. Insurance Commissioner/Department
Standards for Prompt Settlement
After receiving a claim, the insurer must, within 15 days: ● Acknowledge receipt of the claim ● Begin investigating circumstances of the claim ● Give claimant necessary forms ● Request all pertinent information
Cancellation by the Insured
1. Policyholder returns policy to insurer or sends written notice requesting future date of cancellation 2. Insurer sends receipt confirming date of cancellation 3. Insurer informs any third party 4. Policy automatically cancelled upon replacement policy's effective date
Licensing Requirements in Georgia
Applicant must be: ● At least 18 years old ● Resident of Georgia, living in Georgia at least 6 months/year Applicant must have: ● Completed 40-hour Property and Casualty Pre-licensing Course and passed Georgia Adjuster Examination ● Paid required fees ● Been fingerprinted ● Citizenship affidavit ● Valid ID Applicant must not be: ● Guilty of any felony or fraud that would cause license to be denied, suspended, revoked
Georgia Commissioner
At least every five years, he will examine all the domestic insurance companies and rating organizations in the state. He has the authority to look at their transactions, accounts, assets, business methods, and management practices.
Proof of Loss Forms
Claim Settlement Rules: Proof of Loss Forms The insurer must provide proof of loss forms:● When a policyholder files a claim ● When a policyholder requests them in writing ● Within 15 days If an insurer doesn't send proof of loss forms, it forfeits the right to require them of the claimant
Consumer Privacy Protection
Consumers are required to give many details of personal health, finances, and family history to insurers. Federal and state laws regulate how this information can be used, stored, and transferred ● Fair Credit Reporting Act (FCRA) ● Insurance Information and Privacy Protection Act (IIPPA) ● Health Insurance Portability and Accountability Act (HIPAA)
Health Insurance Portability and Accountability Act (HIPAA)
Health Insurance Portability and Accountability Act (HIPAA) 1996 federal law regulating handling of medical information ● Includes regulation about computer and online security for personal medical information ● Some states may have stronger protections than HIPAA
Commissioner's Authority
If an insurer does not follow state laws, the Commissioner can: ● Refuse to issue or renew its certificate of authority ● Revoke or suspend its certificate of authority ● Place the insurer under administrative supervision
Agent License Renewal
License Renewal Requirements ● 24 hours continuing education/2 years ● 20 hours continuing education/2 years if agent more than 20 years ● 3 continuing education hours must cover ethics
Even More Disciplinary Actions
More Reasons for Disciplinary Action ● Failing to pay money owed to insurer or other party to insurance contract ● Failing to provide Commissioner records or appear at hearing ● Failing to report to Commissioner any criminal prosecution within 30 days
Place of Business
Place of Business The adjuster's place of business must be: ● Located where adjuster principally conducts transactions under the license ● Accessible to members of the general public For Change of Address: ● Adjuster has 30 days to notify commissioner of change ● When resident adjuster moves out of state or non-resident adjuster moves from state to state they must also provide certification from new state within 30 days ● There is no fee or application
Insurance Rating
Rating System ● A risk management technique ● If a person is more likely to file claims, insurer may be able to charge higher premiums
Discovery Rule
Statutes of limitations run from when an injury is, or should have been, discovered For example... The statute of limitations for: ● Personal injury: 2 years with the discovery rule ● Product liability: 2 years with the discovery rule or 1 year from date of death ● Fraud: starts when the fraud is discovered Medical Malpractice: ● Statute of limitations: usually 2 years after the date of the alleged act ● Exceptions: ○ when a foreign object is left inside a patient during a surgery, the discovery rule applies ○ a minor under 5 years old has until the minor's 7th birthday to file
Temporary Licenses
The Commissioner can grant temporary licenses if necessary ● Renewed at 3 month intervals ● May not exceed 15 months in total Situations that may require temporary licenses: ● An adjuster or agent becomes ill, disabled, or dies ● An adjuster or agent is away at military service
Insurance Commissioners
The states elect Insurance Commissioners to regulate the insurance industry. State commissioners and departments of insurance are responsible for: ● Maintaining insurer solvency ● Regulating rates ● Protecting consumers ● Making insurance available for all individuals
Admitted Insurers
Three Classes of Insurers ● Domestic: Based in Georgia ● Foreign (a.k.a. Surplus): Based in another state ● Alien: Based outside the United States To do business in Georgia, all insurers must: ● Follow Georgia laws and regulations ● Have a Georgia Certificate of Authority
Qualifications for Adjuster License
To become an adjuster, you must: ● Be at least 18 years of age ● Be a resident of Georgia ● Not have committed any act that is grounds for denial, suspension, or revocation of a license ● Have completed the pre-licensing course required for the license you are applying for ● Get fingerprinted ● Provide citizenship affidavit ● Have valid ID ● Have paid all required fees
Emergency Adjusters
Extreme, violent weather sometimes creates the need for Emergency Adjusters. Frequent occurrences that generate overwhelming number of claims are: ● Tornadoes ● Thunderstorms with hail ● Wildfires Emergency adjusters: not licensed in Georgia but temporarily permitted GEMA declared disaster: ● Insurers send list of non-licensed staff and out of state adjusters ● Commissioner will grant permit to work in state for up to 60 days For Non-GEMA declared disaster: ● Out of state adjusters notify Commissioner that they will be working in state (sending name, date, date of arrival) ● Will need to apply for Georgia license if working longer than 60 days in the state
Elements of a TPA application:
1. Application and fee 2. Company Articles of Incorporation 3. Company by-laws 4. List of current officers and directors; their names, addresses, positions, and qualifications 5. Financial Statements of preceding 2 calendar years 6. Copies of all administrative agreements 7. Proof that the applicant's net worth is at least $200,000 8. A $100,000 surety bond 9. Errors and Omissions insurance of at least $100,000
Unearned Premium Refunds
Insurers must refund unearned premiums to the policyholder in the case of cancellation: ● On or before cancellation date ● To insured or to his agent If insurer fails to return unearned premiums on time: ● Penalty of 25% is added ● With 18% interest
Reciprocity
Reciprocity can be a difficult concept to grasp. Essentially, it refers to when a state recognizes the qualifications of adjusters licensed in another state. So, if you are licensed in a state that is reciprocal with Georgia, you can apply for a non-resident Georgia adjuster's license without taking the pre-licensing course or exam. It does NOT mean that you can simply begin acting as an adjuster in Georgia. You still have to apply for and maintain a license, but the process is much easier
Commissioner's Authority
The Georgia Commissioner enforces insurance rules and regulations and has broad powers of investigation. The Commissioner has the power to: ● Examine all domestic insurance companies and rating organizations ● Examine agents, sub-agents, brokers, counselors, adjusters, and managers of domestic insurance companies ● Serve notice of hearings if he suspects violation of the law
Taking Disciplinary Action
● Commissioner will inform adjuster or agent in writing ● Agent or adjuster can request hearing within 30 days of receiving notice ● Commissioner must then schedule hearing & give adjuster/agent 10 days notice ● Once license has been refused or revoked, the person is ineligible to apply again for 5 years
To maintain a Certificate of Authority, insurers must:
● Comply with all insurance laws ● Be financially sound ● Give claimants their due ● Provide necessary access and information for renewal ● Pay final judgements within 30 days
Rules for Cancellation & Nonrenewal:
● Insurers must give policyholders 30 days notice ● For non-payment of premiums: 10 days notice ● Policies in effect for less than 60 days: 10 days notice ● Notification must be delivered in person or by first class mail ● If sending by mail, insurer must keep receipt
Georgia Requirements
● Insurers must keep sufficient funds on hand to pay any claims that might arise ● All Property and Casualty insurers must participate in Georgia Insurers Insolvency Pool ● All Life and Health insurers must be members of Georgia Life & Health Insurance Guaranty Association
Reasons for Disciplinary Action
● Misrepresenting facts on license application or any form filed with commissioner ● Failing or cheating on insurance licensing exams ● Obtaining or trying to obtain a license by fraud or concealment ● Violating Georgia insurance law ● Engaging in fraudulent or dishonest acts ● Misrepresenting terms or conditions of insurance policy ● Being convicted of any felony or crime involving moral depravity
Types of Insurers Admitted
● Mutual insurance companies ● Farmers Mutual insurance companies ● Reciprocal insurers ● Hospital Service non-profit corporations ● Non-profit Medical Service corporations ● Stock insurers ● Lloyd's associations ● Fraternal Benefit societies
Statutes of Limitations in Georgia include:
● Personal injury: 2 years ● Trespassing: 4 years ● Fraud: 2 years ● Medical malpractice: 2 years ● Defamation of character (libel): 1 year
Georgia 50% Bar Rule
● States can have "at fault" or "no fault" laws ● Georgia is an "at fault" state ● Georgia also uses modified comparative negligence: ○ if injured party was partially responsible for loss, the court will determine how "at fault" they were ○ if injured party bears at least half the fault (i.e. 50% responsible or more), then they get no damages ○ if injured party bears less than 50% of the fault, they can get damages, but damages are reduced based on fault percentage
Insurance Rating: How It Works
● Admitted insurers wanting to change their rate schedules must get approval from state department of insurance ● Changes must be justified by actuarial data ● Insurance department keeps rates from being too high or too low ● Marketplace where many can be insured by variety of safe insurance products
Workers' Compensation Rating
● Premiums based on type of work performed by each employee ● High-risk employees: higher premiums ● Helps insurers to charge premiums that accurately reflect risk exposure Experience Rating: based on accident history for past 3 years ● Fewer claims than average: premiums go down ● More claims than average: premiums go up ● Premium Modification Factor: measures the change in premium Schedule Rating: judgment call by underwriters that takes into account specifics of a case: ● Good management ● Premises upkeep ● Bill paying history Retrospective Rating: yearly premium adjustment based on the insured's performance that year
More reasons for Disciplinary Action
● Withholding, misappropriating, or converting money or property belonging to insurer or other party to his own use ● Ignoring child support obligations or orders by the Commissioner ● Not conducting insurance business in good faith, or with lack of trustworthiness or competence ● Having an insurance license suspended, revoked, or refused in another state or province (must report within 60 days) ● Knowingly participating in writing or issuing substantial over insurance of property
Consumer Privacy Protection
The Fair Credit Reporting Act (FCRA) A federal law that regulates the collection, distribution, and use of consumer information. It is enforced by the Federal Trade Commission, and through civil lawsuits The Insurance Information & Privacy Protection Act (IIPPA) Model legislation adopted by most states IIPPA requires insurers to: ● Inform consumers how their information is protected ● Give reasons for denial of coverage or claims ● Give reasonable notice for policy renewal and other policy changes ● Ensure that they and their agents keep personal information private
More Rules for Prompt Settlement
Timely Decisions for Claimants ● Once insurer receives all paperwork, it has 15 days to make a decision regarding payment ● If unable to make decision in 15 days, the insurer can take 45 more days after notifying claimant ● If arson is suspected, insurer has 30 days to affirm or deny coverage ● The insurer must notify claimant in writing if claim is denied ● Covered claims must be paid within 10 days after insurer makes a decision
Disciplinary Actions
The Georgia Office of Insurance can discipline adjusters who do not follow Georgia Insurance Code. Disciplinary actions may include: ● Warnings ● Suspension ● Revocation of license ● Fines
License Renewal
Adjuster License Renewal ● Every 2 years ● Renews on last day of adjuster's birth month ● $100 fee
Administrative Fines
After a hearing, Commissioner can fine insurers up to $5,000 for regularly: ● Encouraging claimants to accept less than they're due ● Failing to process and pay claims in a timely manner ● Refusing to pay proper claims ● Accepting money or gifts to send work to another company
Insurer Ratings
Did you know that insurers get rated, too? ● Rated by independent organizations ● Consumers can protect themselves by checking rating of insurer before buying policy
Counselor
● Adjuster or agent who advises consumers about benefits contained in insurance contracts ● Must have 5 years experience or equivalent education and experience 3 Kinds of Counselor license: ● Life, Accident and Sickness ● Property and Casualty ● Limited Health
Georgia Commissioner
If the commissioner receives a complaint about an insurance agent or company, and believes the complaint is credible, he will schedule a hearing within 30 days of the complaint, again serving notice by registered mail. Commissioner's Authority The Commissioner also has the power to: ● Prohibit any person he suspects of breaking insurance law from continuing that illegal action ● Impose penalties against any person found guilty of breaking insurance law, even without a hearing ● Place any insurer on probation for up to one year for each violation If after conducting an investigation the Commissioner finds someone to be responsible for breaking insurance law, he can impose any penalty allowed by law, even without holding a hearing. If the offender wants a hearing, he must request one within 10 days of receiving the order prohibiting the illegal action.
Georgia Commissioner of Insurance
Insurance and Safety Fire Commissioner The Georgia Commissioner protects state residents by making and enforcing insurance rules and regulations based on state law. ● Elected position ● Four year term ● Can appoint deputies ● Attorney general decides legality of rules if disputed ● Must not have financial interest in any insurance company or agency
Third Party Administrators
Insurers outsource some tasks to Third Party Administrators (TPAs): ● Collecting premiums ● Processing claims or employee benefit plans Important facts about TPAs: ● TPAs must be licensed (renewed annually) or will be fined ● Risk of loss remains with insurer For example... Because of the huge overflow of claims during Hurricane Katrina, insurers outsourced tens of thousands of overflow claims to TPA's who specialize in handling hurricane claims.
Auto Ratings
Rating Auto Insurance Personal Insurance is one of the areas in which ratings are used. Factors that can affect auto insurance rates: ● Location ● Make and age of vehicle ● Driving record ● Demographic profile of driver For example... 18-year-old Tyler, who just received a brand new red Corvette for his birthday after totaling his pick-up truck, will be charged a higher premium than Mary, a 43-year- old mother who drives a minivan and has not been in a wreck for 20 years
