Georgia Laws, Rules, and Regulations Common to All Lines

Purpose and Function of Department and duties and powers of Commissioner

-Carry out and enforce the provisions of the Insurance Code

Examination of Records

-Commissioner can examine records of each authorized insurer whenever, but must examine all domestic users at least once every 5 years -Domiciles that move out of Georgia can be examined one a year for 5 years -Commissioner gives inadequate records 60 days to be corrected

Penalties

-Commissioner can suspend, revoke, or refuse to issue or renew a producer license in any of the following areas -Laws, rules,regulation of insurance code -Licensing laws -Producer's fiduciary responsibility -Unfair trade practice

Domestic Insurer

-Insurance company doing business in its state

Ownership

-Stock -Mutual

Orders and Notices made in writing and signed by Commissioner must include

-The intent or purpose behind the order -The grounds on which the order is based -Any action taken or action proposed to be taken

HMO examinations

-To ensure they remain solvent and conduct business in compliance with state laws, whenever necessary, but at least once every 3 years -Examines affairs, transactions, accounts, records, and assets -Must furnish a report of the examination at least 20 days prior to filing the report -Commissioner of Community Health also examines HMOs once every 5 years -Cost of examinations is responsibility of the HMO

Promulgate

-To make public, to put into action (laws or court decrees)

Cease and Desist

-To stop or discontinue

After notice, hearing, and a cease and desist, violation subject to

-$10,000 for each violation -Suspension or revocation of license -Any other appropriate relief

Trust Deposit Required for Insurer

-$100,000 for one class of insurance -$25,000 for each additional class of insurance No more than $200,000 is required for any combination of classes

Annual Registration fee for COA to transact life insurance as nonresident

-$25 -COA expires on December 31 the year its issued

Association is liable, at most, for the lesser of the amount the insurer would have been liable if it had not become impaired, or the following amounts with respect to one life

-$300,000 in life death benefits, no more than $100,000 in total net cash surrender and net cash withdrawal values for life insurance -$300,000 in present value annuity benefits, no more than $250,000 in net cash surrender and net cash withdrawal for annuity -$300,000 for health insurance benefits With respect to one owner of multiple individual life insurance policies or annuities, Association will be liable for no more than $5 million in benefits

Requirements for License Maintenance

-24 CE credit hours every 2 years, including 3 credit hours in ethics -20 year licensees need 20 credit hours, including 3 ethic hours

Statute

-A formal written law enacted by legislature; insurance statutes can be found in the state Insurance Code

Reciprocity

-A mutual interchange of rights and privelages

Authority

-Admitted/Authorized -Nonadmitted/Nonauthorized

Inducement

-An offer that attempts to influence the other party

Commissioner must pay

-Any collected taxes, fees, dues, charges, and penalties to the Office of Treasury and Fiscal Services -Authorized to make refunds of or allow credits for any amount which have been illegally paid or erroneously paid or collected -No refunds without written request within 7 years of date of payment

If applying for an agent's license

-Be appointed by an authorized insurer

Title Insurers

-Cannot transact any other insurance

Reciprocal and LLoyd's Insurers

-Cannot transact life insurance

After insurer files application for Certificate of Authority

-Commissioner has 90 days to approve, which he may extend an additional 90 days, but applicant must be notified -All COA expire at midnight on June 30, for renewal insurers must file a copy of their annual statement for the preceding year on March 1st, which may be extended 60 days

If Commissioner determines person charged engaged in unfair method

-Commissioner will send copy of violation -Cease and Desist -Can also impose --$1,000 fine for each violation, $5,000 willful violation --Suspension or revocation of license --Any other relief as is reasonable and appropriate

Moral Turpitude

-Conduct that is contrary to community standards of justice, honesty, or good morals

Nonresident may receive nonresident agent's license if

-Currently licensed as a resident, and in good standing in home state -Submitted proper request for license -Paid required fees -Submitted application for license to Commissioner -Resides in a state that awards nonresident licenses to GA residents (reciprocity agreement)

Disciplinary Actions

-Denial, Suspension, Revocation, or Refusal to renew a license -Cease and Desist order -Monetary Fines

Nonparticipating (stock) Policy

-Does not pay dividends to policyowners, however taxable dividends are paid to stockholders -Dividends not guaranteed as they are based on company profit

Domicile

-Domestic -Foreign -Alien

Commissioner of Insurance

-Elected every 4 years -Regulates the internal affairs of the Department of Insurance -Does not write laws -Examines all authorized insurers

Nonresident agent who moves from one state to another

-Has 30 days to file change of address, provide certification from the new state -If done, no fees or application required

Investigation and Notice of Hearing

-If Commissioner finds request for hearing is made in good faith, it will be held within 30 days after receipt of request -Notice of time and place must be given 15 days in advance -Within 30 days of hearing, Commissioner must issue an order

Commissioner

-If cannot serve due to death, disability, or resignation, the Chief Deputy Commissioner serves until the next election, however, Chief Deputy must have a $15,000 bond approved by the commissioner

Has to pass written examination unless to get license unless

-If previously licensed for the same line of authority in another state, if the application is received within 90 days of the cancellation of the application's previous license -Licensed as an agent in another state who moves to this state and makes an application within 90 days os establishing legal residence

Temporary License

-In event of agents death, disability, or military service Commissioner can issue a temporary card for 6 months, renewable from time to time for periods of 3 months for a maximum of 15 months

Types of Licenses

-Individual Producers: Resident and nonresident -Temporary License: valid for 6 months; issued to maintain existing business

Nonresident Producer

-Individual who is domiciled and licensed as a resident producer in another state -Subject to same limitation and supervision as a resident

Foreign Insurer

-Insurance Company doing business in another state -Including District of Columbia, American Samoa, Guam, Puerto Rico, and U.S. Virgin Islands

Alien Insurer

-Insurance company incorporated outside the U.S.

Surplus Lines

-Insurance not available from authorized insurers; placed with nonadmitted insurers who specialize in offering insurance to he high-risk market

Nonresident agents cannot act as the agent of an insurer unless they are appointed by that insurer as follows

-Insurer must file notice of appointment within 15 days -Commissioner then verifies that appointment within 30 days, if deemed eligible, insurer will be notified within 5 days of determination -Insurer must pay an appointment fee

Authorized Insurer

-Insurer who has received a Certificate of Authority from the department of insurance to transact insurance in this state

Home Office

-Insurer's headquarters, principal place of business

KNOW THIS*****

-Insurers cannot advertise protection by the Insurance Guaranty Association

KNOW THIS****

-Insurers must obtain a Certificate of Authority prior to transacting business in this state

Producer Regulation

-Licensees may be issued only to individuals -Only one license of the same type is allowed per agent, but may hold more than one license (different lines of authority) -Must be licensed in the line of authority which the agent transact insurance -Avoid unfair trade practices

Counselor License

-May be issued to anyone who engages in business of counseling, advising, or rendering opinions -Often involves the terms, value, effect, advantages or disadvantages under tha contract

Licensing Process

-Meet age and residency requirements (18; reside in the state at least 6 months a year) -Pass examination -Submit application and fees -Be of good character

Qualifications for an Original Certificate of Authority

-Minimum of $1.5 million in capital stock or surplus -Must maintain surplus equal to the larger of $1.5 million or 50% of paid-in capital stock (if stock insurer), or of the insurer's surplus (if mutual or reciprocal)

Transacting insurance without a license for that line of authority

-Misdemeanor fine not exceeding $1,000, or confinement in a jail up to 12 months

Maintenance and Duration

-Must be renewed every 2 years -Continuing Education -License is not required if a person does not receive commissions

Deposit by Alien Insurer

-Must be the larger of the greatest deposit required of a domestic insurer or $300,000

If applying for an agent's license, limited subagent's license, or adjuster's license

-Must complete classroom education courses

Georgia Life and Health Insurance Guaranty Association

-Nonprofit, unincorporated association Has the following functions -Assess its members for funds necessary to pay benefits -Continue coverage for insolvent insurers -Help Commissioner detect/prevent insurer impairment/insolvency

Company Regulation

-Obtain a Certificate of Authority -Remain solvent -Have all policy forms and rates approved by the Department -Avoid unfair trade and unfair claim settlement practices

Insurance Producer License not required for

-Officer -Director -Employee of an insurer Provided they do not sell insurance and do not receive comission

Stock Companies

-Owned by stockholders who provide the capital necessary to establish and operate the insurance company and who share in profits or losses -Issue nonparticipating policies, in which policy owners do not share in profits or losses

Mutual Companies

-Owned by the policyowners and issue participating policies -Policyowners are entitled to dividends, in which case of mutual companies, are a return of excess premium, and therefore, nontaxable -Dividends are generated when the premiums and the earnings combined exceed the actual cost of providing coverage -Dividends not guaranteed

Commission

-Payment to the agent by the insurance company for placing insurance, usually a percentage of the policy premium

Insurance Guaranty Association

-Protects policyowners, insureds, and beneficiaries against insolvent insurers -All admitted insurers must be members of the Association -Unfair trade practice: stating that the insurer's policies are guaranteed by the existence of the Association

Limited Subagent Licensees

-Required to complete 5 hours of CE ever biennium (2 years)

Disclosure

-Revealed information to help someone make an intelligent and educated decision

Counselors can provide the following ancillary services

-Risk Identification -Loss measurement -Gathering and analysis of loss information -Verification of workers compensation experience modifiers -Setting of risk retention levels -Development of retention financial plans -Development of insurance specifications -Negotiation with insurers regarding coverage, costs, and payment options -Implementing of retained and transferred risk programs -Monitoring of annual program -Insurance audit services

General Powers, Duties, and Responsibilities of Commissioner

-Set up necessary divisions or sections of the Department -Appoint assistants, examiners, actuaries, clerks, and other -Maintain official records -Adopt and Promulgate rules and regulations (approved by the Attorney General and be on file as a public record for 10 days) -Examine the accounts, records, and transactions of any insurance licensed person, insurer, rating organization, or any other organization authorized to transact insurance in the state -Issue a cease and desist order if any person is believed to have violated provisions of the code -Complete Annual Reports -On July 1 each year, compile a supplementary report regarding property and casualty insurance -During first week of each quarter, file a report to the chairperson of the House Committee on Insurance and the chairperson of the Senate Committee on Insurance and Labor

If applying for a counselor's license

-Show evidence of 5 years of experience in insurance

Commissioner of Insurance

-Supervises Insurance Business -Licensing -Approves policies and forms -Enfore insurance laws and impose penalties for violations -Conduct examinations, investigations, and hearings

Commissioner

-The head of the State Department of Insurance

Twisting and Churning

-Twisting is a misrepresentation or fraudulent comparison of insurance policies that persuade an insured, to their detriment, to cancel, lapse, switch, or take out a policy with another insured -Churning is replacing insurance policies for the sole purpose of making commissions

Insolvent

-Unable to meet financial obligations

Commissioner may refuse to issue a COA if

-Violating or knowingly failing to comply with any applicable Insurance Code -Violating the claims settlements regulations -Being in unsound condition -Refusing to be examined -Failing to pay any judgement within 30 days -Being affiliated with another insurer that transacts direct insurance without a COA

Once licensee whose application has been refused or revoked

-can file a new application for 5 years

Life and Health Insurance Guaranty Association has 2 separate accounts

1. Life insurance and annuity account 2. Health Insurance acount

6 Classes of Insurance in Georiga

1. Life, Accident, and Sickness 2. Property, marine, and transportation 3. Casualty 4. Surety 5. Title 6. Health Maintenance Organizations