146 terms

Georgia State Insurance Laws

Study material for the P & C licensing exam
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Chief Executive Officer of the Office of Insurance
Insurance and Safety Fire Commissioner (Commissioner)
What is the Ins. Commissioner's term of office?
4 years
Chief Deputy Commissioner
Appointed by commissioner and assumes duties if the commissioner is disabled or absent
Powers of Commissioner
Regulation
Examination of records
Investigation
Hearing and judicial review
Issuing penalties
Regulatory Authority
The Commissioner is given the authority to enforce the laws related to insurance created by the state legislature. Likewise, the commissioner is granted the authority to produce rules related to administration and enforcement of such laws.
The legality of any rule is determined by the State Attorney General.
Examination
When the Commissioner feels it is necessary, he may examine insurance companies' authorized to do business in Georgia related to transactions, accounts, records and assets and other facts relative to its business methods, management and dealings with policyowners.
How often are companies subject to Examination
Every 5 years
Who is examined every 5 years
Domestic Insurance Companies and rating organizations.
Who is SUBJECT to examination
insurance agent, subagent, broker, counselor, adjuster or other licensed person. Any person with a contract granting a dominant right of control of an insurance company. Those persons controlling the management of, or involved in the creation or promotion of an insurance co. or an insurance co. holding company
Investigation
To gather information related to the activities of insurance companies, agents, and others in the conduct of insurance transactions. The Commissioner may hold hearings to discover possible violations. They are empowered to subpoena witnesses and ask questions of those commanded to those hearings.
Hearing and Judicial Review
The Commissioner may hold a hearing based upon his belief that there is a possible violation of the Insurance Code or in response to a written demand made by any person who feels they have been wronged under Georgia insurance law.
After a person has complained and the Commissioner feels that grounds for the hearing exist...the hearing will be held within 30 days of the demand. The Commissioner will serve notice of hearings by registered mail. The Commissioner
may preside or assign a designated representative as a hearing officer
Penalties
The Commissioner has the right to impose any penalty or remedy provided by the law against any person who has been investigated and found responsible for a violation without a hearing. If the wrongdoer wishes a hearing they must make such request within 10 days of receipt of the order.
If found in violation of the law, what are the actions taken by the Commissioner's office
a) to cease and desist (stop) from engaging in that act or practice.
b) to be placed on probation for a period of time not exceed 1 year for each and every violation.
c) payment of fine of not more than $1,000 for each violation, unless the violator did it knowingly and in that case the penalty shall not be more than $5,000 for each violation.
d) a person or organization who fails to pay the penalty after it becomes final is subject to a judgment ordered by the appropriate court upon request of the Commissioner.
If the Commissioner feels a violation warrants criminal prosecution, what happens
He turns it over to the appropriate authorities
Domestic Insurer
insurance company formed (or chartered) under the laws
of Georgia.
Foreign Insurer
insurance company formed (or chartered) under the laws of
another state or government of the United States.
Alien Insurer
insurance company formed (or chartered) under the laws of
country other than the United States.
Stock Insurance Company
incorporated insurance company with capital divided into shares and owned by its shareholders. The shareholders may or may not be policyowners. Stock companies do not typically pay dividends to policyowners.
Mutual Insurance Company
incorporated insurance company without capital stock which is owned and governed by its policyowners. Mutual companies typically do pay dividends to policyowners.
What constitutes an insurance transaction in the state of Georgia
It includes any of the following:
• Solicitation and inducement;
• Preliminary negotiations;
• Bringing about a contract of insurance; or
• Transaction of matters subsequent to bringing about the contract and arising out of it.
**does not include the investigation and adjustment of a claim
Who is required to have a Certificate of Authority
Every company that acts as an insurance company and transacts insurance business in the state of Georgia
Admitted company or authorized company
company granted a Certificate of Authority
Non-admitted or unauthorized company
companies not granted certificates of authority. Generally not allowed to do business in Georgia (with few exceptions)
What non-admitted companies are allowed to operate in Georgia
Surplus lines transactions. Only in instances where admitted companies cannot provide coverage.
What is the exception to requiring a Certificate of Authority
When an ins company is not transacting new business, but just collecting premiums and servicing policies remaining in force in Georgia. Also, if they are in the process of investigating a claim or adjusting a loss, it is not required
How do you qualify and hold authority to transact business in the state of ga
insurer must be a stock insurer, mutual insurer, a fraternal benefit society, a hospital service nonprofit corporation, a nonprofit medical service corporation, a farmer's mutual fire insurance company, a Lloyd's association or reciprocal insurer.
What combinations of insurance transactions are not allowed
1) A reciprocal shall not transact life insurance.
2) A Lloyd's insurer shall not transact life insurance.
What are the rules in Ga law regarding naming
1) the name used may not be similar to that of any other authorized insurance company so as to cause confusion
2) the company asking for authorization may not use a name that would be misleading as to the type of organization of the insurance
Discretionary refusal, revocation, or suspension of certificate (33-3-17)
Not everyone is accepted (authorized). Commissioner can refuse to issue a certificate, or following a hearing, refuse to renew, suspend or even revoke a Certificate of Authority or place them under administrative supervision.
What would cause a Company to loose (suspend/revoke) their certificate or be put on administrative supervision
Knowingly fails to comply with or violates any rule, regulation or order of the Commissioner; or
• Is found by the Commissioner to be in unsound condition (generally we are talking about money); or
• As a general practice compels claimants to accept less than the amount due to them; or
• Refuses to be examined or provide requested financial information or any other information required for the renewal of the insurance company's certificate of authority; or
• Fails to pay any final judgment rendered against it in Georgia
within 30 days of the judgment
Administrative supervision or suspension of certificate of Authority (33-3-18)
The Commissioner may, without advance notice or a hearing, place an insurance company under administrative supervision or suspend immediately the certificate
of authority of any insurance company if in any state there have been proceedings for financial distress (receivership, conservatorship or rehabilitation). Another reason for this action is revocation, suspension or restriction of the insurance company's authority in another state.
Administrative fines by the Commissioner for certain acts of officers, employees, agents or representatives (33-3-20)
After a hearing, the commissioner may impose fines for :
• Failed to use due diligence in processing all claims, failed to pay claims in a timely manner, failed to provide required information, failed to pay claims when due, refused without just cause to pay proper claims under policies it has written; or
• Compelled insureds or claimants entitled to proceeds of its
policies in this state to accept less than the amount due them; or
• Accepted money, trade stamps, gifts or other items of value in return for referring auto and other property repair business to a particular auto repairer or glass company,
What are the amounts of administrative fines
The fine shall not exceed $1,000 for each violation; however, if the violation is shown to be willful, the fine for each violation is no more than $5,000 per violation.
Agent's certificate of authority (33-23-26)
Insurance companies authorized to do business in Georgia must obtain an agent's certificate of authority for each agent representing the insurance company in the selling, soliciting or negotiating of contracts.The certificate of authority shall not become effective until the date the applicant is granted a license by the Commissioner.
What do you receive when you are authorized to sell insurance by the state of Ga
An agents (producers) license
What do you receive when you are appointed by an insurance company to represent them
An Agent's Certificate of Authority
LICENSE REQUIREMENTS OF AGENTS AND
COUNSELORS
No person or company shall sell, solicit or negotiate insurance in the State for any type of insurance unless they are licensed for that line (type) of insurance. Individuals must be licensed as producers before selling, soliciting or
negotiating insurance.
What are the requirements to have an application approved (producers)
• Be at least 18 years old.
• Reside and be present within the State of Georgia for at least 6 months every year (Snowbird exclusion).
• Committed no acts that the insurance code says is a basis for denial, suspension or revocation of a license. This includes such things as lying on the application or a conviction of a felony (especially the theft of money).
• Completed a prelicensing course of study for the lines of insurance for which you are applying (unless you are exempted). All courses must be approved by the Commissioner's office. Life, Accident and Sickness as well as Property and Casualty lines require 40 hours of course work and 30 hours is required for P&C Personal Lines
• Passed an examination for the lines of insurance which the
person is applying (unless you are exempted)
• Paid any and all required fees
What lines of ins can you be licensed for if you meet the requirements
1. Life
2. Accident and health or sickness
3. Variable products - insurance coverage provided under variable life and variable annuity contracts
3. Property - coverage for direct or consequential loss or damage to property of every kind
4. Casualty - coverage against legal liability for damage to real or personal property
5. Property and Casualty
6. Personal lines - property and casualty insurance coverage sold to individuals and family units
7. Property and Casualty Counselor
8. Life, Accident & Sickness Counselor
What can you sell under a limited lines license
credit insurance products or certain coverages related to the rental of vehicles. Credit insurance products include credit life and credit accident and sickness insurance, credit casualty and/or property insurance, credit unemployment insurance, accidental death and dismemberment insurance and vendor's single interest. Rental insurance can include personal accident insurance, auto liability insurance,
personal effects insurance and roadside assistance.
Who does not need to hold a Producers license
1. Officer's, director's or employees of an insurance company or an insurance agency if that person does not receive any commission on policies written or sold to insure risks located in the State of Georgia.
2. Officers, directors or employees whose activities are executive, administrative, managerial and clerical or combination of these and are indirectly related to the sale, solicitation or negotiation of insurance.
3. Officers, directors or employees whose function relates to underwriting, loss control, inspection, adjusting a claim on a contract of insurance.
4. Officer, director or employee acting as a special agent assisting insurance producers when such assistance is limited to providing technical advice and does include selling, soliciting or negotiation of insurance.
5. An employer or association or its officers, directors or employees who furnish information concerning the administration or operation of a program of employee benefits, so long as they are not compensated by the insurance company issuing the policies.
6. Employees of insurance companies or organization employed by insurance companies for inspection, rating, or classification of risk or training of insurance agents and not individually engage in the sale or solicitation of insurance.
7. A person whose activities 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 not limited to residents of the state.
8. A salaried full-time employee who advises his or her employer relative to insurance interest of the employer provided the employee does not sell, solicit insurance or receive a commission.
Who is exempt from a Pre-Licensing Course
1. Applicants for lines of property and casualty insurance who
hold the designation of Chartered Property and Casualty Underwriter (CPCU);
2. Applicants for life and health insurance who hold the Chartered Life Underwriters (CLU);
3. Applicants for temporary licenses (discussed later);
4. Applicants for credit insurance agents licenses;
5. applicants who can show successful completion of 10 quarter hours of insurance related courses within the last 12 months at a college or university; or
6. other applicants as the Commissioner wants to exempt.
Who is exempt from the Examination
1. Applicants for lines of property and casualty insurance who
hold the designation of Chartered Property and Casualty Underwriter (CPCU);
2. Applicants for life and health insurance who hold the Chartered Life Underwriters (CLU) designation;
3. Applicants for licenses as counselors who hold the designation of Certified Insurance Counselor (CIC), CPCU, or CLU;
4. Applicants holding a Ph.D in Risk Management;
5. Applicants for temporary licenses (discussed later);
6. Applicants for credit insurance agents licenses;
7. Adjusters who are salaried employees of insurance companies;or
8. Other applicants as the Commissioner wants to exempt.
What continuing education is required
All resident agents licensed for less than 20 years must complete a minimum of 15 hours of continuing education each year. The requirement for those with licenses of more than 20 years must complete a minimum of 10 hours per year. Of the required hours, 3 hours must address ethics, legislative update or Federal or Departmental Regulatory changes, current issues or similar subject matter
approved by the Commissioner.
What can cause your license to be put on inactive status
If you are not doing business with at least one insurer in the state of Ga.
Do you have to complete the continuing education requirements if your license is inactive
yes
How can the commissioner control the behavior of insurance agents and companies that do not follow the state laws
• Place one on probation (you can play but we will be watching
you)
• Place one on suspension (you are put in time out, but you will be able to play when I say so)
• Revocation (you can no longer play)
• Refuse to issue a license (you cannot play)
• Refuse to renew a license (you can no longer play)
How does the commissioner notify of action taken to licenses
Any action is communicated in a written notice sent by registered or certified mail to the applicant or the holder of the license and any insurance company or agent whom the applicant or licensee represents.
How long does the applicant have to request a hearing from the commissioner
within 30 days of the receipt of written notice of action from commissioner
How does the commissioner notify of a date of hearing
A 10 day notice must be given to the applicant
How long must you wait after a refusal or revocation of your license before applying again
5 years from the date of the suspension/revocation
What is the length of a temporary license
can be issued for 6 months without requiring an examination, may be renewed for 3 month periods at the discretion of the commissioner. In no case may it be extended more than 15 months from the date of first issuance
What must exist to receive a non-resident license
• The applicant is currently licensed as a resident in good standing in their home state
• The applicant's home state gives licenses to Georgia residents on the same basis (reciprocity is the technical term)
• The applicant holds the same type of license in their state of
residence as the license requested in Georgia
• If appropriate fees are paid.
How can a non-resident agent act as an agent for an insurance company
must be appointed by the insurance company
What must you do if you move from one state to another
All non resident producers and resident agents must file a change of address form and provide certification from the new resident state within 30 days of the change
What is a counselor
any individual who engages or advertises or holds himself 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 consulting 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 transactions (i.e. no double-dipping).
What are the two kinds of counselors
1) Life, Accident and Sickness Counselor and
2) Property and Casualty Counselor.
What experience is required to become a counselor
5 years experience as an agent, subagent, or adjuster or some other insurance experience or has teaching or educational qualifications or experience.
Who is exempt from taking the counselor exam
Certified Insurance Counselors (CIC), CPCU,CLU or hold a Ph.D. in Risk Management.
What is the Unfair Trade Practices Law
The law that specifically describes wrongful acts that should be avoided in the transaction of insurance. All activities or practices in this state that constitute unfair methods of competition or unfair or deceptive acts or practices are considered unlawful and the Commissioner has the sole enforcement authority.
What is False Advertising
misrepresenting the facts of a policy, or the financial condition of an insurance company, intentionally misquoting a premium, or publishing anything untrue, deceptive, or misleading
What is defamation
Publishing, or spreading around either verbally, or written anything that is false or maliciously derogatory about the financial condition of an insurer with the intent to injure the insurer
What is unfair discrimination
basing rates on such things as race, color or national origin. Any activity that results in discrimination that is considered unfair is unlawful.
What are the specific examples in the Georgia Act of Unfair Discrimination
• Permitting any unfair discrimination between individuals of the same class and equal expectation of life in rates charged for a life policy or annuity;
• Permitting any unfair discrimination between individuals of the same class and essentially the same hazard in the amount of premium fees for any accident or health policy;
• Permitting any unfair discrimination between individuals of the same class and essentially the same hazard by refusing to insure, refusing to renew or limiting the amount of insurance on a property or casualty risk solely because of geographic location of risk or age, unless just cause may be shown to be based on sound underwriting and is actuarially based;
• Refusing to insure, refusing to continue to insure, or limiting the amount of coverage available to a person because of gender, race, religion, national origin, marital status, income or
educational background of the person;
• Refusing to insure solely because another insurer has refused to write a policy or has canceled or refused to renew an existing policy in which that person was a named insured.
What is rebating
the giving or promise to give a person or business something of value so as to induce them to buy a policy of insurance
What is twisting
When an agent or life insurance company misrepresents the facts in order to replace a policy from company A with one
from company B
What is churning
when the policyowner is induced through misrepresentation to cancel an existing policy and replace it with another policy of the same company or family of companies.
Is replacement illegal
No, not when all of the facts are fully disclosed
What is a "guaranteed issue" advertising violation
When an insurance policy is advertised as guaranteed issue when in actuality, certain terms must be met
What is the rule regarding family violence
No person shall deny or refuse to accept an application; refuse to insure; refuse to renew; cancel, restrict, charge a different rate for the same coverage or exclude or limit coverage on the basis that applicant or insured is or
has been a victim of family violence
What must happen in order for the commissioner to suspend, issue a civil penalty, or revoke a license because of an unfair claim practice
It must be committed knowingly, or with such frequency as to indicate a general business practice
Who do the unfair claims practices provisions usually relate to
The insurers, since the agents usually aren't involved in the claims handling
How does the commissioner notify of violations relating to unfair trade practices, unfair methods of communication, or unfair claims practices
The commissioner charges the person with the violation, and must notify the person of a hearing.....giving at least 15 days notice
What happens if a person is found guilty following a violation hearing
Commissioner serves a "cease and desist" order, and can impose one of the following:
• Payment of a civil penalty of not more than $1,000 for each
violation, unless the person knew or should have known, then
the penalty is not more than $5,000 for each violation
• Penalties for violations of a cease and desist orders, the
Commission may assess fines of not more than $10,000 for each and every violation.
• Suspension or revocation of the person's license if the person knew or reasonably should have known that what they were doing was wrong.
What is your financial responsibility regarding premiums collected
You must report all premiums collected to the companies. Any willful violation is considered a misdemeanor.
Where should premium money be held
Any money collected must be held in a separate account for such purpose, and records kept as to what monies goes to what company. Every wrongful act can be the basis of a fine. Any willful violation is considered a misdemeanor, unless the amounts exceed $500 - in that case the violation is treated as a felony.
What is commingling
Depositing premium money into your business checking account
What is a Binder
A temporary contract either oral or written that provides coverage until the policy is issued. Not valid beyond the issuance of the policy, or 90 days, whichever is first.
Can a binder be extended
If a policy hasn't been issued, and the 90 days are up, it can be extended or renewed beyond the 90 days with the written approval of the commissioner
What is the law regarding sharing commissions
It is unlawful to shar commissions with anyone not licensed to solicit, sell, or negotiate property and casualty insurance
What is the law regarding additional fees
No person may knowingly charge for insurance any sum in excess of the premium applicable for such insurance
Who can legally collect fees
A counselor, as long as they have disclosed their role as a counselor or risk manager and indicated the fees, and then they are not allowed to collect commission on the transaction.
What is the law regarding valuation of loss
agent or company shall knowingly issue any fire insurance policy on property in an amount that exceeds the fair value of the property.
What are the common acceptable valuation methods
Fair Market Value, and Replacement Cost
What is the law regarding total loss by fire to a One or Two family residential building
the amount of insurance shown on the declarations page will be paid if the loss occurs within 30 days of the effective date of coverage. Remember this provision is very limited it only applies to the peril of fire to a structure; the fire must occur within the first 30 days of the policy and there must be a total loss.
What are the exceptions to the total loss by fire to a one or two family residential building
(1) the building is not wholly destroyed by fire;
(2) two or more policies provide insurance for this covered loss by fire;
(3) two or more building or structures are insured under a blanket form for a single amount of insurance; or
(4) the completed value of the building is insured under a builder's risk policy.
What are residual markets
Insurance for the almost uninsurables
What is FAIR
Fair Access to Insurance Requirements
What is the purpose of FAIR
to provide property insurance to Georgia citizens and to
encourage improvement and development of properties located in Georgia
Who administers the FAIR plan in Georgia
Georgia Underwriters Association
Who and what qualifies for the FAIR plan
Eligible properties and Qualified applicants
What are the two categories of property risks within the FAIR plan
• Commercial risks - eligible property, other than a farm or
manufacturing risk, that is not habitational unless it an apartment building or condominium.
• Habitational risks - eligible property that is residential (primary or secondary), real property that is owner-occupied or occupied by a tenant or lessee, including mobile or manufactured homes.
Is membership required in the FAIR plan in the state of Georgia
yes, level of participation is determined by the proportion of business written in the state of Ga. If you write 12% P & C, then you will get 12% of the FAIR policies
What is the purpose of the Georgia Automobile Insurance Plan (GAAIP)
This organization was created to provide auto insurance to eligible risks that seek coverage and are unable to get such coverage through the voluntary market. Insurers participation is determined the same way as the FAIR plan.
Who can write business through the GAAIP
Any insurance agent holding a valid property and casualty license for the state of ga
Who administers the GAAIP
A governing committee and a regional manager
How can you disagree with the governing committee or the regional manager of GAAIP
Any person or insurance company that disagrees with any ruling or decision of the Regional Manager or the Committee may appeal to the Commissioner of Insurance. If the unhappy person or company does not agree with the Commissioner's decision they have 10 days to appeal by filing a petition in
superior court of the county of residence.
What is the numerical exemption to the Workers Compensation Laws in Georgia
If you have 3 or less employees, you don't have to provide workers comp ins
What types of employees are not subject to the Ga Workers Comp laws
Agricultural workers, domestic servants, and farm workers
What is the pool for employers who have been rejected for workers comp coverage
Georgia Workers Compensation Insurance Plan and is commonly called the Assigned Risk Plan.
Who administers the Georgia Workers Compensation Plan
The State Board of Workers Compensation
Who participates in the Ga Workers Comp Plan
Every insurer offering workers comp in the state of ga. Participation is determined the same way as FAIR.
What is the primary goal of rate regulation
promote the public welfare by making sure that rates are not excessive, inadequate or unfairly discriminatory
What is a "file and use" state
State where insurance companies and rating organizations are allowed to file their rates and begin using the rates prior to the Commissioners approval. Georgia is a file and use state
What rate increase can spark an examination of an insurance company
A rate increase of 10% or more in a 12 month period. If the increase is less than 25% in a 12 month period, the commissioner may waive the examination if he feels he has adequate information to evaluate the increase.
When is the rate increase effective for personal private passenger autos
Rates MUST be filed with the commissioner, and for policies that provide only the mandatory liability limits (25/50/25), the rates can not be effective until approved by the commissioner, or 45 days have passed without the disapproval of the commissioner. The commissioner can extend the approval for up to another 55 days. If the filing has been disapproved, notice must be given within 100 days, specifying why the filing was rejected. The company has 30 days to request a hearing, and hearing must be held within 30 days of the request. For all other policies, filing is done, and they do not need to wait on the commissioners approval.
What are the requirements for a 10% reduction in premium for liability, medical payments and collision
coverage for auto insureds
Must meet one of the following:
1) The named driver is at least 25 years of age, has a clean driving record (no tickets or at fault accidents) and has completed an approved driving course.
NOTE: Approved courses include: a defensive driving course, an emergency operations course at the Georgia Public Safety Training Center or driver improvement program sponsored by a nonprofit organization, such as AARP, AAA, the National Safety Council or other courses approved by Department of
Driver Services .
2) A named driver under age 25 who is unmarried, enrolled as a fulltime student, maintains a clean driving record and is classified as an honor student.
What must a company do if they want to revise its manual workers comp rates
File an individual rate filing with the commissioner and with the rating organization that they use
What is a workers comp Experience Rating Plan
a rating method that considers the individual loss experience of a specific insured
What is a workers comp Retrospective Rating Plan
a rating method in which the annual premium is determined at the end of coverage period and it is based on the insured's own loss experience for that policy period
What is termination
cancellation or non-renewal
How is notification of termination of policy delivered
First class US Mail to the last known address of the insured, or delivered in person no later than 45 days in advance of termination of policy. If mailed, insurance company MUST obtain a receipt from the US Post Office
What else requires notification delivered in person or first class us mail
notice of cancellation or non renewal, notice of termination, notice of increase in premiums (if the increase is more than 15% of the current policy premium), or notice of any change of policy provisions that limits or restricts coverage
What happens if an insurance company fails to comply with the notification laws
Policyholder is entitled to purchase, under the same rules and policy provisions, another 30 days of coverage beyond the termination date of the policy
What must the notice of cancellation ior non-renewal include
• Wording advising the insured of an opportunity of review by the Commissioner;
• Notification that the if the insured requests, the insurance company must furnish the reasons for the failure to renew the policy;
• Notification that if a insured feels that the nonrenewal is unlawful, the insured must file a written notice with insurance company prior to the effective date of nonrenewal;
• That if the insured wants the Commissioner to review the cancellation or nonrenewal he must send a written request for the review by the Commissioner within 15 days from receipt of the Notice of Nonrenewal or Cancellation
How are premiums handled during a period of review of cancellation or non-renewal
Policyholder pays the company a 30 day pro rata portion of the premium. Insured must send to the commissioner proof that he has paid the premium with his review request
What happens if the Commissioner votes yes (insured, you loose)
the termination is effective as of the date and time originally stated on the notice of cancellation. Termination of the interim coverage will be effective no earlier than 5 days of the commissioners decision
What happens if the Commissioner votes no (insured, you win)
The commissioner reinstates the policy, and based on the circumstances, other penalties may be assessed to the insurance company
What is the law for general cancellation of a policy
Written notice stating the effective date must be at least 30 days from the day such notice is mailed or delivered in person. May be longer if stated in the policy
What are the two exceptions to the 30 day notification of cancellation rule
if the cancellation is within the first 60 days of the policy, notice is 10 days. If the cancellation is due to nonpayment of premium...10 days notice
How are unearned premiums returned to the insured
on a pro rate basis
What happens if an ins company fails to comply with the unearned premium laws
They shall pay to the insured a penalty equal to 25% of the amount of the return of the unearned premium plus interest equal to 18% per annum until such time the proper return has been made. The maximum amount of penalty and interest shall not exceed 50% of the amount of refund due.
How can an insured request cancellation of an insurance policy
returning the original policy to the insurance company, or by making a written request for cancellation stating a future date of cancellation
If a homeowners policy has been in effect for 60 days, or if after the effective date of a policy renewal, what are the only reasons for cancellation
Nonpayment of premium;
• 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;
• The occurrence of a change in the risk that may significantly increase any condition that increase the likelihood of a loss; or
• A material violation of the material conditions or terms of the policy
What are the rules for non-renewal of homeowners policies
Insurance companies may not refuse to renew a policy unless written notice of nonrenewal is mailed or delivered in person to the named insured. The notice must state the time when the nonrenewal will be effective, which shall not be less
than 30 days from date of mailing or delivery of such notice
What must be included in the notification of cancellation of homeowners policy for any reason other than non payment of premium, or in the event of non-renewal
the insurance company shall notify the named insured of his possible eligibility for insurance through the Georgia Fair
Access to Insurance Requirements Plan (FAIR). Included within the notice is the address for the Georgia Fair Plan. Also any unearned premium.
What are 3 things an ins company can not refuse renewal of a homeowners policy for
1. lack of supporting insurance business
2. Changes in the companies underwriting rules, unless the rules apply uniformly within a specific class and have been approved by the commissioner
3. Two or less claims against the policy within the preceeding 36 months if such claims are not attributable to the negligent or intentional acts of the insured or of persons residing at the insured premises
When an auto policy is cancelled for a reason other than nonpayment of premium, or if the policy is nonrenewed, what must the insurance company do
advise the insured that he may eligible for insurance through the Georgia Auto Insurance Plan
How is notification of non-renewal of auto policies handled
written notice of nonrenewal is mailed or delivered in person to the named insured. Such notice must be mailed or delivered at least 30 days prior to the nonrenewal's effective date
What are the reasons not acceptable for non-renewal of auto policies
1) Lack of supporting insurance business;
2) A change in the insurance company's underwriting rules unless such changes in the rules apply uniformly within a specific class or territory and such change has been approved by the Commissioner;
3) Two or less of the following claims within the preceding 36 months:
• accidents involving 2 or more motor vehicles in which the driver of the insured auto was not at fault
• uninsured or underinsured motorists coverage claims
• comprehensive coverage claims ( also known as other-than-collision claims)
• towing or road service coverage claims
4) Age, gender, location of residence address within the state, race, creed, national origin, ancestry, or marital status (Simply stated no unlawful discrimination!)
5) Lawful occupation provided that the insured auto is not used in such occupation
6) Military service, provided that the named insured remains a legal resident of Georgia
7) Number of years of driving experience of a named insured or other resident driver or person who regularly drives an auto insured under the policy
8) Accidents or violations which occurred more than 36 months prior to the expiration of anniversary date or solely for claims paid during the preceding 36 month period which did not total more than $750
9) One at-fault claim against the policy if such coverage has been in effect continuously for at 36 months
10) Two claims against the policy which were the insured's fault if such coverage has been in effect for at least 72 months
11) Factors not relating to claims or driving record or driving ability of the named insured or any other operator who is a household member or regularly operate an insured auto
What must be included in the non-renewal notice of personal auto and motorcycle policies`
It must advise the insured that the insurance company must provide reasons for the nonrenewal and that the named insured must provide a written request if they wish to contest the nonrenewal. If such written request is not filed, then the
named insured may not come back later and assert an action against the insurance company for an unlawful nonrenewal
What are the policy requirements for issuance under the minimum liability policies in Ga
The policy issued must contain at least the state minimum liability limits and must be issued for a minimum term of 6 months. The insurance company must require an advance payment for the first 30 days before issuing a policy of motor vehicle liability insurance. Each policy providing auto liability coverage shall indicate a requirement for notice of claim within 30 days. If an insured does not provide such notice within 30 days, such requirement may be satisfied by an injured third party claimant by mailing the appropriate information.
When, in the state of Ga, will you be asked to show financial responsibility
1. At the time of an accident when anyone is injured or killed
2. When damage to property exceeds $300
3. Regristration of a motor vehicle
4. Replacement or renewal of an auto tag
When are you exempt from providing financial security
1) Any person qualifying as a self-insurer;
2) Owner or operator of a motor vehicle legally parked at the time of the accident; or
3) Owner of the motor vehicle if at the time of the accident the vehicle was being operated without his permission or was parked by a person who had been operating such vehicle without permission.
What are the 3 ways financial responsibility can be met in the state of Ga
• Motor vehicle liability policy means an owner's policy or operator's policy of liability, certified as proof of financial responsibility and issued by an insurance carrier duly licensed to transact business in this state.
(Evidence needed to comply with the law includes documentation such as an insurance card, binder or declaration page of a policy.)
Single limit policy of not less than $75,000
Split-limit policy of not less than $25,000 per person for bodily injury, not less than $50,000 for bodily injury per accident and not less than $25,000 for property damage per accident
• A deposit of cash with the commissioner in the amount of $75,000 or less if so designated by the Department of Driver Services ; or
• Filing of a bond or real property put up as a guarantee with the Commissioner in the amount of $75,000.
Is Georgia a mandatory auto insurance state
no, any one of the three ways are acceptable
What are the consequences of failing to provide financial responsibility
• Suspension of a driver's license;
• Suspension of registration for up to 6 months;
• Misdemeanor charges for a person who fails to surrender their driver's license when required to do so or failure to comply with registration reinstatement.
What must every automobile liability policy in the state of Ga offer
Uninsured motorist coverage. The limits of uninsured motorist coverage offered shall be equal to the bodily injury liability limits stated in the policy
What must the auto insurance companies selling auto ins policies provide
A Notice Acknowledgement: it must be signed by applicant/named insured. The Notice contains the following:
If you have chosen to accept Uninsured Motorists coverage from your automobile insurance company, and have any questions after reading this statement regarding
Uninsured Motorists coverage or the amount of coverage you have selected, your agent or company representative will be able to assist you. You should have chosen the amount of Uninsured Motorist coverage you want based on this
question: If I get hit by someone with little or no liability insurance how much protection do I need to cover the cost associated with car repair, medical bills, other expenses and lost wages?
What is the deductible for UM Property Damage coverage
$250, $500, or even $1,000. A higher deductible can be written if approved by the commissioner
What does the term "insured" mean in an uninsured motorist section of the policy
• the named insured or any family member;
• any other person occupying a covered auto;
• or any person who is entitled to recover because of bodily injury to which the coverage applies.
What is the definition of an Uninsured Motor Vehicle
Uninsured Motor Vehicle means a motor vehicle or trailer of any type:
1) To which there is neither:
• cash or securities on file with the Georgia Director of Public Safety; nor
• a liability bond or policy;
2) To which a policy applies at the time of the accident but the amount paid under the policy is less than the amount of the Uninsured Motorists coverage...this is how Georgia integrates Underinsured Motorists with Uninsured Motorists.
3) Bodily Injury or Property Damage resulting from a hit-and-run driver.
4) Where bodily injury or property damage occurs to the insured or a passenger due to the actions of a hit-and-run driver, but there was no actual contact between the two vehicles. In simple terms, our insured hit a tree avoiding some idiot who was driving in the wrong lane sending a text
message. If our guy can provide a witness, Uninsured Motorists can provide coverage for our guy, his passengers and for his car.
5) Which a liability bond or policy applies at the time of the accident but the bonding or insurance company either denies coverage or is or becomes insolvent.
What does an Uninsured Motor Vehicle definition NOT include
• Owned by, or furnished for the regular use of, the insured or any resident spouse or resident relative in the same household;
• Operated on rails or crawler treads;
• Designed for use mainly off public roads except while on public roads; or
• While located for use as a premises (i.e. no coverage if you live in your car).
What does Property Damage Uninsured Motorist cover
• a covered auto;
• property contained in the covered auto and owned by the Named Insured; or
• property contained in the covered auto and owned by anyone else occupying the covered auto.
What is not covered under Property Damage UM
• If an insured or their legal representative settles a bodily injury or property damage claim without the insurance company consent no payment will be paid under this coverage.
• When the named insured's covered auto is being used as a public or livery conveyance.
• Using a vehicle without a reasonable belief that you were entitled to do so.
• Property contained in or struck by any vehicle owned by the Named Insured that is not a covered auto.
• Will not pay any insurer or self-insurer under workers comp or a disability law.
• Does not provide Uninsured Motorists Coverage for punitive damages.
What is the penalty for an insurance company failing to pay a claim
In an insurance company refuses to pay an insured any loss covered 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 insurance company is responsible to
the insured in addition to appropriate recovery an amount not to exceed 25% of the recovery and all reasonable attorney fees.