Georgia State Insurance Laws

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.

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

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.

Who administers the GAAIP

A governing committee and a regional manager

What is commingling

Depositing premium money into your business checking account

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 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

Powers of Commissioner

Regulation Examination of records Investigation Hearing and judicial review Issuing penalties

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

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.

Domestic Insurer

insurance company formed (or chartered) under the laws of Georgia.

What is the purpose of FAIR

to provide property insurance to Georgia citizens and to encourage improvement and development of properties located in Georgia

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

What is the Ins. Commissioner's term of office?

4 years

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.

If the Commissioner feels a violation warrants criminal prosecution, what happens

He turns it over to the appropriate authorities

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 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

How can a non-resident agent act as an agent for an insurance company

must be appointed by the insurance company

Do you have to complete the continuing education requirements if your license is inactive

yes

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 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

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 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 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.

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 types of employees are not subject to the Ga Workers Comp laws

Agricultural workers, domestic servants, and farm workers

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 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 are residual markets

Insurance for the almost uninsurables

Admitted company or authorized company

company granted a Certificate of Authority

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

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

How does the commissioner notify of a date of hearing

A 10 day notice must be given to the applicant

Who is exempt from taking the counselor exam

Certified Insurance Counselors (CIC), CPCU,CLU or hold a Ph.D. in Risk Management.

Who administers the FAIR plan in Georgia

Georgia Underwriters Association

Chief Executive Officer of the Office of Insurance

Insurance and Safety Fire Commissioner (Commissioner)

Is replacement illegal

No, not when all of the facts are fully disclosed

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.

Who do the unfair claims practices provisions usually relate to

The insurers, since the agents usually aren't involved in the claims handling

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.

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.

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.

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 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 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 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.

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.

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 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

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 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 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.

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.

Who can write business through the GAAIP

Any insurance agent holding a valid property and casualty license for the state of ga

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.

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.

Who is examined every 5 years

Domestic Insurance Companies and rating organizations.

Who and what qualifies for the FAIR plan

Eligible properties and Qualified applicants

How often are companies subject to Examination

Every 5 years

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.

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

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.

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.

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

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.

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.

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

Non-admitted or unauthorized company

companies not granted certificates of authority. Generally not allowed to do business in Georgia (with few exceptions)

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

What is a "guaranteed issue" advertising violation

When an insurance policy is advertised as guaranteed issue when in actuality, certain terms must be met

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.

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

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.

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.

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)

What non-admitted companies are allowed to operate in Georgia

Surplus lines transactions. Only in instances where admitted companies cannot provide coverage.

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.

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.

What are the two kinds of counselors

1) Life, Accident and Sickness Counselor and 2) Property and Casualty Counselor.

What do you receive when you are authorized to sell insurance by the state of Ga

An agents (producers) license

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

What is FAIR

Fair Access to Insurance Requirements

What are the common acceptable valuation methods

Fair Market Value, and Replacement Cost

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

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

Chief Deputy Commissioner

Appointed by commissioner and assumes duties if the commissioner is disabled or absent

What is your financial responsibility regarding premiums collected

You must report all premiums collected to the companies. Any willful violation is considered a misdemeanor.

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 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

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 do you receive when you are appointed by an insurance company to represent them

An Agent's Certificate of Authority

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.

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.

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.

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 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.