and
(C) Permits the Commissioner to examine the complaints at any time.
Private review agents and utilization review entities shall be subject to the jurisdiction of the Commissioner in all matters regulated by this chapter and the Commissioner shall have such powers and authority with regard to private review agents and utilization review entities as provided in Code Sections 33-2-9 through 33-2-28 with regard to insurers.
Private review agents and utilization review entities shall be subject to the provisions of Chapter 39 of this title.
The Commissioner shall periodically, not less than once a year, provide a list of private review agents and utilization review entities issued certificates and the renewal date for those certificates to all hospitals and to any other individual or organization requesting such list.
The Commissioner shall establish such reporting requirements upon private review agents and utilization review entities as are necessary to determine if the utilization review programs are in compliance with the provisions of this chapter and applicable rules and regulations.
The Commissioner shall adopt rules and regulations to implement the provisions of this chapter.
No certificate is required for utilization review by any Georgia licensed pharmacist or pharmacy while engaged in the practice of pharmacy, including but not limited to review of the dispensing of drugs, participation in drug utilization review, and monitoring patient drug therapy.
(a) This chapter shall not apply to any contract with the federal government for utilization and review of patients eligible for hospital services under Title XVIII or XIX of the Social Security Act. 1
(b) This chapter shall not apply to any private review agent or utilization review entity when such private review agent or utilization review entity is working under contract, or an extension or renewal thereof, with a licensed insurer operating under an agreement, providing administrative services pursuant to the provisions of subsection (b) of Code Section 33-20-17 to a healthcare benefit plan negotiated through collective bargaining as that term is defined in the federal National Labor Relations Act, 2 as amended, if the original agreement was executed and in effect prior to January 1, 1990.
(c) This chapter shall not apply to audits of the medical record for the purposes of verifying that healthcare services were ordered and delivered.
1 42 U.S.C.A. § 1395 et seq. or § 1396 et seq.
2 29 U.S.C.A. § 151 et seq.
The Commissioner shall issue an annual report to the Governor and the General Assembly concerning the conduct of utilization review in this state. Such report shall include a description of utilization review programs and the services they provide, an analysis of complaints filed against private review agents and utilization review entities by patients or providers, and an evaluation of the impact of utilization review programs on patient access to care. The Commissioner shall not be required to distribute copies of the annual report to legislators in the General Assembly but shall notify such legislators of the availability of the report in the manner which he or she deems to be most effective and efficient.
(a) An insurer shall make any current prior authorization requirements readily accessible on its website to healthcare providers. Clinical criteria on which an adverse determination is based shall be provided to the healthcare provider at the time of the notification.
(b) If an insurer intends either to implement a new prior authorization requirement or to amend an existing requirement, such insurer shall ensure that the new or amended requirement is not implemented unless such insurer's website has been updated to reflect such addition or change.
(c) An insurer using prior authorization shall make aggregate statistics available per such insurer and per its plans regarding prior authorization approvals and denials on its website in a readily accessible format. The Commissioner shall determine the statistics required in order to comply with this Code section in accordance with applicable state and federal privacy laws. Such statistics shall include, but not be limited to, the following:
(1) Approved or denied on initial request;
(2) Reason for denial;
(3) Whether appealed;
(4) Whether approved or denied on appeal; and
(5) Time between submission and response.
(a) An insurer shall be responsible for monitoring all utilization review activities carried out by, or on behalf of, the insurer and for ensuring that all requirements of this chapter and applicable rules and regulations are met. The insurer also shall ensure that appropriate personnel have operational responsibility for the conduct of the insurer's utilization review program.
(b) Whenever an insurer contracts with a private review agent or utilization review entity to perform services subject to this chapter or applicable rules and regulations, the Commissioner shall hold the insurer responsible for monitoring the activities of such private review agent or utilization review entity and for ensuring that the requirements of this chapter and applicable rules and regulations are met.
(c) A private review agent or utilization review entity shall use documented clinical criteria that are based on sound clinical evidence and which are evaluated periodically to assure ongoing efficacy.
(d) Qualified healthcare professionals shall administer the utilization review program and oversee utilization review decisions. An initial screening of prior authorization requests may be completed without providing the treating provider or other qualified healthcare professional with the opportunity to speak with a clinical peer of the private review agent or utilization review entity. Such an opportunity shall be provided, however, before an appeal. If a private review agent or utilization review entity questions the medical necessity of a healthcare service, such agent or entity shall notify the covered person's treating provider, or such provider's appropriately qualified designee familiar with the patient's case, that medical necessity is being questioned in accordance with the provisions of paragraph (5) of subsection (a) of Code Section 33-46-6.
(e) An insurer shall provide covered persons and participating providers with access to its utilization review staff by telephone or through synchronous digital text or voice messaging or similar technology in accordance with state and federal privacy laws. A clinical peer shall evaluate the clinical appropriateness of adverse determinations.
A private review agent or utilization review entity shall ensure that all appeals are reviewed by an appropriate healthcare provider who shall:
(1) Possess a current and valid nonrestricted license or maintain other appropriate legal authorization;
(2) Be currently in active practice in the same or similar specialty and who typically manages the medical condition or disease;
(3) Be knowledgeable of, and have experience providing, the healthcare service under appeal;
(4) Not have been directly involved in making the adverse determination; and
(5) Consider all known clinical aspects of the healthcare service under review, including, but not limited to, a review of all pertinent medical or other records provided to the private review agent or utilization review entity by the covered person's healthcare provider, any relevant records provided to such agent or entity by a facility, and any medical or other literature provided to such agent or entity by the healthcare provider.
If initial healthcare services are performed within 45 business days of approval of prior authorization, the insurer shall not revoke, limit, condition, or restrict such authorization, unless such prior authorization is for a Schedule II controlled substance or there is a billing error, fraud, material misrepresentation, or loss of coverage.
(a) As used in this Code section, the term:
(1) “Chronic condition” means a serious, long-term, physical, mental, or developmental disability or disease.
(2) “Ongoing medication therapy” means a clinical and evidence-based treatment that uses a prescribed medicine to prevent, diagnose, treat, or relieve the symptoms of a chronic condition and is continuing or expected to continue for at least a year.
(b) Unless otherwise provided in subsection (c) of this Code section or prohibited by state or federal law, if a healthcare provider receives a prior authorization for a medication prescribed to a covered person with a chronic condition that requires ongoing medication therapy, and the provider continues to prescribe the medication, and the medication is used for a condition that is within the scope of use approved by the United States Food and Drug Administration or has been proven to be a safe and effective form of treatment for the patient's specific underlying condition based on clinical practice guidelines that are developed from peer-reviewed publications, the prior authorization received shall:
(1) Be valid for the lesser of:
(A) One year from the date the healthcare provider receives the prior authorization; or
(B) Until the last day of coverage under the covered person's healthcare plan; and
(2) Cover any change in dosage prescribed by the healthcare provider during the period of authorization.
(c)(1) This Code section shall not apply to:
(A) Medications that are prescribed for a nonmaintenance condition;
(B) Medications that have a typical treatment period of less than 12 months;
(C) Medications for which medical or scientific evidence does not support a 12 month approval, including medications where an initial shorter duration approval is necessary to demonstrate appropriate response to therapy; or
(D) Medications that are opioid analgesics or benzodiazepines.
(2) Nothing in this Code section prevents the prior authorization of a medication for more than a year if permissible by the covered person's healthcare plan.
Prior authorization shall not be required for unanticipated emergency healthcare services, urgent healthcare services, or covered healthcare services which are incidental to the primary covered healthcare service and determined by the covered person's physician or dentist to be medically necessary.
An insurer cannot require prior authorization for emergency prehospital ambulance transportation or for the provision of emergency healthcare services.
Effective January 1, 2022, until December 31, 2022, if an insurer requires prior authorization of a healthcare service, a private review agent or utilization review entity shall notify the covered person's healthcare provider, or such provider's appropriately qualified designee, of any prior authorization or adverse determination within 15 calendar days of obtaining all necessary information to make such authorization or adverse determination. Effective January 1, 2023, if an insurer requires prior authorization of a healthcare service, a private review agent or utilization review entity shall notify the covered person's healthcare provider, or such provider's appropriately qualified designee, of any prior authorization or adverse determination within 7 calendar days of obtaining all necessary information to make such authorization or adverse determination.
A private review agent or utilization review entity shall render a prior authorization or adverse determination concerning urgent healthcare services and notify such person's healthcare provider, or such provider's appropriately qualified designee, of that prior authorization or adverse determination no later than 72 hours after receiving all information needed to complete the review of the requested healthcare services.
(a) Upon receipt of information documenting a prior authorization from a covered person or from a covered person's healthcare provider, a private review agent or utilization review entity, for at least the initial 30 days of such person's new coverage, shall honor a prior authorization for a covered healthcare service granted to him or her from a previous private review agent or utilization review entity even if approval criteria or products of a healthcare plan have changed or such person is covered under a new healthcare plan, so long as the former criteria, products, or plans are not binding upon a new insurer.
(b) During the time period described in subsection (a) of this Code section, a private review agent or utilization review entity may perform its own review to grant a prior authorization.
(c) If there is a change in coverage of, or approval criteria for, a previously authorized healthcare service, the change in coverage or approval criteria shall not affect a covered person who received prior authorization before the effective date of such change for the remainder of the covered person's plan year so long as such person remains covered by the same insurer.
(d) A private review agent or utilization review entity shall continue to honor a prior authorization it has granted to a covered person in accordance with this Code section.
Each violation by a private review agent or utilization review entity of deadline or other requirements specified in this chapter shall result in the automatic authorization of healthcare services under review by such private review agent or utilization review entity if such noncompliance is related to such services. Notwithstanding the foregoing, noncompliance based on a de minimis violation that does not cause, or is not likely to cause, prejudice or harm to the covered person shall not result in the automatic authorization of such healthcare services, so long as the insurer demonstrates that the violation occurred due to good cause or due to matters beyond the control of the insurer and that such violation occurred in the context of an ongoing good faith exchange of information between the insurer and the covered person, or, if applicable, the covered person's healthcare provider or authorized representative.
With regard to the provision of healthcare services, each contract entered into or renewed by a managed care organization, each contract entered into or renewed by the Department of Community Health with a care management organization, and each contract entered into by the board of such organization with a contracted entity pursuant to the state health benefit plan shall comply with this chapter.
The Commissioner shall not have the authority to approve, disapprove, or modify any plan offered by a care management organization or any contract between a care management organization and the Department of Community Health. Compliance with this chapter by care management organizations shall be enforced by the Department of Community Health.
Nothing in this chapter shall be construed as reducing the authority of the commissioner of community health.
This chapter shall be known and may be cited as the “Managing General Agents Act.”
As used in this chapter, the term:
(1) “Actuary” means a person who is a member in good standing of the American Academy of Actuaries.
(2) “Insurer” means an insurer as defined in Code Section 33-1-2.
(3)(A) “Managing general agent” means any person, firm, association, or corporation who negotiates and binds ceding reinsurance contracts on behalf of an insurer or manages all or part of the insurance business of an insurer, including the management of a separate division, department, or underwriting office and acts as an agent for such insurer whether known as a managing general agent, general agent, manager, or other similar term, who, with or without the authority, either separately or together with affiliates, produces, directly or indirectly, and underwrites an amount of gross direct written premium equal to or more than 5 percent of the policyholder surplus as reported in the last annual statement of the insurer in any one quarter or year together with one or more of the following:
(i) Adjusts or pays claims in excess of an amount determined by the Commissioner; or
(ii) Negotiates reinsurance on behalf of the insurer.
(B) Notwithstanding the provisions of subparagraph (A) of this paragraph, the following persons shall not be considered as managing general agents for the purposes of this chapter:
(i) An employee of the insurer;
(ii) A United States manager of the United States branch of an alien insurer; or
(iii) An underwriting manager which provides underwriting services only, pursuant to contract, manages any of the insurance underwriting operations of the insurer, is under common control with the insurer, subject to Chapter 13 of this title, and whose compensation is not based on the volume of premiums written.
(4) “Producer” means an agent or subagent as defined in Chapter 23 of this title.
(5) “Underwrite” means the authority to accept or reject risk on behalf of the insurer.
(a) No person, firm, association, or corporation shall act in the capacity of a managing general agent with respect to risks located in this state for an insurer licensed in this state unless such person is a licensed producer in this state.
(b) No person, firm, association, or corporation shall act in the capacity of a managing general agent representing an insurer domiciled in this state with respect to risks located outside this state unless such person is licensed as a producer in this state pursuant to the provisions of this chapter.
(c) The Commissioner may require the managing general agent to maintain a surety bond in an amount acceptable to him for the protection of the insurer. The Commissioner may require the managing general agent to maintain an errors and omissions policy.
No person, firm, association, or corporation acting in the capacity of a managing general agent shall place business with an insurer unless there is in force a written contract between the parties which sets forth the responsibilities of each party and where both parties share responsibility for a particular function, specifies the division of such responsibilities, and which contains the following minimum provisions:
(1) The insurer may terminate the contract for cause upon written notice to the managing general agent. The insurer may suspend the underwriting authority of the managing general agent during the pendency of any dispute regarding the cause for termination;
(2) The managing general agent will render accounts to the insurer detailing all transactions and remit all funds due under the contract to the insurer on not less than a monthly basis;
(3) All funds collected for the account of an insurer will be held by the managing general agent in a fiduciary capacity in a bank which is a member of the Federal Reserve System. This account shall be used for all payments on behalf of the insurer. The managing general agent may retain no more than three months' estimated claims payments and allocated loss adjustment expenses;
(4) Separate records of business written by the managing general agent will be maintained. The insurer shall have access to and right to copy all accounts and records related to its business in a form usable by the insurer and the Commissioner shall have access to all books, bank accounts, and records of the managing general agent in a form usable to the Commissioner. Such records shall be retained according to rules and regulations promulgated by the Commissioner;
(5) The contract may not be assigned in whole or part by the managing general agent;
(6) Appropriate underwriting guidelines including:
(A) The maximum annual premium volume;
(B) The basis of the rates to be charged;
(C) The types of risks which may be written;
(D) Maximum limits of liability;
(E) Applicable exclusions;
(F) Territorial limitations;
(G) Policy cancellation provisions; and
(H) The maximum policy period.
The insurer shall have the right to cancel or nonrenew any policy of insurance subject to the provisions of Chapter 24 of this title which relate to cancellation and nonrenewal of policies;
(7) If the contract permits the managing general agent to settle claims on behalf of the insurer:
(A) All claims must be reported to the company in a timely manner;
(B) A copy of the claim file will be sent to the insurer at its request or as soon as it becomes known that the claim:
(i) Has the potential to exceed an amount determined by the Commissioner or exceeds the limit set by the company, whichever is less;
(ii) Involves a coverage dispute;
(iii) May exceed the managing general agent's claims settlement authority;
(iv) Is open for more than six months; or
(v) Is closed by payment of an amount set by the Commissioner or an amount set by the company, whichever is less;
(C) All claim files will be the joint property of the insurer and the managing general agent. However, upon an order of liquidation of the insurer such files shall become the sole property of the insurer or its estate; the managing general agent shall have reasonable access to and the right to copy the files on a timely basis; and
(D) Any settlement authority granted to the managing general agent may be terminated for cause upon the insurer's written notice to the managing general agent or upon the termination of the contract. The insurer may suspend the settlement authority during the pendency of any dispute regarding the cause for termination;
(8) Where electronic claims files are in existence, the contract must address the timely transmission of the data;
(9) If the contract provides for a sharing of interim profits by the managing general agent, and the managing general agent has the authority to determine the amount of the interim profits by establishing loss reserves or controlling claim payments, or in any other manner, interim profits will not be paid to the managing general agent until one year after they are earned for property insurance business and five years after they are earned on casualty business and not until the profits have been verified pursuant to Code Section 33-47-5; and
(10) The managing general agent shall not:
(A) Bind reinsurance or retrocessions on behalf of the insurer, except that the managing general agent may bind facultative reinsurance contracts pursuant to obligatory facultative agreements if the contract with the insurer contains reinsurance underwriting guidelines including, for both reinsurance assumed and ceded, a list of reinsurers with which such automatic agreements are in effect, the coverages and amounts or percentages that may be reinsured, and commission schedules;
(B) Commit the insurer to participate in insurance or reinsurance syndicates;
(C) Appoint any producer without assuring that the producer is lawfully licensed to transact the type of insurance for which he is appointed;
(D) Without prior approval of the insurer, pay or commit the insurer to pay a claim over a specified amount, net of reinsurance, which shall not exceed 1 percent of the insurer's policyholder's surplus as of December 31 of the last completed calendar year;
(E) Collect any payment from a reinsurer or commit the insurer to any claim settlement with a reinsurer, without prior approval of the insurer. If prior approval is given, a report must be promptly forwarded to the insurer;
(F) Permit its subproducer to serve on the insurer's board of directors;
(G) Jointly employ an individual who is employed with the insurer; or
(H) Appoint a substitute managing general agent.
No licensed managing general agent may charge a fully earned policy fee in connection with the issuance of an insurance policy unless such fee shall be a component of the insurer's rate filing. No fully earned policy fee may exceed $25.00.
(a) The insurer shall have on file an independent financial examination, in a form acceptable to the Commissioner, of each managing general agent with which it has done business.
(b) If a managing general agent establishes loss reserves, the insurer shall annually obtain the opinion of an actuary attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the managing general agent. This is in addition to any other required loss reserve certification.
(c) The insurer shall periodically and at least semiannually conduct an on-site review of the underwriting and claims processing operations of the managing general agent.
(d) Binding authority for all reinsurance contracts or participation in insurance or reinsurance syndicates shall rest with an officer of the insurer, who shall not be affiliated with the managing general agent.
(e) Within 30 days of entering into or termination of a contract with a managing general agent, the insurer shall provide written notification of such appointment or termination to the Commissioner. Notices of appointment of a managing general agent shall include a statement of duties which the applicant is expected to perform on behalf of the insurer, the lines of insurance for which the applicant is to be authorized to act, and any other information the Commissioner may request.
(f) An insurer shall review its books and records each quarter to determine if any producer has become, by operation of paragraph (3) of Code Section 33-47-2, a managing general agent. If the insurer determines that a producer has become a managing general agent, the insurer shall promptly notify the producer and the Commissioner of such determination and the insurer and producer must fully comply with the provisions of this chapter within 30 days of such determination.
(g) An insurer shall not appoint to its board of directors an officer, director, employee, subproducer, or controlling shareholder of its managing general agents. This subsection shall not apply to relationships governed by Chapter 13 of this title or, if applicable, Chapter 48 of this title.
The acts of the managing general agent are considered to be the acts of the insurer on whose behalf it is acting. A managing general agent may be examined as if it were the insurer.
(a) If the Commissioner finds, after a hearing conducted in accordance with Chapter 2 of this title, that any person has violated any provision of this chapter, the Commissioner may order:
(1) For each separate violation, a penalty in an amount not to exceed $10,000.00;
(2) Revocation or suspension of the producer's license; and
(3) The managing general agent to reimburse the insurer or the rehabilitator or liquidator of the insurer for any losses incurred by the insurer caused by a violation of this chapter committed by the managing general agent.
(b) The decision, determination, or order of the Commissioner pursuant to subsection (a) of this Code section shall be subject to judicial review as provided in Chapter 2 of this title.
(c) Nothing contained in this Code section shall affect the right of the Commissioner to impose any other penalties provided for in this title.
(d) Nothing contained in this chapter is intended to or shall in any manner limit or restrict the rights of policyholders, claimants, and auditors.
This chapter shall be known and may be cited as the “Business Transacted with Producer Controlled Property and Casualty Insurer Act.”
As used in this chapter, the term:
(1) “Control” or “controlled” shall have the same meaning as provided in paragraph (3) of Code Section 33-13-1, relating to definitions used with regard to insurance company holding systems.
(2) “Independent casualty actuary” means a casualty actuary who is a member of the American Academy of Actuaries and who is not affiliated with; an employee, principal, or direct or indirect owner of; or in any way controlled by the insurer or producer.
(3) “Licensed property and casualty insurer” or “insurer” means any person, firm, association, or corporation duly licensed to transact a property and casualty insurance business in this state and which issues policies covered by Chapter 36 of this title. The following, inter alia, are not licensed property and casualty insurers for the purposes of this chapter:
(A) All nonadmitted insurers;
(B) All risk retention groups as defined in the Superfund Amendments Reauthorization Act of 1986, P.L. No. 99-499, 100 Stat. 1613 (1986) and the Risk Retention Act, 15 U.S.C. Section 3901, et seq. (1982 & Supp. 1986) and Chapter 40 of this title;
(C) All residual market pools and joint underwriting authorities or associations; and
(D) All captive insurers as defined in Chapter 41 of this title.
(4) “Producer” means an insurance agent or broker or agents or brokers or any other person, firm, association, or corporation, when, for any compensation, commission, or other thing of value, such person, firm, association, or corporation acts or aids in any manner in soliciting, negotiating, or procuring the making of any insurance contract on behalf of an insured other than himself or itself.
(5) “Reinsurance intermediary” means any person, firm, association, or corporation who acts as a producer in soliciting, negotiating, or procuring the making of any reinsurance contract or binder on behalf of a ceding insurer or acts as a producer in accepting any reinsurance contract or binder on behalf of an assuming insurer.
(6) “Violation” means, for purposes of this chapter, a finding by the Commissioner that:
(A) The controlling producer did not materially comply with Code Section 33-48-3;
(B) The controlled insurer, with respect to business placed by the controlling producer, engaged in a pattern of charging premiums that were lower than those being charged by such insurer or other insurers for similar risks written during the same period and placed by noncontrolling producers. When determining whether premiums were lower than those prevailing in the market, the Commissioner shall take into consideration applicable industry or actuarial standards at the time the business was written;
(C) The controlling producer failed to maintain records, sufficient:
(i) To demonstrate that such producer's dealings with its controlled insurer were fair and equitable and in compliance with Chapter 13 of this title; or
(ii) To accurately disclose the nature and details of its transactions with the controlled insurer, including such information as is necessary to support the charges or fees to the respective parties;
(D) The controlled insurer, with respect to business placed by the controlling producer, either failed to establish or deviated from its underwriting procedures;
(E) The controlled insurer's capitalization at the time the business was placed by the controlling producer and with respect to such business was not in compliance with criteria established by the Commissioner or this title; or
(F) The controlling producer or the controlled insurer failed to comply substantially with Chapter 13 of this title and any rules and regulations promulgated by the Commissioner pursuant to such chapter.
(a) No producer which has control of a licensed property and casualty insurer may directly or indirectly place business with such insurer in any transaction in which such producer, at the time the business is placed, is acting as such on behalf of the insured for any compensation, commission, or other thing of value, unless:
(1) There is a written contract between the controlling producer and the insurer, which contract has been approved by the board of directors of the insurer;
(2) Such producer, prior to the effective date of the policy, shall deliver written notice to the prospective insured disclosing the relationship between such producer and the controlled insurer. Such disclosure, signed by the insured, shall be retained in the underwriting file until the filing of the report on examination covering the period in which the coverage is in effect. Except that, if the business is placed through a subproducer who is not a controlling producer, the controlling producer shall retain in his records a signed commitment from the subproducer that the subproducer is aware of the relationship between the insurer and the producer and that the subproducer has or will notify the insured;
(3) All funds collected for the account of the insurer by the controlling producer must be paid, net of commissions, cancellations, and other adjustments, to the insurer no less often than quarterly;
(4) In addition to any other required loss reserve certification, the controlled insurer shall annually, on April 1 of each year, file with the Commissioner an opinion of an independent casualty actuary or other independent loss reserve specialist acceptable to the Commissioner reporting loss ratios for each line of business written and attesting to the adequacy of loss reserves established for losses incurred, including losses incurred but not reported, and outstanding as of the end of the current year on business placed by such producer;
(5) The controlled insurer shall annually report to the Commissioner the amount of commissions paid to such producer, the percentage such amount represents of the net premiums written, and comparable amounts and percentages paid to noncontrolling producers for placements of the same kinds of insurance; and
(6) Every controlled insurer shall have an audit committee of the board of directors composed of independent directors. Prior to approval of the annual financial statement, the audit committee shall meet with management, the insurer's independent certified public accountants, and an independent casualty actuary or other independent loss reserve specialist acceptable to the Commissioner to review the adequacy of the insurer's loss reserves.
(b) No reinsurance intermediary which has control of an assuming insurer may directly or indirectly place business with such insurer in any transaction in which such reinsurance intermediary is acting as a broker on behalf of the ceding insurer. No reinsurance intermediary which has control of a ceding insurer may directly or indirectly accept business from such insurer in any transaction in which such reinsurance intermediary is acting as a producer on behalf of the assuming insurer. The prohibitions in this subsection shall not apply to a reinsurance intermediary which makes a full and complete written disclosure to the parties of its relationship with the assuming or ceding insurer prior to completion of the transaction.
(a)(1) If the Commissioner has reason to believe that a controlling producer has committed or is committing an act which could be determined to be a violation, as defined in paragraph (6) of Code Section 33-48-2, he shall serve upon the controlling producer a statement of the charges and notice of a hearing to be conducted in accordance with Chapter 2 of this title at a time not less than 30 days after the service of the notice and at a place fixed in the notice.
(2) At such hearing, the Commissioner must establish that the controlling producer engaged in a violation, as defined in paragraph (6) of Code Section 33-48-2. The controlling producer shall have an opportunity to be heard and to present evidence rebutting the charges and to establish that the insolvency of the controlled insurer arose out of events not attributable to the violation. The decision, determination, or order of the Commissioner shall be subject to judicial review pursuant to Chapter 2 of this title.
(3) Upon the finding, pursuant to the proceeding set forth in this subsection that the controlling producer committed a violation, as defined in paragraph (6) of Code Section 33-48-2, and the controlling producer failed to establish that such violation did not substantially contribute to the insolvency, the controlling producer shall reimburse the Georgia Insurers Insolvency Pool or the Georgia Life and Health Insurance Guaranty Association for all payments made for losses, loss adjustment, and administrative expenses on the business placed by such producer in excess of gross earned premiums and investment income earned on premiums and loss reserves for such business.
(4) Nothing contained in this Code section shall affect the right of the Commissioner to impose any other penalties provided for in this title.
(b) Nothing contained in this chapter is intended to or shall in any manner alter or affect the rights of policyholders, claimants, creditors, or other third parties.
This chapter shall be known and may be cited as the “Reinsurance Intermediary Act.”
As used in this chapter, the term:
(1) “Actuary” means a person who is a member in good standing of the American Academy of Actuaries.
(2) “Controlling person” means any person, firm, association, or corporation who directly or indirectly has the power to direct or cause to be directed the management, control, or activities of the reinsurance intermediary.
(3) “Insurer” means any person, firm, association, or corporation duly licensed in this state pursuant to the applicable provisions of the insurance law as an insurer.
(4) “Licensed producer” means an agent, broker, or reinsurance intermediary licensed pursuant to the applicable provision of this title.
(5) “Qualified United States financial institution” means an institution that:
(A) Is organized or, in the case of a United States office of a foreign banking organization, licensed under the laws of the United States or any state thereof;
(B) Is regulated, supervised, and examined by United States federal or state authorities having regulatory authority over banks and trust companies; and
(C) Has been determined by either the Commissioner or the Securities Valuation Office of the National Association of Insurance Commissioners to meet such standards of financial condition and standing as are considered necessary and appropriate to regulate the quality of financial institutions whose letters of credit will be acceptable to the Commissioner.
(6) “Reinsurance intermediary” means a reinsurance intermediary broker or a reinsurance intermediary manager as these terms are defined in paragraphs (7) and (8) of this Code section.
(7) “Reinsurance intermediary broker” or “broker” means any person, other than an officer or employee of the ceding insurer, firm, association, or corporation who solicits, negotiates, or places reinsurance cessions or retrocessions on behalf of a ceding insurer without the authority or power to bind reinsurance on behalf of such insurer.
(8) “Reinsurance intermediary manager” or “manager” means any person, firm, association, or corporation who has authority to bind or manages all or part of the assumed reinsurance business of a reinsurer, including the management of a separate division, department, or underwriting office, and acts as an agent for such reinsurer whether known as a reinsurance intermediary manager, manager, or other similar term. Notwithstanding the above, for the purposes of this chapter the following persons shall not be considered as reinsurance intermediary managers with respect to such reinsurer:
(A) An employee of the reinsurer;
(B) A United States manager of the United States branch of an alien reinsurer;
(C) An underwriting manager which, pursuant to contract, manages all the reinsurance operations of the reinsurer, is under common control with the reinsurer, subject to Chapter 13 of this title, and whose compensation is not based on the volume of premiums written; or
(D) The manager of a group, association, pool, or organization of insurers which engages in joint underwriting or joint reinsurance and who is subject to examination by the commissioner of insurance of the state in which the manager's principal business office is located.
(9) “Reinsurer” means any person, firm, association, or corporation duly licensed in this state pursuant to the applicable provisions of this title as an insurer with the authority to assume reinsurance.
(10) “To be in violation” means that the reinsurance intermediary, insurer, or reinsurer for whom the reinsurance intermediary was acting failed to substantially comply with the provisions of this chapter.
(a) No person, firm, association, or corporation shall act as a broker in this state if the broker maintains an office either directly or as a member or employee of a firm or association or as an officer, director, or employee of a corporation:
(1) In this state, unless such broker is a licensed producer in this state; or
(2) In another state, unless such broker is a licensed producer in this state or another state having a law substantially similar to this chapter or unless such broker is licensed in this state as a nonresident reinsurance intermediary.
(b) No person, firm, association, or corporation shall act as a manager:
(1) For a reinsurer domiciled in this state, unless such manager is a licensed producer in this state;
(2) In this state, if the manager maintains an office either directly or as a member or employee of a firm or association or as an officer, director, or employee of a corporation in this state, unless such manager is a licensed producer in this state;
(3) In another state for a nondomestic insurer, unless such manager is a licensed producer in this state or another state having a law substantially similar to this chapter or such person is licensed in this state as a nonresident reinsurance intermediary.
(c) The Commissioner may require a manager subject to subsection (b) of this Code section to:
(1) File a bond in an amount from an insurer acceptable to the Commissioner for the protection of the reinsurer; and
(2) Maintain an errors and omissions policy in an amount acceptable to the Commissioner.
(d)(1) The Commissioner may issue a reinsurance intermediary license to any person, firm, association, or corporation who has complied with the requirements of this chapter. Any such license issued to a firm or association will authorize all the members of such firm or association and any designated employees to act as reinsurance intermediaries under the license, and all such authorized persons shall be named in the application and any supplements thereto. Any such license issued to a corporation shall authorize all of the officers, and any designated employees and directors thereof, to act as reinsurance intermediaries on behalf of such corporation, and all such authorized persons shall be named in the application and any supplements thereto.
(2) If the applicant for a reinsurance intermediary license is a nonresident, such applicant, as a condition precedent to receiving or holding a license, shall designate the Commissioner as agent for service of process in the manner, and with the same legal effect, provided for by this chapter for designation of service of process upon unauthorized insurers; and also shall furnish the Commissioner with the name and address of a resident of this state upon whom notices or orders of the Commissioner or process affecting such nonresident reinsurance intermediary may be served. Such licensee shall promptly notify the Commissioner in writing of every change in its designated agent for service of process, and such change shall not become effective until acknowledged by the Commissioner.
(e) The Commissioner may refuse to issue a reinsurance intermediary license if in his judgment the applicant; any person named on the application; any member, principal, officer, or director of the applicant; or any controlling person of such applicant is not trustworthy to act as a reinsurance intermediary or that any of the foregoing has given cause for revocation or suspension of such license or has failed to comply with any prerequisite for the issuance of such license. Upon written request therefor, the Commissioner will furnish a summary of the basis for refusal to issue a license, which document shall be privileged and not subject to Article 4 of Chapter 18 of Title 50, relating to the inspection of public records.
(f) Licensed attorneys at law of this state when acting in their professional capacity as such shall be exempt from this Code section.
Transactions between a broker and the insurer it represents in such capacity shall only be entered into pursuant to a written authorization specifying the responsibilities of each party. The authorization shall, at a minimum, provide that:
(1) The insurer may terminate the broker's authority at any time;
(2) The broker will render accounts to the insurer accurately detailing all material transactions, including information necessary to support all commissions, charges, and other fees received by or owing to the broker, and remit all funds due to the insurer within 30 days of receipt;
(3) All funds collected for the insurer's account will be held by the broker in a fiduciary capacity in a bank which is a qualified United States financial institution;
(4) The broker will comply with Code Section 33-49-5;
(5) The broker will comply with the written standards established by the insurer for the cession or retrocession of all risks; and
(6) The broker will disclose to the insurer any relationship with any reinsurer to which business will be ceded or retroceded.
(a) For at least ten years after expiration of each contract of reinsurance transacted by the broker, the broker will keep a complete record for each transaction showing:
(1) The type of contract, limits, underwriting restrictions, classes or risks, and territory;
(2) The period of coverage, including effective and expiration dates, cancellation provisions, and notice required of cancellation;
(3) Reporting and settlement requirements of balances;
(4) The rate used to compute the reinsurance premium;
(5) The names and addresses of assuming reinsurers;
(6) Rates of all reinsurance commissions, including the commissions on any retrocessions handled by the broker;
(7) Related correspondence and memoranda;
(8) Proof of placement;
(9) Details regarding retrocessions handled by the broker including the identity of retrocessionaires and the percentage of each contract assumed or ceded;
(10) Financial records, including, but not limited to, premium and loss accounts; and
(11) When the broker procures a reinsurance contract on behalf of a licensed ceding insurer:
(A) Directly from any assuming reinsurer, written evidence that the assuming reinsurer has agreed to assume the risk; or
(B) If placed through a representative of the assuming reinsurer, other than an employee, written evidence that such reinsurer has delegated binding authority to the representative.
(b) The insurer will have access and the right to copy and audit all accounts and records maintained by the broker related to its business in a form usable by the insurer.
(a) An insurer shall not engage the services of any person, firm, association, or corporation to act as a broker on its behalf unless such person is licensed as required by subsection (a) of Code Section 33-49-3.
(b) An insurer may not employ an individual who is employed by a broker with which it transacts business unless such broker is under common control with the insurer and subject to Chapter 13 of this title.
(c) The insurer shall annually obtain a copy of statements of the financial condition of each broker with which it transacts business.
Transactions between a manager and the reinsurer it represents in such capacity shall only be entered into pursuant to a written contract, specifying the responsibilities of each party, which shall be approved by the reinsurer's board of directors. At least 30 days before such reinsurer assumes or cedes business through such producer, a true copy of the approved contract shall be filed with the Commissioner for approval. The contract shall, at a minimum, provide that:
(1) The reinsurer may terminate the contract for cause upon written notice to the manager. The reinsurer may immediately suspend the authority of the manager to assume or cede business during the pendency of any dispute regarding the cause for termination;
(2) The manager will render accounts to the reinsurer accurately detailing all material transactions, including information necessary to support all commissions, charges, and other fees received by or owing to the manager, and remit all funds due under the contract to the reinsurer on not less than a monthly basis;
(3) All funds collected for the reinsurer's account will be held by the manager in a fiduciary capacity in a bank which is a qualified United States financial institution as defined in paragraph (5) of Code Section 33-49-2. The manager may retain no more than three months' estimated claims payments and allocated loss adjustment expenses. The manager shall maintain a separate bank account for each reinsurer that it represents;
(4) For at least ten years after expiration of each contract of reinsurance transacted by the manager, the manager will keep a complete record for each transaction showing:
(A) The type of contract, limits, underwriting restrictions, classes or risks, and territory;
(B) The period of coverage, including effective and expiration dates, cancellation provisions and notice required of cancellation, and disposition of outstanding reserves on covered risks;
(C) Reporting and settlement requirements of balances;
(D) The rate used to compute the reinsurance premium;
(E) The names and addresses of reinsurers;
(F) Rates of all reinsurance commissions, including the commissions on any retrocessions handled by the manager;
(G) Related correspondence and memoranda;
(H) Proof of placement;
(I) Details regarding retrocessions handled by the manager, as permitted by subsection (d) of Code Section 33-49-9, including the identity of retrocessionaires and the percentage of each contract assumed or ceded;
(J) Financial records, including, but not limited to, premium and loss accounts; and
(K) When the manager places a reinsurance contract on behalf of a ceding insurer:
(i) Directly from any assuming reinsurer, written evidence that the assuming reinsurer has agreed to assume the risk; or
(ii) If placed through a representative of the assuming reinsurer, other than an employee, written evidence that such reinsurer has delegated binding authority to the representative;
(5) The reinsurer will have access and the right to copy all accounts and records maintained by the manager related to its business in a form usable by the reinsurer;
(6) The contract cannot be assigned in whole or in part by the manager;
(7) The manager will comply with the written underwriting and rating standards established by the insurer for the acceptance, rejection, or cession of all risks;
(8) The rates, terms, and purposes of commissions, charges, and other fees which the manager may levy against the reinsurer are set forth;
(9) If the contract permits the manager to settle claims on behalf of the reinsurer:
(A) All claims will be reported to the reinsurer in a timely manner;
(B) A copy of the claim file will be sent to the reinsurer at its request or as soon as it becomes known that the claim:
(i) Has the potential to exceed the lesser of an amount determined by the Commissioner or the limit set by the reinsurer;
(ii) Involves a coverage dispute;
(iii) May exceed the manager's claims settlement authority;
(iv) Is open for more than six months; or
(v) Is closed by payment of the lesser of an amount set by the Commissioner or an amount set by the reinsurer;
(C) All claim files will be the joint property of the reinsurer and manager. However, upon an order of liquidation of the reinsurer such files shall become the sole property of the reinsurer or its estate; the manager shall have reasonable access to and the right to copy the files on a timely basis; and
(D) Any settlement authority granted to the manager may be terminated for cause upon the reinsurer's written notice to the manager or upon the termination of the contract. The reinsurer may suspend the settlement authority during the pendency of the dispute regarding the cause of termination;
(10) If the contract provides for a sharing of interim profits by the manager, that such interim profits will not be paid until one year after the end of each underwriting period for property business and five years after the end of each underwriting period for casualty business or a later period set by the Commissioner for specified lines of insurance and not until the adequacy of reserves on remaining claims has been verified pursuant to subsection (c) of Code Section 33-49-9;
(11) The manager will annually provide the reinsurer with a statement of its financial condition prepared by an independent certified accountant;
(12) The reinsurer shall periodically and at least semi-annually conduct an on-site review of the underwriting and claims processing operations of the manager;
(13) The manager will disclose to the reinsurer any relationship it has with any insurer prior to ceding or assuming any business with such insurer pursuant to this contract; and
(14) Within the scope of its actual or apparent authority the acts of the manager shall be deemed to be the acts of the reinsurer on whose behalf it is acting.
The manager shall not:
(1) Cede retrocessions on behalf of the reinsurer, except that the manager may cede facultative retrocessions pursuant to obligatory facultative agreements if the contract with the reinsurer contains reinsurance underwriting guidelines for such retrocessions. Such guidelines shall include a list of reinsurers with which such automatic agreements are in effect, and for each such reinsurer, the coverages and amounts or percentages that may be reinsured, and commission schedules;
(2) Commit the reinsurer to participate in reinsurance syndicates;
(3) Appoint any producer without assuring that the producer is lawfully licensed to transact the type of reinsurance for which he is appointed;
(4) Without prior approval of the reinsurer, pay or commit the reinsurer to pay a claim, net of retrocessions, that exceeds the lesser of an amount specified by the reinsurer or 1 percent of the reinsurer's policyholder's surplus as of December 31 of the last complete calendar year;
(5) Collect any payment from a retrocessionaire or commit the reinsurer to any claim settlement with a retrocessionaire, without prior approval of the reinsurer. If prior approval is given, a report must be promptly forwarded to the reinsurer;
(6) Jointly employ an individual who is employed by the reinsurer unless such manager is under common control with the reinsurer subject to Chapter 13 of this title; or
(7) Appoint a submanager.
(a) A reinsurer shall not engage the services of any person, firm, association, or corporation to act as a manager on its behalf unless such person is licensed as required by subsection (b) of Code Section 33-49-3.
(b) The reinsurer shall annually obtain a copy of statements of the financial condition of each manager which such reinsurer has engaged prepared by an independent certified accountant in a form acceptable to the Commissioner.
(c) If a manager establishes loss reserves, the reinsurer shall annually obtain the opinion of an actuary attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the manager. This opinion shall be in addition to any other required loss reserve certification.
(d) Binding authority for all retrocessional contracts or participation in reinsurance syndicates shall rest with an officer of the reinsurer who shall not be affiliated with the manager.
(e) Within 30 days of termination of a contract with a manager, the reinsurer shall provide written notification of such termination to the Commissioner.
(f) A reinsurer shall not appoint to its board of directors any officer, director, employee, controlling shareholder, or subproducer of its manager. This subsection shall not apply to relationships governed by Chapter 13 or Chapter 48 of this title.
(a) A reinsurance intermediary shall be subject to examination by the Commissioner. The Commissioner shall have access to all books, bank accounts, and records of the reinsurance intermediary in a form usable to the Commissioner.
(b) A manager may be examined as if it were the reinsurer.
(a) A reinsurance intermediary, insurer, or reinsurer found by the Commissioner, after a hearing conducted in accordance with Chapter 2 of this title, to be in violation of any provision of this chapter, shall:
(1) For each separate violation, pay a penalty in an amount not exceeding $10,000.00;
(2) Be subject to revocation or suspension of its license; and
(3) If a violation was committed by the reinsurance intermediary, such reinsurance intermediary shall make restitution to the insurer, reinsurer, rehabilitator, or liquidator of the insurer or reinsurer for the net losses incurred by the insurer or reinsurer attributable to such violation.
(b) The decision, determination, or order of the Commissioner pursuant to subsection (a) of this Code section shall be subject to judicial review pursuant to Chapter 2 of this title.
(c) Nothing contained in this Code section shall affect the right of the Commissioner to impose any other penalties provided in this title.
(d) Nothing contained in this chapter is intended to or shall in any manner limit or restrict the rights of policyholders, claimants, creditors, or other third parties or confer any rights to such persons.
As used in this chapter, the term “multiple employer self-insured health plan” means any plan or arrangement which is established or maintained for the purpose of offering or providing health, dental, or short-term disability benefits to employees of two or more employers but which is not fully insured. A plan or arrangement is considered fully insured only if all benefits payable are guaranteed under a contract or policy of insurance issued by an insurer authorized to transact business in this state.
(a) It is unlawful for any multiple employer self-insured health plan to transact business in this state without a license issued by the Commissioner. Any of the acts described as the transaction of insurance in Code Section 33-1-2, effected by mail or otherwise, by or on behalf of a multiple employer self-insured health plan constitutes the transaction of business in this state. Any multiple employer self-insured health plan which transacts business in this state without the license required by this chapter shall be considered to be an unauthorized insurer within the meaning of Chapter 5 of this title and all remedies and penalties prescribed in such chapter shall be fully applicable.
(b) This chapter does not apply to any plan or arrangement established or maintained by municipalities, counties, or other political subdivisions of this state; any multiple employer self-insured health plan which is not subject to the application of state insurance laws under the provisions of the Employee Retirement Income Security Act of 1974, 29 U.S.C. Section 1001, et seq.; to organizations established under the authority of or receiving funds pursuant to 42 U.S.C. Section 254(b) or 254(c), the federal Public Health Service Act; any other nonprofit organization exempt from federal taxation whose primary purpose is providing access to primary health care services for indigent citizens of Georgia; any plan or arrangement established or maintained by a nonprofit educational organization with assets of more than $100 million for the benefit of the employees of such organization and the employees of any affiliated or associated persons, firms, associations, or corporations which perform functions related to those of such educational organization or of which a majority of the membership of the governing body is composed of employees or members of the governing body of the nonprofit educational organization; or to any plan or arrangement established or maintained, directly or through a legal entity, by two or more accredited independent nonproprietary institutions of higher education located in this state that have combined assets of more than $100 million and are members of the Georgia nonprofit corporation representing a majority of the accredited independent nonproprietary institutions of higher education located in this state for the benefit of the employees, including retired employees, of:
(1) Such institutions;
(2) Any affiliated or associated persons, firms, associations, trusts, or corporations that perform functions similar or related to those of one or more of such institutions or of which a majority of the membership of the governing body is composed of employees or members of the governing body of one or more of such institutions; and
(3) The Georgia nonprofit corporation representing a majority of the accredited independent nonproprietary institutions of higher education located in this state.
(a) Application for a license shall be made on forms prescribed by the Commissioner.
(b) Every multiple employer self-insured health plan shall pay to the Commissioner annual license fees, as established by rule or regulation of the Commissioner.
(c) Every multiple employer self-insured health plan shall be exempt from the payment of premium taxes on the plan's net premium.
At the time application for a license is made, the multiple employer self-insured health plan shall file with the Commissioner a copy of the plan's bylaws, all schedules of benefits, and all management, administration, and trust agreements which the plan had made or proposes to make for the conduct of its business and affairs. Any proposed changes or amendments to the foregoing must also be filed with the Commissioner.
(a) No multiple employer self-insured health plan shall be licensed unless it shall possess and thereafter maintain a minimum surplus of at least $200,000.00.
(b) A multiple employer self-insured health plan shall be subject to and comply with the applicable regulatory action level risk-based capital requirements prescribed by Chapter 56 of this title.
(c) Every multiple employer self-insured health plan shall maintain a security deposit with the Commissioner. The amount of the deposit shall be $100,000.00 and shall be in the form of securities eligible for the investment of capital funds of domestic insurers. The deposit shall be administered in accordance with the provisions of Chapter 12 of this title.
(d) Every multiple employer self-insured health plan shall annually obtain an opinion from a qualified actuary as to the adequacy of its loss reserves. Such opinion shall be prepared and issued based on standards adopted from time to time by the Actuarial Standards Board and in accordance with instruction prescribed by the National Association of Insurance Commissioners.
(e) Every multiple employer self-insured health plan licensed pursuant to this chapter shall have an annual audit by an independent certified public accountant in accordance with Georgia Department of Insurance Regulation 120-2-60 and instructions prescribed by the National Association of Insurance Commissioners.
(f) Every multiple employer self-insured health plan shall file financial statements with the Commissioner in accordance with the provisions of Georgia Department of Insurance Regulation 120-2-18-.06.
(g)(1) Every multiple employer self-insured health plan shall obtain and thereafter maintain aggregate excess stop-loss coverage and individual excess stop-loss coverage.
(2) Excess stop-loss coverage required by this Code section shall be issued by an insurer licensed by the state.
(3) The retention limits for both the aggregate excess stop-loss coverage and individual excess stop-loss coverage shall be determined annually by a qualified actuary based on sound actuarial principles.
(4) Any stop-loss contract maintained pursuant to this Code section shall contain a provision that the stop-loss insurer shall give the multiple employer self-insured health plan and the Commissioner a minimum of 180 days' notice of cancellation or nonrenewal.
(5) If the multiple employer self-insured health plan fails to obtain replacement coverage within 90 days after receipt of the notice of cancellation or nonrenewal, the trustees of the plan shall provide for the orderly liquidation of the multiple employer self-insured health plan.
(h)(1) Each participating employer shall be jointly and severally liable for all legal obligations of the multiple employer self-insured health plans created on or after July 1, 2010.
(2) If the assets of the multiple employer self-insured health plan are at any time insufficient to enable the plan to discharge its legal liabilities and other obligations and to maintain the surplus required under this Code section, it shall forthwith make up the deficiency or levy an assessment upon its participating employers for the amount needed to make up the deficiency.
(3) If the multiple employer self-insured health plan fails to make up the deficiency or make the required assessment within 30 days after the Commissioner orders it to do so or if the deficiency is not fully made up within 60 days after the date on which any such assessment is made or within such longer period as may be specified by the Commissioner, the plan shall be deemed to be insolvent.
(4) If the liquidation of a multiple employer self-insured health plan is ordered, an assessment shall be levied upon its participating employers for such an amount as the Commissioner determines to be necessary to discharge all liabilities of the plan, including the reasonable costs of liquidation.
Funds collected from the participating employers under multiple employer self-insured health plans shall be held in trust subject to the following requirements:
(1) A board of trustees elected by participating employers shall serve as fund managers on behalf of participants. Trustees shall be plan participants or be an employee or owner of a participating employer or an employee of a sponsoring association. No participating employer shall be represented by more than one trustee. A minimum of three and a maximum of seven trustees may be elected. Trustees shall not receive remuneration but they may be reimbursed for actual and reasonable expenses incurred in connection with duties as trustee;
(2) Trustees shall be bonded in an amount not less than $150,000.00 from a licensed surety company or covered under a directors and officers liability policy issued to the multiple employer self-insured health plan;
(3) Investment of plan funds shall be subject to the same restrictions which are applicable to insurers as provided in Chapter 11 of this title; and
(4) A multiple employer self-insured health plan shall maintain a minimum loss ratio of at least 70 percent. Compliance with such minimum loss ratio standard shall be evaluated annually by a multiple employer self-insured health plan. Failure to comply with minimum loss ratio standards shall result in a premium refund to participating employers.
Every application for benefits and every benefit plan issued by a multiple employer self-insured health plan shall contain in contrasting color, in not less than ten-point type, the following statements:
(1) The plan is a self-insured plan, and benefits are not guaranteed by a licensed insurer;
(2) The plan is not covered by the Georgia Life and Health Guaranty Association;
(3) This is a fully assessable benefit plan. In the event that the multiple employer self-insured health plan is unable to pay its obligations, participating employers shall be required to contribute on a joint and several basis the funds necessary to meet any unpaid obligations; and
(4) Certain other major protections offered to Georgia residents under the Georgia Insurance Code and Rules and Regulations, such as conversion rights and certain mandated or required benefits, may not be available through the multiple employer self-insured plan.
Every multiple employer self-insured health plan shall be subject to examination in accordance with Chapter 2 of this title.
(a) A plan that desires to cease existence shall apply to the Commissioner for authority to dissolve. Applications to dissolve must be on forms prescribed by the Commissioner and must be approved or disapproved by the Commissioner within 60 days of receipt. Dissolution without authorization is prohibited and does not absolve a plan or its participants from fulfilling the plan's continuing obligations. An application to dissolve must be granted if either of the following conditions is met:
(1) The plan demonstrates that it has no outstanding liabilities, including incurred but not reported liabilities; or
(2) The plan has obtained an irrevocable commitment from a licensed insurer which provides for payment of all outstanding liabilities and for providing all related services, including payment of claims, preparation of reports, and administration of transactions associated with the period when the plan provided coverage.
(b) Upon dissolution, after payment of all outstanding liabilities and indebtedness, the assets of the plan must be distributed to all employers participating in the plan during the last five years immediately preceding dissolution. The distributive share of each employer must be in the proportion that all contributions made by the employer during such five-year period bear to the total contributions made by all participating employers during such five-year period.
The Commissioner may promulgate rules or regulations which are necessary to implement the provisions of this chapter and to ensure the safe and proper operation of multiple employer self-insured health plans in this state.
(a) If the Commissioner is of the opinion that a multiple employer self-insured health plan is in an unsound condition, that it has failed to comply with the law or any applicable rule or regulations or orders issued by the Commissioner, or that it is in a condition which renders its proceedings hazardous to the public or to persons covered under the plan, the Commissioner may, after a hearing, revoke or suspend the license of the plan or, in lieu thereof, impose a monetary penalty in accordance with Chapter 2 of this title.
(b) If the Commissioner is of the opinion that any of the grounds set forth in subsection (a) of this Code section exists, the Commissioner may commence delinquency proceedings against the plan and supervise, rehabilitate, or liquidate the plan in accordance with the procedures set forth in Chapter 37 of this title.
It is the intent of the General Assembly that a multiple employer self-insured health plan be created and maintained by and for the benefit of participating employers and operated under their exclusive management and control. This chapter is not intended to permit third-party administrators or other entrepreneurial promoters to establish a trust or plan and then proceed to solicit employers as participants. It is specifically intended that the impetus for the creation of the plan must come from the employers themselves, and the employers must at all times exercise absolute control over the management and conduct of the plan's business and affairs.
All multiple employer self-insured health plans who have member employees in this state shall make all filings necessary to comply with this chapter.
A multiple employer self-insured health plan which covers lives in other states may cover lives in this state only if the Commissioner deems the plan to be in compliance with the requirements of this chapter.
This chapter shall be known and may be cited as the “Georgia Affordable HSA Eligible High Deductible Health Plan.”
It is the intent of the General Assembly:
(1) To authorize the Commissioner to establish flexible guidelines for health savings account eligible high deductible plan designs which will be affordable to Georgians and to increase the availability of these types of plans by accident and sickness insurers licensed to transact such insurance in this state;
(2) To encourage the offering of affordable health savings account eligible high deductible plans, as required under the rules of the federal Internal Revenue Service related to the establishment of health savings accounts, with the specific intent of reaching many otherwise uninsured Georgians and the general intent of creating affordable comprehensive health insurance for all Georgians; and
(3) To enhance the affordability of insurance with the flexible health savings account eligible high deductible plans allowed under this chapter by allowing rewards and incentives for participation in and adherence to health behaviors that recognize the value of the personal responsibility of each citizen to maintain good health, seek preventive care services, and comply with approved treatments.
(a) The Commissioner shall develop flexible guidelines for coverage and approval of health savings account eligible high deductible plans which are designed to qualify under federal and state requirements as high deductible health plans for use with health savings accounts which comply with federal requirements under the applicable provisions of the federal Internal Revenue Code for high deductible health plans sold in connection with health savings accounts.
(b) The Commissioner shall be authorized to encourage and promote the marketing of health savings account eligible high deductible plans by accident and sickness insurers in this state; provided, however, that nothing in this Code section shall be construed to authorize the sale of insurance in violation of Chapter 3 of this title or interstate sales of insurance.
(c) The Commissioner shall be authorized to conduct a national study of health savings account eligible high deductible plans available in other states and to determine if and how these products serve the uninsured and if they should be made available to Georgians.
(d) The Commissioner shall be authorized to develop an automatic or fast track approval process for health savings account eligible high deductible plans already approved under the laws and regulations of this state or other states.
Insurers that include and operate wellness and health promotion programs, disease and condition management programs, health risk appraisal programs, and similar provisions in their high deductible health policies in keeping with federal requirements shall not be considered to be engaging in unfair trade practices under Code Section 33-6-4 with respect to references to the practices of illegal inducements, unfair discrimination, and rebating.
There shall be no required relationship between preferred provider and nonpreferred provider plan reimbursements for health savings account eligible high deductible plans using nonpreferred provider reimbursements. Such plans, however, shall not:
(1) Unfairly deny health benefits for medically necessary covered services;
(2) Have differences in benefit levels payable to preferred providers compared to other providers that unfairly deny benefits for covered services;
(3) Have a plan coinsurance percentage applicable to benefit levels for services provided by nonpreferred providers that is less than 60 percent of the benefit levels under the policy for such services; or
(4) Have an adverse effect on the availability or the quality of services.
Notwithstanding the provisions of paragraphs (2) and (3) of Code Section 33-51-5, health benefit plans providing incentives for covered persons to use pharmaceutical or dental services of preferred providers shall provide, and clearly indicate, that the payment or reimbursement for a noncontracting provider of covered pharmaceutical or dental services shall be the same as the payment or reimbursement for a preferred provider of covered pharmaceutical or dental services; provided, however, that the health benefit plan shall not be required to make payment or reimbursement in an amount which is greater than the actual fee charged by the provider for such dental or pharmaceutical services.
(a) The Commissioner shall be authorized to allow health reimbursement arrangement only plans that encourage employer financial support of health insurance or health related expenses recognized under the rules of the federal Internal Revenue Service to be approved for sale in connection with or packaged with individual health insurance policies otherwise approved by the Commissioner.
(b) Health reimbursement arrangement only plans that are not sold in connection with or packaged with individual health insurance policies shall not be considered insurance under this title.
(c) Individual insurance policies offered or funded through health reimbursement arrangements shall not be considered employer sponsored or group coverage for purposes of this title, and nothing in this Code section shall be interpreted to require an insurer to offer an individual health insurance policy for sale in connection with or packaged with a health reimbursement arrangement or to accept premiums from health reimbursement arrangement plans for individual health insurance policies.
(a) This chapter shall apply to any insurer authorized or doing business in this state which transfers or assumes the obligations or risks on contracts of insurance written or assumed in this state to or from another insurer pursuant to an assumption reinsurance agreement.
(b) This chapter shall not apply to:
(1) Any reinsurance agreement or transaction in which the ceding insurer continues to remain directly liable for its insurance obligations or risks under the contracts of insurance subject to the reinsurance agreement;
(2) The substitution of one insurer for another upon expiration of insurance coverage pursuant to statutory or contractual requirements and the issuance of a new contract of insurance by another insurer;
(3) The transfer of contracts of insurance pursuant to mergers or consolidations of two or more insurers to the extent that those transactions are regulated by statute;
(4) Any insurer subject to a judicial order of liquidation or rehabilitation; or
(5) Any contract controlled by a state guaranty association or a state insolvency pool.
As used in this chapter:
(1) “Assuming insurer” means the insurer which acquires an insurance obligation or risk from the transferring insurer pursuant to an assumption reinsurance agreement.
(2) “Assumption reinsurance agreement” means any contract which both:
(A) Transfers insurance obligations or risks of existing or in-force contracts of insurance from a transferring insurer to an assuming insurer; and
(B) Is intended to effect a novation of the transferred contract of insurance with the result that the assuming insurer becomes directly liable to the policyholders of the transferring insurer and the transferring insurer's insurance obligations or risks under such contracts are extinguished.
(3) “Contract of insurance” means any written agreement between an insurer and policyholder pursuant to which the insurer, in exchange for a premium or other consideration, agrees to assume an obligation or risk of the policyholder or to make payments on behalf of or to the policyholder or its beneficiaries; it shall include all property, casualty, life, health, accident, accident and sickness, surety, title, and annuity business authorized to be written pursuant to the provisions of this title.
(4) “Notice of transfer” means the written notice to policyholders required by subsection (a) of Code Section 33-52-3.
(5) “Policyholder” means any individual or entity which has the right to terminate or otherwise alter the terms of a contract of insurance. It includes any person issued a group certificate under a group insurance contract if the certificate vests in such person, separate from the rights of the group contract holder, rights against the insurer that the group contract holder may not terminate. The right to keep the policy in force referred to in this chapter shall not include the right to elect individual coverage under the federal consolidated Omnibus Budget Reconciliation Act (COBRA) Section 601, et seq., of the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. Section 1161, et seq., or under continuation and conversion provisions found in Chapter 24 of this title.
(6) “Transferring or ceding insurer” means the insurer which transfers or cedes an insurance obligation or risk to an assuming insurer pursuant to an assumption reinsurance agreement.
(a)(1) The transferring insurer shall provide or cause to be provided to each policyholder by first-class mail, addressed to the policyholder's last known address or to the address to which premium notices or other policy documents are sent, a notice of transfer; provided, however, that, upon application by the transferring insurer, the Commissioner may approve an alternative method of notification. The notice of transfer shall state or provide the following:
(A) A detailed statement explaining the reason or reasons for the transfer;
(B) The date the transfer and novation of the policyholder's contract of insurance is proposed to take place;
(C) The names, addresses, and telephone numbers of the assuming and transferring insurers;
(D) That the policyholder may reject the transfer and novation;
(E) The procedure and time limit for rejecting the transfer and novation;
(F) A summary of any effect that rejecting the transfer and novation will have on the policyholder's rights including, for participating policyholders, dividend payments or payments under the contract of insurance;
(G) The states in which the assuming insurer is licensed;
(H) The name and address of the person at the transferring insurer to whom the policyholder should send its written statement of rejection of the transfer and novation; and
(I) The address of the insurance department where the policyholder resides so that the policyholder may contact its insurance department for further information regarding the financial condition of the assuming insurer.
(2) The Commissioner may prescribe the form of the notice to be delivered to policyholders.
(3) The notice of transfer shall include a pre-addressed postage-paid response card which a policyholder may return as its written statement of rejection of the transfer and novation.
(b) Prior approval by the Commissioner is required for any transaction before an insurer assumes or transfers obligations or risks on contracts of insurance in this state under an assumption reinsurance agreement.
(a) Every policyholder shall have the right to reject the transfer and novation of his or her contract of insurance. Policyholders electing to reject the assumption transaction shall provide the transferring insurer with the pre-addressed, postage-paid response card or other written notice that the assumption is rejected no later than 60 days after the date on which the transferring insurer mails the notice required under subsection (a) of Code Section 33-52-3. If the ceding insurer does not receive written rejection within the 60 day period, it shall send a second notice in accordance with subsection (a) of Code Section 33-52-3. If the ceding insurer does not receive a rejection within 30 days after the date of mailing, the policyholder shall be deemed to have accepted the transfer.
(b) The transferring insurer will be deemed to have received the response card or other written notice on the date it is postmarked. A policyholder may also send its response card or other written notice by facsimile or other electronic transmission or by certified mail or statutory overnight delivery, express delivery, personal delivery, or courier service, in which case the response card or other written notice shall be deemed to have been received by the assuming insurer on the date of actual receipt by the transferring insurer.
(c) If the transferring company is deemed by the Commissioner to be in hazardous condition or is under a supervision order, rehabilitation, liquidation, conservation, or receivership and the transfer of policies is in the best interest of the policyholders as determined by the Commissioner, a transfer may be effected notwithstanding the provisions of this chapter. This may include adequate notification to the policyholder of the circumstances requiring the transfer as approved by the Commissioner.
If a transfer takes place pursuant to Code Section 33-52-4, there shall be a novation of the contract of insurance subject to the assumption reinsurance agreement with the result that the transferring insurer shall thereby be relieved of all insurance obligations or risks transferred under the assumption reinsurance agreement and the assuming insurer shall become directly and solely liable to the policyholder for those insurance obligations or risks.
(a) The Commissioner shall approve or disapprove the entire assumption reinsurance transaction. The following items shall be submitted to the Commissioner:
(1) A detailed statement explaining the reason or reasons for the transfer;
(2) The assumption reinsurance agreement;
(3) The certificate of assumption;
(4) If either the ceding company or the assuming company is not domiciled in Georgia, copies of the approvals of the entire transaction by the insurance supervisory officials of the states of domicile of the ceding and assuming insurers; and
(5) A statement as to what provision has been made for servicing those policyholders who have rejected the transfer. However, the Commissioner may permit 100 percent reinsurance without novation of these risks with the servicing of those policyholders to be done by the assuming company or may order the transfer and novation of all of the contracts of insurance under the assumption reinsurance agreement.
(b) When seeking the Commissioner's approval of an assumption of a participating business by a stock or mutual company, the applicant should address the disposition of the accumulated surplus connected with the block of business and the level of future dividends.
(c) If protection under the Georgia Insurers Insolvency Pool, the Georgia Life and Health Insurance Guaranty Association, or a similar state guaranty association or insolvency pool will be lost or reduced, the Commissioner shall not approve the assumption of any policy unless the transfer of policies is in the best interest of the policyholders.
As used in this chapter:
(1) “Drug” means a drug or biologic that is used in an antineoplastic regimen.
(2) “Insurance policy” means an individual accident and sickness policy of insurance issued pursuant to Chapter 29 of this title or a group accident and sickness insurance policy issued pursuant to Chapter 30 of this title.
(3) “Standard reference compendium” means any of the following:
(A) The United States Pharmacopeia Drug Information;
(B) The American Medical Association Drug Evaluations;
(C) The American Hospital Formulary Service Drug Information.
An insurance policy that provides coverage for drugs may not exclude coverage of a covered drug on the grounds that the drug has not been approved by the federal Food and Drug Administration for the particular indication if any of the following conditions are met:
(1) The drug is recognized for treatment of the indication in at least one standard reference compendium;
(2) The drug is recommended for that particular type of cancer and found to be safe and effective in formal clinical studies, the results of which have been published in a peer reviewed professional medical journal published in either the United States or Great Britain.
This chapter shall not be deemed to do any of the following:
(1) Require coverage for any drug when the federal Food and Drug Administration has determined the drug's use to be contraindicated;
(2) Require coverage for an experimental drug not approved for any indication by the federal Food and Drug Administration;
(3) Alter any other law limiting the coverage of drugs that have not been approved by the federal Food and Drug Administration.
The General Assembly finds and determines that recent advances in genetic science have led to improvements in the diagnosis, treatment, and understanding of a significant number of human diseases. The General Assembly further finds and declares that:
(1) Genetic information is the unique property of the individual tested;
(2) The use and availability of information concerning an individual obtained through the use of genetic testing techniques may be subject to abuses if disclosed to unauthorized third parties without the willing consent of the individual tested;
(3) To protect individual privacy and to preserve individual autonomy with regard to an individual's genetic information, it is appropriate to limit the use and availability of genetic information; and
(4) The intent of this chapter is to prevent accident and sickness insurance companies, health maintenance organizations, managed care organizations, and other payors from using information derived from genetic testing to deny access to accident and sickness insurance.
As used in this chapter, the term:
(1) “Genetic testing” means laboratory tests of human DNA or chromosomes for the purpose of identifying the presence or absence of inherited alterations in genetic material or genes which are associated with a disease or illness that is asymptomatic at the time of testing and that arises solely as a result of such abnormality in genes or genetic material. For purposes of this chapter, genetic testing shall not include routine physical measurements; chemical, blood, and urine analysis; tests for abuse of drugs; and tests for the presence of the human immunodeficiency virus.
(2) “Insurer” means an insurer, a fraternal benefit society, a health care corporation, a health maintenance corporation, or a self-insured health plan not subject to the exclusive jurisdiction of the Employee Retirement Income Security Act of 1974, 29 U.S.C. Section 1001, et seq.
(a) Except as otherwise provided in this chapter, genetic testing may only be conducted to obtain information for therapeutic or diagnostic purposes. Genetic testing may not be conducted without the prior written consent of the person to be tested.
(b) Information derived from genetic testing shall be confidential and privileged and may be released only to the individual tested and to persons specifically authorized by such individual to receive the information. Any insurer that possesses information derived from genetic testing may not release the information to any third party without the explicit written consent of the individual tested. Information derived from genetic testing may not be sought by any insurer as defined in Code Section 33-54-2.
Any insurer that receives information derived from genetic testing may not use the information for any nontherapeutic purpose.
Notwithstanding the provisions of Code Sections 33-54-3 and 33-54-4, information derived from genetic testing regarding the identity of any individual who is the subject of a criminal investigation or a criminal prosecution may be disclosed to appropriate legal authorities conducting the investigation or prosecution. The information may be used during the course of the investigation or prosecution with respect to the individual tested without the consent of such individual.
Notwithstanding the provisions of Code Sections 33-54-3 and 33-54-4, any research facility may conduct genetic testing and may use the information derived from genetic testing for scientific research purposes so long as the identity of any individual tested is not disclosed to any third party, except that the individual's identity may be disclosed to the individual's physician with the consent of the individual.
This chapter shall not apply to a life insurance policy, disability income policy, accidental death or dismemberment policy, medicare supplement policy, long-term care insurance policy, credit insurance policy, specified disease policy, hospital indemnity policy, blanket accident and sickness policy, franchise policy issued on an individual basis to members of an association, limited accident policy, health insurance policy written as a part of workers' compensation equivalent coverage, or other similar limited accident and sickness policy.
(a) Any violation of this chapter by an insurer shall be unfair trade practice subject to the provisions of Article 1 of Chapter 6 of this title, and a violation of this chapter by any other person shall be an unfair practice and shall be subject to the provisions of Part 2 of Article 15 of Chapter 1 of Title 10, the “Fair Business Practices Act of 1975.” In addition, any individual who is harmed as a result of a violation of this chapter shall have a cause of action against the person whose violation caused the harm.
(b) Any insurer that is found in violation of the provisions of this chapter by a court of competent jurisdiction is liable to the individual injured by the violation in an amount equal to any actual damages suffered by the individual. In the alternative, the court may issue an order directing the insurer to provide accident and sickness insurance to the injured individual under the same terms and conditions as would have applied had the violation not occurred.
(c) The court shall award costs and reasonable attorney's fees to any individual who is successful in enforcing the provision of this chapter.
(a) Every insurer domiciled in this state shall file a report with the Commissioner disclosing material acquisitions and dispositions of assets or material nonrenewals, cancellations, or revisions of ceded reinsurance agreements unless such acquisitions and dispositions of assets or material nonrenewals, cancellations, or revisions of ceded reinsurance agreements have been submitted to the Commissioner for review, approval, or information purposes pursuant to other provisions of this title, regulations, or other requirements.
(b)(1) The report required in subsection (a) of this Code section is due within 15 days after the end of the calendar month in which any of the covered transactions occur.
(2) One complete copy of the report, including any exhibits or other attachments filed as part thereof, shall be filed with:
(A) The Commissioner; and
(B) The National Association of Insurance Commissioners.
(c) All reports obtained by or disclosed to the Commissioner pursuant to this Code section shall be given confidential treatment, shall not be subject to subpoena, and shall not be made public by the Commissioner, the National Association of Insurance Commissioners, or any other person, except to insurance departments of other states, without the prior written consent of the insurer to which it pertains unless the Commissioner, after giving the insurer who would be affected thereby notice and an opportunity to be heard, determines that the interest of policyholders, shareholders, or the public will be served by the publication thereof, in which event the Commissioner may publish all or any part thereof in such manner as he or she may deem appropriate.
(a) No acquisitions or dispositions of assets need be reported pursuant to Code Section 33-55-1 if the acquisitions or dispositions are not material. For purposes of this chapter, a material acquisition or disposition or the aggregate of any series of related acquisitions or related dispositions during any 30 day period is one that is nonrecurring and not in the ordinary course of business and involves more than 5 percent of the reporting insurer's total admitted assets as reported in its most recent statutory statement filed with the insurance department of the insurer's state of domicile.
(b)(1) Asset acquisitions subject to this chapter include every purchase, lease, exchange, merger, consolidation, succession, or other acquisition other than the construction or development of real property by or for the reporting insurer or the acquisition of materials for such purpose.
(2) Asset dispositions subject to this chapter include every sale, lease, exchange, merger, consolidation, mortgage, hypothecation, assignment for the benefit of creditors or otherwise, abandonment, destruction, or other disposition.
(c)(1) The following information is required to be disclosed in any report of a material acquisition or disposition of assets:
(A) Date of the transaction;
(B) Manner of acquisition or disposition;
(C) Description of the assets involved;
(D) Nature and amount of the consideration given or received;
(E) Purpose of or reason for the transaction;
(F) Manner by which the amount of consideration was determined;
(G) Gain or loss recognized or realized as a result of the transaction; and
(H) Name or names of the person or persons from whom the assets were acquired or to whom they were disposed.
(2) Insurers are required to report material acquisitions and dispositions on a nonconsolidated basis unless the insurer is part of a consolidated group of insurers which utilizes a pooling arrangement or 100 percent reinsurance agreement that affects the solvency and integrity of the insurer's reserves and such insurer ceded substantially all of its direct and assumed business to the pool. An insurer is deemed to have ceded substantially all of its direct and assumed business to a pool if the insurer has less than $1 million total direct premiums plus assumed written premiums during a calendar year that are not subject to a pooling arrangement and the net income of the business not subject to the pooling arrangement represents less than 5 percent of the insurer's capital and surplus.
(a) Nonrenewals, cancellations, or revisions of ceded reinsurance agreements shall not be required to be reported pursuant to Code Section 33-55-1 if the nonrenewals, cancellations, or revisions are not material. For purposes of this chapter, a material nonrenewal, cancellation, or revision is one that affects:
(1) With respect to property and casualty business, including accident and health business written by a property and casualty insurer:
(A) More than 50 percent of the insurer's total ceded written premium; or
(B) More than 50 percent of the insurer's total ceded indemnity and loss adjustment reserves;
(2) With respect to life, annuity, and accident and sickness business, more than 50 percent of the total reserve credit taken for business ceded on an annualized basis, as indicated in the insurer's most recent annual statement; or
(3) With respect to either property and casualty or life, annuity, and accident and sickness business, either of the following events shall constitute a material revision which must be reported:
(A) An authorized reinsurer representing more than 10 percent of a total cession is replaced by one or more unauthorized reinsurers; or
(B) Previously established collateral requirements have been reduced or waived as respects one or more unauthorized reinsurers representing collectively more than 10 percent of a total cession.
(b) Notwithstanding the provisions of subsection (a) of this Code section, no filing shall be required if:
(1) With respect to property and casualty business, including accident and sickness business written by a property and casualty insurer, the insurer's total written premium represents, on an annualized basis, less than 10 percent of its total written premium for direct and assumed business; or
(2) With respect to life, annuity, and accident and sickness business, the total reserve credit taken for business ceded represents, on an annualized basis, less than 10 percent of the statutory reserve requirement prior to any cession.
(c)(1) The following information is required to be disclosed in any report of a material nonrenewal, cancellation, or revision of ceded reinsurance agreements:
(A) The effective date of the nonrenewal, cancellation, or revision;
(B) The description of the transaction with an identification of the initiator thereof;
(C) The purpose of or reason for the transaction; and
(D) The identity of the replacement reinsurers, if applicable.
(2) Insurers are required to report all material nonrenewals, cancellations, or revisions of ceded reinsurance agreements on a nonconsolidated basis unless the insurer is part of a consolidated group of insurers which utilizes a pooling arrangement or 100 percent reinsurance agreement that affects the solvency and integrity of the insurer's reserves and the insurer ceded substantially all of its direct and assumed business to the pool. An insurer is deemed to have ceded substantially all of its direct and assumed business to a pool if the insurer has less than $1 million total direct premiums plus assumed written premiums during a calendar year that are not subject to a pooling arrangement and the net income of the business not subject to the pooling arrangement represents less than 5 percent of the insurer's capital and surplus.
As used in this chapter, the term:
(1) “Adjusted RBC report” means an RBC report which has been adjusted in accordance with subsection (e) of Code Section 33-56-2.
(2) “Corrective order” means an order issued by the Commissioner specifying corrective actions which the Commissioner has determined are required.
(3) “Domestic insurer” means an insurer as defined in paragraph (4) of Code Section 33-3-1.
(4) “Foreign insurer” means any insurance company which is licensed to do business in this state under Chapter 3 of this title, but is not a domestic insurer.
(4.1) “Health organization” means any health maintenance organization; limited health service organization; hospital, medical, or dental indemnity or service corporation; or other managed care organization licensed under this title; provided, however, that health organization does not include any life and health insurer or property and casualty insurer.
(4.2) “Insurer” includes without limitation any health organization.
(5) “Life and health insurer” means any insurance company licensed to write insurance as defined in Code Section 33-7-2 or 33-7-4 or a licensed property and casualty insurer writing only accident and health insurance.
(6) “NAIC” means the National Association of Insurance Commissioners.
(7) “Negative trend” means, with respect to a life and health insurer, a negative trend over a period of time, as determined in accordance with the trend test calculation included in the life RBC instructions.
(8) “Property and casualty insurer” means any insurance company licensed to write insurance as defined in Code Section 33-7-3 or 33-7-6 but shall not include monoline mortgage guaranty insurers, financial guaranty insurers, and title insurers.
(9) “RBC” means risk-based capital.
(10) “RBC instructions” means the RBC report including risk-based capital instructions adopted by the NAIC, as such RBC instructions may be amended by the NAIC from time to time in accordance with the procedures adopted by the NAIC.
(11) “RBC level” means an insurer's company action level RBC, regulatory action level RBC, authorized control level RBC, or mandatory control level RBC where:
(A) “Authorized control level RBC” means the number determined under the risk-based capital formula in accordance with the RBC instructions;
(B) “Company action level RBC” means, with respect to any insurer, the product of 2.0 and its authorized control level RBC;
(C) “Mandatory control level RBC” means the product of .70 and the authorized control level RBC; and
(D) “Regulatory action level RBC” means the product of 1.5 and its authorized control level RBC.
(12) “RBC plan” means a comprehensive financial plan containing the elements specified in subsection (b) of Code Section 33-56-3. If the Commissioner rejects the RBC plan and it is revised by the insurer, with or without the Commissioner's recommendation, the plan shall be called the revised RBC plan.
(13) “RBC report” means the report required in Code Section 33-56-2.
(14) “Total adjusted capital” means the sum of:
(A) An insurer's statutory capital and surplus, which in the case of a health organization shall be determined in accordance with the statutory accounting applicable to the annual financial statements required to be filed; and
(B) Such other items, if any, as the RBC instructions may provide.
(a) Every domestic insurer shall, on or prior to each March 1, prepare and submit to the Commissioner a report of its RBC levels, as of the end of the previous calendar year, containing such information as is required by the RBC instructions. In addition, every domestic insurer shall file its RBC report:
(1) With the NAIC in accordance with the RBC instructions; and
(2) With the insurance commissioner in any state in which the insurer is authorized to do business, if the insurance commissioner has notified the insurer of its request in writing, in which case the insurer shall file its RBC report not later than the later of:
(A) Fifteen days from the receipt of notice to file its RBC report with that state; or
(B) March 1.
(b) A life and health insurer's RBC shall be determined in accordance with the formula set forth in the RBC instructions. The formula shall take into account and may adjust for the covariance between:
(1) The risk with respect to the insurer's assets;
(2) The risk of adverse insurance experience with respect to the insurer's liabilities and obligations;
(3) The interest rate risk with respect to the insurer's business; and
(4) All other business risks and such other relevant risks as are set forth in the RBC instructions,
determined in each case by applying the factors in the manner set forth in the RBC instructions.
(c) A property and casualty insurer's or health organization's RBC shall be determined in accordance with the formula set forth in the RBC instructions. The formula shall take into account and may adjust for the covariance between:
(1) Asset risk;
(2) Credit risk;
(3) Underwriting risk; and
(4) All other business risks and such other relevant risks as are set forth in the RBC instructions,
determined in each case by applying the factors in the manner set forth in the RBC instructions.
(d) An excess of capital over the amount produced by the risk-based capital requirements contained in the chapter and the formulas, schedules, and instructions referenced in this chapter is desirable in the business of insurance. Accordingly, insurers should seek to maintain capital above the RBC levels required by this chapter. Additional capital is useful in the insurance business and helps to secure an insurer against various risks inherent in or affecting the business of insurance and is not accounted for or only partially measured by the risk-based capital requirements contained in this chapter.
(e) If a domestic insurer files an RBC report which in the judgment of the Commissioner is inaccurate, then the Commissioner shall adjust the RBC report and notify the insurer of the inaccuracy. The notice shall contain a statement of the reason for the inaccuracy. The insurer must, within 30 days, correct the inaccuracy or request a hearing. If the insurer fails to correct the inaccuracy or to request a hearing, the Commissioner may order a hearing to determine the corrections that are necessary. An RBC report adjusted in accordance with this subsection is referred to as an adjusted RBC report.
(a) As used in this Code section, “company action level event” means any of the following events:
(1) The filing of an RBC report by an insurer which indicates that:
(A) The insurer's total adjusted capital is greater than or equal to its regulatory action level RBC but less than its company action level RBC;
(B) If a life and health insurer, the insurer has total adjusted capital which is greater than or equal to its company action level RBC but less than the product of its authorized control level RBC and 3.0 and has a negative trend;
(C) If a property and casualty insurer, the insurer has total adjusted capital which is greater than or equal to its company action level RBC but less than the product of its authorized control level RBC and 3.0 and triggers the trend test determined in accordance with the trend test calculation included in the property and casualty RBC instructions; or
(D) If a health organization has total adjusted capital which is greater than or equal to its company action level RBC but less than the product of its authorized control level RBC and 3.0 and triggers the trend test determined in accordance with the trend test calculation included in the health RBC instructions;
(2) The notification by the Commissioner to the insurer of an adjusted RBC report that indicates an event in paragraph (1) of this subsection, provided the insurer does not challenge the adjusted RBC report under Code Section 33-56-7; or
(3) If, pursuant to Code Section 33-56-7, an insurer challenges an adjusted RBC report that indicates the event in paragraph (1) of this subsection, the notification by the Commissioner to the insurer that the Commissioner has, after a hearing, rejected the insurer's challenge.
(b) In the event of a company action level event, the insurer shall prepare and submit to the Commissioner an RBC plan which shall:
(1) Identify the conditions which contribute to the company action level event;
(2) Contain proposals of corrective actions which the insurer intends to take and would be expected to result in the elimination of the company action level event;
(3)(A) Provide projections of the insurer's financial results in the current year and at least the four succeeding years, both in the absence of proposed corrective actions and giving effect to the proposed corrective actions, including projections of statutory operating income, net income, capital and surplus, or surplus, except as otherwise provided by subparagraph (B) of this paragraph.
(B) In the case of a health organization, provide projections of the health organization's financial results in the current year and at least the two succeeding years, both in the absence of proposed corrective actions and giving effect to the proposed corrective actions, including projections of statutory balance sheet, operating income, net income, capital and surplus, and RBC levels. The projections for both new and renewal business may include separate projections for each major line of business and separately identify each significant income, expense, and benefit component;
(4) Identify the key assumptions impacting the insurer's projections and the sensitivity of the projections to the assumptions; and
(5) Identify the quality of, and problems associated with, the insurer's business, including but not limited to its assets, anticipated business growth and associated surplus strain, extraordinary exposure to risk, mix of business, and use of reinsurance, if any, in each case.
(c) An RBC plan shall be submitted:
(1) Within 45 days of the company action level event; or
(2) If the insurer challenges an adjusted RBC report pursuant to Code Section 33-56-7, within 45 days after notification to the insurer that the Commissioner has, after a hearing, rejected the insurer's challenge.
(d) Within 60 days after the submission by an insurer of an RBC plan to the Commissioner, the Commissioner shall notify the insurer whether the RBC plan shall be implemented or is, in the judgment of the Commissioner, unsatisfactory. If the Commissioner determines the RBC plan is unsatisfactory, the notification to the insurer shall set forth the reasons for the determination and may set forth proposed revisions which will render the RBC plan satisfactory in the judgment of the Commissioner. Upon notification from the Commissioner, the insurer shall prepare a revised RBC plan, which may incorporate by reference any revisions proposed by the Commissioner, and shall submit the revised RBC plan to the Commissioner:
(1) Within 45 days after the notification from the Commissioner; or
(2) If the insurer challenges the notification from the Commissioner under Code Section 33-56-7, within 45 days after a notification to the insurer that the Commissioner has, after a hearing, rejected the insurer's challenge.
(e) In the event of a notification by the Commissioner to an insurer that the insurer's RBC plan or revised RBC plan is unsatisfactory, the Commissioner may at the Commissioner's discretion, subject to the insurer's right to a hearing under Code Section 33-56-7, specify in the notification that the notification constitutes a regulatory action level event.
(f) Every domestic insurer which files an RBC plan or revised RBC plan with the Commissioner shall file a copy of the RBC plan or revised RBC plan with the insurance commissioner in any state in which the insurer is authorized to do business if:
(1) Such state has an RBC provision substantially similar to subsection (a) of Code Section 33-56-8; and
(2) The insurance commissioner of that state has notified the insurer of its request for the filing in writing, in which case the insurer shall file a copy of the RBC plan or revised RBC plan in that state no later than the later of:
(A) Fifteen days after the receipt of notice to file a copy of its RBC plan or revised RBC plan with the state; or
(B) The date on which the RBC plan or revised RBC plan is filed under subsection (c) or (d) of this Code section.
(a) For the purposes of this Code section, “regulatory action level event” means, with respect to any insurer, any of the following events:
(1) The filing of an RBC report by the insurer which indicates that the insurer's total adjusted capital is greater than or equal to its authorized control level RBC but less than its regulatory action level RBC;
(2) The notification by the Commissioner to an insurer of an adjusted RBC report that indicates the event in paragraph (1) of this subsection, provided the insurer does not challenge the adjusted RBC report under Code Section 33-56-7;
(3) If, pursuant to Code Section 33-56-7, the insurer challenges an adjusted RBC report that indicates the event in paragraph (1) of this subsection, the notification by the Commissioner to the insurer that the Commissioner has, after a hearing, rejected the insurer's challenge;
(4) The failure of the insurer to file an RBC report by the filing date, unless the insurer has provided an explanation for such failure which is satisfactory to the Commissioner and has corrected the failure within ten days after the filing date;
(5) The failure of the insurer to submit an RBC plan to the Commissioner within the time period set forth in subsection (c) of Code Section 33-56-3;
(6) Notification by the Commissioner to the insurer that:
(A) The RBC plan or revised RBC plan submitted by the insurer is, in the judgment of the Commissioner, unsatisfactory; and
(B) Such notification constitutes a regulatory action level event with respect to the insurer, provided the insurer has not challenged the determination under Code Section 33-56-7;
(7) If, pursuant to Code Section 33-56-7, the insurer challenges a determination by the Commissioner under paragraph (6) of this subsection, the notification by the Commissioner to the insurer that the Commissioner has, after a hearing, rejected such challenge;
(8) Notification by the Commissioner to the insurer that the insurer has failed to adhere to its RBC plan or revised RBC plan, but only if such failure has a substantial adverse effect on the ability of the insurer to eliminate the company action level event in accordance with its RBC plan or revised RBC plan and the Commissioner has so stated in the notification, provided the insurer has not challenged the determination under Code Section 33-56-7; or
(9) If, pursuant to Code Section 33-56-7, the insurer challenges a determination by the Commissioner under paragraph (8) of this subsection, the notification by the Commissioner to the insurer that the Commissioner has, after a hearing, rejected the challenge.
(b) In the event of a regulatory action level event, the Commissioner shall:
(1) Require the insurer to prepare and submit an RBC plan or, if applicable, a revised RBC plan;
(2) Perform such examination or analysis as the Commissioner deems necessary of the assets, liabilities, and operations of the insurer including a review of its RBC plan or revised RBC plan; and
(3) Subsequent to the examination or analysis described in paragraph (2) of this subsection, issue an order specifying such corrective actions as the Commissioner shall determine are required.
(c) In determining corrective actions, the Commissioner may take into account such factors as are deemed relevant with respect to the insurer based upon the Commissioner's examination or analysis of the assets, liabilities, and operations of the insurer, including, but not limited to, the results of any sensitivity tests undertaken pursuant to the RBC instructions. The RBC plan or revised RBC plan shall be submitted:
(1) Within 45 days after the occurrence of the regulatory action level event;
(2) If the insurer challenges an adjusted RBC report pursuant to Code Section 33-56-7 and the challenge is not frivolous in the judgment of the Commissioner within 45 days after the notification to the insurer that the Commissioner has, after a hearing, rejected the insurer's challenge; or
(3) If the insurer challenges a revised RBC plan pursuant to Code Section 33-56-7 and the challenge is not frivolous in the judgment of the Commissioner, within 45 days after the notification to the insurer that the Commissioner has, after a hearing, rejected the insurer's challenge.
(d) The Commissioner may retain actuaries and investment experts and other consultants as may be necessary in the judgment of the Commissioner to review a health organization's RBC plan or revised RBC plan, examine or analyze the assets, liabilities, and operations, including contractual relationships, of the health organization, and formulate the corrective order with respect to the health organization. The fees, costs, and expenses relating to consultants shall be borne by the affected health organization or such other party as directed by the Commissioner.
(a) For the purposes of this Code section, “authorized control level event” means any of the following events:
(1) The filing of an RBC report by the insurer which indicates that the insurer's total adjusted capital is greater than or equal to its mandatory control level RBC but less than its authorized control level RBC;
(2) The notification by the Commissioner to the insurer of an adjusted RBC report that indicates the event in paragraph (1) of this subsection, provided the insurer does not challenge the adjusted RBC report under Code Section 33-56-7;
(3) If, pursuant to Code Section 33-56-7, the insurer challenges an adjusted RBC report that indicates the event in paragraph (1) of this subsection, notification by the Commissioner to the insurer that the Commissioner has, after a hearing, rejected the insurer's challenge;
(4) The failure of the insurer to respond, in a manner satisfactory to the Commissioner, to a corrective order; or
(5) If the insurer has challenged a corrective order under Code Section 33-56-7 and the Commissioner has, after a hearing, rejected the challenge or modified the corrective order, the failure of the insurer to respond, in a manner satisfactory to the Commissioner, to the corrective order subsequent to rejection or modification by the Commissioner.
(b) In the event of an authorized control level event with respect to an insurer, the Commissioner shall:
(1) Take such actions as are required under Code Section 33-56-4 regarding an insurer with respect to which a regulatory action level event has occurred; or
(2) If the Commissioner deems it to be in the best interests of the policy holders and creditors of the insurer and of the public, take such actions as are necessary to cause the insurer to be placed under regulatory control under Chapter 37 of this title.
In the event the Commissioner takes such actions, the authorized control level event shall be deemed sufficient grounds for the Commissioner to take action under Chapter 37 of this title, and the Commissioner shall have the rights, powers, and duties with respect to the insurer as are set forth in Chapter 37 of this title. In the event the Commissioner takes actions under this paragraph pursuant to an adjusted RBC report, the insurer shall be entitled to such protections as are afforded to insurers under the provisions of Chapter 2 of this title pertaining to summary proceedings.
(a) For purposes of this Code section, “mandatory control level event” means any of the following events:
(1) The filing of an RBC report which indicates that the insurer's total adjusted capital is less than its mandatory control level RBC;
(2) Notification by the Commissioner to the insurer of an adjusted RBC report that indicates the event in paragraph (1) of this subsection, provided that the insurer does not challenge the adjusted RBC report under Code Section 33-56-7; or
(3) If, pursuant to Code Section 33-56-7, the insurer challenges an adjusted RBC report that indicates the event in paragraph (1) of this subsection, notification by the Commissioner to the insurer that the Commissioner has, after a hearing, rejected the insurer's challenge.
(b) In the event of a mandatory control level event:
(1) With respect to a life insurer or health organization, the Commissioner shall take such actions as are necessary to place the insurer under regulatory control under Chapter 37 of this title. In that event, the mandatory control level event shall be deemed sufficient grounds for the Commissioner to take action under Chapter 37 of this title, and the Commissioner shall have the rights, powers, and duties with respect to the insurer as are set forth in Chapter 37 of this title. If the Commissioner takes actions pursuant to an adjusted RBC report, the insurer shall be entitled to the protections of Chapter 2 of this title pertaining to summary proceedings. Notwithstanding any of the foregoing, the Commissioner may forgo action for up to 90 days after the mandatory control level event if the Commissioner finds there is a reasonable expectation that the mandatory control level event may be eliminated within the 90 day period.
(2) With respect to a property and casualty insurer, the Commissioner shall take such actions as are necessary to place the insurer under regulatory control under Chapter 37 of this title, or in the case of an insurer which is writing no business and which is running-off its existing business may allow the insurer to continue its run-off under the supervision of the Commissioner. In either event, the mandatory control level event shall be deemed sufficient grounds for the Commissioner to take action under Chapter 37 of this title and the Commissioner shall have the rights, powers, and duties with respect to the insurer as are set forth in Chapter 37 of this title. If the Commissioner takes actions pursuant to an adjusted RBC report, the insurer shall be entitled to the protections of Chapter 2 of this title pertaining to summary proceedings. Notwithstanding any of the foregoing, the Commissioner may forgo action for up to 90 days after the mandatory control level event if the Commissioner finds there is a reasonable expectation that the mandatory control level event may be eliminated within the 90 day period.
Upon notification:
(1) To an insurer by the Commissioner of an adjusted RBC report;
(2) To an insurer by the Commissioner that:
(A) The insurer's RBC plan or revised RBC plan is unsatisfactory; and
(B) Such notification constitutes a regulatory action level event with respect to such insurer;
(3) To any insurer by the Commissioner that the insurer has failed to adhere to its RBC plan or revised RBC plan and that such failure has a substantial adverse effect on the ability of the insurer to eliminate the company action level event with respect to the insurer in accordance with its RBC plan or revised RBC plan; or
(4) To an insurer by the Commissioner of a corrective order with respect to the insurer,
the insurer shall have the right to a departmental hearing, on a record, at which the insurer may challenge any determination or action by the Commissioner. The insurer shall notify the Commissioner of its request for a hearing within five days after the notification by the Commissioner under this Code section. Upon receipt of the insurer's request for a hearing, the Commissioner shall set a date for the hearing, which date shall be no less than ten nor more than 30 days after the date of the insurer's request.
(a) Notwithstanding the provisions of Article 4 of Chapter 18 of Title 50, all RBC reports, to the extent the information therein is not required to be set forth in a publicly available annual statement schedule, and RBC plans, including the results or report of any examination or analysis of an insurer performed pursuant hereto, and any corrective order issued by the Commissioner pursuant to examination or analysis, with respect to any domestic insurer or foreign insurer, which are filed with the Commissioner, constitute information that might be damaging to the insurer if made available to its competitors and therefore shall be kept confidential by the Commissioner. This information shall not be made public or be subject to subpoena, other than by the Commissioner, and then only for the purpose of enforcement actions taken by the Commissioner pursuant to this chapter or any other provision of the insurance laws of this state.
(b) It is the judgment of the General Assembly that the comparison of an insurer's total adjusted capital to any of its RBC levels is a regulatory tool which may indicate the need for possible corrective action with respect to the insurer and is not intended as a means to rank insurers generally. Therefore, except as otherwise required under the provisions of this chapter, the making, publishing, disseminating, circulating, or placing before the public or causing directly or indirectly to be made, published, disseminated, circulated, or placed before the public in a newspaper, magazine, or other publication or in the form of a notice, circular, pamphlet, letter, or poster or over any radio or television station or in any other way an advertisement, announcement, or statement containing an assertion, representation, or statement with regard to the RBC levels of any insurer or of any component derived in the calculation by any insurer, agent, broker, or other person engaged in any manner in the insurance business would be misleading and is therefore prohibited; provided, however, that if any materially false statement with respect to the comparison regarding an insurer's total adjusted capital to its RBC levels or an inappropriate comparison of any other amount to the insurer's RBC levels is published in any written publication and the insurer is able to demonstrate to the Commissioner with substantial proof the falsity of such statement or the inappropriateness, as the case may be, of such statement, then the insurer may publish an announcement in a written publication if the sole purpose of the announcement is to rebut the materially false or inappropriate statement.
(c) It is the further judgment of the General Assembly that the RBC instructions, RBC reports, adjusted RBC reports, RBC plans, and revised RBC plans are intended solely for use by the Commissioner in monitoring the solvency of insurers and the need for possible corrective action with respect to insurers and shall not be used by the Commissioner for rate-making purposes, considered or introduced as evidence in any rate proceeding, or used by the Commissioner to calculate or derive any elements of an appropriate premium level or rate of return for any line of insurance which an insurer or any affiliate is authorized to write.
(a) The provisions of this chapter are supplemental to any other provisions of the laws of this state and shall not preclude or limit any other powers or duties of the Commissioner under such laws, including, but not limited to, Chapters 2, 3, 13, 14, 20, 21, and 37 of this title.
(b) The Commissioner may exempt from the application of this chapter any domestic property and casualty insurer which:
(1) Meets all three of the following criteria:
(A) Writes direct business only in this state;
(B) Writes direct annual premiums of $2 million or less; and
(C) Assumes no reinsurance in excess of 5 percent of direct premium written; or
(2) Demonstrates to the satisfaction of the Commissioner by other means that preparation and submission of an RBC report would create an unusual and unnecessary hardship or would result in a report which is ambiguous or misleading based upon the unique nature of the company's product offerings or financial structure.
(c) The Commissioner may exempt from the application of this chapter any health organization which:
(1) Has less than 1,000 covered lives; and
(2) Has less than $1 million in direct written premiums.
(a) Any foreign insurer shall, upon the written request of the Commissioner, submit to the Commissioner an RBC report as of the end of the previous calendar year the later of:
(1) The date an RBC report would be required to be filed by a domestic insurer under this chapter; or
(2) Fifteen days after the request is received by the foreign insurer.
(b) Any foreign insurer shall, at the written request of the Commissioner, promptly submit to the Commissioner a copy of any RBC plan that is filed with the insurance commissioner of any other state.
(c) In the event of a company action level event, regulatory action level event, or authorized control level event with respect to any foreign insurer as determined under the RBC statute applicable in the state of domicile of the insurer, or, if no RBC statute is in force in that state, under the provisions of this chapter, if the insurance commissioner of the state of domicile of the foreign insurer fails to require the foreign insurer to file an RBC plan in the manner specified under that state's RBC statute, or, if no RBC statute is in force in that state, under Code Section 33-56-2, the Commissioner may require the foreign insurer to file an RBC plan with the Commissioner. In such event, the failure of the foreign insurer to file an RBC plan with the Commissioner shall be grounds to order the insurer to cease and desist from writing new insurance business in this state.
(d) In the event of a mandatory control level event with respect to any foreign insurer, if no domiciliary receiver has been appointed with respect to the foreign insurer under the rehabilitation and liquidation statute applicable in the state of domicile of the foreign insurer, the Commissioner may make application to the superior court permitted under Chapter 37 of this title with respect to the liquidation of property of foreign insurers found in this state, and the occurrence of the mandatory control level event shall be considered adequate grounds for the application.
(e) The primary responsibility for requiring a domestic insurer to submit RBC reports and take any corrective action rests exclusively with the Commissioner. If, in the judgment of the Commissioner, a domestic insurer has responded promptly and adequately to the department according to the requirements of this Code section, then such domestic insurer should be exempt from responding to separate requests for reports or corrective action from the commissioner of insurance of any other state where the domestic insurer does business. The domestic insurer may request that the information supplied to the Commissioner be shared with the insurance commissioner of any other state, and such information should be accepted by such other insurance commissioner in recognition of the Georgia Commissioner's primary responsibility for, and oversight of, the risk-based capital law as it pertains to domestic insurers.
(f) If the Commissioner determines that a domestic insurer is still being required to respond to separate requests for reports or corrective action under the terms of this Code section, then such request shall constitute prima-facie evidence that such other state is imposing a requirement which exceeds the requirements imposed by Georgia law, triggering the provisions of the retaliatory law in Code Section 33-3-26. In such cases, the Commissioner is thereupon authorized to require separate risk-based capital reports or corrective action requirements from each and every insurer doing business in Georgia whose home state commissioner has imposed such requirements on any Georgia domestic insurer.
There shall be no liability on the part of, and no cause of action shall arise against, the Commissioner or the department or its employees or agents for any action taken by them in the performance of their powers and duties under this chapter.
All notices by the Commissioner to an insurer which may result in regulatory action under this chapter shall be effective upon dispatch if transmitted by registered or certified mail or statutory overnight delivery or, in the case of any other transmission, shall be effective upon the insurer's receipt of such notice.
As used in this chapter, the term:
(1) “Charitable gift annuity” means a transfer of cash or other property by a donor to a charitable organization in return for an annuity payable over one or two lives, under which the actuarial value of the annuity is less than the value of the cash or other property transferred and the difference in value constitutes a charitable deduction for federal tax purposes.
(2) “Charitable organization” means an entity described by:
(A) Section 501(c)(3), Internal Revenue Code of 1986 (26 U.S.C. Section 501(c)(3)); or
(B) Section 170(c), Internal Revenue Code of 1986 (26 U.S.C. Section 170(c)).
(3) “Qualified charitable gift annuity” means a charitable gift annuity described in Section 501(m)(5), Internal Revenue Code of 1986 (26 U.S.C. Section 501(m)(5)), and Section 514(c)(5), Internal Revenue Code of 1986 (26 U.S.C. Section 514(c)(5)), that is issued by a charitable organization that on the date of the annuity agreement:
(A) Has a minimum of $300,000.00 in unrestricted cash, cash equivalents, or publicly traded securities, exclusive of the assets funding the annuity agreement; and
(B) Has been in continuous operation for at least three years or is a successor or affiliate of a charitable organization that has been in continuous operation for at least three years.
(a) The issuance of a qualified charitable gift annuity does not constitute engaging in the business of insurance in this state.
(b) A charitable gift annuity issued before July 1, 2000, is a qualified charitable gift annuity for purposes of this chapter, and the issuance of that charitable gift annuity does not constitute engaging in the business of insurance in this state.
(a) When entering into an agreement for a qualified charitable gift annuity, the charitable organization shall disclose to the donor in writing in the annuity agreement that a qualified charitable gift annuity is not insurance under the laws of this state and is not subject to regulation by the Commissioner of Insurance or protected by an insurance guaranty association.
(b) The notice provisions required by this Code section must be in a separate paragraph in a print size no smaller than that employed in the annuity agreement generally.
(a) A charitable organization that issues qualified charitable gift annuities shall notify the Commissioner in writing by the date on which it enters into the organization's first qualified charitable gift annuity agreement. The notice shall:
(1) Be signed by an officer or director of the organization;
(2) Identify the organization; and
(3) Certify that:
(A) The organization is a charitable organization; and
(B) The annuities issued by the organization are qualified charitable gift annuities.
(b) The charitable organization shall not be required to submit additional information except to determine appropriate penalties that may be applicable under Code Section 33-58-5.
The failure of a charitable organization to comply with the notice requirements imposed under Code Section 33-58-3 or Code Section 33-58-4 does not prevent a charitable gift annuity that otherwise meets the requirements of this chapter from constituting a qualified charitable gift annuity. The Commissioner may enforce performance of the requirements of Code Section 33-58-3 or Code Section 33-58-4 by sending a letter by certified mail, or statutory overnight delivery, return receipt requested, demanding that the charitable organization comply with the requirements of such Code sections. The Commissioner may fine the charitable organization in an amount not to exceed $1,000.00 per qualified charitable gift annuity agreement issued until such time as the charitable organization complies with such Code sections.
The issuance of a qualified charitable gift annuity does not constitute a violation of Article 15 of Chapter 1 of Title 10.
This chapter shall be known and may be cited as the “Life Settlements Act.”
As used in this chapter, the term:
(1) “Advertisement” means any written, electronic, or printed communication or any communication by means of recorded telephone messages or transmitted on radio, television, the Internet, or similar communications media, including film strips, motion pictures, and videos, published, disseminated, circulated, or placed directly before the public in this state for the purpose of creating an interest in or inducing a person to purchase or sell, assign, devise, bequest, or transfer the death benefit or ownership of a life insurance policy or an interest in a life insurance policy pursuant to a life settlement contract.
(2) “Business of life settlements” means an activity involved in, but not limited to, offering to enter into, soliciting, negotiating, procuring, effectuating, monitoring, or tracking of life settlement contracts.
(3) “Chronically ill” means:
(A) Being unable to perform at least two activities of daily living such as eating, toileting, transferring, bathing, dressing, or continence;
(B) Requiring substantial supervision to protect the individual from threats to health and safety due to severe cognitive impairment; or
(C) Having a level of disability similar to that described in subparagraph (A) of this paragraph as determined by the United States Secretary of Health and Human Services.
(4) “Financing entity” means an underwriter, placement agent, lender, purchaser of securities, purchaser of a policy or certificate from a provider, credit enhancer, or any entity that has a direct ownership in a policy or certificate that is the subject of a life settlement contract, but:
(A) Whose principal activity related to the transaction is providing funds to effect the life settlement contract or purchase of one or more policies; and
(B) Who has an agreement in writing with one or more providers to finance the acquisition of life settlement contracts.
“Financing entity” does not include a nonaccredited investor or purchaser.
(5) “Financing transaction” means a transaction in which a licensed provider obtains financing from a financing entity including, without limitation, any secured or unsecured financing, any securitization transaction, or any securities offering which either is registered or exempt from registration under federal and state securities law.
(6) “Fraudulent life settlement act” includes:
(A) Acts or omissions committed by any person who, knowingly and with intent to defraud, for the purpose of depriving another of property or for pecuniary gain, engages in acts, or permits its employees or its agents to engage in acts, including, but not limited to:
(i) Presenting, causing to be presented, or preparing with knowledge and belief that it will be presented to or by a provider, premium finance lender, life settlement broker, insurer, insurance producer, or any other person, false material information, or concealing material information, as part of, in support of, or concerning a fact material to one or more of the following:
(I) An application for the issuance of a life settlement contract or insurance policy;
(II) The underwriting of a life settlement contract or insurance policy;
(III) A claim for payment or benefit pursuant to a life settlement contract or insurance policy;
(IV) Premiums paid on an insurance policy;
(V) Payments and changes in ownership or beneficiary made in accordance with the terms of a life settlement contract or insurance policy;
(VI) The reinstatement or conversion of an insurance policy;
(VII) The solicitation, offer to enter into, or effectuation of a life settlement contract or insurance policy;
(VIII) The issuance of written evidence of life settlement contracts or insurance;
(IX) Any application for or the existence of or any payments related to a loan secured directly or indirectly by an interest in a life insurance policy; or
(X) Stranger originated life insurance as defined in paragraph (24) of this Code section;
(ii) Failing to disclose to the insurer where the request for such disclosure has been asked for by the insurer that the prospective insured has undergone a life expectancy evaluation by any person or entity other than the insurer or its authorized representatives in connection with the issuance of the policy;
(iii) Employing any device, scheme, or artifice to defraud in the business of life settlements; or
(iv) In the solicitation, application, or issuance of a life insurance policy, employing any device, scheme, or artifice in violation of state insurable interest laws; and
(B) In the furtherance of a fraud or to prevent the detection of a fraud, acts or omissions of any person, its employees, or its agents acting with such person's permission, to:
(i) Remove, conceal, alter, destroy, or sequester from the Commissioner the assets or records of a licensee or other person engaged in the business of life settlements;
(ii) Misrepresent or conceal the financial condition of a licensee, financing entity, insurer, or other person;
(iii) Transact the business of life settlements in violation of laws requiring a license, certificate of authority, or other legal authority for the transaction of the business of life settlements;
(iv) File with the Commissioner or the chief insurance regulatory official of another jurisdiction a document containing false information or otherwise conceal information about a material fact from the Commissioner;
(v) Engage in embezzlement, theft, misappropriation, or conversion of moneys, funds, premiums, credits, or other property of a provider, insurer, insured, insurance policy owner, or any other person engaged in the business of life settlements or insurance;
(vi) Knowingly and with intent to defraud, enter into, broker, or otherwise deal in a life settlement contract, the subject of which is a life insurance policy that was obtained by presenting false information concerning any fact material to the policy or by concealing, for the purpose of misleading another, information concerning any fact material to the policy, where the owner or the owner's agent intended to defraud the policy's issuer;
(vii) Attempt to commit, assist, aid, or abet in the commission of, or conspiracy to commit, the acts or omissions specified in this paragraph; or
(viii) Misrepresent the state of residence of an owner to be a state or jurisdiction that does not have a law substantially similar to this chapter for the purpose of evading or avoiding the provisions of this chapter.
(7) “Insured” means the person covered under the policy being considered for sale in a life settlement contract.
(8) “Life expectancy” means the arithmetic mean of the number of months the insured under the life insurance policy to be settled can be expected to live as determined by professionally competent individuals considering medical records and appropriate experiential data.
(9) “Life insurance producer” means any person licensed in this state as a resident or nonresident insurance producer who has received qualification or authority for life insurance coverage or a life line of coverage pursuant to Chapter 23 of this title.
(10) “Life settlement broker” means a person who, on behalf of an owner and for a fee, commission, or other valuable consideration, offers or attempts to negotiate life settlement contracts between an owner and providers. A life settlement broker represents only the owner and owes a fiduciary duty to the owner to act according to the owner's instructions, and in the best interest of the owner, notwithstanding the manner in which the life settlement broker is compensated. A life settlement broker does not include an attorney, certified public accountant, or financial planner retained in the type of practice customarily performed in their professional capacity to represent the owner whose compensation is not paid directly or indirectly by the provider or any other person, except the owner.
(11)(A) “Life settlement contract” means a written agreement entered into between a provider and an owner establishing the terms under which compensation or any thing of value will be paid, which compensation or thing of value is less than the expected death benefit of the insurance policy or certificate, in return for the owner's assignment, transfer, sale, devise, or bequest of the death benefit or any portion of an insurance policy or certificate of insurance for compensation; provided, however, that the minimum value for a life settlement contract shall be greater than a cash surrender value or accelerated death benefit available at the time of an application for a life settlement contract. “Life settlement contract” also includes the transfer for compensation or value of ownership or beneficial interest in a trust or other entity that owns such policy if the trust or other entity was formed or availed of for the principal purpose of acquiring one or more life insurance contracts, which life insurance contract insures the life of a person residing in this state.
(B) “Life settlement contract” also includes:
(i) A written agreement for a loan or other lending transaction, secured primarily by an individual or group life insurance policy; and
(ii) A premium finance loan made for a policy on or before the date of issuance of the policy where:
(I) The loan proceeds are not used solely to pay premiums for the policy and any costs or expenses incurred by the lender or the borrower in connection with the financing;
(II) The owner receives on the date of the premium finance loan a guarantee of the future life settlement value of the policy; or
(III) The owner agrees on the date of the premium finance loan to sell the policy or any portion of its death benefit on any date following the issuance of the policy.
(C) Life settlement contract does not include:
(i) A policy loan by a life insurance company pursuant to the terms of the life insurance policy or accelerated death provisions contained in the life insurance policy, whether issued with the original policy or as a rider;
(ii) A premium finance loan, as defined in paragraph (18) of this Code section, or any loan made by a bank or other licensed financial institution, provided that neither default on such loan nor the transfer of the policy in connection with such default is pursuant to an agreement or understanding with any other person for the purpose of evading regulation under this chapter;
(iii) A collateral assignment of a life insurance policy by an owner;
(iv) A loan made by a lender that does not violate Chapter 22 of this title, provided such loan is not described in this paragraph as being included in the definition of a life settlement contract and is not otherwise within the definition of life settlement contract;
(v) An agreement where all the parties are closely related to the insured by blood or law or have a lawful substantial economic interest in the continued life, health, and bodily safety of the person insured or are trusts established primarily for the benefit of such parties;
(vi) Any designation, consent, or agreement by an insured who is an employee of an employer in connection with the purchase by the employer, or trust established by the employer, of life insurance on the life of the employee;
(vii) A bona fide business succession planning arrangement between:
(I) One or more shareholders in a corporation or between a corporation and one or more of its shareholders or one or more trust established by its shareholders;
(II) One or more partners in a partnership or between a partnership and one or more of its partners or one or more trust established by its partners; or
(III) One or more members in a limited liability company or between a limited liability company and one or more of its members or one or more trust established by its members;
(viii) An agreement entered into by a service recipient, or a trust established by the service recipient, and a service provider or a trust established by the service provider, who performs significant services for the service recipient's trade or business; or
(ix) Any other contract, transaction, or arrangement from the definition of life settlement contract that the Commissioner determines is not of the type intended to be regulated by this chapter.
(12) “Net death benefit” means the amount of the life insurance policy or certificate to be settled less any outstanding debts or liens.
(13) “Owner” means the owner of a life insurance policy or a certificate holder under a group policy, with or without a terminal illness, who enters or seeks to enter into a life settlement contract. For the purposes of this chapter, an owner shall not be limited to an owner of a life insurance policy or a certificate holder under a group policy that insures the life of an individual with a terminal or chronic illness or condition except where specifically addressed. “Owner” does not include:
(A) Any provider or other licensee under this chapter;
(B) A qualified institutional buyer as defined in Rule 144A of the federal Securities Act of 1933, as amended;
(C) A financing entity;
(D) A special purpose entity; or
(E) A related provider trust.
(14) “Patient identifying information” means an insured's address, telephone number, facsimile number, e-mail address, photograph or likeness, employer, employment status, social security number, or any other information that is likely to lead to the identification of the insured.
(15) “Person” means any natural person or a legal entity, including, but not limited to, a partnership, limited liability company, association, trust, or corporation.
(16) “Policy” means an individual or group policy, group certificate, contract, or arrangement of life insurance owned by a resident of this state, regardless of whether delivered or issued for delivery in this state.
(17) “Premium finance loan” is a loan made primarily for the purposes of making premium payments on a life insurance policy, which loan is secured by an interest in such life insurance policy.
(18) “Provider” means a person, other than an owner, who enters into or effectuates a life settlement contract with an owner. A provider does not include:
(A) Any bank, savings bank, savings and loan association, or credit union;
(B) A licensed lending institution or creditor or secured party pursuant to a premium finance loan agreement which takes an assignment of a life insurance policy or certificate issued pursuant to a group life insurance policy as collateral for a loan;
(C) The insurer of a life insurance policy or rider to the extent of providing accelerated death benefits or riders under this title or cash surrender value;
(D) Any natural person who enters into or effectuates no more than one agreement in a calendar year for the transfer of a life insurance policy or certificate issued pursuant to a group life insurance policy for compensation or any thing of value less than the expected death benefit payable under the policy;
(E) A purchaser;
(F) Any authorized or eligible insurer that provides stop-loss coverage to a provider, purchaser, financing entity, special purpose entity, or related provider trust;
(G) A financing entity;
(H) A special purpose entity;
(I) A related provider trust;
(J) A life settlement broker; or
(K) An accredited investor or qualified institutional buyer as defined in, respectively, Regulation D, Rule 501, or Rule 144A of the federal Securities Act of 1933, as amended, who purchases a life settlement policy from a provider.
(19) “Purchased policy” means a policy or group certificate that has been acquired by a provider pursuant to a life settlement contract.
(20) “Purchaser” means a person who pays compensation or any thing of value as consideration for a beneficial interest in a trust which is vested with, or for the assignment, transfer, or sale of, an ownership or other interest in a life insurance policy or a certificate issued pursuant to a group life insurance policy which has been the subject of a life settlement contract.
(21) “Related provider trust” means a titling trust or other trust established by a licensed provider or a financing entity for the sole purpose of holding the ownership or beneficial interest in purchased policies in connection with a financing transaction. In order to qualify as a related provider trust, the trust must have a written agreement with the licensed provider under which the licensed provider is responsible for ensuring compliance with all statutory and regulatory requirements and under which the trust agrees to make all records and files relating to life settlement transactions available to the department as if those records and files were maintained directly by the licensed provider.
(22) “Settled policy” means a life insurance policy or certificate that has been acquired by a provider pursuant to a life settlement contract.
(23) “Special purpose entity” means a corporation, partnership, trust, limited liability company, or other legal entity formed solely to provide either directly or indirectly access to institutional capital markets for a financing entity or provider; or in connection with a transaction in which the securities in the special purpose entity are acquired by the owner or by a qualified institutional buyer as defined in Rule 144 promulgated under the federal Securities Act of 1933, as amended, or the securities pay a fixed rate of return commensurate with established asset-backed institutional capital markets.
(24) “Stranger originated life insurance” is a series of acts or a practice to initiate a life insurance policy for the benefit of a third-party investor who, at the time of policy origination, has no insurable interest in the insured. Stranger originated life insurance acts or practices include, but are not limited to, cases in which life insurance is purchased with resources or guarantees from or through a person or entity who, at the time of policy inception, could not lawfully initiate the policy himself or herself or itself, and where, at the time of inception, there is an arrangement or agreement to directly or indirectly transfer the ownership of the policy or the policy benefits to a third party. Trusts that are created to give the appearance of insurable interest and are used to initiate policies for investors violate insurable interest laws and the prohibition against wagering on life. Stranger originated life insurance arrangements do not include those practices set forth in subparagraph (C) of paragraph (11) of this Code section.
(25) “Terminally ill” means having an illness or sickness that can reasonably be expected to result in death in 24 months or less.
(a) No person, wherever located, shall act as a provider or life settlement broker with an owner or multiple owners who are residents of this state without first having obtained a license or acknowledgment of registration from the Commissioner. If there is more than one owner on a single policy and the owners are residents of different states, the life settlement contract shall be governed by the law of the state in which the owner having the largest percentage ownership resides or, if the owners hold equal ownership, the state of residence of one owner agreed upon in writing by all owners.
(b) Application for a provider license or life settlement broker registration shall be made to the Commissioner by the applicant on a form prescribed by the Commissioner and the application shall be accompanied by a fee in an amount established by the Commissioner; provided, however, that the license and renewal fees for a provider license shall be reasonable and that the registration and renewal fees for a life settlement broker registration shall not exceed those established for an insurance producer, as such fees are otherwise provided for in this title.
(c) A life insurance producer who has been duly licensed as a resident insurance producer with a life line of authority in this state or his or her home state for at least one year and is licensed as a nonresident producer in this state shall be deemed to meet the licensing and registration requirements of this Code section and shall be permitted to operate as a life settlement broker.
(d) Not later than 30 days from the first day of operating as a life settlement broker, the life insurance producer shall notify the Commissioner that he or she is acting as a life settlement broker on a form prescribed by the Commissioner and shall pay any applicable fee to be determined by the Commissioner. Notification shall include an acknowledgment by the life insurance producer that he or she will operate as a life settlement broker in accordance with this chapter.
(e) The insurer that issued the policy that is the subject of a life settlement contract shall not be responsible for any act or omission of a life settlement broker, provider, or purchaser arising out of or in connection with the life settlement transaction unless the insurer receives compensation for the placement of a life settlement contract from the provider, purchaser, or life settlement broker in connection with the life settlement contract.
(f) A person licensed as an attorney, certified public accountant, or financial planner accredited by a nationally recognized accreditation agency who is retained to represent the owner and whose compensation is not paid directly or indirectly by the provider or purchaser may negotiate life settlement contracts on behalf of the owner without having to obtain a license as a life settlement broker.
(g) Licenses may be renewed every year on May 1 upon payment of the periodic renewal fee. Failure to pay the fee within the terms prescribed shall result in the automatic revocation of the license requiring periodic renewal.
(h) The term of a provider license shall be equal to that of a domestic stock life insurance company and the term of a life settlement broker registration shall be equal to that of an insurance producer license. Licenses or registrations requiring periodic renewal may be renewed on their anniversary date upon payment of the periodic renewal fee as specified in subsection (b) of this Code section. Failure to pay the fees on or before the renewal date shall result in expiration of the license or registration.
(i) The applicant shall provide such information as the Commissioner may require on forms prepared by the Commissioner. The Commissioner shall have the authority, at any time, to require such applicant to fully disclose the identity of its stockholders, except stockholders owning fewer than 10 percent of the shares of an applicant whose shares are publicly traded, partners, officers, and employees, and the Commissioner may, in the exercise of the Commissioner's sole discretion, refuse to issue such a license in the name of any person if not satisfied that any officer, employee, stockholder, or partner thereof who may materially influence the applicant's conduct meets the standards of this chapter.
(j) A license issued to a partnership, corporation, or other entity authorizes all members, officers, and designated employees to act as a licensee under the license if those persons are named in the application and any supplements to the application.
(k) Upon the filing of an application and the payment of the license fee, the Commissioner shall make an investigation of each applicant and may issue a license if the Commissioner finds that the applicant:
(1) If a provider, has provided a detailed plan of operation;
(2) Is competent and trustworthy and intends to transact its business in good faith;
(3) Has a good business reputation and has had experience, training, or education so as to be qualified in the business for which the license is applied;
(4) If the applicant is a legal entity, is formed or organized pursuant to the laws of this state or is a foreign legal entity authorized to transact business in this state or provides a certificate of good standing from the state of its domicile; and
(5) Has provided to the Commissioner an antifraud plan that meets the requirements of Code Section 33-59-14 and includes:
(A) A description of the procedures for detecting and investigating possible fraudulent acts and procedures for resolving material inconsistencies between medical records and insurance applications;
(B) A description of the procedures for reporting fraudulent insurance acts to the Commissioner;
(C) A description of the plan for antifraud education and training of its underwriters and other personnel; and
(D) A written description or chart outlining the arrangement of the antifraud personnel who are responsible for the investigation and reporting of possible fraudulent insurance acts and investigating unresolved material inconsistencies between medical records and insurance applications.
(l) The Commissioner shall not issue any license to any nonresident applicant unless a written designation of an agent for service of process is filed and maintained with the Commissioner or unless the applicant has filed with the Commissioner the applicant's written irrevocable consent that any action against the applicant may be commenced against the applicant by service of process on the Commissioner.
(m) The Commissioner shall not issue a license to any applicant unless the applicant has an adequate net worth as prescribed by order, rule, or regulation.
(n) Each licensee shall file with the Commissioner on or before the first day of May of each year an annual statement containing such information as the Commissioner by rule may prescribe.
(o) A provider shall not use any person to perform the functions of a life settlement broker as defined in paragraph (10) of Code Section 33-59-2 unless the person holds a current, valid registration as a life settlement broker and as provided in this Code section.
(p) A life settlement broker shall not use any person to perform the functions of a provider as defined in paragraph (18) of Code Section 33-59-2 unless such person holds a current, valid license as a provider and as provided in this Code section.
(q) A provider and a life settlement broker shall provide to the Commissioner new or revised information about officers, 10 percent or more stockholders, partners, directors, members, and designated employees within 30 days of any change.
(r) An individual registered as a life settlement broker shall complete on a biennial basis 15 hours of training related to life settlements and life settlement transactions as required by the Commissioner; provided, however, that a life insurance producer who is operating as a life settlement broker pursuant to this Code section shall not be subject to the requirements of this subsection. Any person failing to meet the requirements of this subsection shall be subject to the penalties imposed by the Commissioner.
(a) The Commissioner may suspend, revoke, or refuse to renew the license of any licensee if the Commissioner finds that:
(1) There was any material misrepresentation in the application for the license;
(2) The licensee or any officer, partner, member, or director has been guilty of fraudulent or dishonest practices, is subject to a final administrative action, or is otherwise shown to be untrustworthy or incompetent to act as a licensee;
(3) The provider demonstrates a pattern of unreasonably withholding payments to policy owners;
(4) The licensee no longer meets the requirements for initial licensure;
(5) The licensee or any officer, partner, member, or director has been convicted of a felony or any misdemeanor of which criminal fraud is an element; or the licensee has pleaded guilty or nolo contendere to any felony or any misdemeanor of which criminal fraud or moral turpitude is an element regardless of whether a judgment of conviction has been entered by the court;
(6) The provider has entered into any life settlement contract using a form that has not been approved pursuant to this chapter;
(7) The provider has failed to honor contractual obligations set out in a life settlement contract;
(8) The provider has assigned, transferred, or pledged a settled policy to a person other than a provider licensed in this state, purchaser, accredited investor or qualified institutional buyer as defined, respectively, in Regulation D, Rule 501, or Rule 144A of the federal Securities Act of 1933 1, as amended, financing entity, special purpose entity, or related provider trust;
(9) The licensee or any officer, partner, member, or key management personnel has violated any of the provisions of this chapter; or
(10) The provider has failed to maintain an adequate net worth.
(b) Before the Commissioner denies a license application or suspends, revokes, or refuses to renew the license of any licensee under this chapter, the Commissioner shall conduct a hearing in accordance with Chapter 2 of this title.
1 15 U.S.C.A. § 77a et seq.
(a) No person may use any form of life settlement contract in this state unless it has been filed with and approved, if required, by the Commissioner in a manner that conforms with the filing procedures and any time restrictions or deeming provisions, if any, for life insurance forms, policies, and contracts.
(b) No insurer may, as a condition of responding to a request for verification of coverage or in connection with the transfer of a policy pursuant to a life settlement contract, require that the owner, insured, provider, or life settlement broker sign any form, disclosure, consent, waiver, or acknowledgment that has not been expressly approved by the Commissioner for use in connection with life settlement contracts in this state.
(c) A person shall not use a life settlement contract form or provide to an owner a disclosure statement form in this state unless first filed with and approved by the Commissioner. The Commissioner shall disapprove a life settlement contract form or disclosure statement form if, in the Commissioner's opinion, the contract or provisions contained therein fail to meet the requirements of Code Sections 33-59-8, 33-59-9, 33-59-11, and 33-59-15 or are unreasonable, contrary to the interests of the public, or otherwise misleading or unfair to the owner. At the Commissioner's discretion, the Commissioner may require the submission of advertising material.
(a)(1) Each provider shall file with the Commissioner on or before May 1 of each year an annual statement containing such information as the Commissioner may prescribe by rule or regulation in addition to any other requirements for any policy settled within five years of policy issuance. In addition to any other requirements, the annual statement shall specify the total number, aggregate face amount, and life settlement proceeds of policies settled during the immediately preceding calendar year, together with a breakdown of the information by policy issue year. The annual statement shall also include the names of the insurance companies whose policies have been settled and the life settlement brokers that have settled said policies.
(2) Such information shall be limited to only those transactions where the insured is a resident of this state and shall not include individual transaction data regarding the business of life settlements or information that there is a reasonable basis to believe could be used to identify the owner or the insured.
(3) Every provider that willfully fails to file an annual statement as required in this Code section or willfully fails to reply within 30 days to a written inquiry by the Commissioner in connection therewith, shall, in addition to other penalties provided by this chapter, be subject, upon due notice and opportunity to be heard, to a penalty of up to $250.00 per day of delay, not to exceed $25,000.00 in the aggregate, for each such failure.
(b) Except as otherwise allowed or required by law, a provider, life settlement broker, insurance company, insurance producer, information bureau, rating agency or company, or any other person with actual knowledge of an insured's identity shall not disclose the identity of an insured or information that there is a reasonable basis to believe could be used to identify the insured or the insured's financial or medical information to any other person unless the disclosure:
(1) Is necessary to effect a life settlement contract between the owner and a provider and the owner and insured have provided prior written consent to the disclosure;
(2) Is necessary to effectuate the sale of life settlement contracts, or interests therein, as investments, provided that the sale is conducted in accordance with applicable state and federal securities law and provided further that the owner and the insured have both provided prior written consent to the disclosure;
(3) Is provided in response to an investigation or examination by the Commissioner or any other governmental officer or agency or pursuant to the requirements of Code Section 33-59-7;
(4) Is a term or condition to the transfer of a policy by one provider to another provider, in which case the receiving provider shall be required to comply with the confidentiality requirements of this subsection;
(5) Is necessary to allow the provider or life settlement broker or its authorized representatives to make contacts for the purpose of determining health status. For the purposes of this paragraph, the term “authorized representative” shall not include any person who has or may have any financial interest in the settlement contract other than a provider, registered life settlement broker, financing entity, related provider trust, or special purpose entity. A provider or life settlement broker shall require its authorized representative to agree in writing to adhere to the privacy provisions of this chapter; or
(6) Is required to purchase stop-loss coverage.
(c) Nonpublic personal information solicited or obtained in connection with a proposed or actual life settlement contract shall be subject to the provisions applicable to financial institutions under the federal Gramm-Leach-Bliley Act, P.L. 106-102 (1999), and all other state and federal laws relating to confidentiality of nonpublic personal information.
(a) The Commissioner may, when the Commissioner deems it reasonably necessary to protect the interests of the public, examine the business and affairs of any licensee or applicant for a license. The Commissioner may order any licensee or applicant to produce any records, books, files, or other information reasonably necessary to ascertain whether such licensee or applicant is acting or has acted in violation of the law or otherwise contrary to the interests of the public. The expenses incurred in conducting any examination shall be paid by the licensee or applicant.
(b) In lieu of an examination under this chapter of any foreign or alien licensee licensed in this state, the Commissioner may, at the Commissioner's discretion, accept an examination report on the licensee as prepared by the Commissioner for the licensee's state of domicile or port-of-entry state.
(c) Names of and individual identification data for all owners and insureds shall be considered private and confidential information and shall not be disclosed by the Commissioner unless required by law.
(d) Records of all consummated transactions and life settlement contracts shall be maintained by the provider for three years after the death of the insured and shall be available to the Commissioner for inspection during reasonable business hours.
(e)(1) Upon determining that an examination should be conducted, the Commissioner shall issue an examination warrant appointing one or more examiners to perform the examination and instructing them as to the scope of the examination. In conducting the examination, the examiner shall use methods common to the examination of any life settlement licensee and should use those guidelines and procedures set forth in an examiners' handbook adopted by a national organization. The Commissioner may also employ such other guidelines as the Commissioner may deem appropriate.
(2) Every licensee or person from whom information is sought, its officers, directors, and agents shall provide to the examiners timely, convenient, and free access at all reasonable hours at its offices to all books, records, accounts, papers, documents, assets, and computer or other recordings relating to the property, assets, business, and affairs of the licensee being examined. The officers, directors, employees, and agents of the licensee or person shall facilitate the examination and aid in the examination so far as it is in their power to do so. The refusal of a licensee, by its officers, directors, employees, or agents, to submit to examination or to comply with any reasonable written request of the Commissioner shall be grounds for suspension or refusal of or nonrenewal of any license or authority held by the licensee to engage in the life settlement business or other business subject to the Commissioner's jurisdiction. Any proceedings for suspension, revocation, or refusal of any license or authority shall be conducted pursuant to Chapter 2 of this title.
(3) The Commissioner shall have the power to issue subpoenas, to administer oaths, and to examine under oath any person as to any matter pertinent to the examination. Upon the failure or refusal of a person to obey a subpoena, the Commissioner may petition a court of competent jurisdiction and, upon proper showing, the court may enter an order compelling the witness to appear and testify or produce documentary evidence.
(4) When making an examination under this Code section, the Commissioner may retain attorneys, appraisers, independent actuaries, independent certified public accountants, or other professionals and specialists as examiners, the reasonable cost of which shall be borne by the licensee that is the subject of the examination.
(5) Nothing contained in this Code section shall be construed to limit the Commissioner's authority to terminate or suspend an examination in order to pursue other legal or regulatory action pursuant to the insurance laws of this state. Findings of fact and conclusions made pursuant to any examination shall be prima-facie evidence in any legal or regulatory action.
(6) Nothing contained in this Code section shall be construed to limit the Commissioner's authority to use and, if appropriate, to make public any final or preliminary examination report, any examiner or licensee work papers or other documents, or any other information discovered or developed during the course of any examination in the furtherance of any legal or regulatory action which the Commissioner may, in his or her sole discretion, deem appropriate.
(f)(1) Examination reports shall be composed of (A) only facts appearing upon the books, records, or other documents of the licensee, its agents, or other persons examined or as ascertained from the testimony of the licensee's officers or agents or other persons examined concerning the licensee's affairs and (B) such conclusions and recommendations as the examiners find reasonably warranted from the facts.
(2) No later than 60 days following completion of the examination, the examiner in charge shall file with the Commissioner a verified written report of examination under oath. Upon receipt of the verified report, the Commissioner shall transmit the report to the licensee examined, together with a notice that shall afford the licensee examined a reasonable opportunity of not more than 30 days to make a written submission or rebuttal with respect to any matters contained in the examination report and which shall become part of the report or to request a hearing on any matter in dispute if the Commissioner deems such written submission or rebuttal comments appropriate and consistent with the findings of the examination.
(3) In the event the Commissioner determines that regulatory action is appropriate as a result of an examination, the Commissioner may initiate any proceedings or actions provided by law.
(g)(1) Names and individual identification data for all owners, purchasers, and insureds shall be considered private and confidential information and shall not be disclosed by the Commissioner unless the disclosure is to another regulator or is required by law.
(2) Except as otherwise provided in this chapter, all examination reports, working papers, recorded information, documents, and copies thereof produced by, obtained by, or disclosed to the Commissioner or any other person in the course of an examination made under this chapter or in the course of analysis or investigation by the Commissioner of the financial condition or market conduct of a licensee shall be confidential by law and privileged, shall not be subject to the provisions of Article 4 of Chapter 18 of Title 50, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. The Commissioner is authorized to use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as part of the Commissioner's official duties. The licensee being examined may have access to all documents used to make the report except documents and work papers that the Commissioner has deemed privileged.
(h)(1) An examiner shall not be appointed by the Commissioner if the examiner, either directly or indirectly, has a conflict of interest or is affiliated with the management of or owns a pecuniary interest in any person subject to examination under this chapter. This subsection shall not be construed to preclude automatically an examiner from being:
(A) An owner;
(B) An insured in a life settlement contract or insurance policy; or
(C) A beneficiary in an insurance policy that is proposed for a life settlement contract.
(2) Notwithstanding the requirements of this subsection, the Commissioner may retain from time to time, on an individual basis, qualified actuaries, certified public accountants, or other similar individuals who are independently practicing their professions even though these persons may from time to time be similarly employed or retained by persons subject to examination under this chapter.
(i)(1) No cause of action shall arise nor shall any liability be imposed against the Commissioner, the Commissioner's authorized representatives, or any examiner appointed by the Commissioner for any statements made or conduct performed in good faith while carrying out the provisions of this chapter.
(2) No cause of action shall arise nor shall any liability be imposed against any person for the act of communicating or delivering information or data to the Commissioner or the Commissioner's authorized representative or examiner pursuant to an examination made under this chapter if the act of communication or delivery was performed in good faith and without fraudulent intent or the intent to deceive. This paragraph shall not abrogate or modify in any way any common law or statutory privilege or immunity heretofore enjoyed by any person identified in paragraph (1) of this subsection.
(3) A person identified in paragraph (1) or (2) of this subsection shall be entitled to an award of attorney's fees and costs if he or she is the prevailing party in a civil cause of action for libel, slander, or any other relevant tort arising out of activities in carrying out the provisions of this chapter and the party bringing the action was not substantially justified in doing so. For purposes of this subsection, a proceeding is substantially justified if it had a reasonable basis in law or fact at the time that it was initiated.
(j) The Commissioner may investigate suspected fraudulent life settlement acts and persons engaged in the business of life settlements.
(a) A registered life settlement broker or licensed provider who is registered or licensed pursuant to this chapter may conduct or participate in advertisements within this state. Such advertisements shall comply with all advertising and marketing laws of this state and rules and regulations promulgated by the Commissioner that are applicable to life insurers or to life settlement brokers and providers licensed pursuant to this chapter.
(b) Advertisements shall be accurate, truthful, and not misleading in fact or by implication.
(c) No person or trust shall:
(1) Directly or indirectly, market, advertise, solicit, or otherwise promote the purchase of a policy for the sole purpose of or with a primary emphasis on settling the policy; or
(2) Use the words “free,” “no cost,” or words of similar import in the marketing, advertising, soliciting, or otherwise promoting of the purchase of a policy.
(a) The provider or broker shall provide in writing, in a separate document that is signed by the owner, the following information no later than the date of the application for a life settlement contract:
(1) The fact that possible alternatives to life settlement contracts exist, including, but not limited to, accelerated benefits offered by the issuer of the life insurance policy;
(2) The fact that some or all of the proceeds of a life settlement contract may be taxable and that assistance should be sought from a professional tax adviser;
(3) The fact that the proceeds from a life settlement contract could be subject to the claims of creditors;
(4) The fact that receipt of proceeds from a life settlement contract may adversely affect the recipient's eligibility for public assistance or other government benefits or entitlements and that advice should be obtained from the appropriate agencies;
(5) The fact that the owner has a right to terminate a life settlement contract within 15 days of the date it is executed by all parties and the owner has received the disclosures contained in this Code section. Rescission, if exercised by the owner, is effective only if both notice of the rescission is given and the owner repays all proceeds and any premiums, loans, and loan interest paid on account of the provider within the rescission period. If the insured dies during the rescission period, the contract shall be deemed to have been rescinded subject to repayment by the owner or the owner's estate of all proceeds and any premiums, loans, and loan interest to the provider;
(6) The fact that proceeds will be sent to the owner within three business days after the provider has received the insurer or group administrator's acknowledgment that ownership of the policy or interest in the certificate has been transferred and the beneficiary has been designated in accordance with the terms of the life settlement contract;
(7) The fact that entering into a life settlement contract may cause other rights or benefits, including conversion rights and waiver of premium benefits that may exist under the policy or certificate of a group policy, to be forfeited by the owner and that assistance should be sought from a professional financial adviser;
(8) The method of calculating the compensation paid or to be paid to the life settlement broker or any other person acting for the owner in connection with the transaction, where the term “compensation” includes any thing of value paid or given;
(9) The date by which the funds will be available to the owner and the transmitter of the funds;
(10) The fact that the Commissioner shall require delivery of a buyer's guide or a similar consumer advisory package in the form prescribed by the Commissioner to owners during the solicitation process;
(11) The disclosure document shall contain the following language:
“All medical, financial, or personal information solicited or obtained by a provider or life settlement broker about an insured, including the insured's identity or the identity of family members, a spouse, or a significant other, may be disclosed as necessary to effect the life settlement contract between the owner and provider. If you are asked to provide this information, you will be asked to consent to the disclosure. The information may be provided to someone who buys the policy or provides funds for the purchase. You may be asked to renew your permission to share information every two years.”;
(12) The fact that the Commissioner shall require providers and life settlement brokers to print separate signed fraud warnings on their applications and on their life settlement contracts as follows:
“Any person who knowingly presents false information in an application for insurance or life settlement contract is guilty of a crime and may be subject to fines and confinement in prison.”;
(13) The fact that the insured may be contacted by either the provider or life settlement broker or its authorized representative for the purpose of determining the insured's health status or to verify the insured's address. This contact is limited to once every three months if the insured has a life expectancy of more than one year and no more than once per month if the insured has a life expectancy of one year or less;
(14) The affiliation, if any, between the provider and the issuer of the insurance policy to be settled;
(15) That a life settlement broker represents exclusively the owner, and not the insurer or the provider or any other person, and owes a fiduciary duty to the owner, including a duty to act according to the owner's instructions and in the best interest of the owner;
(16) The document shall include the name, address, and telephone number of the provider;
(17) The name, business address, and telephone number of the independent third-party escrow agent, and the fact that the owner may inspect or receive copies of the relevant escrow or trust agreements or documents; and
(18) The fact that a change of ownership could in the future limit the insured's ability to purchase future insurance on the insured's life because there is a limit to how much coverage insurers will issue on one life.
(b) The written disclosures shall be conspicuously displayed in any life settlement contract furnished to the owner by a provider including any affiliations or contractual arrangements between the provider and the life settlement broker.
(c) A life settlement broker shall provide the owner and the provider with at least the following disclosures no later than the date the life settlement contract is signed by all parties. The disclosures shall be conspicuously displayed in the life settlement contract or in a separate document signed by the owner and provide the following information:
(1) The name, business address, and telephone number of the life settlement broker;
(2) A full, complete, and accurate description of all the offers, counter-offers, acceptances, and rejections relating to the proposed life settlement contract;
(3) A written disclosure at the inception of the brokerage arrangement of any affiliations or contractual arrangements between the life settlement broker and any person making an offer in connection with the proposed life settlement contracts;
(4) The name of each life settlement broker who receives compensation and the amount of compensation received by that life settlement broker, which compensation includes any thing of value paid or given to the life settlement broker in connection with the life settlement contract; and
(5) A complete reconciliation of the gross offer or bid by the provider to the net amount of proceeds or value to be received by the owner. For the purpose of this paragraph, “gross offer or bid” means the total amount or value offered by the provider for the purchase of one or more life insurance policies, inclusive of commissions and fees.
(d) The failure to provide the disclosures or rights described in this Code section shall be deemed an unfair trade practice pursuant to Code Section 33-59-17.
(a) In addition to other questions an insurance carrier may lawfully pose to a life insurance applicant, insurance carriers may inquire in the application for insurance whether the proposed owner intends to pay premiums with the assistance of financing from a lender that will use the policy as collateral to support the financing.
(b) If, as described in paragraph (11) of Code Section 33-59-2, the loan provides funds which can be used for a purpose other than paying for the premiums, costs, and expenses associated with obtaining and maintaining the life insurance policy and loan, the application shall be rejected as a violation of the prohibited practices in Code Section 33-59-13.
(c) If the financing does not violate Code Section 33-59-13 in this manner, the insurance carrier:
(1) May make disclosures, including, but not limited to, disclosures such as the following, to the applicant and the insured, either on the application or an amendment to the application to be completed no later than the delivery of the policy:
“If you have entered into a loan arrangement where the policy is used as collateral and the policy changes ownership at some point in the future in satisfaction of the loan, the following may be true:
(A) A change of ownership could lead to a stranger owning an interest in the insured's life;
(B) A change of ownership could in the future limit your ability to purchase future insurance on the insured's life because there is a limit to how much coverage insurers will issue on one life;
(C) Should there be a change of ownership and you wish to obtain more insurance coverage on the insured's life in the future, the insured's higher issue age, a change in health status, or other factors may reduce the ability to obtain coverage or may result in significantly higher premiums; and
(D) You should consult a professional adviser since a change in ownership in satisfaction of the loan may result in tax consequences to the owner, depending on the structure of the loan.”; and
(2) May require certifications, such as the following, from the applicant and the insured:
“(A) I have not entered into any agreement or arrangement providing for the future sale of this life insurance policy;
(B) My loan arrangement for this policy provides funds sufficient to pay for some or all of the premiums, costs, and expenses associated with obtaining and maintaining my life insurance policy, but I have not entered into any agreement by which I am to receive consideration in exchange for procuring this policy; and
(C) The borrower has an insurable interest in the insured.”
(a) A provider entering into a life settlement contract, wherein the insured is terminally or chronically ill, shall first obtain:
(1) If the owner is the insured, a written statement from a licensed attending physician that the owner is of sound mind and under no constraint or undue influence to enter into a settlement contract; and
(2) A document in which the insured consents to the release of his or her medical records to a provider, life settlement broker, or insurance producer and, if the policy was issued less than two years from the date of application for a settlement contract, to the insurance company that issued the policy.
(b) The insurer shall respond to a request for verification of coverage submitted by a provider, life settlement broker, or life insurance producer not later than 30 calendar days after the date the request is received. The request for verification of coverage must be made on a form approved by the Commissioner. The insurer shall complete and issue the verification of coverage or indicate in which respects it is unable to respond. In its response, the insurer shall indicate whether, based on the medical evidence and documents provided, the insurer intends to pursue an investigation at this time regarding the validity of the insurance contract.
(c) Before or at the time of execution of the settlement contract, the provider shall obtain a witnessed document in which the owner consents to the settlement contract, represents that the owner has a full and complete understanding of the settlement contract, represents that the owner has a full and complete understanding of the benefits of the policy, acknowledges that the owner is entering into the settlement contract freely and voluntarily, and, for persons with a terminal or chronic illness or condition, acknowledges that the insured has a terminal or chronic illness and that the terminal or chronic illness or condition was diagnosed after the policy was issued.
(d) The insurer shall not unreasonably delay effecting change of ownership or beneficiary with any life settlement contract lawfully entered into in this state or with a resident of this state.
(e) If a life settlement broker or life insurance producer performs any of these activities required of the provider, the provider is deemed to have fulfilled the requirements of this Code section.
(f) If a life settlement broker performs those verification of coverage activities required of the provider, the provider is deemed to have fulfilled the requirements of subsection (a) of Code Section 33-59-9.
(g) Within 20 days after an owner executes the life settlement contract, the provider shall give written notice to the insurer that issued that insurance policy that the policy has become subject to a life settlement contract. The notice shall be accompanied by the documents required by Code Section 33-59-10.
(h) All medical information solicited or obtained by any licensee shall be subject to the applicable provision of state law relating to confidentiality of medical information if not otherwise provided in this chapter.
(i) All life settlement contracts entered into in this state shall provide that the owner may rescind the contract on or before 15 days after the date it is executed by all parties thereto. Rescission, if exercised by the owner, is effective only if both notice of the rescission is given and the owner repays all proceeds and any premiums, loans, and loan interest paid on account of the provider within the rescission period. If the insured dies during the rescission period, the contract shall be deemed to have been rescinded subject to repayment by the owner or the owner's estate of all proceeds and any premiums, loans, and loan interest to the provider.
(j) Within three business days after receipt from the owner of documents to effect the transfer of the insurance policy, the provider shall pay the proceeds of the settlement to an escrow or trust account managed by a trustee or escrow agent in a state or federally chartered financial institution pending acknowledgment of the transfer by issuer of the policy. The trustee or escrow agent shall be required to transfer the proceeds due to the owner within three business days of acknowledgment of the transfer from the insurer.
(k) Failure to tender the life settlement contract proceeds to the owner by the date disclosed to the owner renders the contract voidable by the owner for lack of consideration until the time the proceeds are tendered to and accepted by the owner. A failure to give written notice of the right of rescission hereunder shall toll the right of rescission until 30 days after the written notice of the right of rescission has been given.
(l) Any fee paid by a provider, party, individual, or an owner to a life settlement broker in exchange for services provided to the owner pertaining to a life settlement contract shall be computed as a percentage of the offer obtained, not the face value of the policy. Nothing in this Code section shall be construed to prohibit a life settlement broker from reducing such life settlement broker's fee below this percentage if the life settlement broker so chooses.
(m) The life settlement broker shall disclose to the owner any thing of value paid or given to a life settlement broker which relates to a life settlement contract.
(n) No person at any time prior to, or at the time of, the application for, or issuance of, a policy, or during a two-year period commencing with the date of issuance of the policy, shall enter into a life settlement contract regardless of the date the compensation is to be provided and regardless of the date the assignment, transfer, sale, devise, bequest, or surrender of the policy is to occur. This prohibition shall not apply if the owner certifies to the provider that:
(1) The policy was issued upon the owner's exercise of conversion rights arising out of a group or individual policy, provided that the total of the time covered under the conversion policy plus the time covered under the prior policy is at least 24 months. The time covered under a group policy shall be calculated without regard to a change in insurance carriers, provided that the coverage has been continuous and under the same group sponsorship; or
(2) The owner submits independent evidence to the provider that one or more of the following conditions have been met within the two-year period:
(A) The owner or insured is terminally or chronically ill;
(B) The owner or insured disposes of his or her ownership interests in a closely held corporation, pursuant to the terms of a buyout or other similar agreement in effect at the time the insurance policy was initially issued;
(C) The owner's spouse dies;
(D) The owner divorces his or her spouse;
(E) The owner retires from full-time employment;
(F) The owner becomes physically or mentally disabled and a physician determines that the disability prevents the owner from maintaining full-time employment; or
(G) A final order, judgment, or decree is entered by a court of competent jurisdiction, on the application of a creditor of the owner, adjudicating the owner bankrupt or insolvent, or approving a petition seeking reorganization of the owner or appointing a receiver, trustee, or liquidator to all or a substantial part of the owner's assets.
Copies of the independent evidence required by paragraph (2) of this subsection shall be submitted to the insurer when the provider submits a request to the insurer for verification of coverage. The copies shall be accompanied by a letter of attestation from the provider that the copies are true and correct copies of the documents received by the provider. Nothing in this Code section shall prohibit an insurer from exercising its right to contest the validity of any policy. If the provider submits to the insurer a copy of independent evidence provided for in paragraph (2) of this subsection when the provider submits a request to the insurer to effect the transfer of the policy to the provider, the copy is deemed to establish that the settlement contract satisfies the requirements of this subsection.
(a) If there is more than one owner on a single policy, and the owners are residents of different states, the life settlement contract shall be governed by the law of the state in which the owner having the largest percentage ownership resides or, if the owners hold equal ownership, the state of residence of one owner agreed upon in writing by all of the owners. The law of the state of the insured shall govern in the event that equal owners fail to agree in writing upon a state of residence for jurisdictional purposes.
(b) A provider from this state who enters into a life settlement contract with an owner who is a resident of another state that has enacted statutes or adopted regulations governing life settlement contracts shall be governed in the effectuation of that life settlement contract by the statutes and regulations of the owner's state of residence. If the state in which the owner is a resident has not enacted statutes or regulations governing life settlement contracts, the provider shall give the owner notice that neither state regulates the transaction upon which he or she is entering. For transactions in those states, however, the provider is to maintain all records required if the transactions were executed in the state of residence. The forms used in those states need not be approved by the Commissioner.
(c) If there is a conflict in the laws that apply to an owner and a purchaser in any individual transaction, the laws of the state that apply to the owner shall take precedence and the provider shall comply with those laws.
(a) It shall be unlawful for any person to:
(1) Enter into a life settlement contract if such person knows or reasonably should have known that the life insurance policy was obtained by means of a false, deceptive, or misleading application for such policy;
(2) Engage in any transaction, practice, or course of business if such person knows or reasonably should have known that the intent was to avoid the notice requirements of this Code section;
(3) Engage in any fraudulent act or practice in connection with any transaction relating to any settlement involving an owner who is a resident of this state;
(4) Issue, solicit, market, or otherwise promote the purchase of an insurance policy for the purpose of or with an emphasis on settling the policy;
(5) Enter into a premium finance agreement with any person or agency, or any person affiliated with such person or agency, pursuant to which such person shall receive any proceeds, fees, or other consideration, directly or indirectly, from the policy or owner of the policy or any other person with respect to the premium finance agreement or any settlement contract or other transaction related to such policy that are in addition to the amounts required to pay the principal, interest, service charges, and any cost or expense incurred by the lender or borrower in connection with the premium finance agreement or subsequent sale of such agreement; provided, further, that any payments, charges, fees, or other amounts in addition to the amounts required to pay the principal, interest, service charges, and any cost or expense incurred by the lender or borrower in connection with the premium finance agreement shall be remitted to the original owner of the policy or to his or her estate if he or she is not living at the time of the determination of the overpayment;
(6) With respect to any settlement contract or insurance policy and a life settlement broker, knowingly solicit an offer from, effectuate a life settlement contract with, or make a sale to any provider, financing entity, or related provider trust that is controlling, controlled by, or under common control with such life settlement broker unless such relationship is disclosed to the owner in accordance with paragraph (3) of subsection (c) of Code Section 33-59-9;
(7) With respect to any life settlement contract or insurance policy and a provider, knowingly enter into a life settlement contract with an owner, if, in connection with such life settlement contract, any thing of value will be paid to a life settlement broker that is controlling, controlled by, or under common control with such provider or the financing entity or related provider trust that is involved in such settlement contract unless such relationship is disclosed to the owner in accordance with paragraph (3) of subsection (c) of Code Section 33-59-9;
(8) With respect to a provider, enter into a life settlement contract unless the life settlement promotional, advertisement, and marketing materials, as may be prescribed by rule or regulation, have been filed with the Commissioner. In no event shall any marketing materials expressly reference that the insurance is “free” for any period of time. The inclusion of any reference in the marketing materials that would cause an owner to reasonably believe that the insurance is free for any period of time shall be considered a violation of this chapter; or
(9) With respect to any life insurance producer, insurance company, life settlement broker, or provider, make any statement or representation to the applicant or policyholder in connection with the sale or financing of a life insurance policy to the effect that the insurance is free or without cost to the policyholder for any period of time unless provided in the policy.
(b) A violation of this Code section shall be deemed a fraudulent life settlement act.
(a)(1) It shall be illegal for a person to commit a fraudulent life settlement act.
(2) A person shall not knowingly and intentionally interfere with the enforcement of the provisions of this chapter or investigations of suspected or actual violations of this chapter.
(3) A person in the business of life settlements shall not knowingly or intentionally permit any person convicted of a felony involving dishonesty or breach of trust to participate in the business of life settlements.
(b)(1) Life settlement contracts and applications for life settlement contracts, regardless of the form of transmission, shall contain the following statement or a substantially similar statement:
“Any person who knowingly presents false information in an application for insurance or life settlement contract is guilty of a crime and may be subject to fines or confinement in prison.”
(2) The lack of a statement as required in paragraph (1) of this subsection does not constitute a defense in any prosecution for a fraudulent life settlement act.
(c)(1) Any person engaged in the business of life settlements having knowledge or a reasonable belief that a fraudulent life settlement act is being, will be, or has been committed shall provide to the Commissioner the information required by, and in a manner prescribed by, the Commissioner.
(2) Any other person having knowledge or a reasonable belief that a fraudulent life settlement act is being, will be, or has been committed may provide to the Commissioner the information required by, and in a manner prescribed by, the Commissioner.
(d)(1) No civil liability shall be imposed on and no cause of action shall arise from a person's furnishing information concerning suspected, anticipated, or completed fraudulent life settlement acts or suspected or completed fraudulent insurance acts if the information is provided to or received from:
(A) The Commissioner or the Commissioner's employees, agents, or representatives;
(B) Federal, state, or local law enforcement or regulatory officials or their employees, agents, or representatives;
(C) A person involved in the prevention and detection of fraudulent life settlement acts or that person's agents, employees, or representatives;
(D) Any regulatory body or their employees, agents, or representatives overseeing life insurance or life settlements, securities, or investment fraud;
(E) The life insurer that issued the life insurance policy covering the life of the insured; or
(F) The licensee and any agents, employees, or representatives.
(2) Paragraph (1) of this subsection shall not apply to statements made with actual malice. In an action brought against a person for filing a report or furnishing other information concerning a fraudulent life settlement act or a fraudulent insurance act, the party bringing the action shall plead specifically any allegation that paragraph (1) of this subsection does not apply because the person filing the report or furnishing the information did so with actual malice.
(3) A person identified in paragraph (1) of this subsection shall be entitled to an award of attorney's fees and costs if he or she is the prevailing party in a civil cause of action for libel, slander, or any other relevant tort arising out of activities in carrying out the provisions of this chapter and the party bringing the action was not substantially justified in doing so. For purposes of this paragraph, a proceeding is substantially justified if it had a reasonable basis in law or fact at the time that it was initiated.
(4) This subsection does not abrogate or modify common law or statutory privileges or immunities enjoyed by a person described in paragraph (1) of this subsection.
(e)(1) The documents and evidence provided pursuant to subsection (d) of this Code section or obtained by the Commissioner in an investigation of suspected or actual fraudulent life settlement acts shall be privileged and confidential and shall not be a public record and shall not be subject to discovery or subpoena in a civil or criminal action.
(2) Paragraph (1) of this subsection shall not prohibit release by the Commissioner of documents and evidence obtained in an investigation of suspected or actual fraudulent life settlement acts:
(A) In administrative or judicial proceedings to enforce laws administered by the Commissioner;
(B) To federal, state, or local law enforcement or regulatory agencies, to an organization established for the purpose of detecting and preventing fraudulent life settlement acts, or to the National Association of Insurance Commissioners; or
(C) At the discretion of the Commissioner, to a person in the business of life settlements that is aggrieved by a fraudulent life settlement act.
(3) Release of documents and evidence under paragraph (2) of this subsection does not abrogate or modify the privilege granted in paragraph (1) of this subsection.
(f) This chapter shall not:
(1) Preempt the authority or relieve the duty of other law enforcement or regulatory agencies to investigate, examine, and prosecute suspected violations of law;
(2) Preempt, supersede, or limit any provision of any state securities law or any rule, order, or notice issued thereunder;
(3) Prevent or prohibit a person from disclosing voluntarily information concerning life settlement fraud to a law enforcement or regulatory agency other than the department; or
(4) Limit the powers granted elsewhere by the laws of this state to the Commissioner or an insurance fraud unit to investigate and examine possible violations of law and to take appropriate action against wrongdoers.
(g)(1) Providers and life settlement brokers shall have in place antifraud initiatives reasonably calculated to detect, prosecute, and prevent fraudulent life settlement acts. At the discretion of the Commissioner, the Commissioner may order, or a licensee may request and the Commissioner may grant, such modifications of the following required initiatives as necessary to ensure an effective antifraud program. The modifications may be more or less restrictive than the required initiatives so long as the modifications may reasonably be expected to accomplish the purpose of this subsection. Antifraud initiatives shall include:
(A) Fraud investigators, who may be provider or life settlement broker employees or independent contractors; and
(B) An antifraud plan, which shall be submitted to the Commissioner. The antifraud plan shall include, but not be limited to:
(i) A description of the procedures for detecting and investigating possible fraudulent life settlement acts and procedures for resolving material inconsistencies between medical records and insurance applications;
(ii) A description of the procedures for reporting possible fraudulent life settlement acts to the Commissioner;
(iii) A description of the plan for antifraud education and training of underwriters and other personnel; and
(iv) A description or chart outlining the organizational arrangement of the antifraud personnel who are responsible for the investigation and reporting of possible fraudulent life settlement acts and investigating unresolved material inconsistencies between medical records and insurance applications.
(2) Antifraud plans submitted to the Commissioner shall be privileged and confidential and shall not be a public record and shall not be subject to discovery or subpoena in a civil or criminal action.
(a) In addition to the penalties and other enforcement provisions of this chapter, if any person violates this chapter or any rule or regulation implementing this chapter, the Commissioner may seek an injunction in a court of competent jurisdiction in the county where the person resides or has a principal place of business and may apply for temporary and permanent orders as the Commissioner determines necessary to restrain the person from further committing the violation.
(b) Any person damaged by the acts of any other person in violation of this chapter or any rule or regulation implementing this chapter may bring a civil action for damages against the person committing the violation in a court of competent jurisdiction.
(c) The Commissioner may issue a cease and desist order upon a person who violates any provision of this chapter, any rule, regulation, or order adopted by the Commissioner, or any written agreement entered into with the Commissioner, in accordance with Chapter 2 of this title.
(d) When the Commissioner finds that such an action presents an immediate danger to the public and requires an immediate final order, he or she may issue an emergency cease and desist order reciting with particularity the facts underlying such findings. The emergency cease and desist order shall become effective immediately upon service of a copy of the order on the respondent and shall remain effective for 90 days. If the department begins nonemergency cease and desist proceedings under subsection (a) of this Code section, the emergency cease and desist order shall remain effective, absent an order by an appellate court of competent jurisdiction pursuant to Chapter 13 of Title 50. In the event of a willful violation of this chapter, the trial court may award statutory damages in addition to actual damages in an additional amount up to three times the actual damage award. The provisions of this chapter may not be waived by agreement. No choice of law provision may be utilized to prevent the application of this chapter to any settlement in which a party to the settlement is a resident of this state.
(a) It is a violation of this chapter for any person, provider, life settlement broker, or any other party related to the business of life settlements to commit a fraudulent life settlement act.
(b) For criminal liability purposes, a person that commits a fraudulent life settlement act shall be guilty of committing insurance fraud and shall be guilty of a felony and, upon conviction, shall be punished by imprisonment for not less than two nor more than ten years, or by a fine of not more than $10,000.00, or both.
(c) The Commissioner shall be empowered to levy a civil penalty:
(1) Not exceeding $1,000.00 for each and every act in violation of this chapter or, if the person knew or reasonably should have known the acts that he or she committed were in violation of this chapter, the monetary penalty provided for in this subsection may be increased to an amount up to $5,000.00 for each and every act in violation; and
(2) The amount of the claim for each violation upon any person, including those persons and their employees licensed pursuant to this chapter, who is found to have committed a fraudulent life settlement act or violated any other provision of this chapter.
(d) The license of a person licensed under this chapter that commits a fraudulent life settlement act shall be revoked for a period of at least one year.
A violation of this chapter shall be considered an unfair trade practice pursuant to state law and subject to the penalties provided by state law.
The Interstate Insurance Product Regulation Compact is enacted into law and entered into by this state with all other jurisdictions legally joining therein in the form substantially as follows:
INTERSTATE INSURANCE PRODUCT REGULATION COMPACT
Article I. Purposes.
The purposes of this Interstate Insurance Product Regulation Compact are, through means of joint and cooperative action among the Compacting States:
(1) To promote and protect the interest of consumers of individual and group annuity, life insurance, disability income and long-term care insurance products;
(2) To develop uniform standards for insurance products covered under the Compact;
(3) To establish a central clearinghouse to receive and provide prompt review of insurance products covered under the Compact and, in certain cases, advertisements related thereto, submitted by insurers authorized to do business in one or more Compacting States;
(4) To give appropriate regulatory approval to those product filings and advertisements satisfying the applicable uniform standard;
(5) To improve coordination of regulatory resources and expertise between state insurance departments regarding the setting of uniform standards and review of insurance products covered under the Compact;
(6) To create the Interstate Insurance Product Regulation Commission; and
(7) To perform these and such other related functions as may be consistent with the state regulation of the business of insurance.
Article II. Definitions.
For purposes of this Compact:
(1) “Advertisement” means any material designed to create public interest in a Product, or induce the public to purchase, increase, modify, reinstate, borrow on, surrender, replace or retain a policy, as more specifically defined in the Rules and Operating Procedures of the Commission.
(2) “Bylaws” mean those bylaws established by the Commission for its governance, or for directing or controlling the Commission's actions or conduct.
(3) “Compacting State” means any State which has enacted this Compact legislation and which has not withdrawn pursuant to Article XIV, Section 1, or been terminated pursuant to Article XIV, Section 2.
(4) “Commission” means the Interstate Insurance Product Regulation Commission established by this Compact.
(5) “Commissioner” means the chief insurance regulatory official of a State including, but not limited to, commissioner, superintendent, director or administrator.
(6) “Domiciliary State” means the state in which an Insurer is incorporated or organized, or, in the case of an alien Insurer, its state of entry.
(7) “Insurer” means any entity licensed by a State to issue contracts of insurance for any of the lines of insurance covered by this Act.
(8) “Member” means the person chosen by a Compacting State as its representative to the Commission, or his or her designee.
(9) “Noncompacting State” means any State which is not at the time a Compacting State.
(10) “Operating Procedures” mean procedures promulgated by the Commission implementing a Rule, Uniform Standard, or a provision of this Compact.
(11) “Product” means the form of a policy or contract, including any application, endorsement, or related form which is attached to and made a part of the policy or contract, and any evidence of coverage or certificate, for an individual or group annuity, life insurance, disability income, or long-term care insurance product that an Insurer is authorized to issue.
(12) “Rule” means a statement of general or particular applicability and future effect promulgated by the Commission, including a Uniform Standard developed pursuant to Article VII of this Compact, designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of the Commission, which shall have the force and effect of law in the Compacting States.
(13) “State” means any state, district, or territory of the United States of America.
(14) “Third-Party Filer” means an entity that submits a Product filing to the Commission on behalf of an Insurer.
(15) “Uniform Standard” means a standard adopted by the Commission for a Product line, pursuant to Article VII of this Compact, and shall include all of the Product requirements in aggregate; provided, that each Uniform Standard shall be construed, whether express or implied, to prohibit the use of any inconsistent, misleading, or ambiguous provisions in a Product and the form of the Product made available to the public shall not be unfair, inequitable, or against public policy as determined by the Commission.
Article III. Establishment of the Commission and Venue.
(1) The Compacting States hereby create and establish a joint public agency known as the “Interstate Insurance Product Regulation Commission.” Pursuant to Article IV, the Commission will have the power to develop Uniform Standards for Product lines, receive and provide prompt review of Products filed therewith, and give approval to those Product filings satisfying applicable Uniform Standards; provided, it is not intended for the Commission to be the exclusive entity for receipt and review of insurance product filings. Nothing herein shall prohibit any Insurer from filing its product in any State wherein the Insurer is licensed to conduct the business of insurance; and any such filing shall be subject to the laws of the State where filed.
(2) The Commission is a body corporate and politic, and an instrumentality of the Compacting States.
(3) The Commission is solely responsible for its liabilities except as otherwise specifically provided in this Compact.
(4) Venue is proper and judicial proceedings by or against the Commission shall be brought solely and exclusively in a Court of competent jurisdiction where the principal office of the Commission is located.
Article IV. Powers of the Commission.
The Commission shall have the following powers:
(1) To promulgate Rules, pursuant to Article VII of this Compact, which shall have the force and effect of law and shall be binding in the Compacting States to the extent and in the manner provided in this Compact;
(2) To exercise its rulemaking authority and establish reasonable Uniform Standards for Products covered under the Compact, and Advertisement related thereto, which shall have the force and effect of law and shall be binding in the Compacting States, but only for those Products filed with the Commission, provided, that a Compacting State shall have the right to opt out of such Uniform Standard pursuant to Article VII, to the extent and in the manner provided in this Compact, and, provided further, that any Uniform Standard established by the Commission for long-term care insurance products may provide the same or greater protections for consumers as, but shall not provide less than, those protections set forth in the National Association of Insurance Commissioners' Long-Term Care Insurance Model Act and Long-Term Care Insurance Model Regulation, respectively, adopted as of 2001. The Commission shall consider whether any subsequent amendments to the NAIC Long-Term Care Insurance Model Act or Long-Term Care Insurance Model Regulation adopted by the NAIC require amending of the Uniform Standards established by the Commission for long-term care insurance products;
(3) To receive and review in an expeditious manner Products filed with the Commission, and rate filings for disability income and long-term care insurance Products, and give approval of those Products and rate filings that satisfy the applicable Uniform Standard, where such approval shall have the force and effect of law and be binding on the Compacting States to the extent and in the manner provided in the Compact;
(4) To receive and review in an expeditious manner Advertisement relating to long-term care insurance products for which Uniform Standards have been adopted by the Commission, and give approval to all Advertisement that satisfies the applicable Uniform Standard. For any product covered under this Compact, other than long-term care insurance products, the Commission shall have the authority to require an insurer to submit all or any part of its Advertisement with respect to that product for review or approval prior to use, if the Commission determines that the nature of the product is such that an Advertisement of the product could have the capacity or tendency to mislead the public. The actions of Commission as provided in this section shall have the force and effect of law and shall be binding in the Compacting States to the extent and in the manner provided in the Compact;
(5) To exercise its rule-making authority and designate Products and Advertisement that may be subject to a self-certification process without the need for prior approval by the Commission.
(6) To promulgate Operating Procedures, pursuant to Article VII of this Compact, which shall be binding in the Compacting States to the extent and in the manner provided in this Compact;
(7) To bring and prosecute legal proceedings or actions in its name as the Commission; provided, that the standing of any state insurance department to sue or be sued under applicable law shall not be affected;
(8) To issue subpoenas requiring the attendance and testimony of witnesses and the production of evidence;
(9) To establish and maintain offices;
(10) To purchase and maintain insurance and bonds;
(11) To borrow, accept, or contract for services of personnel, including, but not limited to, employees of a Compacting State;
(12) To hire employees, professionals, or specialists, and elect or appoint officers, and to fix their compensation, define their duties, and give them appropriate authority to carry out the purposes of the Compact, and determine their qualifications; and to establish the Commission's personnel policies and programs relating to, among other things, conflicts of interest, rates of compensation, and qualifications of personnel;
(13) To accept any and all appropriate donations and grants of money, equipment, supplies, materials, and services, and to receive, utilize, and dispose of the same; provided that at all times the Commission shall strive to avoid any appearance of impropriety;
(14) To lease, purchase, accept appropriate gifts or donations of, or otherwise to own, hold, improve, or use, any property, real, personal, or mixed; provided that at all times the Commission shall strive to avoid any appearance of impropriety;
(15) To sell, convey, mortgage, pledge, lease, exchange, abandon, or otherwise dispose of any property, real, personal, or mixed;
(16) To remit filing fees to Compacting States as may be set forth in the Bylaws, Rules, or Operating Procedures;
(17) To enforce compliance by Compacting States with Rules, Uniform Standards, Operating Procedures, and Bylaws;
(18) To provide for dispute resolution among Compacting States;
(19) To advise Compacting States on issues relating to Insurers domiciled or doing business in Noncompacting jurisdictions, consistent with the purposes of this Compact;
(20) To provide advice and training to those personnel in state insurance departments responsible for product review, and to be a resource for state insurance departments;
(21) To establish a budget and make expenditures;
(22) To borrow money;
(23) To appoint committees, including advisory committees comprising Members, state insurance regulators, state legislators or their representatives, insurance industry and consumer representatives, and such other interested persons as may be designated in the Bylaws;
(24) To provide and receive information from, and to cooperate with law enforcement agencies;
(25) To adopt and use a corporate seal; and
(26) To perform such other functions as may be necessary or appropriate to achieve the purposes of this Compact consistent with the state regulation of the business of insurance.
Article V. Organization of the Commission.
(1) Membership, Voting, and Bylaws.
(a) Each Compacting State shall have and be limited to one Member. Each Member shall be qualified to serve in that capacity pursuant to applicable law of the Compacting State. Any Member may be removed or suspended from office as provided by the law of the State from which he or she shall be appointed. Any vacancy occurring in the Commission shall be filled in accordance with the laws of the Compacting State wherein the vacancy exists. Nothing herein shall be construed to affect the manner in which a Compacting State determines the election or appointment and qualification of its own Commissioner.
(b) Each Member shall be entitled to one vote and shall have an opportunity to participate in the governance of the Commission in accordance with the Bylaws. Notwithstanding any provision herein to the contrary, no action of the Commission with respect to the promulgation of a Uniform Standard shall be effective unless two-thirds ( 2/3 ) of the Members vote in favor thereof.
(c) The Commission shall, by a majority of the Members, prescribe Bylaws to govern its conduct as may be necessary or appropriate to carry out the purposes, and exercise the powers, of the Compact, including, but not limited to:
(i) Establishing the fiscal year of the Commission;
(ii) Providing reasonable procedures for appointing and electing members, as well as holding meetings, of the Management Committee;
(iii) Providing reasonable standards and procedures: (i) for the establishment and meetings of other committees, and (ii) governing any general or specific delegation of any authority or function of the Commission;
(iv) Providing reasonable procedures for calling and conducting meetings of the Commission that consists of a majority of Commission members, ensuring reasonable advance notice of each such meeting and providing for the right of citizens to attend each such meeting with enumerated exceptions designed to protect the public's interest, the privacy of individuals, and insurers' proprietary information, including trade secrets. The Commission may meet in camera only after a majority of the entire membership votes to close a meeting en toto or in part. As soon as practicable, the Commission must make public (i) a copy of the vote to close the meeting revealing the vote of each Member with no proxy votes allowed, and (ii) votes taken during such meeting;
(v) Establishing the titles, duties, and authority and reasonable procedures for the election of the officers of the Commission;
(vi) Providing reasonable standards and procedures for the establishment of the personnel policies and programs of the Commission. Notwithstanding any civil service or other similar laws of any Compacting State, the Bylaws shall exclusively govern the personnel policies and programs of the Commission;
(vii) Promulgating a code of ethics to address permissible and prohibited activities of commission members and employees; and
(viii) Providing a mechanism for winding up the operations of the Commission and the equitable disposition of any surplus funds that may exist after the termination of the Compact after the payment and/or reserving of all of its debts and obligations.
(d) The Commission shall publish its bylaws in a convenient form and file a copy thereof and a copy of any amendment thereto, with the appropriate agency or officer in each of the Compacting States.
(2) Management Committee, Officers, and Personnel.
(a) A Management Committee comprising no more than fourteen (14) members shall be established as follows:
(i) One (1) member from each of the six (6) Compacting States with the largest premium volume for individual and group annuities, life, disability income, and long-term care insurance products, determined from the records of the NAIC for the prior year;
(ii) Four (4) members from those Compacting States with at least two percent (2%) of the market based on the premium volume described above, other than the six (6) Compacting States with the largest premium volume, selected on a rotating basis as provided in the Bylaws; and
(iii) Four (4) members from those Compacting States with less than two percent (2%) of the market, based on the premium volume described above, with one (1) selected from each of the four (4) zone regions of the NAIC as provided in the Bylaws.
(b) The Management Committee shall have such authority and duties as may be set forth in the Bylaws, including but not limited to:
(i) Managing the affairs of the Commission in a manner consistent with the Bylaws and purposes of the Commission;
(ii) Establishing and overseeing an organizational structure within, and appropriate procedures for, the Commission to provide for the creation of Uniform Standards and other Rules, receipt and review of product filings, administrative and technical support functions, review of decisions regarding the disapproval of a product filing, and the review of elections made by a Compacting State to opt out of a Uniform Standard; provided that a Uniform Standard shall not be submitted to the Compacting States for adoption unless approved by two-thirds ( 2/3 ) of the members of the Management Committee;
(iii) Overseeing the offices of the Commission; and
(iv) Planning, implementing, and coordinating communications and activities with other state, federal, and local government organizations in order to advance the goals of the Commission.
(c) The Commission shall elect annually officers from the Management Committee, with each having such authority and duties, as may be specified in the Bylaws.
(d) The Management Committee may, subject to the approval of the Commission, appoint or retain an executive director for such period, upon such terms and conditions and for such compensation as the Commission may deem appropriate. The executive director shall serve as secretary to the Commission, but shall not be a Member of the Commission. The executive director shall hire and supervise such other staff as may be authorized by the Commission.
(3) Legislative and Advisory Committees.
(a) A legislative committee comprising state legislators or their designees shall be established to monitor the operations of, and make recommendations to, the Commission, including the Management Committee; provided that the manner of selection and term of any legislative committee member shall be as set forth in the Bylaws. Prior to the adoption by the Commission of any Uniform Standard, revision to the Bylaws, annual budget, or other significant matter as may be provided in the Bylaws, the Management Committee shall consult with and report to the legislative committee.
(b) The Commission shall establish two (2) advisory committees, one of which shall comprise consumer representatives independent of the insurance industry, and the other comprising insurance industry representatives.
(c) The Commission may establish additional advisory committees as its Bylaws may provide for the carrying out of its functions.
(4) Corporate Records of the Commission.
The Commission shall maintain its corporate books and records in accordance with the Bylaws.
(5) Qualified Immunity, Defense, and Indemnification.
(a) The Members, officers, executive director, employees, and representatives of the Commission shall be immune from suit and liability, either personally or in their official capacity, for any claim for damage to or loss of property or personal injury or other civil liability caused by or arising out of any actual or alleged act, error, or omission that occurred, or that the person against whom the claim is made had a reasonable basis for believing occurred within the scope of Commission employment, duties, or responsibilities; provided, that nothing in this paragraph shall be construed to protect any such person from suit and/or liability for any damage, loss, injury, or liability caused by the intentional or willful and wanton misconduct of that person.
(b) The Commission shall defend any Member, officer, executive director, employee, or representative of the Commission in any civil action seeking to impose liability arising out of any actual or alleged act, error, or omission that occurred within the scope of Commission employment, duties, or responsibilities, or that the person against whom the claim is made had a reasonable basis for believing occurred within the scope of Commission employment, duties, or responsibilities; provided, that nothing herein shall be construed to prohibit that person from retaining his or her own counsel; and provided further, that the actual or alleged act, error, or omission did not result from that person's intentional or willful and wanton misconduct.
(c) The Commission shall indemnify and hold harmless any Member, officer, executive director, employee, or representative of the Commission for the amount of any settlement or judgment obtained against that person arising out of any actual or alleged act, error, or omission that occurred within the scope of Commission employment, duties, or responsibilities, or that such person had a reasonable basis for believing occurred within the scope of Commission employment, duties, or responsibilities, provided, that the actual or alleged act, error, or omission did not result from the intentional or willful and wanton misconduct of that person.
Article VI. Meetings and Acts of the Commission.
(1) The Commission shall meet and take such actions as are consistent with the provisions of this Compact and the Bylaws.
(2) Each Member of the Commission shall have the right and power to cast a vote to which that Compacting State is entitled and to participate in the business and affairs of the Commission. A Member shall vote in person or by such other means as provided in the Bylaws. The Bylaws may provide for Members' participation in meetings by telephone or other means of communication.
(3) The Commission shall meet at least once during each calendar year. Additional meetings shall be held as set forth in the Bylaws.
RULEMAKING FUNCTIONS OF THE COMMISSION AND OPTING OUT OF UNIFORM STANDARDS
Article VII. Rules and Operating Procedures.
(1) Rulemaking Authority. The Commission shall promulgate reasonable Rules, including Uniform Standards, and Operating Procedures in order to effectively and efficiently achieve the purposes of this Compact. Notwithstanding the foregoing, in the event the Commission exercises its rulemaking authority in a manner that is beyond the scope of the purposes of this Compact, or the powers granted hereunder, then such an action by the Commission shall be invalid and have no force and effect.
(2) Rulemaking Procedure. Rules and Operating Procedures shall be made pursuant to a rulemaking process that conforms to the Model State Administrative Procedure Act of 1981, as amended, as may be appropriate to the operations of the Commission. Before the Commission adopts a Uniform Standard, the Commission shall give written notice to the relevant state legislative committee(s) in each Compacting State responsible for insurance issues of its intention to adopt the Uniform Standard. The Commission in adopting a Uniform Standard shall consider fully all submitted materials and issue a concise explanation of its decision.
(3) Effective Date and Opt Out of a Uniform Standard. A Uniform Standard shall become effective ninety (90) days after its promulgation by the Commission or such later date as the Commission may determine; provided, however, that a Compacting State may opt out of a Uniform Standard as provided in this Article. “Opt out” shall be defined as any action by a Compacting State to decline to adopt or participate in a promulgated Uniform Standard. All other Rules and Operating Procedures, and amendments thereto, shall become effective as of the date specified in each Rule, Operating Procedure, or amendment.
(4) Opt Out Procedure. A Compacting State may opt out of a Uniform Standard, either by legislation or regulation duly promulgated by the Insurance Department under the Compacting State's Administrative Procedure Act. If a Compacting State elects to opt out of a Uniform Standard by regulation, it must (a) give written notice to the Commission no later than ten (10) business days after the Uniform Standard is promulgated, or at the time the State becomes a Compacting State and (b) find that the Uniform Standard does not provide reasonable protections to the citizens of the State, given the conditions in the State. The Commissioner shall make specific findings of fact and conclusions of law, based on a preponderance of the evidence, detailing the conditions in the State which warrant a departure from the Uniform Standard and determining that the Uniform Standard would not reasonably protect the citizens of the State. The Commissioner must consider and balance the following factors and find that the conditions in the State and needs of the citizens of the State outweigh: (i) the intent of the legislature to participate in, and the benefits of, an interstate agreement to establish national uniform consumer protections for the Products subject to this Compact; and (ii) the presumption that a Uniform Standard adopted by the Commission provides reasonable protections to consumers of the relevant Product.
Notwithstanding the foregoing, a Compacting State may, at the time of its enactment of this Compact, prospectively opt out of all Uniform Standards involving long-term care insurance products by expressly providing for such opt out in the enacted Compact, and such an opt out shall not be treated as a material variance in the offer or acceptance of any State to participate in this Compact. Such an opt out shall be effective at the time of enactment of this Compact by the Compacting State and shall apply to all existing Uniform Standards involving long-term care insurance products and those subsequently promulgated.
(5) Effect of Opt Out. If a Compacting State elects to opt out of a Uniform Standard, the Uniform Standard shall remain applicable in the Compacting State electing to opt out until such time the opt out legislation is enacted into law or the regulation opting out becomes effective.
Once the opt out of a Uniform Standard by a Compacting State becomes effective as provided under the laws of that State, the Uniform Standard shall have no further force and effect in that State unless and until the legislation or regulation implementing the opt out is repealed or otherwise becomes ineffective under the laws of the State. If a Compacting State opts out of a Uniform Standard after the Uniform Standard has been made effective in that State, the opt out shall have the same prospective effect as provided under Article XIV for withdrawals.
(6) Stay of Uniform Standard. If a Compacting State has formally initiated the process of opting out of a Uniform Standard by regulation, and, while the regulatory opt out is pending, the Compacting State may petition the Commission, at least fifteen (15) days before the effective date of the Uniform Standard, to stay the effectiveness of the Uniform Standard in that State. The Commission may grant a stay if it determines the regulatory opt out is being pursued in a reasonable manner and there is a likelihood of success. If a stay is granted or extended by the Commission, the stay or extension thereof may postpone the effective date by up to ninety (90) days, unless affirmatively extended by the Commission; provided, a stay may not be permitted to remain in effect for more than one (1) year unless the Compacting State can show extraordinary circumstances which warrant a continuance of the stay, including, but not limited to, the existence of a legal challenge which prevents the Compacting State from opting out. A stay may be terminated by the Commission upon notice that the rulemaking process has been terminated.
(7) Not later than thirty (30) days after a Rule or Operating Procedure is promulgated, any person may file a petition for judicial review of the Rule or Operating Procedure; provided, that the filing of such a petition shall not stay or otherwise prevent the Rule or Operating Procedure from becoming effective unless the court finds that the petitioner has a substantial likelihood of success. The court shall give deference to the actions of the Commission consistent with applicable law and shall not find the Rule or Operating Procedure to be unlawful if the Rule or Operating Procedure represents a reasonable exercise of the Commission's authority.
Article VIII. Commission Records and Enforcement.
(1) The Commission shall promulgate Rules establishing conditions and procedures for public inspection and copying of its information and official records, except such information and records involving the privacy of individuals and insurers' trade secrets. The Commission may promulgate additional Rules under which it may make available to federal and state agencies, including law enforcement agencies, records and information otherwise exempt from disclosure, and may enter into agreements with such agencies to receive or exchange information or records subject to nondisclosure and confidentiality provisions.
(2) Except as to privileged records, data, and information, the laws of any Compacting State pertaining to confidentiality or nondisclosure shall not relieve any Compacting State Commissioner of the duty to disclose any relevant records, data, or information to the Commission; provided, that disclosure to the Commission shall not be deemed to waive or otherwise affect any confidentiality requirement; and further provided, that, except as otherwise expressly provided in this Act, the Commission shall not be subject to the Compacting State's laws pertaining to confidentiality and nondisclosure with respect to records, data, and information in its possession. Confidential information of the Commission shall remain confidential after such information is provided to any Commissioner.
(3) The Commission shall monitor Compacting States for compliance with duly adopted Bylaws, Rules, including Uniform Standards, and Operating Procedures. The Commission shall notify any noncomplying Compacting State in writing of its noncompliance with Commission Bylaws, Rules or Operating Procedures. If a noncomplying Compacting State fails to remedy its noncompliance within the time specified in the notice of noncompliance, the Compacting State shall be deemed to be in default as set forth in Article XIV.
(4) The Commissioner of any State in which an Insurer is authorized to do business, or is conducting the business of insurance, shall continue to exercise his or her authority to oversee the market regulation of the activities of the Insurer in accordance with the provisions of the State's law. The Commissioner's enforcement of compliance with the Compact is governed by the following provisions:
(a) With respect to the Commissioner's market regulation of a Product or Advertisement that is approved or certified to the Commission, the content of the Product or Advertisement shall not constitute a violation of the provisions, standards, or requirements of the Compact except upon a final order of the Commission, issued at the request of a Commissioner after prior notice to the Insurer and an opportunity for hearing before the Commission.
(b) Before a Commissioner may bring an action for violation of any provision, standard, or requirement of the Compact relating to the content of an Advertisement not approved or certified to the Commission, the Commission, or an authorized Commission officer or employee, must authorize the action. However, authorization pursuant to this paragraph does not require notice to the Insurer, opportunity for hearing or disclosure of requests for authorization or records of the Commission's action on such requests.
Article IX. Dispute Resolution.
The Commission shall attempt, upon the request of a Member, to resolve any disputes or other issues that are subject to this Compact and which may arise between two or more Compacting States, or between Compacting States and Noncompacting States, and the Commission shall promulgate an Operating Procedure providing for resolution of such disputes.
Article X. Product Filing and Approval.
(1) Insurers and Third-Party Filers seeking to have a Product approved by the Commission shall file the Product with, and pay applicable filing fees to, the Commission. Nothing in this Act shall be construed to restrict or otherwise prevent an insurer from filing its Product with the insurance department in any State wherein the insurer is licensed to conduct the business of insurance, and such filing shall be subject to the laws of the States where filed.
(2) The Commission shall establish appropriate filing and review processes and procedures pursuant to Commission Rules and Operating Procedures. Notwithstanding any provision herein to the contrary, the Commission shall promulgate Rules to establish conditions and procedures under which the Commission will provide public access to Product filing information. In establishing such Rules, the Commission shall consider the interests of the public in having access to such information, as well as protection of personal medical and financial information and trade secrets, that may be contained in a Product filing or supporting information.
(3) Any Product approved by the Commission may be sold or otherwise issued in those Compacting States for which the Insurer is legally authorized to do business.
Article XI. Review of Commission Decisions Regarding Filings.
(1) Not later than thirty (30) days after the Commission has given notice of a disapproved Product or Advertisement filed with the Commission, the Insurer or Third Party Filer whose filing was disapproved may appeal the determination to a review panel appointed by the Commission. The Commission shall promulgate Rules to establish procedures for appointing such review panels and provide for notice and hearing. An allegation that the Commission, in disapproving a Product or Advertisement filed with the Commission, acted arbitrarily, capriciously, or in a manner that is an abuse of discretion or otherwise not in accordance with the law, is subject to judicial review in accordance with Article III, Section (4).
(2) The Commission shall have authority to monitor, review, and reconsider Products and Advertisement subsequent to their filing or approval upon a finding that the product does not meet the relevant Uniform Standard. Where appropriate, the Commission may withdraw or modify its approval after proper notice and hearing, subject to the appeal process in Section (1) above.
Article XII. Finance.
(1) The Commission shall pay or provide for the payment of the reasonable expenses of its establishment and organization. To fund the cost of its initial operations, the Commission may accept contributions and other forms of funding from the National Association of Insurance Commissioners, Compacting States, and other sources. Contributions and other forms of funding from other sources shall be of such a nature that the independence of the Commission concerning the performance of its duties shall not be compromised.
(2) The Commission shall collect a filing fee from each Insurer and Third Party Filer filing a product with the Commission to cover the cost of the operations and activities of the Commission and its staff in a total amount sufficient to cover the Commission's annual budget.
(3) The Commission's budget for a fiscal year shall not be approved until it has been subject to notice and comment as set forth in Article VII of this Compact.
(4) The Commission shall be exempt from all taxation in and by the Compacting States.
(5) The Commission shall not pledge the credit of any Compacting State, except by and with the appropriate legal authority of that Compacting State.
(6) The Commission shall keep complete and accurate accounts of all its internal receipts, including grants and donations, and disbursements of all funds under its control. The internal financial accounts of the Commission shall be subject to the accounting procedures established under its Bylaws. The financial accounts and reports including the system of internal controls and procedures of the Commission shall be audited annually by an independent certified public accountant. Upon the determination of the Commission, but no less frequently than every three (3) years, the review of the independent auditor shall include a management and performance audit of the Commission. The Commission shall make an Annual Report to the Governor and legislature of the Compacting States, which shall include a report of the independent audit. The Commission's internal accounts shall not be confidential and such materials may be shared with the Commissioner of any Compacting State upon request provided, however, that any work papers related to any internal or independent audit and any information regarding the privacy of individuals and insurers' proprietary information, including trade secrets, shall remain confidential.
(7) No Compacting State shall have any claim to or ownership of any property held by or vested in the Commission or to any Commission funds held pursuant to the provisions of this Compact.
Article XIII. Compacting States, Effective Date, and Amendment.
(1) Any State is eligible to become a Compacting State.
(2) The Compact shall become effective and binding upon legislative enactment of the Compact into law by two Compacting States; provided, the Commission shall become effective for purposes of adopting Uniform Standards for, reviewing, and giving approval or disapproval of, Products filed with the Commission that satisfy applicable Uniform Standards only after twenty-six (26) States are Compacting States or, alternatively, by States representing greater than forty percent (40%) of the premium volume for life insurance, annuity, disability income, and long-term care insurance products, based on records of the NAIC for the prior year. Thereafter, it shall become effective and binding as to any other Compacting State upon enactment of the Compact into law by that State.
(3) Amendments to the Compact may be proposed by the Commission for enactment by the Compacting States. No amendment shall become effective and binding upon the Commission and the Compacting States unless and until all Compacting States enact the amendment into law.
Article XIV. Withdrawal, Default, and Termination.
(1) Withdrawal.
(a) Once effective, the Compact shall continue in force and remain binding upon each and every Compacting State; provided, that a Compacting State may withdraw from the Compact (“Withdrawing State”) by enacting a statute specifically repealing the statute which enacted the Compact into law.
(b) The effective date of withdrawal is the effective date of the repealing statute. However, the withdrawal shall not apply to any product filings approved or self-certified, or any Advertisement of such products, on the date the repealing statute becomes effective, except by mutual agreement of the Commission and the Withdrawing State unless the approval is rescinded by the Withdrawing State as provided in Paragraph (e) of this section.
(c) The Commissioner of the Withdrawing State shall immediately notify the Management Committee in writing upon the introduction of legislation repealing this Compact in the Withdrawing State.
(d) The Commission shall notify the other Compacting States of the introduction of such legislation within ten (10) days after its receipt of notice thereof.
(e) The Withdrawing State is responsible for all obligations, duties, and liabilities incurred through the effective date of withdrawal, including any obligations, the performance of which extend beyond the effective date of withdrawal, except to the extent those obligations may have been released or relinquished by mutual agreement of the Commission and the Withdrawing State. The Commission's approval of Products and Advertisement prior to the effective date of withdrawal shall continue to be effective and be given full force and effect in the Withdrawing State, unless formally rescinded by the Withdrawing State in the same manner as provided by the laws of the Withdrawing State for the prospective disapproval of products or advertisement previously approved under state law.
(f) Reinstatement following withdrawal of any Compacting State shall occur upon the effective date of the Withdrawing State reenacting the Compact.
(2) Default.
(a) If the Commission determines that any Compacting State has at any time defaulted (“Defaulting State”) in the performance of any of its obligations or responsibilities under this Compact, the Bylaws or duly promulgated Rules or Operating Procedures, then, after notice and hearing as set forth in the Bylaws, all rights, privileges, and benefits conferred by this Compact on the Defaulting State shall be suspended from the effective date of default as fixed by the Commission. The grounds for default include, but are not limited to, failure of a Compacting State to perform its obligations or responsibilities, and any other grounds designated in Commission Rules. The Commission shall immediately notify the Defaulting State in writing of the Defaulting State's suspension pending a cure of the default. The Commission shall stipulate the conditions and the time period within which the Defaulting State must cure its default. If the Defaulting State fails to cure the default within the time period specified by the Commission, the Defaulting State shall be terminated from the Compact and all rights, privileges, and benefits conferred by this Compact shall be terminated from the effective date of termination.
(b) Product approvals by the Commission or product self-certifications, or any Advertisement in connection with such product, that are in force on the effective date of termination shall remain in force in the Defaulting State in the same manner as if the Defaulting State had withdrawn voluntarily pursuant to Section (1) of this article.
(c) Reinstatement following termination of any Compacting State requires a reenactment of the Compact.
(3) Dissolution of Compact.
(a) The Compact dissolves effective upon the date of the withdrawal or default of the Compacting State which reduces membership in the Compact to one Compacting State.
(b) Upon the dissolution of this Compact, the Compact becomes null and void and shall be of no further force or effect, and the business and affairs of the Commission shall be wound up and any surplus funds shall be distributed in accordance with the Bylaws.
Article XV. Severability and Construction.
(1) The provisions of this Compact shall be severable; and if any phrase, clause, sentence, or provision is deemed unenforceable, the remaining provisions of the Compact shall be enforceable.
(2) The provisions of this Compact shall be liberally construed to effectuate its purposes.
Article XVI. Binding Effect of Compact and Other Laws.
(1) Other Laws.
(a) Nothing herein prevents the enforcement of any other law of a Compacting State, except as provided in Paragraph (b) of this section.
(b) For any Product approved or certified to the Commission, the Rules, Uniform Standards, and any other requirements of the Commission shall constitute the exclusive provisions applicable to the content, approval, and certification of such Products. For Advertisement that is subject to the Commission's authority, any Rule, Uniform Standard, or other requirement of the Commission which governs the content of the Advertisement shall constitute the exclusive provision that a Commissioner may apply to the content of the Advertisement. Notwithstanding the foregoing, no action taken by the Commission shall abrogate or restrict: (i) the access of any person to state courts; (ii) remedies available under state law related to breach of contract, tort, or other laws not specifically directed to the content of the Product; (iii) state law relating to the construction of insurance contracts; or (iv) the authority of the attorney general of the state, including, but not limited to, maintaining any actions or proceedings, as authorized by law.
(c) All insurance products filed with individual States shall be subject to the laws of those States.
(2) Binding Effect of this Compact.
(a) All lawful actions of the Commission, including all Rules and Operating Procedures promulgated by the Commission, are binding upon the Compacting States.
(b) All agreements between the Commission and the Compacting States are binding in accordance with their terms.
(c) Upon the request of a party to a conflict over the meaning or interpretation of Commission actions, and upon a majority vote of the Compacting States, the Commission may issue advisory opinions regarding the meaning or interpretation in dispute.
(d) In the event any provision of this Compact exceeds the constitutional limits imposed on the legislature of any Compacting State, the obligations, duties, powers, or jurisdiction sought to be conferred by that provision upon the Commission shall be ineffective as to that Compacting State, and those obligations, duties, powers, or jurisdiction shall remain in the Compacting State and shall be exercised by the agency thereof to which those obligations, duties, powers, or jurisdiction are delegated by law in effect at the time this Compact becomes effective.
Pursuant to terms and conditions of this chapter, the State of Georgia seeks to join with other states and establish the Interstate Insurance Product Regulation Compact, and thus become a member of the Interstate Insurance Product Regulation Commission. The Commissioner of Insurance is hereby designated to serve as the representative of the State of Georgia to the commission.
This chapter shall be known and may be cited as the “Small Business Employee Choice of Benefits Health Insurance Plan Act.”
The General Assembly recognizes the need for employers and individuals in this state to have the opportunity to choose among group and individual health insurance plans that are more affordable and flexible than standard market policies of accident and sickness insurance and the need to increase the availability of health insurance coverage by authorizing the transaction of this type of plan or policy by accident and sickness insurers licensed to transact business in this state. This chapter shall require insurers which provide major medical coverage to offer policies that contain all state mandated health benefits as well as policies that contain the limited selection of state mandated health benefits set forth in Code Section 33-60-3; provided, however, that employees in group plans or individuals may choose pursuant to this chapter among new health insurance plans offered by insurers that either include all state mandated health benefits or include the limited state mandated health benefits set forth in Code Section 33-60-3.
As used in this chapter, the term:
(1) “Alternative health benefit plan” means a group or individual health benefit plan that contains:
(A) Major medical benefits;
(B) Standard provisions or rights required to be present in an individual, blanket, or group policy or contract for accident and sickness insurance pursuant to state law or regulations unrelated to specific health illnesses, injuries, or conditions of the insured, including, but not limited to, those related to continuation of coverage in Code Section 33-24-21.1, Code Section 33-24-21.2, paragraph (4) of Code Section 33-30-4, and paragraph (8) of subsection (b) of Code Section 33-30-6; entitlement to conversion privileges in Code Section 33-24-21.1; termination of coverage in Code Sections 33-24-21 and 33-24-28; and coverage of newly born or adopted children in Code Section 33-24-22; and
(C) Coverage of testing for chlamydia in Code Section 31-17-4.1; coverage for complications of pregnancy in Code Section 33-24-24; coverage for general anesthesia and related hospital and outpatient facility charges for dental care for persons who are developmentally disabled, seven or younger, neurologically impaired, or suffering severe face or head trauma in Code Section 33-24-28.4; surveillance tests for ovarian cancer in Code Section 33-24-56.2; colorectal cancer screening and testing in Code Section 33-24-56.3; coverage for hospital stays after delivery in Code Section 33-24-58.2; direct access to obstetricians and gynecologists in Code Section 33-24-59; treatment of dependent children with cancer in Code Section 33-24-59.1; coverage for equipment and self-management training for individuals with diabetes in Code Section 33-24-59.2; coverage for prescribed female contraceptive drugs or devices in Code Section 33-24-59.6, provided that nothing contained in this paragraph shall be construed to require any insurance company to provide coverage for abortion; coverage for prescription inhalers in Code Section 33-24-59.8; coverage for autism in Code Section 33-24-59.10; coverage for mastectomy and lymph node dissection in Code Section 33-24-72; coverage for mammograms, Pap smears, and screening for prostate cancer in Code Sections 33-29-3.2 and 33-30-4.2; provisions concerning mail-order pharmaceuticals in Code Section 33-30-4.3; and coverage for child wellness exams in Code Sections 33-29-3.4 and 33-30-4.5.
(2) “Group” means any employer group of 50 employees or less.
(3) “Insurer” means any insurer or nonprofit organization authorized to sell accident and sickness policies, subscriber contracts, certificates, or agreements of any form under Chapters 15, 20, 21, 29, and 30 of this title.
(a) Notwithstanding any other provision of law:
(1) Any insurer authorized to transact business in this state offering group accident and sickness policies or contracts shall be required to offer, through a licensed agent or agency, a group health benefit plan that contains all state mandated health benefits and may offer a group alternative health benefit plan as defined in this chapter; and
(2) Any insurer authorized to transact business in this state offering individual accident and sickness policies or contracts shall be required to offer, through a licensed agent or agency, an individual health benefit plan that contains all state mandated health benefits and may offer an individual alternative health benefit plan as defined in this chapter.
(b) An employer who chooses to offer group health benefit plans to its employees shall offer to each eligible employee a group health benefit plan that contains all state mandated health benefits and may offer to each eligible employee a group alternative health benefit plan as defined in this chapter.
(c) The provisions of Chapter 21 of this title shall not be deemed to prohibit licensees thereunder from selling the policies provided for in this Code section.
(d) The purchase of an accident and sickness policy or contract under this Code section shall not preclude the purchaser from purchasing additional limited benefit insurance policies or contracts.
(a) In each sale of an alternative health benefit plan, the insurer shall provide to each proposed individual group member or individual policyholder a notice and an acknowledgment at the beginning of the application for the alternative health benefit plan containing the following language in boldface type:
“You have the option to choose this Small Business Employee Choice of Benefits Health Insurance Plan which does not provide all of the state mandated health benefits normally required in accident and sickness insurance policies in Georgia. This health benefits plan may provide a more affordable health insurance policy for you, although, at the same time, it may provide you with fewer health benefits than those normally included as state mandated health benefits in policies in Georgia. If you choose this option, please consult with your insurance agent to discover which state mandated health benefits are excluded in this policy.”
(b) An acknowledgment separate from the notice and application provided for in subsection (a) of this Code section shall be provided to and completed by each individual policyholder or individual group member. Such acknowledgment shall contain a comparison of the benefits contained in each of the health benefit plan options being offered to the individual policyholder or individual group member. In the case of group health benefit plans being offered by an employer, a copy of the acknowledgment for each individual group member shall be maintained by the employer.
As used in this chapter, the term:
(1) “Automobile club” or “club” means any person, who in consideration of fees, dues, periodic payments, or other specifically stated charges, promises its members to provide automobile club services.
(2) “Automobile club services” shall include, but not be limited to, the assumption of or reimbursement of the expense or a portion thereof for towing of a motor vehicle, emergency road service, matters relating to the operation, use, and maintenance of a motor vehicle, and the supplying of services which includes, augments, or is incidental to theft or reward services, discount services, arrest bond services, lock and key services, trip interruption services, and legal fee reimbursement services in defense of traffic related offenses.
An automobile club performing services as defined in this chapter shall not be subject to any laws respecting insurance companies of any class, kind, or character in this state or regulation under such laws because of performance of those services.
This chapter shall be known and may be cited as the “Property and Casualty Actuarial Opinion Law.”
(a) Every property and casualty insurance company doing business in this state, unless otherwise exempted by the domiciliary commissioner, shall annually submit the opinion of an appointed actuary entitled “Statement of Actuarial Opinion.” This opinion shall be filed in accordance with rules and regulations promulgated by the Commissioner regarding property and casualty annual statement instructions.
(b)(1) Every property and casualty insurance company domiciled in this state that is required to submit a statement of actuarial opinion shall annually submit an actuarial opinion summary written by the company's appointed actuary. This actuarial opinion summary shall be filed in accordance with rules and regulations promulgated by the Commissioner regarding property and casualty annual statement instructions and shall be considered as a document supporting the actuarial opinion required in subsection (a) of this Code section.
(2) A company licensed but not domiciled in this state shall provide the actuarial opinion summary upon request.
(c)(1) An actuarial report and underlying work papers as required by rules and regulations promulgated by the Commissioner regarding property and casualty annual statement instructions shall be prepared to support each actuarial opinion.
(2) If the insurance company fails to provide a supporting actuarial report or work papers at the request of the Commissioner or the Commissioner determines that the supporting actuarial report or work papers provided by the insurance company are otherwise unacceptable to the Commissioner, the Commissioner may engage a qualified actuary at the expense of the insurance company to review the opinion and the basis for the opinion and prepare the supporting actuarial report or work papers.
(d) The appointed actuary shall not be liable for damages to any person other than the insurance company and the Commissioner for any act, error, omission, decision, or conduct with respect to the actuary's opinion except in cases of fraud or willful misconduct on the part of the appointed actuary.
(a) The statement of actuarial opinion shall be provided with the annual statement in accordance with rules and regulations promulgated by the Commissioner regarding property and casualty annual statement instructions and shall be treated as a public document.
(b)(1) Documents, materials, or other information in the possession or control of the department that are considered an actuarial report, work papers, or actuarial opinion summary provided in support of the opinion and any other material provided by the insurance company to the Commissioner in connection with the actuarial report, work papers, or the actuarial opinion summary shall be confidential by law and privileged, shall not be subject to disclosure under Article 4 of Chapter 18 of Title 50, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action.
(2) The provisions of this subsection shall not be construed to limit the Commissioner's authority to release the documents to the Actuarial Board for Counseling and Discipline so long as the material is required for the purpose of professional disciplinary proceedings and that the Actuarial Board for Counseling and Discipline establishes procedures satisfactory to the Commissioner for preserving the confidentiality of the documents. In addition, the provisions of this subsection shall not be construed to limit the Commissioner's authority to use the documents, materials, or other information in furtherance of any regulatory or legal action brought as a part of the Commissioner's official duties.
(c) Neither the Commissioner nor any person who received documents, materials, or other information while acting under the authority of the Commissioner shall be permitted or required to testify in any private civil action concerning such confidential documents, materials, or other information subject to subsection (b) of this Code section.
(d) In order to assist the Commissioner in the performance of his or her duties, the Commissioner may:
(1) Share documents, materials, and other information, including confidential and privileged documents, materials, and information subject to subsection (b) of this Code section with other state, federal, and international regulatory agencies, with the National Association of Insurance Commissioners and its affiliates and subsidiaries, and with state, federal, and international law enforcement authorities, provided that the recipient agrees to maintain the confidentiality and privileged status of the document, material, or other information and has the legal authority to maintain confidentiality;
(2) Receive documents, materials, and other information, including otherwise confidential and privileged documents, materials, or information, from the National Association of Insurance Commissioners and its affiliates and subsidiaries and from regulatory and law enforcement officials of other foreign or domestic jurisdictions. The Commissioner shall maintain as confidential and privileged any document, material, or information received with notice and the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information; and
(3) Enter into agreements concerning sharing and use of information consistent with this subsection and subsections (b) and (c) of this Code section.
(e) No waiver of any applicable privilege or claim of confidentiality in the documents, materials, or information shall occur as a result of disclosure to the Commissioner under this Code section or as a result of sharing as authorized by subsection (d) of this Code section.
The General Assembly finds that guaranteed asset protection waivers are not insurance. All guaranteed asset protection waivers issued on or after the date of enactment of this chapter shall not be construed as insurance.
(a) The purpose of this chapter is to provide a framework within which guaranteed asset protection waivers are defined and may be offered within this state.
(b) This chapter shall not apply to:
(1) An insurance policy offered by an insurer under the insurance laws of this state; or
(2) A debt cancellation or debt suspension contract being offered in compliance with 12 C.F.R. Part 37 or 12 C.F.R. Part 721 or other federal law.
(c) Guaranteed asset protection waivers governed under this chapter are not insurance and are exempt from the insurance laws of this state. Persons marketing, selling, or offering to sell guaranteed asset protection waivers to borrowers that comply with this chapter are exempt from this state's insurance licensing requirements.
The following terms are defined for purposes of this chapter and are not intended to provide actual terms required in guaranteed asset protection waivers:
(1) “Administrator” means a person, other than an insurer or creditor, that performs administrative or operational functions pursuant to guaranteed asset protection waiver programs.
(2) “Borrower” means a debtor, retail buyer, or lessee under a finance agreement.
(3) “Creditor” means:
(A) The lender in a loan or credit transaction;
(B) The lessor in a lease transaction;
(C) Any retail installment seller that provides credit to any retail buyer of motor vehicles, provided that such entity complies with the provisions of this chapter;
(D) The seller in commercial retail installment transactions; or
(E) The assignees of any of the creditors listed in subparagraphs (A) through (D) of this paragraph to whom the credit obligation is payable.
(4) “Finance agreement” means a loan, lease, or retail installment sales contract for the purchase or lease of a motor vehicle.
(5) “Free look period” means the period of time from the effective date of the guaranteed asset protection waiver until the date the borrower may cancel the guaranteed asset protection waiver without penalty, fees, or costs to the borrower. This period of time must not be shorter than 30 days.
(6) “Guaranteed asset protection waiver” means a contractual agreement wherein a creditor agrees, with or without a separate charge, to cancel or waive all or part of amounts due on a borrower's finance agreement in the event of a total physical damage loss or unrecovered theft of the motor vehicle, which agreement must be part of, or a separate addendum to, the finance agreement or a contractual agreement wherein a creditor agrees, with or without a separate charge, to cancel or waive all or part of the excess wear and use charges owed by the borrower to the creditor under the lease contract when the borrower returns a leased vehicle to the creditor at termination of the lease, which agreement must be part of, or a separate addendum to, the lease contract. Such waiver may also provide, with or without a separate charge, a benefit that waives an amount, or provides a borrower with a credit, toward the purchase of a replacement vehicle.
(7) “Insurer” means an insurance company licensed, registered, or otherwise authorized to do business under the insurance laws of this state.
(8) “Motor vehicle” means self-propelled or towed vehicles designed for personal or commercial use, including but not limited to automobiles, trucks, motorcycles, recreational vehicles, all-terrain vehicles, campers, boats, personal watercraft, and motorcycle, boat, camper, and personal watercraft trailers.
(9) “Person” includes an individual, company, association, organization, partnership, business trust, corporation, and every form of legal entity.
(10) “Retail buyer” shall have the same meaning as provided in Code Section 10-1-31.
(11) “Retail installment seller” shall have the same meaning as provided in Code Section 10-1-31.
(a) Guaranteed asset protection waivers may be offered, sold, or provided to borrowers in this state in compliance with this chapter.
(b) Guaranteed asset protection waivers may, at the option of the creditor, be sold for a single payment or may be offered with a monthly or periodic payment option.
(c) Notwithstanding any other provision of law, any cost to the borrower for a guaranteed asset protection waiver entered into in compliance with the federal Truth in Lending Act, 15 U.S.C. Section 1601, et seq., and its implementing regulations, as they may be amended from time to time, must be separately stated and is not to be considered a finance charge or interest.
(d) A retail installment seller must insure its guaranteed asset protection waiver obligations under a contractual liability or other insurance policy issued by an insurer. A creditor other than a retail installment seller may insure its guaranteed asset protection waiver obligations under a contractual liability policy or other such policy issued by an insurer. Any such insurance policy may be directly obtained by a creditor or retail installment seller or may be procured by an administrator to cover a creditor's or retail installment seller's obligations. However, retail installment sellers that are lessors on motor vehicles are not required to insure obligations related to guaranteed asset protection waivers on such leased vehicles.
(e) The guaranteed asset protection waiver shall remain a part of the finance agreement upon the assignment, sale, or transfer of such finance agreement by the creditor.
(f) Neither the extension of credit, the term of credit, nor the term of the related motor vehicle sale or lease may be conditioned upon the purchase of a guaranteed asset protection waiver.
(g) Any creditor that offers a guaranteed asset protection waiver must report the sale of, and forward funds received on, all such waivers to the designated party, if any, as prescribed in any applicable administrative services agreement, contractual liability policy, other insurance policy or other specified program documents.
(h) Funds received or held by a creditor or administrator and belonging to an insurer, creditor, or administrator pursuant to the terms of a written agreement must be held by such creditor or administrator in a fiduciary capacity.
(i) A retail installment seller that offers, provides, or sells a guaranteed asset protection waiver in connection with the sale of a motor vehicle shall not be required to insure its guaranteed asset protection waiver if the retail installment seller does both of the following:
(1) Maintains, or has a parent company that maintains, a net worth or stockholders' equity of at least $50 million, provided the parent company guarantees the obligations of the retail installment seller arising from guaranteed asset protection waivers underwritten pursuant to this subsection; and
(2) Files a copy of its Form 10-K or Form 20-F disclosure statements, or, if it does not file with the United States Securities and Exchange Commission, a copy of its audited financial statements reported on generally accepted accounting principles. If the retail installment seller's financial statements are consolidated with those of its parent company, then the retail installment seller may comply with the provisions of this paragraph by filing the statements of its parent company. The statement shall be filed with the Commissioner at least 30 days prior to the retail installment seller's initial offering or delivering a guaranteed asset protection waiver, and thereafter the statement shall be filed with the Commissioner annually.
(a) Contractual liability or other insurance policies insuring guaranteed asset protection waivers must state the obligation of the insurer to reimburse or pay to the creditor any sums the creditor is legally obligated to waive under the guaranteed asset protection waivers issued by the creditor and purchased or held by the borrower.
(b) Coverage under a contractual liability or other insurance policy insuring a guaranteed asset protection waiver must also cover any subsequent assignee upon the assignment, sale, or transfer of the finance agreement.
(c) Coverage under a contractual liability or other insurance policy insuring a guaranteed asset protection waiver must remain in effect unless cancelled or terminated in compliance with the applicable insurance laws of this state.
(d) The cancellation or termination of a contractual liability or other insurance policy must not reduce the insurer's responsibility for guaranteed asset protection waivers issued by the creditor prior to the date of cancellation or termination and for which premium has been received by the insurer.
Guaranteed asset protection waivers must disclose, as applicable, in writing and in clear, understandable language that is easy to read, the following:
(1) The name and address of the initial creditor and the borrower at the time of sale and the identity of any administrator if different from the creditor;
(2) The purchase price and the terms of the guaranteed asset protection waiver, including without limitation the requirements for protection, conditions, or exclusions associated with the guaranteed asset protection waiver;
(3) That the borrower may cancel the guaranteed asset protection waiver within a free look period, as specified in the waiver, and will be entitled to a full refund of the purchase price, provided no benefits have been made; or in the event benefits have been made, the borrower may receive a full or partial refund if the waiver so provides;
(4) The procedure the borrower must follow, if any, to obtain guaranteed asset protection waiver benefits under the terms and conditions of the waiver, including a telephone number and address where the borrower may apply for waiver benefits;
(5) Whether or not the guaranteed asset protection waiver is cancelable after the free look period and the conditions under which it may be canceled or terminated, including the procedures for requesting any refund due;
(6) That in order to receive any refund due in the event of a borrower's cancellation of the guaranteed asset protection waiver agreement or early termination of the finance agreement after the free look period of the guaranteed asset protection waiver, the borrower, in accordance with terms of the waiver, must provide a written request to cancel to the creditor, administrator, or such other party within 90 days after the borrower's decision to cancel the waiver or the occurrence of the event terminating the finance agreement;
(7) The methodology for calculating any refund of the unearned purchase price of the guaranteed asset protection waiver due in the event of cancellation of the guaranteed asset protection waiver or early termination of the finance agreement; and
(8) That neither the extension of credit, the terms of the credit, nor the terms of the related motor vehicle sale or lease may be conditioned upon the purchase of the guaranteed asset protection waiver.
(a) Guaranteed asset protection waiver agreements may be cancelable or noncancelable after the free look period. Guaranteed asset protection waivers must provide that if a borrower cancels a waiver within the free look period, the borrower will be entitled to a full refund of the purchase price, provided no benefits have been paid; or in the event benefits have been paid, the borrower may receive a full or partial refund if the waiver so provides.
(b) In the event of a borrower's cancellation of the guaranteed asset protection waiver or early termination of the finance agreement, after the agreement has been in effect beyond the free look period, the borrower may be entitled to a refund of any unearned portion of the purchase price of the waiver unless the waiver provides otherwise. In order to receive a refund, the borrower, in accordance with any applicable terms of the waiver, must provide a written request to the creditor, administrator, or other party within 90 days after the borrower's decision to cancel the waiver or the occurrence of the event terminating the finance agreement.
(c) If the cancellation of a guaranteed asset protection waiver occurs as a result of a default under the finance agreement or the repossession of the motor vehicle associated with the finance agreement, or any other termination of the finance agreement, any refund due may be paid directly to the creditor or administrator and applied as set forth in subsection (d) of this Code section.
(d) Any cancellation refund under subsection (a), (b), or (c) of this Code section may be applied by the creditor as a reduction of the amount owed under the finance agreement unless the borrower can show that the finance agreement has been paid in full.
Subsection (c) of Code Section 33-63-4 and Code Sections 33-63-6 and 33-63-9 shall not be applicable to a guaranteed asset protection waiver offered in connection with a lease or retail installment sale associated with a commercial transaction.
The Commissioner may take action which is necessary or appropriate to enforce the provisions of this chapter and to protect guaranteed asset protection waiver holders in this state. After proper notice and opportunity for hearing, the Commissioner may:
(1) Order the creditor, administrator, or any other person not in compliance with this chapter to cease and desist from further guaranteed asset protection waiver related operations which are in violation of this chapter; and
(2) Impose a penalty of not more than $500.00 per violation and not more than $10,000.00 in the aggregate for all violations of a similar nature. For purposes of this paragraph, violations must be of a similar nature if the violation consists of the same or similar course of conduct, action, or practice, irrespective of the number of times the conduct, action, or practice which is determined to be a violation of this chapter occurred.
As used in this chapter, the term:
(1) “Affiliate pharmacy” means a pharmacy which, either directly or indirectly through one or more intermediaries:
(A) Has an investment or ownership interest in a pharmacy benefits manager licensed under this chapter;
(B) Shares common ownership with a pharmacy benefits manager licensed under this chapter; or
(C) Has an investor or ownership interest holder which is a pharmacy benefits manager licensed under this chapter.
(2) “Business entity” means a corporation, association, partnership, sole proprietorship, limited liability company, limited liability partnership, or other legal entity.
(3) “Dispenser” shall have the same meaning as in paragraph (10) of Code Section 16-13-21.
(4) “Health plan” means an individual or group plan or program which is established by contract, certificate, law, plan, policy, subscriber agreement, or any other method and which is entered into, issued, or offered for the purpose of arranging for, delivering, paying for, providing, or reimbursing any of the costs of health care or medical care, including pharmacy services, drugs, or devices. Such term includes any health care coverage provided under the state health benefit plan pursuant to Article 1 of Chapter 18 of Title 45; the medical assistance program pursuant to Article 7 of Chapter 4 of Title 49; the PeachCare for Kids Program pursuant to Article 13 of Chapter 5 of Title 49; and any other health benefit plan or policy administered by or on behalf of this state.
(5) “Health system” means a hospital or any other facility or entity owned, operated, or leased by a hospital and a long-term care home.
(6) “Insured” means a person who receives prescription drug benefits administered by a pharmacy benefits manager.
(7) “Maximum allowable cost” means the per unit amount that a pharmacy benefits manager reimburses a pharmacist for a prescription drug, excluding dispensing fees and copayments, coinsurance, or other cost-sharing charges, if any.
(8) “National average drug acquisition cost” means the monthly survey of retail pharmacies conducted by the federal Centers for Medicare and Medicaid Services to determine average acquisition cost for Medicaid covered outpatient drugs.
(9) “Pharmacy” means a pharmacy or pharmacist licensed pursuant to Chapter 4 of Title 26 or another dispensing provider.
(10) “Pharmacy benefits management” means the administration of a plan or program that pays for, reimburses, and covers the cost of drugs, devices, or pharmacy care to insureds on behalf of a health plan. The term shall not include the practice of pharmacy as defined in Code Section 26-4-4.
(11) “Pharmacy benefits manager” means a person, business entity, or other entity that performs pharmacy benefits management. The term includes a person or entity acting for a pharmacy benefits manager in a contractual or employment relationship in the performance of pharmacy benefits management for a health plan. The term does not include services provided by pharmacies operating under a hospital pharmacy license. The term also does not include health systems while providing pharmacy services for their patients, employees, or beneficiaries, for indigent care, or for the provision of drugs for outpatient procedures. The term also does not include services provided by pharmacies affiliated with a facility licensed under Code Section 31-44-4 or a licensed group model health maintenance organization with an exclusive medical group contract and which operates its own pharmacies which are licensed under Code Section 26-4-110.
(12) “Point-of-sale fee” means all or a portion of a drug reimbursement to a pharmacy or other dispenser withheld at the time of adjudication of a claim for any reason.
(13) “Rebate” means any and all payments that accrue to a pharmacy benefits manager or its health plan client, directly or indirectly, from a pharmaceutical manufacturer, including but not limited to discounts, administration fees, credits, incentives, or penalties associated directly or indirectly in any way with claims administered on behalf of a health plan client.
(14) “Retroactive fee” means all or a portion of a drug reimbursement to a pharmacy or other dispenser recouped or reduced following adjudication of a claim for any reason, except as otherwise permissible as described in Code Section 26-4-118.
(15) “Steering” means:
(A) Ordering an insured to use its affiliate pharmacy for the filling of a prescription or the provision of pharmacy care;
(B) Ordering an insured to use an affiliate pharmacy of another pharmacy benefits manager licensed under this chapter pursuant to an arrangement or agreement for the filling of a prescription or the provision of pharmacy care;
(C) Offering or implementing plan designs that require an insured to utilize its affiliate pharmacy or an affiliate pharmacy of another pharmacy benefits manager licensed under this chapter or that increases plan or insured costs, including requiring an insured to pay the full cost for a prescription when an insured chooses not to use any affiliate pharmacy; or
(D) Advertising, marketing, or promoting its affiliate pharmacy or an affiliate pharmacy of another pharmacy benefits manager licensed under this chapter to insureds. Subject to the foregoing, a pharmacy benefits manager may include its affiliated pharmacy or an affiliate pharmacy of another pharmacy benefits manager licensed under this chapter in communications to patients, including patient and prospective patient specific communications, regarding network pharmacies and prices, provided that the pharmacy benefits manager includes information regarding eligible nonaffiliated pharmacies in such communications and that the information provided is accurate.
(a) No person, business entity, or other entity shall act as or hold itself out to be a pharmacy benefits manager in this state, other than an applicant licensed in this state for the kinds of business for which it is acting as a pharmacy benefits manager, unless such person, business entity, or other entity holds a license as a pharmacy benefits manager issued by the Commissioner pursuant to this chapter. The license shall be renewable on an annual basis. Failure to hold such license shall subject such person, business entity, or other entity to the fines and other appropriate penalties as provided in Chapter 2 of this title.
(b) An application for a pharmacy benefits manager's license or an application for renewal of such license shall be accompanied by a filing fee of $2,000.00 for an initial license and $1,000.00 for renewal.
(c) A license shall be issued or renewed by the Commissioner unless the Commissioner finds that the applicant for or holder of the license:
(1) Has intentionally misrepresented or concealed any material fact in the application for the license;
(2) Has obtained or attempted to obtain the license by misrepresentation, concealment, or other fraud;
(3) Has committed fraud;
(4) Has failed to obtain for initial licensure or retain for annual licensure renewal a net worth of at least $200,000.00; or
(5) Has violated any provision of this chapter while on probation, if for license renewal.
(d) If the Commissioner moves to suspend, revoke, or nonrenew a license for a pharmacy benefits manager, the Commissioner shall provide notice of that action to the pharmacy benefits manager, and the pharmacy benefits manager may invoke the right to an administrative hearing in accordance with Chapter 2 of this title.
(e) No licensee whose license has been revoked as prescribed under this Code section shall be entitled to file another application for a license within five years from the effective date of the revocation or, if judicial review of such revocation is sought, within five years from the date of final court order or decree affirming the revocation. The application when filed may be refused by the Commissioner unless the applicant shows good cause why the revocation of its license shall not be deemed a bar to the issuance of a new license.
(f) Appeal from any order or decision of the Commissioner made pursuant to this chapter shall be taken as provided in Chapter 2 of this title.
(g)(1) The Commissioner shall have the authority to issue a probationary license to any applicant under this title.
(2) A probationary license may be issued for a period of not less than three months and not longer than 12 months and shall be subject to immediate revocation for cause at any time without a hearing.
(3) The Commissioner shall prescribe the terms of probation, may extend the probationary period, or refuse to grant a license at the end of any probationary period in accordance with rules and regulations.
(h) A pharmacy benefits manager's license may not be sold or transferred to a nonaffiliated or otherwise unrelated party. A pharmacy benefits manager may not contract or subcontract any of its negotiated formulary services to any unlicensed business entity.
(i) In addition to all other penalties provided for under this title, the Commissioner shall have the authority to assess a monetary penalty against any person, business entity, or other entity acting as a pharmacy benefits manager without a license of up to $2,000.00 for each transaction in violation of this chapter, unless such person, business entity, or other entity knew or reasonably should have known it was in violation of this chapter, in which case the monetary penalty provided for in this subsection may be increased to an amount of up to $10,000.00 for each and every act in violation.
(j) A licensed pharmacy benefits manager shall not market or administer any insurance product not approved in Georgia or that is issued by a nonadmitted insurer or unauthorized multiple employer self-insured health plan.
(k) In addition to all other penalties provided for under this title, the Commissioner shall have the authority to place any pharmacy benefits manager on probation for a period of time not to exceed one year for each and every act in violation of this chapter and shall subject such pharmacy benefits manager to a monetary penalty of up to $2,000.00 for each and every act in violation of this chapter, unless the pharmacy benefits manager knew or reasonably should have known he or she was in violation of this chapter, in which case the monetary penalty provided for in this subsection shall be increased to an amount of up to $10,000.00 for each and every act in violation. In the event a pharmacy benefits manager violates any provision of this chapter while on probation, the Commissioner shall have the authority to suspend the pharmacy benefits manager's license. For purposes of this subsection, a violation shall be considered to have occurred each time an act in violation of this chapter is committed.
(a) Every applicant for a pharmacy benefits manager's license shall file with the application and shall thereafter maintain in force a bond in the amount of $100,000.00 in favor of the Commissioner executed by a corporate surety insurer authorized to transact insurance in this state. The terms and type of the bond shall be established by rules and regulations.
(b) The bond shall remain in force until the surety is released from liability by the Commissioner or until the bond is canceled by the surety. Without prejudice to any liability accrued prior to cancellation, the surety may cancel the bond upon 30 days' advance notice, in writing, filed with the Commissioner.
(c) Every applicant for a pharmacy benefits manager's license shall obtain and shall thereafter maintain in force errors and omissions coverage or other appropriate liability insurance, written by an insurer authorized to transact insurance in this state, in an amount of at least $250,000.00.
(d) The coverage required in subsection (c) of this Code section shall remain in force for a term of at least one year and shall contain language that includes that the insurer may cancel the insurance upon 60 days' advance notice filed with the Commissioner. Other terms and conditions relating to the errors and omissions policy may be imposed on the applicant in accordance with rules and regulations.
(e) In the event a licensed pharmacy benefits manager fails to renew, surrenders, or otherwise terminates its license, it must retain both the bond and the errors and omissions coverage for a period of not less than one year after the licensee has failed to renew, surrendered, or otherwise terminated the license.
(a) No pharmacy benefits manager shall engage in the practice of medicine, except as otherwise provided in subsection (b) of this Code section.
(b) Any physician employed by or contracted with a pharmacy benefits manager advising on or making determinations specific to a Georgia insured in connection with a prior authorization or step therapy appeal or determination review shall:
(1) Have actively seen patients within the past five years; and
(2) Have practiced in the same specialty area for which he or she is providing advisement within the past five years.
(c) For contracts and amendments entered into with a pharmacy benefits manager on and after July 1, 2021, the department is encouraged to require the use of a licensed Georgia physician for prior authorization or step therapy appeal or determination reviews.
Pharmacy benefits managers, whether licensed pursuant to this chapter or exempt from licensure pursuant to subsection (l) of Code Section 33-64-2, shall be subject to Code Section 26-4-118, “The Pharmacy Audit Bill of Rights,” to the same extent and in the same manner as pharmacies.
A pharmacy benefits manager licensed pursuant to this chapter shall not be required to obtain a license as an administrator pursuant to Article 2 of Chapter 23 of this title to perform any function as a pharmacy benefits manager pursuant to this chapter.
(a) The Commissioner shall enforce the provisions of this chapter and may promulgate rules and regulations to implement the provisions of this chapter to ensure the safe and proper operations of pharmacy benefits managers in this state.
(b) In addition to all other authority granted by this title, the Commissioner may:
(1) Conduct financial examinations and compliance audits of pharmacy benefits managers to ensure compliance with the provisions of this chapter and rules and regulations implemented pursuant to this chapter; provided, however, that such authority shall not extend to financial examination and compliance audits of pharmacy benefits managers' conduct in performing services on behalf of the state health benefit plan pursuant to Article 1 of Chapter 18 of Title 45 or the medical assistance program pursuant to Article 7 of Chapter 4 of Title 49. The pharmacy benefits manager subject to a financial examination or compliance audit shall pay all the actual expenses incurred in conducting the examination or audit. When the examination or audit is made by an examiner or auditor who is not a regular employee of the department, the pharmacy benefits manager examined or audited shall pay the proper expenses for the services of the examiner or auditor and his or her assistants and the actual travel and lodging expenses incurred by such examiners, auditors, and assistants in an amount approved by the Commissioner. The examiner or auditor shall file a consolidated accounting of expenses for the examination or audit with the Commissioner. No pharmacy benefits manager shall pay, and no examiner or auditor shall accept, any additional emolument on account of any examination or audit. When the examination or audit is conducted in whole or in part by regular salaried employees of the department, payment for such services and proper expenses shall be made by the pharmacy benefits manager examined or audited to the Commissioner. The Commissioner shall be authorized to keep a portion of examination or audit fees paid by the pharmacy benefits manager examined or audited to pay for any costs incurred as a result of the examination or audit, and any fees remaining shall be deposited in the state treasury; provided, however, that when a pharmacy benefits manager is examined or audited because of a complaint filed against such pharmacy benefits manager and it is determined by the Commissioner that the complaint was not justified, the expenses incurred as a result of the examination or audit shall not be assessed against the pharmacy benefits manager but shall be borne by the department;
(2) Investigate complaints of alleged violations of this chapter;
(3) Issue cease and desist orders when a pharmacy benefits manager is taking or threatening to take action in violation of this chapter or rules and regulations implemented pursuant to this chapter; and
(4) Order reimbursement to an insured, pharmacy, or dispenser who has incurred a monetary loss as a result of a violation of this chapter or rules and regulations implemented pursuant to this chapter as well as order payment of a fine not to exceed $1,000.00 per violation to an insured, pharmacy, or dispenser who has been aggrieved as a result of a violation of this chapter or rules and regulations implemented pursuant to this chapter. Such fine shall be in addition to and shall not preclude any other fines imposed pursuant to this title. For purposes of this paragraph, a violation shall be considered to have occurred each time a prohibited act is committed.
(c) A pharmacy benefits manager shall make its records available to the Commissioner, deidentified of any protected health information, upon written demand and provide cooperation in connection with financial examinations, compliance audits, and investigations.
(d) In the event a violation of this chapter or rules and regulations implemented pursuant to this chapter is found following a complaint, the Commissioner may, at his or her discretion, conduct a compliance audit to identify whether any other similar violations have occurred within the state.
(a) As used in this Code section, “electronic prior authorization” or “e-prior authorization” means a requirement that a prescriber obtain approval via electronic media from a health plan to prescribe a specific medication prior to dispensing. Facsimiles shall not be considered an electronic submission under this Code section except in the event that such electronic media is temporarily unavailable due to system failure or outage.
(b) No later than 24 months after the adoption of standards by the National Council of Prescription Drug Programs, the department shall under the direction of the Commissioner adopt standards by which the pharmacy benefits manager shall exchange standard e-prior authorization requests with health care providers for drugs and devices using electronic data interchange standards consistent with those adopted by the National Council of Prescription Drug Programs. Such standards shall support clinical workflow decision support of the physician provider.
(c) No later than 24 months after the adoption of standards by the National Council of Prescription Drug Programs, e-prior authorization requests shall be accessible and submitted by providers to pharmacy benefits managers and health plans through secure electronic transmissions utilizing the current National Council of Prescription Drug Programs electronic prior authorization standard.
(d) Nothing in this Code section shall require any health care provider to participate in e-prior authorization or electronic prior authorization in order to obtain the necessary authorization for patient care.
(a) Upon each contract execution or renewal between a pharmacy benefits manager and a pharmacy or between a pharmacy benefits manager and a pharmacy's contracting representative or agent, such as a pharmacy services administrative organization, a pharmacy benefits manager shall, with respect to such contract or renewal:
(1) Include in such contract or renewal the sources utilized to determine multi-source generic drug pricing, such as maximum allowable cost or any successive benchmark pricing formula, and update such pricing information at least every five business days, provided that such pricing information update shall be at least every 14 business days for those contracts pursuant to Article 7 of Chapter 4 of Title 49; and
(2) Maintain a procedure to eliminate products from the multi-source generic list of drugs subject to such pricing or modify multi-source generic drug pricing within five business days when such drugs do not meet the standards and requirements of this Code section in order to remain consistent with pricing changes in the marketplace.
(b) A pharmacy benefits manager shall reimburse pharmacies for drugs subject to multi-source generic drug pricing based upon pricing information which has been updated within five business days as set forth in paragraph (1) of subsection (a) of this Code section.
(c) A pharmacy benefits manager may not place a drug on a multi-source generic list unless there are at least two therapeutically equivalent, multi-source generic drugs, or at least one generic drug available from only one manufacturer, generally available for purchase by network pharmacies from national or regional wholesalers.
(d) All contracts between a pharmacy benefits manager and a contracted pharmacy or between a pharmacy benefits manager and a pharmacy's contracting representative or agent, such as a pharmacy services administrative organization, shall include a process to internally appeal, investigate, and resolve disputes regarding multi-source generic drug pricing. The process shall include the following:
(1) The right to appeal shall be limited to 14 calendar days following reimbursement of the initial claim; and
(2) A requirement that the health benefit plan issuer or pharmacy benefits manager shall respond to an appeal described in subsection (a) of this Code section no later than 14 calendar days after the date the appeal was received by such health benefit plan issuer or pharmacy benefits manager.
(e) For appeals that are denied, the pharmacy benefits manager shall provide the reason for the denial and identify the national drug code of a drug product that may be purchased by contracted pharmacies at a price at or below the maximum allowable cost.
(f) If the appeal is successful, the health benefit plan issuer or pharmacy benefits manager shall:
(1) Adjust the maximum allowable cost price that is the subject of the appeal effective on the day after the date the appeal is decided;
(2) Apply the adjusted maximum allowable cost price to all similarly situated pharmacists and pharmacies as determined by the health plan issuer or pharmacy benefits manager; and
(3) Allow the pharmacist or pharmacy that succeeded in the appeal to reverse and rebill the pharmacy benefits claim giving rise to the appeal.
(g) Appeals shall be upheld if:
(1) The pharmacy being reimbursed for the drug subject to the multi-source generic drug pricing in question was not reimbursed as required in subsection (b) of this Code section; or
(2) The drug subject to the multi-source generic drug pricing in question does not meet the requirements set forth in subsection (c) of this Code section.
(h) The Commissioner shall have enforcement authority over this Code section.
(a)(1) Any methodologies utilized by a pharmacy benefits manager in connection with reimbursement pursuant to Code Section 33-64-9 shall be filed with the Commissioner for use in determining maximum allowable cost appeals; provided, however, that methodologies not otherwise subject to disclosure under Article 4 of Chapter 18 of Title 50 shall be treated as confidential and shall not be subject to disclosure.
(2) A pharmacy benefits manager shall utilize the national average drug acquisition cost as a point of reference for the ingredient drug product component of a pharmacy's reimbursement for drugs appearing on the national average drug acquisition cost list and shall produce a report every four months, which shall be provided to the Commissioner and published by the pharmacy benefits manager on a website available to the public for no less than 24 months, of all drugs appearing on the national average drug acquisition cost list reimbursed 10 percent and below the national average drug acquisition cost, as well as all drugs reimbursed 10 percent and above the national average drug acquisition cost. For each drug in the report, a pharmacy benefits manager shall include the month the drug was dispensed, the quantity of the drug dispensed, the amount the pharmacy was reimbursed per unit or dosage, whether the dispensing pharmacy was an affiliate, whether the drug was dispensed pursuant to a state or local government health plan, and the average national average drug acquisition cost for the month the drug was dispensed. Such report shall exclude drugs dispensed pursuant to 42 U.S.C. Section 256b.
(3) This subsection shall not apply to Medicaid under Chapter 4 of Title 49 when the department reimburses providers directly for each covered service; provided, however, that it shall apply to Medicaid managed care programs administered through care management organizations.
(4) This subsection shall take effect on January 1, 2021; provided, however, that prior to July 1, 2021, upon written request, a pharmacy benefits manager shall be granted an extension by the Commissioner of up to six months for its initial filing required pursuant to paragraph (1) of this subsection if the pharmacy benefits manager certifies it is in need of such extension.
(b) On and after July 1, 2021, a pharmacy benefits manager shall not:
(1) Discriminate in reimbursement, assess any fees or adjustments, or exclude a pharmacy from the pharmacy benefit manager's network on the basis that the pharmacy dispenses drugs subject to an agreement under 42 U.S.C. Section 256b; or
(2) Engage in any practice that:
(A) In any way bases pharmacy reimbursement for a drug on patient outcomes, scores, or metrics; provided, however, that nothing shall prohibit pharmacy reimbursement for pharmacy care, including dispensing fees from being based on patient outcomes, scores, or metrics so long as the patient outcomes, scores, or metrics are disclosed to and agreed to by the pharmacy in advance;
(B) Includes imposing a point-of-sale fee or retroactive fee; or
(C) Derives any revenue from a pharmacy or insured in connection with performing pharmacy benefits management services; provided, however, that this shall not be construed to prohibit pharmacy benefits managers from receiving deductibles or copayments.
(c) This Code section shall also apply to pharmacy benefits managers' reimbursements to dispensers.
(a) A pharmacy benefits manager shall administer claims in compliance with Code Section 33-30-4.3 and shall not require insureds to use a mail-order pharmaceutical distributor including a mail-order pharmacy.
(b) A pharmacy benefits manager shall offer a health plan the ability to receive 100 percent of all rebates it receives from pharmaceutical manufacturers. In addition, a pharmacy benefits manager shall report annually to each health plan and the department the aggregate amount of all rebates and other payments that the pharmacy benefits manager received from pharmaceutical manufacturers in connection with claims if administered on behalf of the health plan.
(c) A pharmacy benefits manager shall offer a health plan the option of charging such health plan the same price for a prescription drug as it pays a pharmacy for the prescription drug; provided, however, that a pharmacy benefits manager shall charge a health benefit plan administered by or on behalf of the state or a political subdivision of the state, including any county or municipality, the same price for a prescription drug as it pays a pharmacy for the prescription drug.
(d) A pharmacy benefits manager shall report in the aggregate to a health plan the difference between the amount the pharmacy benefits manager reimbursed a pharmacy and the amount the pharmacy benefits manager charged a health plan. Such information shall be confidential and shall not be subject to Article 4 of Chapter 18 of Title 50, relating to open records; provided, however, that such information as it relates to health plans administered by or through the Department of Community Health, including Medicaid care management organizations, or any other state agency shall not be confidential and shall be subject to disclosure under Article 4 of Chapter 18 of Title 50.
(e) When calculating an insured's contribution to any out-of-pocket maximum, deductible, or copayment responsibility, a pharmacy benefits manager shall include any amount paid by the insured or paid on his or her behalf through a third-party payment, financial assistance, discount, or product voucher for a prescription drug that does not have a generic equivalent or that has a generic equivalent but was obtained through prior authorization, a step therapy protocol, or the insurer's exceptions and appeals process. Nothing in this subsection shall be construed to require that a pharmacy benefits manager accept a third-party payment, financial assistance, discount, or product voucher submitted on behalf of an insured.
(f) This Code section shall not apply to any licensed group model health maintenance organization with an exclusive medical group contract and which operates its own pharmacies which are licensed under Code Section 26-4-110.
(g) As used in this Code section, the term “generic equivalent”:
(1) Means a drug that has an identical amount of the same active chemical ingredients in the same dosage form, that meets applicable standards of strength, quality, and purity according to the United States Pharmacopeia or other nationally recognized compendium, and that, if administered in the same amounts, will provide comparable therapeutic effects; and
(2) Does not include a drug that is listed by the federal Food and Drug Administration as having unresolved bioequivalence concerns according to the administration's most recent publication of approved drug products with therapeutic equivalence evaluations.
(a) A pharmacy benefits manager shall be proscribed from:
(1) Prohibiting a pharmacist, pharmacy, or other dispenser or dispenser practice from providing an insured individual information on the amount of the insured's cost share for such insured's prescription drug and the clinical efficacy of a more affordable alternative drug if one is available. No pharmacist, pharmacy, or other dispenser or dispenser practice shall be penalized by a pharmacy benefits manager for disclosing such information to an insured or for selling to an insured a more affordable alternative if one is available;
(2) Prohibiting a pharmacist, pharmacy, or other dispenser or dispenser practice from offering and providing delivery services to an insured as an ancillary service of the pharmacy or dispenser practice;
(3) Charging or collecting from an insured a copayment that exceeds the total submitted charges by the network pharmacy or other dispenser practice for which the pharmacy or dispenser practice is paid;
(4) Charging or holding a pharmacist or pharmacy or dispenser or dispenser practice responsible for a fee or penalty relating to the adjudication of a claim or an audit conducted pursuant to Code Section 26-4-118, provided that this shall not restrict recoupments made in accordance with Code Section 26-4-118;
(5) Recouping funds from a pharmacy in connection with claims for which the pharmacy has already been paid without first complying with the requirements set forth in Code Section 26-4-118, unless such recoupment is otherwise permitted or required by law;
(6) Penalizing or retaliating against a pharmacist or pharmacy for exercising rights under this chapter or Code Section 26-4-118;
(7) Steering. This paragraph shall not be construed to prohibit a pharmacy benefits manager from entering into an agreement with an affiliated pharmacy or an affiliated pharmacy of another pharmacy benefits manager licensed pursuant to this chapter to provide pharmacy care to patients;
(8) Transferring or sharing records relative to prescription information containing patient-identifiable and prescriber-identifiable data to an affiliated pharmacy for any commercial purpose; provided, however, that nothing shall be construed to prohibit the exchange of prescription information between a pharmacy benefits manager and an affiliated pharmacy for the limited purposes of pharmacy reimbursement, formulary compliance, pharmacy care, or utilization review;
(9) Knowingly making a misrepresentation to an insured, pharmacist, pharmacy, dispenser, or dispenser practice;
(10) Taking any action in violation of subparagraphs (a)(21)(D) and (a)(21)(E) of Code Section 26-4-28 or charging a pharmacy a fee in connection with network enrollment;
(11) Withholding coverage or requiring prior authorization for a lower cost therapeutically equivalent drug available to an insured or failing to reduce an insured's cost share when an insured selects a lower cost therapeutically equivalent drug; and
(12) Removing a drug from a formulary or denying coverage of a drug for the purpose of incentivizing an insured to seek coverage from a different health plan.
(b) To the extent that any provision of this Code section is inconsistent or conflicts with applicable federal law, rule, or regulation, such applicable federal law, rule, or regulation shall apply.
(c) This Code section shall not apply to any licensed group model health maintenance organization with an exclusive medical group contract and which operates its own pharmacies which are licensed under Code Section 26-4-110.
(a) The General Assembly finds that:
(1) The practice of steering by a pharmacy benefits manager represents a conflict of interest;
(2) The practice of imposing point-of-sale fees or retroactive fees obscures the true cost of prescription drugs in this state;
(3) These practices have resulted in harm, including increasing drug prices, overcharging insureds and payors, restricting insureds' choice of pharmacies and other dispensers, underpaying community pharmacies and other dispensers, and fragmenting and creating barriers to care, particularly in rural Georgia and for patients battling life-threatening illnesses and chronic diseases; and
(4) Imposing a surcharge on pharmacy benefits managers that engage in these practices in this state may encourage entities licensed under this title and other payors to use pharmacy benefits managers that are committed to refraining from such practices.
(b)(1) A pharmacy benefits manager that engages in the practices of steering or imposing point-of-sale fees or retroactive fees shall be subject to a surcharge payable to the state of 10 percent on the aggregate dollar amount it reimbursed pharmacies in the previous calendar year for prescription drugs for Georgia insureds.
(2) Any other person operating a health plan and licensed under this title whose contracted pharmacy benefits manager engages in the practices of steering or imposing point-of-sale fees or retroactive fees in connection with its health plans shall be subject to a surcharge payable to the state of 10 percent on the aggregate dollar amount its pharmacy benefits manager reimbursed pharmacies on its behalf in the previous calendar year for prescription drugs for Georgia insureds.
(c)(1) By March 1 of each year, a pharmacy benefits manager shall provide a letter to the Commissioner attesting as to whether or not, in the previous calendar year, it engaged in the practices of steering or imposing point-of-sale fees or retroactive fees. The pharmacy benefits manager shall also submit to the Commissioner, in a form and manner and by a date specified by the Commissioner, data detailing all prescription drug claims it administered for Georgia insureds on behalf of each health plan client and any other data the Commissioner deems necessary to evaluate whether a pharmacy benefits manager may be engaged in the practice of steering or imposing point-of-sale fees or retroactive fees. Such data shall be confidential and not subject to Article 4 of Chapter 18 of Title 50, relating to open records; provided, however, that the Commissioner shall prepare an aggregate report reflecting the total number of prescriptions administered by the reporting pharmacy benefits manager on behalf of all health plans in the state along with the total sum due to the state. The Department of Audits and Accounts shall have access to all confidential data collected by the Commissioner for audit purposes.
(2) By March 1 of each year, any other person operating a health plan and licensed under this title that utilizes a contracted pharmacy benefits manager shall provide a letter to the Commissioner attesting as to whether or not, in the previous calendar year, its contracted pharmacy benefits manager engaged in the practices of steering or imposing point-of-sale fees or retroactive fees in connection with its health plans. The health plan shall also submit to the Commissioner, in a form and manner and by a date specified by the Commissioner, data detailing all prescription drug claims its contracted pharmacy benefits manager administered for Georgia insureds and any other data the Commissioner deems necessary to evaluate whether a health plan's pharmacy benefits manager may be engaged in the practice of steering or imposing point-of-sale fees or retroactive fees. Such data shall be confidential and not subject to Article 4 of Chapter 18 of Title 50, relating to open records; provided, however, that the Commissioner shall prepare an aggregate report reflecting the total number of prescriptions administered by the reporting health plan along with the total sum due to the state. The Department of Audits and Accounts shall have access to all confidential data collected by the Commissioner for audit purposes.
(d) By April 1 of each year, a pharmacy benefits manager or other person operating a health plan and licensed under this title shall pay into the general fund of the state treasury the surcharge owed, if any, as contained in the report submitted pursuant to subsection (c) of this Code section.
(e) Nothing in this Code section shall be construed to authorize the practices of steering or imposing point-of-sale fees or retroactive fees where otherwise prohibited by law.
To the extent that any provision of this chapter is inconsistent or conflicts with applicable federal law, rule, or regulation, such applicable federal law, rule, or regulation shall apply.
This chapter shall be known and may be cited as the “Corporate Governance Annual Disclosure Act.”
As used in this chapter, the term:
(1) “Corporate governance annual disclosure” means a confidential report filed by the insurer or insurance group made in accordance with the requirements of this chapter.
(2) “Insurance group” means those insurers and affiliates included within an insurance holding company system as defined in paragraph (7) of Code Section 33-13-1.
(3) “Insurer” has the same meaning as set forth in Code Section 33-1-2, except that it shall not include agencies, authorities, or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state.
(4) “Own Risk and Solvency Assessment Summary Report” means the report filed in accordance with Article 2 of Chapter 13 of this title.
(a) An insurer, or the insurance group of which the insurer is a member, shall, no later than June 1 of each calendar year, submit to the Commissioner a corporate governance annual disclosure that contains the information described in subsection (b) of Code Section 33-65-5. Notwithstanding any request from the Commissioner made pursuant to subsection (c) of this Code section, if the insurer is a member of an insurance group, the insurer shall submit the report required by this subsection to the Commissioner of the lead state for the insurance group, in accordance with the laws of the lead state, as determined by the procedures outlined in the most recent Financial Analysis Handbook adopted by the National Association of Insurance Commissioners.
(b) The corporate governance annual disclosure must include a signature of the insurer or insurance group's chief executive officer or corporate secretary attesting to the best of that individual's belief and knowledge that the insurer has implemented the corporate governance practices and that a copy of the disclosure has been provided to the insurer's board of directors or the appropriate committee thereof.
(c) An insurer not required to submit a corporate governance annual disclosure under this Code section shall do so upon the Commissioner's request.
(d) For purposes of completing the corporate governance annual disclosure, the insurer or insurance group may provide information regarding corporate governance at the ultimate controlling parent level, an intermediate holding company level, or the individual legal entity level, depending upon how the insurer or insurance group has structured its system of corporate governance. The insurer or insurance group is encouraged to make the disclosures at the level at which the insurer's or insurance group's risk appetite is determined, or at which the earnings, capital, liquidity, operations, and reputation of the insurer are overseen collectively and at which the supervision of those factors is coordinated and exercised, or the level at which legal liability for failure of general corporate governance duties would be placed. If the insurer or insurance group determines the level of reporting based on these criteria, it shall indicate which of the three criteria was used to determine the level of reporting and explain any subsequent changes in level of reporting.
(e) The review of the corporate governance annual disclosure and any additional requests for information shall be made through the lead state as determined by the procedures within the most recent Financial Analysis Handbook referenced in subsection (a) of this Code section.
(f) Insurers providing information substantially similar to the information required by this chapter in other documents provided to the Commissioner, including proxy statements filed in conjunction with Form B requirements, or other state or federal filings provided to the department shall not be required to duplicate that information in the corporate governance annual disclosure, but shall only be required to cross-reference the document in which the information is included.
The Commissioner may, upon notice and opportunity for all interested persons to be heard, issue such rules, regulations, and orders as shall be necessary to carry out the provisions of this chapter.
(a) The insurer or insurance group shall have discretion over the responses to the corporate governance annual disclosure inquiries, provided that the corporate governance annual disclosure shall contain the material information necessary to permit the Commissioner to gain an understanding of the insurer's or group's corporate governance structure, policies, and practices. The Commissioner may request additional information that he or she deems material and necessary to provide the Commissioner with a clear understanding of the corporate governance policies, the reporting or information system or controls implementing those policies.
(b) Notwithstanding subsection (a) of this Code section, the corporate governance annual disclosure shall be prepared consistent with the Corporate Governance Annual Disclosure Regulation as promulgated by the Commissioner. Documentation and supporting information shall be maintained and made available upon examination or upon request of the Commissioner.
(a) Documents, materials, or other information including the corporate governance annual disclosure, in the possession or control of the department that are obtained by, created by, or disclosed to the Commissioner or any other person under this chapter, are recognized by this state as being proprietary and to contain trade secrets. All such documents, materials, or other information shall be confidential by law and privileged, shall not be subject to Article 4 of Chapter 18 of Title 50, relating to open records, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. However, the Commissioner is authorized to use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the Commissioner's official duties. The Commissioner shall not otherwise make the documents, materials, or other information public without the prior written consent of the insurer. Nothing in this Code section shall be construed to require written consent of the insurer before the Commissioner may share or receive confidential documents, materials, or other corporate governance annual disclosure related information pursuant to subsection (c) of this Code section to assist in the performance of the Commissioner's regular duties.
(b) Neither the Commissioner nor any person who received documents, materials, or other corporate governance annual disclosure related information, through examination or otherwise, while acting under the authority of the Commissioner, or with whom such documents, materials, or other information are shared pursuant to this chapter shall be permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject to subsection (a) of this Code section.
(c) In order to assist in the performance of the Commissioner's regulatory duties, the Commissioner:
(1) May, upon request, share documents, materials, or other corporate governance annual disclosure related information including the confidential and privileged documents, materials, or information subject to subsection (a) of this Code section, including proprietary and trade secret documents and materials with other state, federal, and international financial regulatory agencies, including members of any supervisory college as described in subsection (c) of Code Section 33-13-7, with the National Association of Insurance Commissioners, and with third-party consultants pursuant to Code Section 33-65-7, provided that the recipient agrees in writing to maintain the confidentiality and privileged status of the corporate governance annual disclosure related documents, material, or other information and has verified in writing the legal authority to maintain confidentiality; and
(2) May receive documents, materials, or other corporate governance annual disclosure related information, including otherwise confidential and privileged documents, materials, or information, including proprietary and trade secret information or documents, from regulatory officials of other states, federal and international financial regulatory agencies, including members of any supervisory college as described in subsection (c) of Code Section 33-13-7, and from the National Association of Insurance Commissioners, and shall maintain as confidential or privileged any documents, materials, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information.
(d) The sharing of information and documents by the Commissioner pursuant to this chapter shall not constitute a delegation of regulatory authority or rule-making, and the Commissioner is solely responsible for the administration, execution, and enforcement of the provisions of this chapter.
(e) No waiver of any applicable privilege or claim of confidentiality in the documents, proprietary and trade secret materials, or other corporate governance annual disclosure related information shall occur as a result of disclosure of such corporate governance annual disclosure related information or documents to the Commissioner under this Code section or as a result of sharing as authorized in this chapter.
(a) The Commissioner may retain, at the insurer's expense, third-party consultants, including attorneys, actuaries, accountants, and other experts not otherwise a part of the Commissioner's staff as may be reasonably necessary to assist the Commissioner in reviewing the corporate governance annual disclosure and related information or the insurer's compliance with this chapter.
(b) Any persons retained under subsection (a) of this Code section shall be under the direction and control of the Commissioner and shall act in a purely advisory capacity.
(c) The National Association of Insurance Commissioners and third-party consultants shall be subject to the same confidentiality standards and requirements as the Commissioner.
(d) As part of the retention process, a third-party consultant shall verify to the Commissioner, with notice to the insurer, that it is free of conflicts of interest and that it has internal procedures in place to monitor compliance of potential conflicts and to comply with the confidentiality standards and requirements of this chapter.
(e) A written agreement between the Commissioner and the National Association of Insurance Commissioners or a third-party consultant governing sharing and use of information provided pursuant to this chapter shall contain the following provisions and expressly require the written consent of the insurer prior to making public information provided under this chapter:
(1) Specific procedures and protocols for maintaining the confidentiality and security of corporate governance annual disclosure related information shared with the National Association of Insurance Commissioners or a third-party consultant pursuant to this chapter;
(2) Procedures and protocols for sharing by the National Association of Insurance Commissioners only with other state regulators from states in which the insurance group has domiciled insurers. The agreement shall provide that the recipient agrees in writing to maintain the confidentiality and privileged status of the corporate governance annual disclosure related documents, materials, or other information and has verified in writing the legal authority to maintain confidentiality;
(3) A provision specifying that ownership of the corporate governance annual disclosure related information shared with the National Association of Insurance Commissioners or a third-party consultant remains with the department, and the National Association of Insurance Commissioners' or third-party consultant's use of the information is subject to the direction of the Commissioner;
(4) A provision that prohibits the National Association of Insurance Commissioners or a third-party consultant from storing the information shared pursuant to this chapter in a permanent data base after the underlying analysis is completed;
(5) A provision requiring the National Association of Insurance Commissioners or a third-party consultant to provide prompt notice to the Commissioner and to the insurer or insurance group regarding any subpoena, request for disclosure, or request for production of the insurer's corporate governance annual disclosure related information; and
(6) A requirement that the National Association of Insurance Commissioners or a third-party consultant consent to intervention by an insurer in any judicial or administrative action in which the National Association of Insurance Commissioners or a third-party consultant may be required to disclose confidential information about the insurer shared with the National Association of Insurance Commissioners or a third-party consultant pursuant to this chapter.
Any insurer failing, without just cause, to timely file the corporate governance annual disclosure as required in this chapter shall be required, after notice and hearing, to pay a penalty of $100.00 for each day's delay, to be recovered by the Commissioner, and the penalty so recovered shall be paid into the general fund of the state treasury. The maximum penalty under this Code section is $10,000.00. The Commissioner may reduce the penalty if the insurer demonstrates to the Commissioner that the imposition of the penalty would constitute a financial hardship to the insurer.
If any provision of this chapter other than Code Section 33-65-6, or the application thereof to any person or circumstance, is held invalid, such determination shall not affect the provisions or applications of this chapter which can be given effect without the invalid provision or application, and to that end the provisions of this chapter, with the exception of Code Section 33-65-6, are severable.
The requirements of this chapter shall apply to all insurers domiciled in this state.
The first filing of the corporate governance annual disclosure shall be in 2020.
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