Cross references. - Specific limitations on corporations, Ga. Const. 1983, Art. III, Sec. VI, Para. V and T. 14, C. 4.

Insurance regulation generally, Ga. Const. 1983, Art. III, Sec. VIII.

Requirement that banks obtain and maintain deposit insurance, § 7-1-244 .

Credit Union Deposit Insurance Corporation, T. 7, C. 2.

Secretary of State, corporations, generally, T. 14, C. 4.

Purchase of liability insurance for school officials and employees, § 20-2-990 et seq.

Joint purchase of insurance and joint formation of self-insurance programs by boards of education, § 20-2-2001 et seq.

Nuclear facility liability insurance for schools under control of board of regents, § 20-3-71 .

Liability insurance requirements for persons importing, transporting, or otherwise handling inherently dangerous wild animals, § 27-5-4 .

Joint purchase of insurance and joint formation of self-insurance programs by municipalities and counties, T. 36, C. 85.

Public liability insurance requirements for operators of motor vehicle racetracks, § 43-25-4 .

Purchase of liability insurance for public officers and employees generally, § 45-9-1 et seq.

State employees' insurance and benefit plans, T. 45, C. 18.

Editor's notes. - Former Code 1933, § 56-115, enacted by Ga. L. 1960, p. 289, § 1, provided that the Georgia Insurance Code would become effective on January 1, 1961, except as otherwise expressly provided.

Law reviews. - For article, "No-Fault Insurance for Injuries Arising from Medical Treatment: A Proposal for Elective Coverage," see 24 Emory L.J. 21 (1975). For article discussing developments in Georgia insurance law in 1976 to 1977, see 29 Mercer L. Rev. 157 (1977). For article surveying Georgia cases in the area of insurance from June 1977 through May 1978, see 30 Mercer L. Rev. 105 (1978). For annual survey on insurance, see 36 Mercer L. Rev. 217 (1984). For article surveying insurance law in 1984-1985, see 37 Mercer L. Rev. 275 (1985). For annual survey of insurance law, see 39 Mercer L. Rev. 241 (1987). For annual survey of insurance law, see 42 Mercer L. Rev. 259 (1990). For annual survey of insurance law, see 43 Mercer L. Rev. 285 (1991). For annual survey article on insurance law, see 45 Mercer Law Rev. 253 (1993). For annual survey article on insurance law, see 46 Mercer L. Rev. 261 (1994). For annual survey article on insurance law, see 49 Mercer L. Rev. 175 (1997). For annual survey article discussing developments in insurance law, see 51 Mercer L. Rev. 313 (1999). For annual survey article on insurance law, see 52 Mercer L. Rev. 303 (2000). For article, "When Do State Laws Determine ERISA Plan Benefit Rights," see 47 J. Marshall L. Rev. 145 (2014). For article, "Nondiscrimination in Insurance: The Next Chapter," see 49 Ga. L. Rev. 1 (2014). For article, "Public Officers and Employees: Employees' Insurance and Benefit Plans," see 31 Georgia St. U.L. Review 177 (2014). For annual survey on insurance law, see 68 Mercer L. Rev. 133 (2016). For article, "Price Transparency and Incomplete Contracts in Health Care," see 67 Emory L.J. 1 (2017). For annual survey on health care law, see 69 Mercer L. Rev. 1209 (2018). For note discussing the relationship of federal and state regulation of insurance, in light of In the Matter of American Hospital and Life Insurance Co., C.C.H. Trade Reg. Rep. /P25,954 (FTC, April 24, 1956), see 5 J. of Pub. L. 494 (1956). For note, "The Parity Cure: Solving Unequal Treatment of Mental Illness Health Insurance Through Federal Legislation," see 44 Ga. L. Rev. 511 (2010). For note, "When an Idea is More Than Just an Idea: Insurance Coverage of Business Method Patent Infringement Suits Under Advertising Injury Provisions of Commercial General Liability Policies," see 18 J. Intell. Prop. L. 631 (2011). For note, “Phishing for Computer Fraud Insurance Coverage,” see 36 Ga. St. U.L. Rev. 407 (2020).

JUDICIAL DECISIONS

In 1960 the Insurance Code became, by law, a part of every policy thereafter issued in the state. Chicago Ins. Co. v. Camors, 296 F. Supp. 1335 (N.D. Ga. 1969), aff'd, 420 F.2d 376 (5th Cir. 1970).

Title not retroactive. - Insurance Code, enacted by Ga. L. 1960, p. 289, was not intended to and could not have had any retroactive effect. Chatham County Hosp. Auth. v. John Hancock Mut. Life Ins. Co., 325 F. Supp. 614 (S.D. Ga. 1971).

All aspects of insurance industry regulated. - Insurance Code extensively and exhaustively regulates, at the state level, all aspects of the insurance industry in Georgia. Cotton States Mut. Ins. Co. v. DeKalb County, 251 Ga. 309 , 304 S.E.2d 386 (1983).

Scope of Commissioner's investigative powers. - Investigative powers of the Insurance Commissioner under the Insurance Code are not restricted only to those instances in which a hearing is pending. Southeastern Adjusters, Inc. v. Caldwell, 229 Ga. 4 , 189 S.E.2d 76 (1972).

Cited in Scott v. State Grand Lodge No. 1, 110 Ga. App. 762 , 140 S.E.2d 86 (1964); Miller v. National Fid. Life Ins. Co., 588 F.2d 185 (5th Cir. 1979).

OPINIONS OF THE ATTORNEY GENERAL

Employee of an industrial loan licensee may conduct the business of insurance provided that that person is duly licensed as an insurance agent and provided that the customer is not misled into thinking that the customer's ability to procure a loan is contingent upon an agreement to purchase this insurance or otherwise to transact business in the industrial loan office. 1984 Op. Att'y Gen. No. U84-54.

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, § 19 et seq.

ALR. - Misrepresentation by one other than insurance agent as to coverage, exclusion, or legal effect of insurance policy, as actionable, 29 A.L.R.2d 213.

Liability insurer's waiver of right, or estoppel, to set up breach of cooperation clause, 30 A.L.R.4th 620; 65 A.L.R.5th 272.

Acts in self-defense as within provision of liability insurance policy expressly excluding coverage for damage or injury intended or expected by insured, 34 A.L.R.4th 761.

Liability of insurer or agent of insurer for failure to advise insured as to coverage needs, 88 A.L.R.4th 249.

Validity and operation of "step-down" provision of automobile liability policy reducing coverage for permissive users, 29 A.L.R.5th 469.

Construction and application of preemption exemption, under Employee Retirement Income Security Act (29 USC § 1001 et seq.), for state laws regulating insurance, banking, or securities (29 USC § 1144(b)(2)), 87 A.L.R. Fed. 797.

Exemption or immunity from federal antitrust liability under McCarran-Ferguson Act (15 USCS §§ 1011-1013) and state action and Noerr-Pennington Doctrines for business of insurance and persons engaged in it, 116 A.L.R. Fed. 163.

CHAPTER 1 GENERAL PROVISIONS

Sec.

33-1-1. Short title.

This title shall be known and may be cited as the "Georgia Insurance Code."

(Code 1933, § 56-101, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1965, p. 371, § 2.)

Editor's notes. - Former Code 1933, § 56-115, enacted by Ga. L. 1960, p. 289, § 1, provided that the Georgia Insurance Code would become effective on January 1, 1961, except as otherwise expressly provided.

JUDICIAL DECISIONS

Section 7-1011(1), DeKalb County Code, a business license ordinance, is repealed by implication by the Georgia Insurance Code. Georgia Farm Bureau Mut. Ins. Co. v. DeKalb County, 167 Ga. App. 577 , 306 S.E.2d 924 (1983) (on motion for rehearing).

Cited in Federated Mut. Implement & Hdwe. Ins. Co. v. Barker, 123 Ga. App. 259 , 180 S.E.2d 559 (1971).

RESEARCH REFERENCES

14A Am. Jur. Pleading and Practice Forms, Insurance, § 2.

ALR. - Liability of insurance agent or broker on ground of inadequacy of liability-insurance coverage procured, 60 A.L.R.5th 165.

Waiver or estoppel of insurer on basis of statements or omissions in promotional, illustrative, or explanatory materials given to insured, 63 A.L.R.5th 427.

33-1-2. Definitions.

As used in this title, the term:

  1. "Commissioner of Insurance" or "Commissioner" means the Commissioner of Insurance of the State of Georgia.
  2. "Department of Insurance" or "department" means the Department of Insurance established by Code Section 33-2-1.
  3. "Health benefit policy," "health benefit plan," or other similar terms shall not include limited benefit insurance policies designed, advertised, and marketed to supplement major medical insurance such as accident only, CHAMPUS supplement, dental, disability income, fixed indemnity, long-term care, medicare supplement, specified disease, vision, and any other type of accident and sickness insurance other than basic hospital expense, basic medical-surgical expense, or major medical insurance.
  4. "Insurance" means a contract which is an integral part of a plan for distributing individual losses whereby one undertakes to indemnify another or to pay a specified amount or benefits upon determinable contingencies.
  5. "Insurer" means any person engaged as indemnitor, surety, or contractor who issues insurance, annuity or endowment contracts, subscriber certificates, or other contracts of insurance by whatever name called. Burial associations, health care plans, and health maintenance organizations are insurers within the meaning of this title.
  6. "Natural person" means an individual human being and does not include any firm, partnership, association, corporation, or trust.
  7. "Person" means an individual, insurer, company, association, trade association, organization, society, reciprocal or interinsurance exchange, partnership, syndicate, business trust, corporation, Lloyd's association, and associations, groups, or department of underwriters, and any other legal entity.
  8. "Security," "security deposit," "special deposit," or "deposit," when used to refer to posted deposits required to be placed in the possession of the Commissioner, shall mean the actual physical evidence of a security, such as a certificate, or an entry made through the federal reserve book-entry system. The federal reserve book-entry system shall be limited in meaning to the computerized systems sponsored by the United States Department of Treasury and certain agencies and instrumentalities of the United States for holding and transferring securities of the United States government and such agencies and instrumentalities, respectively, in federal reserve banks through banks which are members of the Federal Reserve System or which otherwise have access to such computerized systems.
  9. "Transact," with respect to insurance, includes any of the following:
    1. Solicitation and inducement;
    2. Preliminary negotiations;
    3. Effectuation of a contract of insurance; or
    4. Transaction of matters subsequent to effectuation of the contract and arising out of it.

      (Code 1933, §§ 56-102, 56-103, 56-104, 56-105, 56-106, 56-107, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1982, p. 3, § 33; Ga. L. 1988, p. 693, § 1; Ga. L. 1989, p. 1119, § 1; Ga. L. 2000, p. 136, § 33; Ga. L. 2003, p. 387, § 1.1; Ga. L. 2003, p. 872, § 1; Ga. L. 2017, p. 164, § 3/HB 127; Ga. L. 2019, p. 337, § 1-1/SB 132.)

The 2019 amendment, effective July 1, 2019, added paragraph (2); deleted former paragraph (3), which read: " 'Insurance Department' or 'department' means the Insurance Department established by Code Section 33-2-1."; redesignated former paragraphs (1.1) through (6) as present paragraphs (3) through (9), respectively; and, in paragraph (3), substituted "terms shall not" for "terms do not", "CHAMPUS" for "Champus", and "medicare" for "Medicare".

Cross references. - Designation of Comptroller General as Insurance Commissioner, § 33-2-1 .

Investigation, adjustment, and litigation of claims as not constituting "transacting of insurance," § 33-3-2(b) .

Lending institutions being authorized to underwrite credit life and accident and sickness insurance, § 33-3-23 .

Code Commission notes. - Pursuant to Code Section 28-9-5, in 1989, the definitions of "Insurance" and "Commissioner of Insurance" have been renumbered and "Commissioner of Insurance" has been substituted for "Insurance Commissioner" in two places in paragraph (1).

Law reviews. - For article discussing interpretation in Georgia of insurance policies containing evidentiary conditions, see 12 Ga. L. Rev. 783 (1978). For annual survey article on insurance law, see 49 Mercer L. Rev. 175 (1997).

JUDICIAL DECISIONS

Editor's notes. - In light of the similarity of the statutory provisions in this title, decisions under former Code 1933, § 56-901, repealed by Ga. L. 1960, p. 289, which, as amended, enacted this title, are included in the annotations for this section.

Purpose, effect, contents, and import determine if contract is "insurance." - Whether a contract is one of insurance is to be determined by its purpose, effect, contents, and import and not necessarily by the terminology used even though it contains declarations to the contrary. Benevolent Burial Ass'n v. Harrison, 181 Ga. 230 , 181 S.E. 829 (1935).

A contract to underwrite a hole-in-one give-away by indemnifying the sponsor of a golf tournament for the cost of the prize awarded for a hole-in-one on a particular hole was an "insurance" contract. Golf Mktg., Inc. v. Atlanta Classic Cars, Inc., 245 Ga. App. 720 , 538 S.E.2d 809 (2000).

Loss need not be paid directly to contractee. - It is not essential that loss, damage, or expense indemnified against be paid to the contractee. The contract may constitute "insurance" if it is for his benefit and is a contract on which he, in case of breach, may assert a cause of action. Benevolent Burial Ass'n v. Harrison, 181 Ga. 230 , 181 S.E. 829 (1935).

Contract will be construed most favorably for contractee. - Where the contract is ambiguous on the question of whether it should be treated as having a value commensurate with the amount paid in or as securing to the holder the element of a life insurance policy, it should, under the proper rule of construction, be given a meaning most favorable to the holder and least favorable to the company on this question. Benevolent Burial Ass'n v. Harrison, 181 Ga. 230 , 181 S.E. 829 (1935).

Employer not "insurer." - In an action by a former employee to enforce an agreement by his former employer to pay the proceeds of a "key man" life insurance policy to the employee's estate, the trial court did not err in failing to charge on the definition of life insurance since the agreement was not a contract of life insurance and the employer was not an insurer. Primus Pharmaceuticals, Inc. v. Glovier, 215 Ga. App. 411 , 450 S.E.2d 832 (1994).

Period of coverage. - Mere idea of retroactive insurance coverage defied common sense; according to O.C.G.A. § 33-1-2(2) (now paragraph (4)), insurance was a contract which was an integral part of a plan for distributing individual losses whereby one undertook to indemnify another or to pay a specified amount or benefits upon determinable contingencies. Coverage for an event that already occurred contravened the very definition of insurance; a reasonable person speaking with any insurance agent would not reasonably believe that an insurance agent has the authority to provide retroactive coverage. Rutland v. State Farm Mut. Auto. Ins. Co., 392 Fed. Appx. 721 (11th Cir. 2010)(Unpublished).

Selling memberships in automobile clubs was "insurance." - Based on the fact that selling memberships in automobile clubs was considered "insurance" under O.C.G.A. § 33-1-2(2) (now paragraph (4)) and application of the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1-16, would impair O.C.G.A. § 9-9-2(c)(3), the McCarran-Ferguson Act, 15 U.S.C. §§ 1011-1015, preempted the FAA and prohibited enforcement of the parties' arbitration agreement. Love v. Money Tree, Inc., 279 Ga. 476 , 614 S.E.2d 47 (2005).

Funeral service contracts held "insurance." - Under the evidence judge was authorized to find that contracts issued by defendant company amounted in substance and effect to policies of life insurance, and that company, in the issuance of such contracts, was doing a life insurance business contrary to the laws of this state, notwithstanding the contracts issued to the holders were called stock certificates and entitled the holders to stated mortuary service or merchandise on conditions prescribed by the charter and bylaws of the company. Benevolent Burial Ass'n v. Harrison, 181 Ga. 230 , 181 S.E. 829 (1935).

Where it was shown that in consideration of the initial and installment payments provided for by each contract the defendants had agreed that so long as the contract remained of force they would render to the person to whom the contract was issued all of the services customarily rendered by undertakers or funeral directors, including hearse service, all necessary embalming, directing, and conducting of funerals, etc., within a radius of 25 road miles, and to sell at wholesale cost price (plus transportation charges only) caskets, burial clothes, etc., to any contract holder for use in the funeral of any member of his or her family or dependents, the evidence authorized the grant of an interlocutory injunction on the ground that the contracts issued by the company constituted policies of life insurance, and that the company, in the issuance of such contracts, was doing a life insurance business contrary to law. Clark v. Harrison, 182 Ga. 56 , 184 S.E. 620 (1936); South Ga. Funeral Homes v. Harrison, 182 Ga. 60 , 184 S.E. 875 , later appeal, 183 Ga. 379 , 188 S.E. 529 (1936).

Where undertaking business was executing contracts and issuing certificates to furnish funeral merchandise and funeral services upon death and purchasers were obligated to make installment payments, it was, for a consideration, assuming an obligation to be performed upon the death of the purchaser, namely, to furnish the goods and render the stipulated service, and the business was to be characterized as a life insurance business within the meaning of Ga. L. 1937, p. 702 (now repealed), and was subject to the legal regulatory provisions relating to life insurance generally. Harrison v. Tanner-Poindexter Co., 187 Ga. 678 , 1 S.E.2d 646 (1939).

Only "insurer" is liable for penalties for refusing to pay. - Former Code 1933, § 56-1206 (see O.C.G.A. § 33-4-6(a) ) applies only to an "insurer" as defined by paragraph (4) (see now paragraph (5)) of this section. McGhee v. Kroger Co., 150 Ga. App. 291 , 257 S.E.2d 361 (1979).

Individual agent not insurer. - Defendant could not be considered an "insurer" where defendant was allegedly acting falsely as an individual insurance agent, not as an entity issuing contracts of insurance to insureds, and in any event, no insurance contract was ever consummated. Gilbert v. Van Ord, 203 Ga. App. 660 , 417 S.E.2d 390 , cert. denied, 203 Ga. App. 906 , 417 S.E.2d 390 (1992), cert. denied, 203 Ga. App. 906 , 417 S.E.2d 390 (1992).

Arbitration agreements. - O.C.G.A. § 9-9-2(c)(3) invalidates arbitration agreements in insurance contracts as defined in O.C.G.A. § 33-1-2 , with the exception that it does not prohibit enforcement of arbitration agreements in contracts between insurance companies; simply stated, in Georgia a contract of insurance is not subject to arbitration unless the contract is between insurance companies. Davis v. Zurich Am. Ins. Co. (In re TFI Enters.), Bankr. (Bankr. M.D. Ga. Apr. 9, 2008).

Employer is not liable under statute penalizing workers' compensation insurer. - Where an employer is not an "insurer" as defined by paragraph (4) of this section, it cannot be held liable for penalty and attorney fees provided for under former Code 1933, § 56-1206 (see O.C.G.A. § 33-4-6(a) ), covering workers' compensation insurer's initial failure to pay employee's indebtedness to a hospital. McGhee v. Kroger Co., 150 Ga. App. 291 , 257 S.E.2d 361 (1979).

United States deemed "person." - The United States is a "person" within the meaning of O.C.G.A. § 33-36-3(2)(F) (see O.C.G.A. § 33-36-3(10) ). United States v. Rutland, Inc., 849 F. Supp. 806 (S.D. Ga. 1994), aff'd, 46 F.3d 71 (11th Cir. 1995).

"Person" does not include state or its agencies. - Since the definition of "person" in paragraph (5) of this Code section does not specifically include the state or its agencies, the Insurance Code does not apply to the board of regents. Board of Regents v. Tyson, 261 Ga. 368 , 404 S.E.2d 557 (1991).

County deemed "person." - A county is a "legal entity" within the meaning of paragraph (5) (now paragraph (7)) of this Code section and is, therefore, a "person" within the meaning of this Code section and of O.C.G.A. § 33-36-3(2)(F) (see O.C.G.A. § 33-36-3(10) ). As a "person," if its stipulated net worth is more than $1 (now $3) million, its claim is not covered by the Georgia Insurers Insolvency Pool Act. Georgia Insurers Insolvency Pool v. Elbert County, 258 Ga. 317 , 368 S.E.2d 500 (1988).

Employee had no authority to offer retroactive coverage. - When an insured was in a car crash after an insurer canceled the policy for failing to pay the premium and an insurance employee allegedly told the insured that the insurer would provide retroactive coverage for the crash if the insured paid the past-due amount, the insurer had no duty to defend the insured because, inter alia, the insurance employee did not have the actual or apparent authority to bind the insurer to retroactive coverage of the crash. Rutland v. State Farm Mut. Auto. Ins. Co., 426 Fed. Appx. 771 (11th Cir. 2011)(Unpublished).

When foreign law governs. - Where money contracts are valid in the state where they are made and to be performed, the laws of that state shall govern the obligation, even though it is a usurious one under Georgia law. Commercial Credit Plan, Inc. v. Parker, 152 Ga. App. 409 , 263 S.E.2d 220 (1979).

What statute of limitations applies to insurance. - Insurance is a matter of contract, the applicable statute of limitations on a simple contract being six years. Smith v. State Farm Mut. Auto. Ins. Co., 152 Ga. App. 825 , 264 S.E.2d 296 (1979), rev'd on other grounds, 245 Ga. 654 , 266 S.E.2d 505 (1980).

Insurance law not applicable to suretyship contract. - Insurance law was not applicable in a case involving liability under a suretyship contract. American Mfg. Mut. Ins. Co. v. Tison Hog Mkt., Inc., 182 F.3d 1284 (11th Cir. 1999), cert. denied, 531 U.S. 819, 121 S. Ct. 59 , 148 L. Ed. 2 d 26 (2000).

Cited in Bentley v. Allstate Ins. Co., 227 Ga. 708 , 182 S.E.2d 770 (1971); Sollek v. Laseter, 126 Ga. App. 137 , 190 S.E.2d 148 (1972); Olukoya v. American Ass'n of Cab Cos., 219 Ga. App. 508 , 465 S.E.2d 715 (1995); Villa Sonoma at Perimeter Summit Condo. Ass'n v. Commercial Indus. Bldg. Owners Alliance, Inc., 349 Ga. App. 666 , 824 S.E.2d 738 (2019).

OPINIONS OF THE ATTORNEY GENERAL

Assumption or distribution of risk is essential of "insurance." - The assumption of or the actuarial distribution of a loss risk is an essential ingredient in any contract of "insurance." 1972 Op. Att'y Gen. No. 72-62.

Contract to provide burial space for cemetery lot purchaser's children held "insurance." - Where a private company engaged in the business of maintaining a cemetery and selling cemetery lots gives to each purchaser a supplemental written agreement to the effect that if any one or more of purchaser's unmarried children between the ages of one and 19 die, then the cemetery company will furnish without cost such space or spaces for interment of the deceased child or children, provided that at that time no installment payments on the lot purchase agreement are in arrears, the contract is a contract of insurance, and such a contract may not be lawfully made by a concern which is not licensed to engage in the life insurance business, in view of former Code 1933, § 56-9901 (see O.C.G.A. § 33-24-43 ). 1963-65 Op. Att'y Gen. p. 367.

Contract to furnish tuition grant to student on sponsor's death held "life insurance." - Where a college, in consideration of monthly payments pursuant to an agreement with a student and a sponsor, assumes the obligation of furnishing a 100 percent tuition grant and refunding all moneys paid, to be performed upon the death of the sponsor, the contract constitutes a contract of life insurance. Such an obligation is one to pay a sum of money as well as to furnish a thing of value, and it is immaterial whether the cost or value of such an undertaking on the part of the college is more or less than the consideration flowing to it. 1963-65 Op. Att'y Gen. p. 367.

Cancellation of debt on death of debtor held "insurance." - An agreement to cancel a debt in the event of the death of the debtor is insurance. 1967 Op. Att'y Gen. No. 67-170.

Contract to waive installment payments upon borrower's loss of employment held insurance. - A contract between a borrower and a lender to waive installment payments upon the borrower's loss of employment would amount to the conducting of the business of insurance under Georgia law if there is a distribution of risk among the various borrowers. 1990 Op. Att'y Gen. No. 90-28.

National bank must comply with title if it enters into cancellation agreement. - A national bank operating in Georgia may not enter into a debt cancellation contract providing that the debt will be automatically cancelled in the event of the borrower's death without complying with this title. 1963-65 Op. Att'y Gen. p. 457.

Credit union may not guarantee or insure loans and deposits. - Although there is no cost to the insureds, an agreement by a credit union to indemnify or pay to another a certain sum in the event of certain determinable contingencies would constitute a contract of insurance; a credit union has no power or authority to legally act as a guarantor or insurer of loans and deposits of the credit union. 1967 Op. Att'y Gen. No. 67-170.

Agreement to repair or replace eyeglasses held "insurance." - An eyeglass agreement which provides that the issuer will make any repairs to damaged or broken glasses, provided that the patient pays a small replacement fee, amounts to a contract of "insurance" within the meaning of this section; moreover, the stipulation of an unreasonably low replacement fee in the eyeglass agreement could result in a contract of "insurance." 1972 Op. Att'y Gen. No. 72-62.

Prepaid legal service plan held "insurance." - Where a prepaid legal service plan, which has been brought to the attention of the Insurance Department, has been submitted by an institution which is apparently operated on a profit-making basis and which has prior experience in the insurance industry and includes a proposed "policy" which incorporates a schedule of benefits providing for such services as will drafting, general counseling, defense representation in criminal and certain civil cases, and representation in adoption, divorce, and bankruptcy proceedings and does not appear to contemplate contractual relations between the offering company and attorneys but rather, attorneys would be retained by the "policy holders" and would be in no way answerable to or subject to any instructions of the "issuer," except instructions with regard to procedure to be followed in filing claims, and under the terms of the "policy" the "insured" could receive maximum benefits many times greater than the sum of his monthly premiums, it constitutes "insurance." 1974 Op. Att'y Gen. No. 74-48. (See O.C.G.A. §§ 33-35-1 through 33-35-23 ).

Automobile club held to offer "insurance." - An automobile or motor club whose members are entitled to benefits including, but not limited to, emergency road service, reimbursement for attorney's fees, arrest and bail bonds, reimbursement for personal expenses such as food, lodging, car rental, etc., is offering a contract of indemnity against expenses resulting from a member's ownership, maintenance, or use of an automobile and hence is offering "insurance" within the definition of this section. 1976 Op. Att'y Gen. No. 76-59.

Contract whereby tire dealer and sponsoring company agree with tire purchaser to replace tire under certain conditions constitutes offering of insurance. 1982 Op. Att'y Gen. No. 82-75.

Dental discount plan not within definition of "insurance." - A dental discount plan offered as part of a membership package made available to employers, which does not involve the distribution of risks, is not within the definition of "insurance," as where payments by plan members at least approximate the dentists' actual costs in providing the specific services performed. 1989 Op. Att'y Gen. No. 89-12.

Corporate guarantee for subsidiary's liability. - Issuance by a parent corporation of a guarantee for its subsidiary's liability for hazardous waste treatment, storage or disposal facilities would not constitute engaging in the business of insurance. 1986 Op. Att'y Gen. No. 86-35.

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, §§ 1 et seq., 250.

C.J.S. - 44 C.J.S., Insurance, § 35.

ALR. - Full faith and credit provision as affecting insurance contracts, 41 A.L.R. 1386 ; 114 A.L.R. 250 ; 119 A.L.R. 483 ; 173 A.L.R. 1138 .

Meaning of term "solicit" in statute relating to insurance agents, 48 A.L.R. 1173 .

What constitutes insurance, 63 A.L.R. 711 ; 100 A.L.R. 1449 ; 119 A.L.R. 1241 .

Undertaking to defend suit or furnish legal services in certain future contingencies as insurance, 71 A.L.R. 695 .

Construction and application of "key man" life insurance, 12 A.L.R.7th 6.

33-1-3. Application of title to fraternal benefit societies and farmers' mutual fire insurance companies.

Reserved. Repealed by Ga. L. 2019, p. 337, § 1-2/SB 132, effective July 1, 2019.

Editor's notes. - This Code section was based on Ga. L. 1960, p. 289, § 1; Ga. L. 1977, p. 1229, § 1; Ga. L. 2017, p. 164, § 4/HB 127.

33-1-4. Use of existing forms and filings.

Every form of insurance document and every rate or other filing lawfully in use immediately prior to January 1, 1961, may continue to be so used or be effective until the Commissioner otherwise prescribes in accordance with this title, except that, before the expiration of one year from and after January 1, 1961, neither this title nor the Commissioner shall prohibit the use of any such document, rate, or filing because of any power, prohibition, or requirement contained in this title which did not exist under laws in force immediately prior to January 1, 1961.

(Code 1933, § 56-110, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1982, p. 3, § 33.)

JUDICIAL DECISIONS

Cited in Thompson v. Metropolitan Life Ins. Co., 115 Ga. App. 724 , 155 S.E.2d 728 (1967).

OPINIONS OF THE ATTORNEY GENERAL

Charter must be amended if it did not authorize participation policies. - A Georgia stock insurance company chartered after 1950 but before the adoption of the present provisions of this title must amend its charter in order to issue participating policies, if no reference is made to such policies in the charter. 1965-66 Op. Att'y Gen. No. 66-51.

33-1-5. Provisions of title relating to particular matters to prevail over general provisions.

Provisions of this title relating to a particular kind of insurance or to a particular type of insurer or to a particular matter prevail over provisions relating to insurance in general or to insurers in general.

(Code 1933, § 56-113, enacted by Ga. L. 1960, p. 289, § 1.)

JUDICIAL DECISIONS

Cited in Thompson v. Metropolitan Life Ins. Co., 115 Ga. App. 724 , 155 S.E.2d 728 (1967); Kirkpatrick v. Mackey, 162 Ga. App. 876 , 293 S.E.2d 461 (1982).

33-1-6. Requirements for action as insurer generally.

No person shall act as an insurer as defined in Code Section 33-1-2 in this state without complying with the applicable provisions of this title.

(Code 1933, § 56-109, enacted by Ga. L. 1960, p. 289, § 1.)

33-1-7. Issuance or delivery of policy in violation of title.

Any insurer, or any officer or agent thereof, issuing or delivering to any person in this state any policy in violation of any provision of this title shall be guilty of a misdemeanor, except as otherwise provided.

(Code 1933, § 56-9907, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 2019, p. 337, § 1-3/SB 132.)

The 2019 amendment, effective July 1, 2019, added ", except as otherwise provided" at the end of this Code section.

33-1-8. Making of false statements; reporting of such statements.

Any director, officer, agent, or employee of any insurance company who willfully and knowingly subscribes, makes, or concurs in making any annual or other statement required by law containing any material statement which is false shall be guilty of a misdemeanor. It shall be the duty of the Commissioner to report all such misrepresentations and false statements to the appropriate prosecuting attorney of the circuit or county in which they shall occur, except as otherwise provided.

(Code 1933, § 56-9908, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 2019, p. 337, § 1-4/SB 132.)

The 2019 amendment, effective July 1, 2019, in the second sentence, substituted "appropriate prosecuting attorney" for "district attorney" and added ", except as otherwise provided" at the end.

33-1-9. Insurance fraud; venue; penalty; exemption.

  1. Any natural person who knowingly or willfully:
    1. Makes or aids in the making of any false or fraudulent statement or representation of any material fact or thing:
      1. In any written statement or certificate;
      2. In the filing of a claim;
      3. In the making of an application for a policy of insurance;
      4. In the receiving of such an application for a policy of insurance; or
      5. In the receiving of money for such application for a policy of insurance

        for the purpose of procuring or attempting to procure the payment of any false or fraudulent claim or other benefit by an insurer;

    2. Receives money for the purpose of purchasing insurance and converts such money to such person's own benefit;
    3. Issues fake or counterfeit insurance policies, certificates of insurance, insurance identification cards, or insurance binders; or
    4. Makes any false or fraudulent representation as to the death or disability of a policy or certificate holder in any written statement or certificate for the purpose of fraudulently obtaining money or benefit from an insurer

      commits the crime of insurance fraud.

  2. Any natural person who knowingly and willfully or with reckless disregard engages in the following activities, either directly or indirectly, as an agent for, as a representative of, or on behalf of an insurer not authorized to transact insurance in this state commits the crime of insurance fraud:
    1. Soliciting, negotiating, procuring, or effectuating insurance or annuity contracts or renewals thereof;
    2. Soliciting, negotiating, procuring, or effectuating any contract relating to benefits or services;
    3. Disseminating information as to coverage or rates;
    4. Forwarding applications;
    5. Delivering policies or contracts;
    6. Inspecting or assessing risk;
    7. Fixing of rates;
    8. Investigating or adjusting claims or losses;
    9. Collecting or forwarding of premiums; or
    10. In any other manner representing or assisting such an insurer in the transaction of insurance with respect to subjects of insurance resident, located, or to be performed in this state.
  3. Any natural person who knowingly and willfully with intent to defraud subscribes, makes, or concurs in making any annual or other statement required by law to be filed with the Commissioner containing any material statement which is false commits the crime of insurance fraud.
  4. In any prosecution under this Code section, the crime shall be considered as having been committed in the county of the purported loss, in the county in which the insurer or the insurer's agent received the fraudulent or false claim or application, in the county in which money was received for the fraudulent application, or in any county where any act in furtherance of the criminal scheme was committed.
  5. A natural person convicted of a violation of this Code section shall be guilty of a felony and shall be punished by imprisonment for not less than two nor more than ten years, or by a fine of not more than $10,000.00, or both.
  6. Subsection (b) of this Code section shall not apply to a contract of insurance entered into in accordance with Article 2 of Chapter 5 of this title.

    (Code 1933, § 56-9910, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1985, p. 723, § 1; Ga. L. 1991, p. 1608, § 1.1; Ga. L. 1997, p. 1296, § 1; Ga. L. 1998, p. 1064, § 1; Ga. L. 2003, p. 387, § 1.2; Ga. L. 2003, p. 641, § 1; Ga. L. 2004, p. 754, § 1A.)

Cross references. - Fraud generally, § 16-9-50 et seq.

Code Commission notes. - Pursuant to Code Section 28-9-5, in 2003, "Commissioner" was substituted for "commission" in subsection (c).

Editor's notes. - Ga. L. 1998, p. 1064, § 12, not codified by the General Assembly, provides that the 1998 amendment to this Code section applies to offenses committed on or after July 1, 1998, and shall not apply to or affect conduct or offenses committed prior to July 1, 1998.

Law reviews. - For review of 1998 legislation relating to insurance, see 15 Ga. St. U.L. Rev. 153 (1998). For note on 1991 amendment of this Code section, see 8 Ga. St. U.L. Rev. 99 (1992).

JUDICIAL DECISIONS

Venue for staged accidents. - Because a staged wreck was clearly an act in furtherance of a criminal scheme, venue was proper in the county where the wreck occurred. Callaway v. State, 247 Ga. App. 310 , 542 S.E.2d 596 (2000).

When the defendant, an attorney, knew that the client had received approximately $15,000 at closing, but told the client's insurer that the client had not been paid for the sale of the property, because the indictment specifically charged the defendant with violating the insurance fraud statute; and the indictment further indicated, tracking the statute's own language, that the fraudulent misrepresentation was the statement of the client that the client had suffered a loss of $117,849.82, the indictment was sufficient to withstand a general demurrer. Sallee v. State, 329 Ga. App. 612 , 765 S.E.2d 758 (2014), cert. denied, 136 S. Ct. 199 , 193 L. Ed. 2 d 128 (U.S. 2015).

Evidence sufficient for conviction. - Callaway v. State, 247 Ga. App. 310 , 542 S.E.2d 596 (2000).

Evidence sufficient to convict attorney for role in insurance scheme. - Evidence was sufficient to convict the defendant of insurance fraud as the defendant, an attorney, aided the client in making a false or fraudulent written statement for the purpose of procuring or attempting to procure the payment of a false claim because, even though the defendant knew that the client's loan on the property had been paid off on August 4, 2006, at the closing, the defendant nonetheless filed the client's signed proof of loss statement with the client's insurer on December 8, 2008, in which the client falsely claimed a loss of approximately $118,000 under the insurance policy. Sallee v. State, 329 Ga. App. 612 , 765 S.E.2d 758 (2014), cert. denied, 136 S. Ct. 199 , 193 L. Ed. 2 d 128 (U.S. 2015).

Sentencing for violations. - Defendant was properly sentenced to separate terms for insurance fraud violations committed by several coconspirators; each fraudulent claim made was a separate offense and did not merge under O.C.G.A. § 16-1-7 . Crowder v. State, 222 Ga. App. 351 , 474 S.E.2d 246 (1996).

Cited in Dover v. State, 192 Ga. App. 429 , 385 S.E.2d 417 (1989); McClellan v. Evans, 294 Ga. App. 595 , 669 S.E.2d 554 (2008).

OPINIONS OF THE ATTORNEY GENERAL

Dentist violation for filing claim for insurance payment while waiving patient's copayment. - A dentist who files a claim for third party payment in which the dentist asserts a certain fee charged, when in fact the dentist has waived or intends to waive the patient's copayment for the service, without full disclosure to the third party insurer that such waiver has or will be taking place, may be subject to disciplinary action by the Georgia Board of Dentistry under O.C.G.A. § 43-11-47(a)(2) and may be guilty of a violation of O.C.G.A. § 33-1-9 . 1983 Op. Att'y Gen. No. 83-25.

RESEARCH REFERENCES

ALR. - Criminal offense of obtaining money under false pretenses, or attempting to do so, predicated upon receipt or claim of benefits under insurance policy, 135 A.L.R. 1157 .

Insured's cooperation with claimant in establishing valid claim against insurer as breach of cooperation clause, 8 A.L.R.3d 1345.

When does the statute of limitations begin to run in action under the False Claims Act (31 USCS §§ 3729-3733), 139 A.L.R. Fed 645.

33-1-9.1. Crimes of staging a collision or filing a fraudulent claim; penalty.

  1. A person shall be guilty of the crime of staging a collision when, with intent to commit insurance fraud, as defined in Code Section 33-1-9, such person does any of the following:
    1. Intentionally causes or attempts to cause a motor vehicle collision; or
    2. Engages in a scheme to fabricate evidence of a motor vehicle collision that did not occur.

      Staging a collision shall constitute a felony punishable by no less than one year nor more than five years imprisonment.

  2. A person shall be guilty of the crime of aggravated staging of a collision when, with intent to commit insurance fraud as defined in Code Section 33-1-9, such person commits acts in violation of subsection (a) of this Code section which result in serious personal injury to another. Aggravated staging of a collision shall constitute a felony punishable by no less than two years nor more than ten years imprisonment.
  3. A person shall be guilty of the crime of making a fraudulent claim related to a staged collision when such person makes, or assists in making, a claim for insurance benefits of any type or brings, or assists in bringing, a civil lawsuit against another seeking monetary damages with knowledge that the injuries for which insurance benefits or monetary damages are sought resulted from a staged collision, or seeks to obtain any benefit to which such claimant is not legally entitled. Making a fraudulent claim related to a staged collision shall constitute a felony and shall be punishable by no less than one year nor more than five years imprisonment. (Code 1981, § 33-1-9.1 , enacted by Ga. L. 2019, p. 147, § 1/HB 353.)

Effective date. - This Code section became effective April 25, 2019.

33-1-10. Limitations upon right to choose funeral services for insured.

It shall be unlawful for any insurer to designate in any policy, contract, certificate, or otherwise the person, firm, or corporation to conduct the funeral of the insured; or to organize, promote, or operate any enterprise or plan; or to enter into any contract with such insured or with any other person, which plan or contract tends to limit or restrict the freedom of choice in the open market of the person or persons having the legal right of such choice regarding contracts, purchases, and arrangements with reference to any part of a funeral service for such insured.

(Code 1933, § 56-9902, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 2000, p. 136, § 33.)

Cross references. - Declaration that contracts in general restraint of trade are contrary to public policy, § 13-8-2 .

Funeral directors, and embalmers, T. 43, C. 18.

OPINIONS OF THE ATTORNEY GENERAL

Editor's notes. - In light of the similarity of the statutory provisions, opinions rendered under Ga. L. 1935, p. 392 are included in the annotations for this Code section.

Policies designating funeral director or restricting purchase of services may not be sold. - A licensed or unlicensed insurance company or agent may not sell policies which designate the person to conduct the funeral of the insured, restrict the right to purchase funeral services in the open market, or provide for payment in funeral services, merchandise, or other than legal tender of the United States. 1945-47 Op. Att'y Gen. p. 366 (rendered under Ga. L. 1935, p. 392).

RESEARCH REFERENCES

ALR. - Construction and effect of contracts or insurance policies providing preneed coverage of burial expense or services, 67 A.L.R.4th 36.

33-1-11. Entry into contracts by life insurers with funeral directors or undertakers for conduct of funerals of persons insured.

It shall be unlawful for any insurer writing any type of life insurance, by whatever term described, upon the lives of citizens of this state to enter into any contract with any funeral director or undertaker, providing that such funeral director or undertaker shall conduct the funeral of persons insured by such insurer.

(Code 1933, § 56-9904, enacted by Ga. L. 1960, p. 289, § 1.)

Cross references. - Funeral directors, and embalmers, T. 43, C. 18.

RESEARCH REFERENCES

ALR. - Construction and effect of contracts or insurance policies providing pre-need coverage of burial expense or services, 67 A.L.R.4th 36.

33-1-12. Entry into contracts by life insurers for provision of funeral merchandise or services to persons insured.

It shall be unlawful for any insurer writing any type of life insurance upon the lives of citizens of this state to enter into any contract with any citizen of this state contracting and agreeing to furnish funeral merchandise or services upon the death of any person insured.

(Code 1933, § 56-9905, enacted by Ga. L. 1960, p. 289, § 1.)

Cross references. - Funeral directors, and embalmers, T. 43, C. 18.

JUDICIAL DECISIONS

Preneed funeral service contract. - A three-party transaction between the plaintiffs, a funeral home, and an insurance company involved in a preneed funeral service contract as defined in paragraph (6) of former O.C.G.A. § 43-18-92, where plaintiffs each purchased from the insurer a single premium annuity policy with a death benefit, then executed a document purporting to be an irrevocable assignment of the policy to the funeral home and in consideration of that assignment, the funeral home agreed to provide burial services for plaintiffs, was revocable as a matter of law. Johnson v. Morris, 186 Ga. App. 522 , 367 S.E.2d 841 (1988).

OPINIONS OF THE ATTORNEY GENERAL

Editor's notes. - In light of the similarity of the statutory provisions, opinions decided under former Ga. L. 1935, p. 392 are included in the annotations for this Code section.

Policies providing for furnishing funeral services may not be sold. - A licensed or unlicensed insurance company or agent may not sell policies which designate the person to conduct the funeral of the insured, restrict the right to purchase funeral services in the open market, or provide for payment in funeral services, merchandise, or other than legal tender of the United States. 1945-47 Op. Att'y Gen. p. 366 (rendered under Ga. L. 1935, p. 392).

Burial supplies and equipment. - Personal property sold in advance of need as a device for the burial of human remains and which functions both as a burial casket and underground burial vault, but which cannot be used to encase a casket, such as the "chapel vault system," is one of the articles classified as burial supplies and equipment by former O.C.G.A. § 43-18-92. 1989 Op. Att'y Gen. 89-43.

33-1-13. Receiving of compensation from undertakers on account of employment; giving of compensation by undertakers.

No person, firm, or corporation engaged in the life insurance business shall contract for or receive any compensation or gratuity, directly or indirectly, on account of the employment of any undertaker in connection with a burial or preparation for burial of any person whose life is insured by said company; and no undertaker shall give or agree to give any such compensation or commission to such person, firm, or corporation engaged in the insurance business.

(Ga. L. 1933, p. 186, § 1; Code 1933, § 56-9907; Code 1933, § 56-9903, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 2019, p. 337, § 1-5/SB 132.)

The 2019 amendment, effective July 1, 2019, deleted "or the industrial life insurance business" following "life insurance business" near the beginning.

Cross references. - Funeral directors, and embalmers, T. 43, C. 18.

JUDICIAL DECISIONS

Undertakers entitled to enjoin insurance company without seeking administrative relief. - Where the plaintiffs were engaged in the undertaking business and were suffering special injury from the alleged illegal acts of the defendant insurance company in issuing burial policies naming a certain firm as undertakers and receiving commissions from this firm in violation of this section, the plaintiffs were entitled to maintain the suit for injunction in their own names, without first seeking relief from the Insurance Commissioner, and without abiding the action of this or any other officer in behalf of the state. Blackmon v. Gulf Life Ins. Co., 179 Ga. 343 , 175 S.E. 798 (1934).

33-1-14. Regulation of certain persons providing coverage for medical or dental services.

  1. Notwithstanding any other provision of law and except as provided in this Code section, any person, other than an authorized insurer, the state and its instrumentalities, or political subdivisions of the state and their instrumentalities, who provides coverage in this state for medical, surgical, chiropractic, physical therapy, optometry, speech pathology, podiatry, audiology, psychology, pharmaceutical, dental, or hospital services, whether such coverage is by direct payment, reimbursement, or otherwise, shall be presumed to be subject to the jurisdiction of the Department of Insurance, unless the person shows that, while providing coverage for such services, such person is subject to the jurisdiction of an insurance supervisory official of another state or specifically subject to the exclusive jurisdiction of the federal government.
  2. Any person may show that such person is subject to the jurisdiction of an insurance supervisory official of another state or specifically subject to the exclusive jurisdiction of the federal government by providing to the Commissioner the appropriate certificate, license, or document, issued by the insurance supervisory official of another state or specifically issued to such person by an appropriate official or agency of the federal government which permits such person to provide such coverages.
  3. Any such person who is unable to show under subsection (b) of this Code section that such person is subject to the jurisdiction of an insurance supervisory official of another state or specifically subject to the exclusive jurisdiction of the federal government shall submit to an examination by the Commissioner to determine the organization and solvency of the person and to determine whether or not such person complies with the applicable provisions of this title.
  4. Any person unable to show under subsection (b) of this Code section that such person is subject to the jurisdiction of an insurance supervisory official of another state or specifically subject to the exclusive jurisdiction of the federal government shall be subject to all appropriate provisions of this title regarding the conduct of such person's business.
    1. Any production agency or administrator which advertises, sells, transacts, or administers the coverage in this state described in subsection (a) of this Code section and which is required to submit to an examination by the Commissioner under subsection (c) of this Code section shall, if said coverage is not fully insured or otherwise fully covered by an authorized insurer, advise every purchaser, prospective purchaser, and covered person of such lack of insurance or other coverage.
    2. Any administrator which advertises or administers the coverage in this state described in subsection (a) of this Code section and which is required to submit to an examination by the Commissioner under subsection (c) of this Code section shall advise any production agency of the elements of the coverage, including the amount of "stop-loss" insurance in effect.
  6. As used in this Code section, the term "authorized insurer" means any insurer authorized to sell accident and sickness policies, subscriber contracts, certificates, or agreements of any form under Chapter 15, 20, 21, 29, or 30 of this title. (Code 1981, § 33-1-14 , enacted by Ga. L. 1985, p. 723, § 2; Ga. L. 1987, p. 3, § 33; Ga. L. 2019, p. 337, § 1-6/SB 132.)

The 2019 amendment, effective July 1, 2019, substituted "Department of Insurance" for "Insurance Department" in the middle of subsection (a); and deleted "18, 19," following "Chapter 15," at the end of subsection (f).

33-1-15. Affidavit that insured's motor vehicle stolen.

  1. In any case where an insured has executed an affidavit affirming that such insured's motor vehicle has been stolen, the insurer shall be required to accept by-hand delivery of such affidavit from such insured.
  2. It shall be unlawful for any person who executes the affidavit provided for in subsection (a) of this Code section knowing that it purports to be an acknowledgment of a lawful oath or affirmation to hand deliver such affidavit if such person knowingly and willfully made a false statement in such affidavit.
  3. Any person who violates subsection (b) of this Code section shall be guilty of a felony and, upon conviction thereof, shall be punished by imprisonment for not less than one nor more than five years or by a fine of not more than $10,000.00, or both. (Code 1981, § 33-1-15 , enacted by Ga. L. 1989, p. 328, § 1.)

33-1-16. Investigation of fraudulent insurance act; collection of evidence; immunity from liability; public inspection; enforcement.

  1. For the purposes of this Code section, a person commits a "fraudulent insurance act" if he:
    1. Knowingly and with intent to defraud presents, causes to be presented, or prepares with knowledge or belief that it will be presented, to or by an insurer, purported insurer, broker, or any agent thereof, any written statement as part of, or in support of, an application for the issuance of, or the rating of, an insurance policy, or a claim for payment or other benefit pursuant to an insurance policy, which he knows to contain materially false information concerning any fact material thereto or if he conceals, for the purpose of misleading another, information concerning any fact material thereto; or
    2. Knowingly and willfully transacts any contract, agreement, or instrument which violates this title.
  2. If, by his own inquiries or as a result of information received, the Commissioner has reason to believe that a person has engaged in, or is engaging in, a fraudulent insurance act, the Commissioner may administer oaths and affirmations, request the attendance of witnesses or proffering of matter, and collect evidence.  The Commissioner shall not compel the attendance of any person or matter in any such investigation except pursuant to subsection (d) of this Code section.
  3. If matter that the Commissioner seeks to obtain by request is located outside the state, the person so requested may make it available to the Commissioner or his representative to examine the matter at the place where it is located.  The Commissioner may designate representatives, including officials of the state in which the matter is located, to inspect the matter on his behalf, and he may respond to similar requests from officials of other states.
    1. The Commissioner may request that an individual who refuses to comply with any such request be ordered by the superior court to provide the testimony or matter.  The court shall not order such compliance unless the Commissioner has demonstrated to the satisfaction of the court that the testimony of the witness or the matter under request has a direct bearing on the commission of a fraudulent insurance act or is pertinent or necessary to further such investigation.
    2. Except in a prosecution for perjury, an individual who complies with a court order to provide testimony or matter after asserting a privilege against self-incrimination, to which he is entitled by law, may not be subjected to a criminal proceeding or to a civil penalty with respect to the act concerning which he is required to testify or produce relevant matter.
    3. In the absence of fraud or bad faith, a person is not subject to civil liability for libel, slander, or any other relevant tort by virtue of filing reports, without malice, or furnishing other information, without malice, required by this Code section or required by the Commissioner under the authority granted in this Code section, and no civil cause of action of any nature shall arise against such person:
      1. For any information relating to suspected fraudulent insurance acts furnished to or received from law enforcement officials, their agents, or employees;
      2. For any such information relating to suspected fraudulent insurance acts furnished to or received from other persons subject to the provisions of this title; or
      3. For any such information furnished in reports to the Commissioner or the National Association of Insurance Commissioners.
    4. The Commissioner or any employee or agent is not subject to civil liability for libel, slander, or any other relevant tort, and no civil cause of action of any nature exists against such persons by virtue of the execution of activities or duties of the Commissioner under this Code section or by virtue of the publication of any report or bulletin related to the activities or duties of the Commissioner under this Code section.
    5. This Code section does not abrogate or modify in any way any common law or statutory privilege or immunity heretofore enjoyed by any person.
  5. The papers, documents, reports, or evidence relative to the subject of an investigation under this Code section shall not be subject to public inspection for so long as the Commissioner deems reasonably necessary to complete the investigation, to protect the person investigated from unwarranted injury, or to be in the public interest.  Further, such papers, documents, reports, or evidence relative to the subject of an investigation under this Code section shall not be subject to subpoena until opened for public inspection by the Commissioner, unless the Commissioner consents, or until, after notice to the Commissioner and a hearing, a superior court determines the Commissioner would not be unnecessarily hindered by such subpoena.  The Commissioner or his employees or agents shall not be subject to subpoena in civil actions by any court of this state to testify concerning any matter of which they have knowledge pursuant to pending investigations of fraudulent insurance acts.
  6. Any person, other than an insurer, agent, or other person licensed under this title, or an employee thereof, having knowledge of or who believes that a fraudulent insurance act is being or has been committed may send to the Commissioner a report of information pertinent to such knowledge of or belief and such additional information relative thereto as the Commissioner may request.  Any insurer, agent, or other person licensed under this title, or an employee thereof, having knowledge of or who believes that a fraudulent insurance act is being or has been committed shall send to the Commissioner a report or information pertinent to such knowledge or belief and such additional information relative thereto as the Commissioner or his employees or agents may require.  The Commissioner or his employees or agents shall review such information or reports as, in the judgment of the Commissioner or such employees or agents, may require further investigation.  The Commissioner shall then cause an investigation of the facts surrounding such information or report to be made to determine the extent, if any, to which a fraudulent insurance act is being committed and shall report any alleged violations of law which the investigations disclose to the appropriate prosecuting attorney having jurisdiction with respect to any such violation.  If prosecution by the prosecuting attorney is not begun within 90 days of the report, the prosecuting attorney shall inform the Commissioner of the reasons for the lack of prosecution.
  7. Notwithstanding the provisions of subsection (f) of this Code section, when an insurer or an insured knows or has reasonable grounds to believe that a person committed a fraudulent insurance act and which the insurer reasonably believes not to have been reported to a law enforcement agency in this state, then, for the purpose of notification and investigation, the insurer or an agent authorized by an insurer to act on its behalf or the insured may notify such law enforcement agency of such knowledge or reasonable belief and provide such information relevant to the fraudulent insurance act, including, but not limited to, insurance policy information, including the application for insurance; policy premium payment records; history of previous claims made by the insured; and other information relating to the investigation of the claim, including statements of any person, proofs of loss, and notice of loss.  In the absence of fraud or bad faith, no insurer or agent authorized by an insurer to act on its behalf, law enforcement agency, or their respective employees or an insured shall be subject to any civil liability for libel, slander, or related cause of action by virtue of filing reports or for releasing or receiving any information pursuant to this subsection. For the purposes of this Code section, the term "law enforcement agency" shall mean and include any federal, state, county, or consolidated police or law enforcement department and any prosecuting official of the federal, state, county, local, or consolidated government.  For the purposes of this Code section, the term "insured" shall mean and include any person who is a named insured or beneficiary under a policy or contract of insurance or a person who is not a named insured or beneficiary under a policy or contract of insurance due to the fraudulent action of another but who in good faith believes himself to be such an insured or beneficiary.
  8. Personnel employed by the Commissioner under this Code section shall have the power to make arrests for criminal violations established as a result of investigations only.  The general laws applicable to arrests by peace officers of this state shall also be applicable to such personnel. Such personnel shall have the power to execute arrest warrants and search warrants for the same criminal violations; to serve subpoenas issued for the examination, investigation, and trial of all offenses determined by their investigations; and to arrest upon probable cause without warrant any person found in the act of violating any of the provisions of applicable laws. Personnel empowered to make arrests under this Code section shall be empowered to carry firearms or other weapons in the performance of their duties.  It is unlawful for any person to resist an arrest authorized by this Code section or in any manner to interfere, either by abetting or assisting such resistance or otherwise interfering, with personnel employed by the Commissioner under this Code section in the duties imposed upon them by law. (Code 1981, § 33-1-16 , enacted by Ga. L. 1990, p. 1477, § 1; Ga. L. 1991, p. 1608, §§ 1.2, 1.3.)

Code Commission notes. - Pursuant to Code Section 28-9-5, in 1990, "he" was substituted for "the" at the end of the introductory language in subsection (a) and a comma was deleted following "agent" near the beginning of paragraph (4) of subsection (d).

Law reviews. - For note on 1991 amendment of this Code section, see 8 Ga. St. U.L. Rev. 99 (1992).

JUDICIAL DECISIONS

Cited in Nat'l Viatical, Inc. v. State, 258 Ga. App. 408 , 574 S.E.2d 337 (2002).

33-1-17. Special Insurance Fraud Fund.

  1. The General Assembly finds that the proper and expeditious investigation and prosecution of fraudulent insurance acts are beneficial to the public interest. The General Assembly further finds that proper investigation of fraudulent insurance acts, followed by vigorous prosecution of insurance fraud, will bring about lower insurance rates for the citizens of this state.
  2. There is created a Special Insurance Fraud Fund for the purpose of funding the investigation and prosecution of insurance fraud.
    1. The Commissioner shall prepare, on an annual basis, a separate budget request to the General Assembly which sets forth the anticipated cost and expense of funding the investigation and prosecution of insurance fraud in this state for the ensuing 12 months. Such budget request shall set forth the annual cost and expense of the investigation and prosecution of insurance fraud in Georgia for the preceding 12 months.
    2. There is imposed upon each foreign, alien, and domestic insurance company doing business in the state an annual assessment under a formula to be established by regulation promulgated by the Commissioner. The formula shall be calculated such that the total proceeds paid or collected from such assessments for any year shall not exceed the amounts appropriated by the General Assembly pursuant to paragraph (3) of this subsection, which appropriation shall be based upon the budget request setting forth the applicable annual cost and expense of the investigation and prosecution of insurance fraud in Georgia submitted by the Commissioner. Such assessments may be measured by kind of company, kind of insurance, income, volume of transactions, or such other factors as the Commissioner determines appropriate. Assessments shall be due and payable for each calendar quarter at the times specified in subsection (b) of Code Section 33-8-6. Any insurance company which fails to report and pay any installment of such assessment shall be subject to penalties and interest as provided by subsection (d) of Code Section 33-8-6. The Commissioner shall provide by regulation for such other terms and conditions for the payment or collection of such assessments as may be necessary to ensure the proper payment and collection thereof. Notwithstanding the foregoing, the provisions of this Code section shall not apply to an agency captive insurance company, dormant captive insurance company, industrial insured captive insurance company, sponsored captive insurance company (including a protected cell thereof), or pure captive insurance company. Foreign and alien captive insurance companies doing business in Georgia shall, however, pay a fixed amount of $100.00 per year into the Special Insurance Fraud Fund without regard to the amount of the Georgia premium written by such foreign or alien captive. No additional amount shall be assessed against the foreign or alien captive insurance company.
    3. The General Assembly may appropriate funds to the department for the investigation of insurance fraud and for the funding of the prosecution of insurance fraud. The Commissioner is authorized to use such funds for investigation of insurance fraud and to reimburse prosecuting attorneys for some or all of the costs of retaining assistant prosecuting attorneys to prosecute insurance fraud cases. The Commissioner shall provide by regulation for such other terms and conditions for the use of the funds for the investigation, reimbursement, and prosecution contemplated by the terms of this paragraph.
  4. Insurers shall make personnel involved in investigating insurance fraud and any files relating to insurance fraud investigation available to the Commissioner, the Attorney General, local prosecuting officials, special prosecuting attorneys, or other law enforcement agencies as needed in order to further the investigation and prosecution of insurance fraud. Information supplied by an insurer and contained in such files shall upon receipt become part of the investigative file and subject to the provisions of Code Section 50-18-72. The insurer and its employees and agents shall be entitled to immunity as provided in Code Section 33-1-16.
  5. Any expenses incurred by insurers as a result of this Code section shall be defrayed by such insurers from their own funds and shall not be borne by the state or by the Special Insurance Fraud Fund. (Code 1981, § 33-1-17 , enacted by Ga. L. 1995, p. 1242, § 1; Ga. L. 2019, p. 337, § 1-7/SB 132; Ga. L. 2019, p. 533, § 2-15/HB 99.)

The 2019 amendments. The first 2019 amendment, effective July 1, 2019, in subsection (c), substituted "Such budget" for "Beginning with the year 1997, such budget" at the beginning of the second sentence of paragraph (1), and, in paragraph (3), substituted "appropriate funds to the department" for "appropriate to the Insurance Department funds" in the first sentence. The second 2019 amendment, effective July 1, 2019, added the seventh through ninth sentences in paragraph (c)(2).

Administrative Rules and Regulations. - Special Insurance Fraud Fund, Official Compilation of the Rules and Regulations of the State of Georgia, Rules of Comptroller General Office of Commissioner of Insurance, Chapter 120-2-72.

33-1-18. Housing tax credit for qualified projects; rules and regulations.

  1. As used in this Code section, the term:
    1. "Federal housing tax credit" means the federal tax credit as provided in Section 42 of the Internal Revenue Code of 1986, as amended.
    2. "Median income" means those incomes that are determined by the federal Department of Housing and Urban Development guidelines and adjusted for family size.
    3. "Project" means a housing project that has restricted rents that do not exceed 30 percent of median income for at least 40 percent of its units occupied by persons or families having incomes of 60 percent or less of the median income or at least 20 percent of the units occupied by persons or families having incomes of 50 percent or less of the median income.
    4. "Qualified basis" means that portion of the tax basis of a qualified Georgia project eligible for the federal housing tax credit, as that term is defined in Section 42 of the Internal Revenue Code of 1986, as amended.
    5. "Qualified Georgia project" means a qualified low-income building as that term is defined in Section 42 of the Internal Revenue Code of 1986, as amended, that is located in Georgia.
    1. A tax credit against the taxes imposed under Code Sections 33-5-31, 33-8-4, and 33-40-5, to be termed the Georgia housing tax credit, shall be allowed with respect to each qualified Georgia project placed in service after January 1, 2001. The amount of such credit shall, when combined with the total amount of credit authorized under Code Section 48-7-29.6, in no event exceed an amount equal to the federal housing tax credit allowed with respect to such qualified Georgia project.
      1. If under Section 42 of the Internal Revenue Code of 1986, as amended, a portion of any federal housing tax credit taken on a project is required to be recaptured as a result of a reduction in the qualified basis of such project, the taxpayer claiming any state tax credit with respect to such project shall also be required to recapture a portion of any state tax credit authorized by this Code section. The state recapture amount shall be equal to the proportion of the state tax credit claimed by the taxpayer that equals the proportion the federal recapture amount bears to the original federal housing tax credit amount subject to recapture. The tax credit under this Code section shall not be subject to recapture if such recapture is due solely to the sale or transfer of any direct or indirect interest in such qualified Georgia project.
      2. In the event that recapture of any Georgia housing tax credit is required, any amended return submitted to the Commissioner as provided in this Code section shall include the proportion of the state tax credit required to be recaptured, the identity of each taxpayer subject to the recapture, and the amount of tax credit previously allocated to such taxpayer.
    3. In no event shall the total amount of the tax credit under this Code section for a taxable year exceed the taxpayer's tax liability under Code Sections 33-5-31, 33-8-4, and 33-40-5. Any unused tax credit shall be allowed to be carried forward to apply to the taxpayer's next three succeeding years' tax liability. No such tax credit shall be allowed the taxpayer against prior years' tax liability.
    4. The tax credit allowed under this Code section, and any recaptured tax credit, shall be allocated among some or all of the partners, members, or shareholders of the entity owning the project in any manner agreed to by such persons, whether or not such persons are allocated or allowed any portion of the federal housing tax credit with respect to the project.
  3. The commissioner and the state department designated by the Governor as the state housing credit agency for purposes of Section 42(h) of the Internal Revenue Code of 1986, as amended, shall each be authorized to promulgate any rules and regulations necessary to implement and administer this Code section. (Code 1981, § 33-1-18 , enacted by Ga. L. 2001, p. 1181, § 2; Ga. L. 2002, p. 415, § 33; Ga. L. 2003, p. 640, § 1.)

Editor's notes. - Ga. L. 2001, p. 1181, § 3, not codified by the General Assembly, provides that this Code section shall be applicable to all taxable years beginning on or after January 1, 2002.

U.S. Code. - Section 42 of the Internal Revenue Code of 1986, referred to in this Code section, is codified as 26 U.S.C. § 42.

Law reviews. - For article, "Revenue and Taxation: Amend Titles 48, 2, 28, 33, 36, 46, and 50 of the Official Code of Georgia Annotated, Relating Respectively to Revenue and Taxation, Agriculture, the General Assembly, Insurance, Local Government, Public Utilities, and State Government," see 28 Ga. St. U.L. Rev. 217 (2011).

33-1-19. Special Advisory Commission on Mandated Health Insurance Benefits.

Reserved. Repealed by Ga. L. 2019, p. 919, § 13-1/HB 553, effective July 1, 2019.

Code Commission notes. - Former Code Section 33-1-19 was repealed by Ga. L. 2019, p. 919, § 13-1/HB 553, effective July 1, 2019. However, Ga. L. 2019, p. 337, § 1-8/SB 132, effective July 1, 2019, purported to amend this Code section by substituting "department" for "Insurance Department" in paragraphs (d)(1) and (d)(2) and "Department of Insurance" for "Insurance Department" in subsection (f). For effect of subsequent amendment of a repealed statute, see Lampkin v. Pike, 115 Ga. 827 (1902).

Editor's notes. - This Code section was based on Code 1981, § 33-1-19 , enacted by Ga. L. 2011, p. 329, § 1/SB 17; Ga. L. 2012, p. 775, § 33/HB 942.

Ga. L. 2019, p. 919, § 13-2/HB 553, not codified by the General Assembly, provides: "Any assets of the Special Advisory Commission on Mandated Health Insurance Benefits existing as of June 30, 2019, shall devolve by operation of law and without further action to the State of Georgia on July 1, 2019. Any liabilities and obligations of the Special Advisory Commission on Mandated Health Insurance Benefits existing as of June 30, 2019, shall be transferred to and assumed by the State of Georgia, by such instruments as may be required to maintain the same."

33-1-20. Health care sharing ministry.

  1. As used in this Code section, the term "health care sharing ministry" means a faith-based, nonprofit organization that is tax exempt under the Internal Revenue Code which:
    1. Limits its participants to those who are of a similar faith;
    2. Acts as a facilitator among participants who have financial or medical needs and matches those participants with other participants with the present ability to assist those with financial or medical needs in accordance with criteria established by the health care sharing ministry;
    3. Provides for the financial or medical needs of a participant through contributions from one participant to another;
    4. Provides amounts that participants may contribute with no assumption of risk or promise to pay among the participants and no assumption of risk or promise to pay by the health care sharing ministry to the participants;
    5. Provides a written monthly statement to all participants that lists the total dollar amount of qualified needs submitted to the health care sharing ministry, as well as the amount actually published or assigned to participants for their contribution; and
    6. Provides a written disclaimer on or accompanying all applications and guideline materials distributed by or on behalf of the organization that reads, in substance: "Notice: The organization facilitating the sharing of medical expenses is not an insurance company, and neither its guidelines nor plan of operation is an insurance policy. Whether anyone chooses to assist you with your medical bills will be totally voluntary because no other participant will be compelled by law to contribute toward your medical bills. As such, participation in the organization or a subscription to any of its documents should never be considered to be insurance. Regardless of whether you receive any payment for medical expenses or whether this organization continues to operate, you are always personally responsible for the payment of your own medical bills."
  2. A health care sharing ministry which has entered into a health care cost sharing arrangement with its participants shall not be considered an insurance company, health maintenance organization, or health benefit plan of any class, kind, or character and shall not be subject to any laws respecting insurance companies, health maintenance organizations, or health benefit plans of any class, kind, or character in this state or subject to regulation under such laws, including, but not limited to, the provisions of this title, and shall not be subject to the jurisdiction of the Commissioner of Insurance. (Code 1981, § 33-1-20 , enacted by Ga. L. 2011, p. 350, § 1/HB 248.)

Code Commission notes. - Pursuant to Code Section 28-9-5, in 2011, Code Section 33-1-19, as enacted by Ga. L. 2011, p. 350, § 1/HB 248, was redesignated as Code Section 33-1-20 and Code Section 33-1-20, as enacted by Ga. L. 2011, p. 350, § 1/HB 248, was redesignated as Code Section 33-1-21.

33-1-21. Certain subscription agreements for prepaid air ambulance service not contract of insurance; definitions.

  1. As used in this Code section, the term:
    1. "Air ambulance" means any rotary-wing aircraft used or intended to be used for hire for transportation of sick or injured persons who may need medical attention during transport.
    2. "Air ambulance service" means the for-hire providing of emergency care and transportation by means of an air ambulance for an injured or sick person to or from a place where medical or hospital care is furnished.
    3. "Membership fees" means amounts collected by a membership provider as consideration for a membership subscription.
    4. "Membership provider" means an entity that is licensed to provide air ambulance services pursuant to Chapter 11 of Title 31.
    5. "Membership subscription" means an agreement where a membership provider's charges to a subscription member for air ambulance services are discounted or are prepaid, but only for charges that are not otherwise covered by a third party.
    6. "Subscription member" means an individual who is the beneficiary of a membership subscription.
    1. The solicitation of membership subscriptions, the acceptance of applications for membership subscriptions, the charging of membership fees, and the furnishing of prepaid or discounted air ambulance service to subscription members by a membership provider shall not constitute the writing of insurance.
    2. A membership subscription shall not constitute a contract of insurance. (Code 1981, § 33-1-21 , enacted by Ga. L. 2011, p. 350, § 1/HB 248.)

Code Commission notes. - Pursuant to Code Section 28-9-5, in 2011, Code Section 33-1-20, as enacted by Ga. L. 2011, p. 350, § 1/HB 248, was redesignated as Code Section 33-1-21.

33-1-22. English language version of policy controls.

In the event of a dispute or complaint wherein an insurer provided any material in a language other than English, the English language version of the policy, as that term is defined in Code Section 33-24-1, shall control the resolution of such dispute or complaint; provided, however, that nothing contained in this Code section shall abrogate or supersede the provisions set forth in Chapter 6 of this title, relating to unfair trade practices.

(Code 1981, § 33-1-22 , enacted by Ga. L. 2012, p. 1350, § 8A/HB 1067.)

Cross references. - English designated as official language, § 50-3-100 .

Code Commission notes. - Pursuant to Code Section 28-9-5, in 2012, Code Section 33-1-22, as enacted by Ga. L. 2012, p. 348, § 1/HB 785, was redesignated as Code Section 43-1-32.

33-1-23. Establishment of exchange.

  1. As used in this Code section, the term "exchange" shall have the same meaning provided for in paragraph (1) of Code Section 33-23-201.
  2. No department, agency, instrumentality, or political subdivision of this state shall:
    1. Establish any program; promulgate any rule, policy, guideline, or plan; or change any program, rule, policy, or guideline to implement, establish, create, administer, or otherwise operate an exchange; or
    2. Apply for, accept, or expend federal moneys related to the creation, implementation, or operation of an exchange.
  3. Nothing in this Code section shall apply to the Commissioner of Insurance in the implementation or enforcement of the provisions of Article 3 of Chapter 23 of this title.
  4. Neither the state nor any department, agency, bureau, authority, office, or other unit of the state, including the University System of Georgia and its member institutions, nor any political subdivision of the state shall establish, create, implement, or operate a navigator program or its equivalent as defined in Code Section 33-23-201; provided, however, that any grant regarding a navigator program in effect on April 15, 2014, shall be permitted to continue for the term of such grant but shall then terminate upon the expiration of the term of such grant and shall not be renewed, notwithstanding any provision contained within such grant allowing for automatic renewal under certain circumstances.
  5. Nothing in this Code section shall be construed to preclude the state from participating in any MEDICAID program. (Code 1981, § 33-1-23 , enacted by Ga. L. 2014, p. 243, § 1-3/HB 943.)

Cross references. - Advocating for voluntary expansion by the state of eligibility for medical assistance in furtherance of the federal Patient Protection and Affordable Care Act, § 31-1-40 .

Code Commission notes. - Pursuant to Code Section 28-9-5, in 2014, "April 15, 2014," was substituted for "the effective date of this Code section" in subsection (d).

Editor's notes. - Ga. L. 2014, p. 243, § 1-1/HB 943, not codified by the General Assembly, provides that: "This Act shall be known and may be cited as the 'Georgia Health Care Freedom Act.'"

33-1-24. Insurance requirements for transportation network companies and their drivers.

  1. As used in this Code section, the term:
    1. "Personal vehicle" means a registered motor vehicle that is used by a transportation network company driver in connection with providing services for a transportation network company.
    2. "Transportation network company" means a corporation, partnership, sole proprietorship, or other entity that uses a digital network or other means to connect customers to transportation network company drivers for the purposes of providing transportation for compensation, including, but not limited to, payment, donation, or other item of value. The term shall not include emergency or nonemergency medical transports.
    3. "Transportation network company customer" or "customer" means an individual who uses a transportation network company to connect with a driver to obtain services in such driver's personal vehicle, from an agreed upon point of departure to an agreed upon destination.
    4. "Transportation network company driver" or "driver" means an individual who uses or permits to be used his or her personal vehicle to provide transportation network company services. Such driver need not be an employee of a transportation network company.
    5. "Transportation network company services" or "services" means:
      1. The period of time a driver is logged on to the transportation network company's digital network and available to accept a ride request until the driver is logged off, except for that time period described in subparagraph (B) of this paragraph; and
      2. The period of time a driver accepts a ride request on the transportation network company's digital network until the driver completes the transaction or the ride is complete, whichever is later.

        Transportation network company services shall not include transportation provided using a taxi, a limousine carrier as defined in Code Section 40-1-151, or any other commercially registered motor vehicle and commercially licensed driver.

  2. A transportation network company shall maintain or cause to be maintained a primary motor vehicle insurance policy that:
    1. Recognizes the driver as a transportation network company driver and explicitly covers the driver's provision of transportation network company services as defined in paragraph (5) of subsection (a) of this Code section;
    2. During the time period defined in subparagraph (a)(5)(A) of this Code section, provides a minimum of $100,000.00 for bodily injuries to or death of all persons in any one accident with a maximum of $50,000.00 for bodily injuries to or death of one person and $50,000.00 for loss of or damage to property of others, excluding cargo, in any one accident; and
    3. During the time period defined in subparagraph (a)(5)(B) of this Code section, provides a minimum of $1 million for death, personal injury, and property damage per occurrence and provides uninsured and underinsured motorist coverage of at least $1 million per incident.
  3. The requirements of subsection (b) of this Code section may be satisfied by either:
    1. A commercial motor vehicle insurance policy purchased by the transportation network company or the driver that provides coverage that meets the requirements set forth in subsection (b) of this Code section; or
    2. An insurance rider to, an endorsement of, or an express provision of coverage for transportation network company services within the driver's personal private passenger motor vehicle insurance policy required by Code Section 40-9-34 which may be combined with an excess policy provided by the transportation network company to meet the requirements set forth in subsection (b) of this Code section.
  4. A transportation network company that purchases an insurance policy to satisfy any of the requirements under subsection (b) of this Code section shall provide the insurance policy to the Commissioner.
  5. An insurance policy required by subsection (b) of this Code section shall be placed with an insurer licensed under this title or with a surplus lines insurer eligible under Chapter 23 of this title.
  6. To the extent the coverage requirements in subsection (b) of this Code section are met by a driver, then such driver shall submit verification of such coverage to the transportation network company. In the event that the insurance maintained by a driver to fulfill the requirements of subsection (b) of this Code section has lapsed or ceases to exist, then the transportation network company shall provide coverage which shall become primary beginning with the first dollar of a claim.
    1. Nothing in this Code section shall be construed to require a personal vehicle insurance policy to provide primary or excess coverage for transportation network company services.
    2. Insurers that write motor vehicle insurance policies in this state may exclude any and all coverage afforded under the owner's insurance policy for any loss or injury that occurs while a driver is logged on to a transportation network company's digital network or while a driver provides transportation network company services. Notwithstanding any other law, a personal vehicle insurer may, at its discretion, offer a personal vehicle insurance policy, or an amendment or endorsement to an existing policy, that covers a driver's vehicle while being used for transportation network company services during the time period specified in this paragraph, with or without a separate charge, or the policy contains an amendment or an endorsement to provide such coverage, for which a separately stated premium may be charged.
  8. The transportation network company shall comply with the following requirements for each driver:
    1. The driver shall be provided a disclosure from the transportation network company containing:
      1. All information and documentation required for compliance with Code Section 40-6-10 if the transportation network company provides any insurance policy required by subsection (b) of this Code section;
      2. Notice that the driver's personal vehicle insurance policy may exclude any and all coverage for injuries to the driver and to others and may exclude the duty to defend or indemnify any person or organization for liability for any loss or injury that occurs while providing transportation network company services; and
      3. Notice that the driver's personal vehicle insurance policy may exclude coverage for damage to the personal vehicle, medical payments coverage, uninsured and underinsured motorist coverage, and other first-party claims;
    2. Such transportation network company shall make the following disclosure to a driver in the driver's terms of service: "If the vehicle with which you provide transportation network company services has a lien against it, you must notify the lienholder that you provide transportation network company services with such vehicle. Providing such transportation network company services may violate the terms of your contract with the lienholder.";
    3. The transportation network company shall include the disclosures required by this subsection in the driver's terms of service in a distinctive clause; and
    4. For purposes of claims coverage investigation and upon request of the transportation network company driver's personal vehicle insurer, the transportation network company shall provide, within 15 days of such insurer's request, the date and times at which an accident occurred that involved a transportation network company driver and the precise times in the 12 hours preceding and following the accident that the driver logged on and off the transportation network company network or application or otherwise signified availability to provide transportation network company services. Coverage under a motor vehicle insurance policy maintained by the transportation network company shall not be dependent on a personal vehicle insurer first denying a claim nor shall a personal vehicle insurance policy be required to first deny a claim.
  9. In the event the transportation network company is providing primary insurance coverage under subsection (b) of this Code section, the transportation network company's insurer shall assume the costs of defense and indemnification. The transportation network company shall notify the driver and the driver's insurer of any dispute concerning primary coverage within 25 business days of receiving notice of the accident that gives rise to such claim. A personal vehicle insurer that defends or indemnifies a claim against a driver that is excluded under the terms of its policy shall have a right of contribution against other insurers that provide motor vehicle insurance to the same driver in satisfaction of the coverage requirements of this Code section at the time of loss.
  10. In the event the transportation network company is providing primary insurance coverage under subsection (b) of this Code section and the driver or the driver's insurer is named as a defendant in a civil action for any loss or injury that occurs while a personal vehicle is available to provide transportation network company services, the transportation network company's insurer shall have the duty to defend and indemnify the driver and the driver's insurer. (Code 1981, § 33-1-24 , enacted by Ga. L. 2015, p. 1280, § 1/HB 190; Ga. L. 2016, p. 864, § 33/HB 737.)

Law reviews. - For article on the 2015 enactment of this Code section, see 32 Ga. St. U. L. Rev. 177 (2015). For annual survey on trial practice and procedure, see 67 Mercer L. Rev. 257 (2015). For note, "Disability Rights in the Age of Uber: Applying the Americans with Disabilities Act of 1990 to Transportation Network Companies," see 33 Ga. St. U. L. Rev. 517 (2017).

33-1-25. Georgia Agribusiness and Rural Jobs Act.

  1. This Code section shall be known and may be cited as the "Georgia Agribusiness and Rural Jobs Act."
  2. As used in this Code section, the term:
    1. "Affiliate" means an entity that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with another entity. For the purposes of this Code section, an entity is "controlled by" another entity if the controlling entity holds, directly or indirectly, the majority voting or ownership interest in the controlled entity or has control over the day-to-day operations of the controlled entity by contract or by law.
    2. "Applicable percentage" means 0 percent for the first two credit allowance dates and 15 percent for the next four credit allowance dates.
    3. "Capital investment" means any equity investment in a rural fund by a rural investor that:
      1. Is acquired after July 1, 2017, at its original issuance solely in exchange for cash;
      2. Has 100 percent of its cash purchase price used by the rural fund to make qualified investments in eligible businesses located in this state by the second anniversary of the initial credit allowance date; and
      3. Is designated by the rural fund as a capital investment under this Code section and is certified by the department pursuant to subsection (e) of this Code section. This term shall include any capital investment that does not meet the provisions of subsection (e)(1)(A) of this Code section if such investment was a capital investment in the hands of a prior holder.
    4. "Credit allowance date" means the date on which a capital investment is made and each of the five anniversary dates of such date thereafter.
    5. "Department" means the Department of Community Affairs.
    6. "Eligible business" means a business that, at the time of the initial qualified investment in the company:
      1. Has less than 250 employees; and
        1. Has its principal business operations in one or more rural areas in this state; and
        2. Produces or provides any goods or services produced in Georgia normally used by farmers, ranchers, or producers and harvesters of aquatic products in their business operations, or to improve the welfare or livelihood of such persons, or is involved in the processing and marketing of agricultural products, farm supplies, and input suppliers, or is engaged in agribusiness as defined by the United States Department of Agriculture, or is engaged in manufacturing, health care, technology, transportation, or related services, or if not engaged in such industries, the department determines that such investment will be beneficial to the rural area and the economic growth of the state. Any business which is classified as an eligible business at the time of the initial investment in said business by a rural fund shall remain classified as an eligible business and may receive follow-on investments from any rural fund, and such follow-on investments shall be qualified investments even though such business may not meet the definition of an eligible business at the time of such follow-on investments.
    7. "Eligible distribution" means:
      1. A distribution of cash to one or more equity owners of a rural investor to fully or partially offset a projected increase in the owner's federal or state tax liability, including any penalties and interest, related to the owner's ownership, management, or operation of the rural investor;
      2. A distribution of cash as payment of interest and principal on the debt of the rural investor or rural fund; or
      3. A distribution of cash related to the reasonable costs and expenses of forming, syndicating, managing, and operating the rural investor or the rural fund, or a return of equity to affiliates of a rural investor or rural fund. Such distributions may include reasonable and necessary fees paid for professional services, including legal and accounting services, related to the formation and operation of the rural fund and an annual management fee that shall not exceed 2 percent of the rural fund's qualified investment authority.
    8. "Principal business operations" means the location where at least 60 percent of a business's employees work or where employees who are paid at least 60 percent of such business's payroll work. A business that has agreed to relocate employees using the proceeds of a qualified investment to establish its principal business operations in a new location shall be deemed to have its principal business operations in such new location if it satisfies these requirements no later than 180 days after receiving a qualified investment.
    9. "Purchase price" means the amount paid to the rural fund that issues a capital investment which shall not exceed the amount of capital investment authority certified pursuant to subsection (e) of this Code section.
    10. "Qualified investment" means any investment in an eligible business or any loan to an eligible business with a stated maturity date of at least one year after the date of issuance, excluding revolving lines of credit and senior secured debt unless the eligible business has a credit refusal letter or similar correspondence from a depository institution or a referral letter or similar correspondence from a depository institution referring the business to a rural fund; provided that, with respect to any one eligible business, the maximum amount of investments made in such business by one or more rural funds, on a collective basis with all of the businesses' affiliates, with the proceeds of capital investments shall be the greater of 20 percent of the rural fund's capital investment authority or $6.5 million, exclusive of investments made with repaid or redeemed investments or interest or profits realized thereon.
    11. "Rural area" means any county of this state that has a population of less than 50,000 according to the latest decennial census of the United States.
    12. "Rural fund" means an entity certified by the department under subsection (e) of this Code section.
    13. "Rural investor" means an entity that makes a capital investment in a rural fund.
    14. "State tax liability" means any liability incurred by any entity under Code Sections 33-3-26 and 33-8-4 or Code Sections 48-7-21 and 48-7-27, or, if such taxes are eliminated or reduced, the term shall also mean any tax liability imposed on an entity or other person that had tax liability under the laws of this state.
  3. Upon making a capital investment in a rural fund, a rural investor earns a vested right to a credit against such entity's state tax liability that may be utilized on each credit allowance date of such capital investment in an amount equal to the applicable percentage for such credit allowance date multiplied by the purchase price paid to the rural fund for the capital investment. The amount of the credit claimed by a rural investor shall not exceed the amount of such entity's state tax liability for the tax year for which the credit is claimed. Any amount of credit that a rural investor is prohibited from claiming in a taxable year as a result of this Code section may be carried forward for use in any subsequent taxable year. It is the intent of this Act that a rural investor claiming a credit under this Code section is not required to pay any additional tax that may arise as a result of claiming such credit.
  4. No credit claimed under this Code section shall be refundable or saleable on the open market. Credits earned by or allocated to a partnership, limited liability company, or S-corporation may be allocated to the partners, members, or shareholders of such entity for their direct use in accordance with the provisions of any agreement among such partners, members, or shareholders, and a rural fund must notify the department of the names of the entities that are eligible to utilize credits pursuant to an allocation of credits or a change in allocation of credits or due to a transfer of a capital investment upon such allocation, change, or transfer. Such allocation shall be not considered a sale for purposes of this Code section.
    1. A rural fund that seeks to have an equity investment certified as a capital investment and eligible for credits under this Code section shall apply to the department. The department shall begin accepting applications within 90 days of July 1, 2017. The rural fund shall include the following:
      1. The amount of capital investment requested;
      2. A copy of the applicant's or an affiliate of the applicant's license as a rural business investment company under 7 U.S.C. Section 2009cc or as a small business investment company under 15 U.S.C. Section 681 and a certificate executed by an executive officer of the applicant attesting that such license remains in effect and has not been revoked;
      3. Evidence that, as of the date the application is submitted, the applicant or affiliates of the applicant have invested at least $100 million in nonpublic companies located in rural areas within the United States;
      4. An estimate of the number of jobs that will be created or retained in this state as a result of the applicant's qualified investments;
      5. A business plan that includes a revenue impact assessment projecting state and local tax revenue to be generated by the applicant's proposed qualified investments prepared by a nationally recognized, third-party, independent economic forecasting firm using a dynamic economic forecasting model that analyzes the applicant's business plan over the ten years following the date the application is submitted to the department; and
      6. A nonrefundable application fee of $5,000.00 payable to the department.
    2. Within 30 days after receipt of a completed application, the department shall grant or deny the application in full or in part. The department shall deny the application if:
      1. The applicant does not satisfy all of the criteria described in paragraph (1) of this subsection;
      2. The revenue impact assessment submitted with the application does not demonstrate that the applicant's business plan will result in a positive economic impact on this state over a ten-year period that exceeds the cumulative amount of tax credits that would be issued to the applicant if the application were approved; or
      3. The department has already approved the maximum amount of capital investment authority under paragraph (6) of this subsection.

        If the department denies any part of the application, it shall inform the applicant of the grounds for the denial. If the applicant provides any additional information required by the department or otherwise completes its application within 15 days of the notice of denial, the application shall be considered completed as of the original date of submission. If the applicant fails to provide the information or fails to complete its application within the 15 day period, the application remains denied and must be resubmitted in full with a new submission date.

    3. If the application is complete, the department shall certify the proposed equity investment as a capital investment that is eligible for credits under this Code section, subject to the limitations contained in paragraph (6) of this subsection. The department shall provide written notice of the certification to the rural fund.
    4. The department shall certify capital investments in the order that the applications were received by the department. Applications received on the same day shall be deemed to have been received simultaneously.
    5. For applications that are complete and received on the same day, the department shall certify applications in proportionate percentages based upon the ratio of the amount of capital investments requested in an application to the total amount of capital investments requested in all applications.
    6. The department shall certify $100 million in capital investments pursuant to this Code section.
    7. Within 60 days of the applicant receiving notice of certification, the rural fund shall issue the capital investment to and receive cash in the amount of the certified amount from a rural investor. At least 50 percent of the rural investor's capital investment shall be composed of capital raised by the rural investor from sources, including directors, members, employees, officers, and affiliates of the rural investor, other than the amount of capital invested by the allocatee claiming the tax credits in exchange for such allocation of tax credits. The rural fund shall provide the department with evidence of the receipt of the cash investment within 65 days of the applicant receiving notice of certification. If the rural fund does not receive the cash investment and issue the capital investment within such time period following receipt of the certification notice, the certification shall lapse and the rural fund shall not issue the capital investment without reapplying to the department for certification. Lapsed certifications revert to the authority and shall be reissued pro rata to applicants whose capital investment allocations were reduced pursuant to paragraph (5) of this subsection and then in accordance with the application process.
    1. The department may recapture, from a rural investor that claimed the credit on a tax return, the credit allowed under this Code section if:
      1. The rural fund does not invest 100 percent of its capital investment authority in qualified investments in this state within two years of the closing date, with at least 10 percent of its capital investment authority initially invested in eligible businesses engaged in agribusiness as defined by the United States Department of Agriculture and at least 10 percent of such investment shall be equity investments;
      2. The rural fund, after satisfying subparagraph (A) of this paragraph, fails to maintain qualified investments equal to 100 percent of its capital investment authority until the fifth anniversary of the credit allowance date. For the purposes of this subsection, a qualified investment is considered maintained even if the qualified investment was sold or repaid so long as the rural fund reinvests an amount equal to the capital returned or recovered by the rural fund from the original investment, exclusive of any profits realized, in other qualified investments in this state within 12 months of the receipt of such capital. Amounts received periodically by a rural fund shall be treated as continually invested in qualified investments if the amounts are reinvested in one or more qualified investments by the end of the following calendar year. A rural fund shall not be required to reinvest capital returned from qualified investments after the fourth anniversary of the credit allowance date, and such qualified investments shall be considered held continuously by the rural fund through the fifth anniversary of the credit allowance date;
      3. The rural fund, before exiting the program in accordance with subsection (i) of this Code section, makes a distribution or payment that results in the rural fund having less than 100 percent of its capital investment authority invested in qualified investments in this state or available for investment in qualified investments and held in cash and other marketable securities; or
      4. The rural fund violates subsection (h) of this Code section.
    2. Recaptured credits and the related capital investment authority revert to the department and shall be reissued pro rata to applicants whose capital investment allocations were reduced pursuant to paragraph (5) of subsection (e) of this Code section and then in accordance with the application process.
  7. Enforcement of each of the recapture provisions of paragraph (1) of subsection (f) of this Code section shall be subject to a six-month cure period. No recapture shall occur until the rural fund has been given notice of noncompliance and afforded six months from the date of such notice to cure the noncompliance.
  8. No eligible business that receives a qualified investment under this chapter, or any affiliates of such eligible business, may directly or indirectly:
    1. Own or have the right to acquire an ownership interest in a rural fund or member or affiliate of a rural fund, including, but not limited to, a holder of a capital investment issued by the rural fund; or
    2. Loan to or invest in a rural fund or member or affiliate of a rural fund, including, but not limited to, a holder of a capital investment issued by a rural fund, where the proceeds of such loan or investment are directly or indirectly used to fund or refinance the purchase of a capital investment under this Code section.
  9. On or after the sixth anniversary of the closing date, a rural fund may apply to the department to exit the program and no longer be subject to regulation under this Code section. The department shall respond to the exit application within 30 days of receipt. In evaluating the exit application, the fact that no credits have been recaptured and that the rural fund has not received a notice of recapture that has not been cured pursuant to subsection (g) of this Code section shall be sufficient evidence to prove that the rural fund is eligible for exit. The department shall not unreasonably deny an exit application submitted under this subsection. If the exit application is denied, the notice shall include the reasons for the determination. The state shall receive a 10 percent share of any distributions annually from a rural fund that made a capital investment, other than the amount in excess of equity invested in the rural fund and tax distributions made by the rural fund. A rural fund shall distribute all amounts not held in qualified investments no later than the fourteenth anniversary of the closing date. No claimant of credits pursuant to subsection (c) of this Code section shall receive distributions in excess of an amount that would result in an internal rate of return on capital invested that is more than 20 percent if the number of jobs created is:
    1. Less than 60 percent of the projected jobs in the rural fund's approved business plan, then the state shall receive a penalty of 10 percent of the total tax credits distributed to the rural fund; or
    2. Greater than 60 percent but less than 80 percent of the projected jobs in the rural fund's approved business plan, then the state shall receive a penalty of 5 percent of the total tax credits distributed to the rural fund.
  10. A rural fund, before making a qualified investment, may request from the department a written opinion as to whether the business in which it proposes to invest is an eligible business. The department, not later than the twentieth business day after the date of receipt of such request, shall notify the rural fund of its determination. If the department fails to notify the rural fund of its determination by the twentieth business day, the business in which the rural fund proposes to invest shall be considered an eligible business.
    1. Rural funds shall submit a report to the department within the first 15 business days after the second anniversary of the initial credit allowance date that provides documentation as to the investment of 100 percent of the purchase price of such capital investment in qualified investments. Such report shall include:
      1. The location of each eligible business receiving a qualified investment;
      2. Bank statements of such rural fund evidencing each qualified investment;
      3. A copy of the written opinion of the department set forth in subsection (j) of this Code section or evidence that such business was an eligible business at the time of such qualified investment, as applicable;
      4. The number of employment positions created and retained as a result of qualified investments;
      5. The average annual salary of positions described in subparagraph (D) of this paragraph; and
      6. Such other information required by the department.
    2. Thereafter, rural funds shall submit an annual report to the department within 45 days of the beginning of the calendar year during the compliance period. The report shall include but is not limited to the following:
      1. The number of employment positions created and retained as a result of qualified investments; and
      2. The average annual salary of positions described in subparagraph (A) of this paragraph. (Code 1981, § 33-1-25 , enacted by Ga. L. 2017, p. 637, § 1-1/SB 133; Ga. L. 2019, p. 1056, § 33/SB 52.)

The 2019 amendment, effective May 12, 2019, part of an Act to revise, modernize, and correct the Code, substituted " 'Credit allowance date' means the date" for " 'Credit allowance date' mean the date" in paragraph (b)(4).

Code Commission notes. - Pursuant to Code Section 28-9-5, in 2017, "July 1, 2017," was substituted for "the effective date of this Code section" in subparagraph (b)(4)(A) [now (b)(3)(A)], and "July 1, 2017" was substituted for "the effective date of this Act" in the second sentence of paragraph (e)(1).

Pursuant to Code Section 28-9-5, in 2017, paragraphs (b)(4), (b)(5), and (b)(5.1) were redesignated as paragraphs (b)(3) through (b)(5), respectively.

Editor's notes. - Ga. L. 2017, p. 637, § 3-1(a)/SB 133, not codified by the General Assembly, provides, in part, that this Act shall be applicable to all taxable years beginning on or after January 1, 2018.

33-1-26. Governor's request for waiver from federal Patient Protection and Affordable Care Act; expiration of authority.

  1. The Governor is hereby authorized to submit one or more applications to the United States Secretaries of Health and Human Services and the Treasury for waiver of applicable provisions of the federal Patient Protection and Affordable Care Act (P. L. 111-148) under Section 1332 with respect to health insurance coverage or health insurance products.  Any such submission to obtain a state innovation waiver may include multiple waiver submissions.  On or after January 1, 2020, upon approval of one or more waivers, the state is authorized to implement such waiver or waivers as provided under Section 1332 of such federal act in a manner consistent with state and federal law.
  2. The authority granted to the Governor in subsection (a) of this Code section to submit one or more applications shall expire on December 31, 2021. (Code 1981, § 33-1-26 , enacted by Ga. L. 2019, p. 2, § 3-2/SB 106.)

Effective date. - This Code section became effective March 27, 2019.

Editor's notes. - Ga. L. 2019, p. 2, § 1-1/SB 106, not codified by the General Assembly, provides: "This Act shall be known and may be cited as the 'Patients First Act.'"

Ga. L. 2019, p. 2, § 3-1/SB 106, not codified by the General Assembly, provides: "The General Assembly finds that:

"(1) For Georgians in recent years, private sector health insurance choices have decreased and the costs of insurance coverage have increased;

"(2) Through the granting of Section 1332 innovation waivers, the federal government allows states to pursue innovative strategies for providing their residents with access to high quality, comprehensive, and affordable health insurance while retaining the basic protections for consumers; and

"(3) Such waivers may be narrowly tailored to address specific problems and may address, among other things, the creation of state reinsurance programs, high-risk health conditions, changes to premium tax credits and cost-sharing arrangements, consumer-driven health care accounts, the creation of new health insurance products, the implementation of health care delivery systems, or the redefinition of essential health benefits."

Law reviews. - For article on the 2019 enactment of this Code section, see 36 Ga. St. U.L. Rev. 207 (2019).

CHAPTER 2 DEPARTMENT AND COMMISSIONER OF INSURANCE

Sec.

Cross references. - Requirements pertaining to regulations, standards, and plans required to be filed by Insurance Commissioner with Secretary of State, § 50-13-21 .

Administrative Rules and Regulations. - Organization, practice and procedure, Official Compilation of the Rules and Regulations of the State of Georgia, Rules of Comptroller General Office of Commissioner of Insurance, Chapters 120-2-1 through 120-2-2.

JUDICIAL DECISIONS

Investigation does not require hearing. - The investigative powers of the Insurance Commissioner under this title are not restricted only to those instances in which a hearing is pending. Southeastern Adjusters, Inc. v. Caldwell, 229 Ga. 4 , 189 S.E.2d 76 (1972).

If hearing held, procedural requirements must be met. - In the event a hearing does take place, the Commissioner must accord all the procedural safeguards provided as hearing requirements of this title before there can be any final decisions, orders, or actions adverse to any member of the insurance industry. Southeastern Adjusters, Inc. v. Caldwell, 229 Ga. 4 , 189 S.E.2d 76 (1972).

Action involving insurance violations. - A consumer class action complaint asserting various claims against an insurance company, including claims for fraud, Georgia RICO, and breach of contract was erroneously dismissed on the basis that the Insurance Commissioner had exclusive jurisdiction and that plaintiffs were required to exhaust their administrative remedies before the Insurance Commissioner before filing an action in court. Griffeth v. Principal Mut. Ins. Co., 243 Ga. App. 618 , 533 S.E.2d 126 (2000).

OPINIONS OF THE ATTORNEY GENERAL

Rule-making procedures. - The Insurance Department may utilize rule-making procedures of T. 33, C. 2 in lieu of rule-making procedures outlined in § 50-13-21 . 1982 Op. Att'y Gen. No. 82-10.

33-2-1. Creation of department; Commissioner chief officer of department; powers and duties of department and Commissioner generally.

There is created the Department of Insurance of the State of Georgia. The chief officer of such department shall be the Commissioner of Insurance. The purpose and function of the department and the duties and powers of the Commissioner shall be those created and vested by this title.

(Ga. L. 1912, p. 119, § 1; Code 1933, § 56-101; Code 1933, § 56-201, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1986, p. 855, § 12; Ga. L. 1987, p. 3, § 33; Ga. L. 2019, p. 337, § 1-9/SB 132.)

The 2019 amendment, effective July 1, 2019, substituted "Department of Insurance" for "Insurance Department" in the first sentence.

JUDICIAL DECISIONS

Cited in Brown v. Quality Fin. Co., 112 Ga. App. 369 , 145 S.E.2d 99 (1965); Ferguson v. United Ins. Co. of Am., 163 Ga. App. 282 , 293 S.E.2d 736 (1982).

OPINIONS OF THE ATTORNEY GENERAL

Commissioner lacks power to make binding tax claim settlement. - The Insurance Commissioner does not have the authority to accept payment of taxes for a five-year period and sign a binding agreement that this amount satisfies all claims by the state against the insurer. 1969 Op. Att'y Gen. No. 69-396.

33-2-2. Seal of Commissioner.

The Commissioner shall have an official seal of such design as he or she shall select with the approval of the Governor.

(Code 1933, § 56-202, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 2011, p. 99, § 45/HB 24.)

Editor's notes. - Ga. L. 2011, p. 99, § 101/HB 24, not codified by the General Assembly, provides that the amendment to this Code section by that Act shall apply to any motion made or hearing or trial commenced on or after January 1, 2013.

Law reviews. - For article, "Evidence," see 27 Ga. St. U.L. Rev. 1 (2011). For article on the 2011 amendment of this Code section, see 28 Ga. St. U.L. Rev. 1 (2011).

33-2-3. Organization of department by Commissioner.

The Commissioner shall set up within the department such divisions or sections as he may deem necessary for the appropriate performance of the duties of the department and the proper exercise of the powers vested in the department. Such organization shall proceed along functional lines and shall have as its purpose efficiency in operation and service to the public.

(Code 1933, § 56-205, enacted by Ga. L. 1960, p. 289, § 1.)

33-2-4. Appointment and removal of chief deputy insurance commissioner and other deputies.

Reserved. Repealed by Ga. L. 2019, p. 337, § 1-10/SB 132, effective July 1, 2019.

Editor's notes. - This Code section was based on Ga. L. 1960, p. 289, § 1.

33-2-5. Appointment of personnel; possession of financial interest; additional remuneration for services.

  1. The Commissioner may appoint and prescribe the duties of such assistants, examiners, actuaries, clerks, and employees as may be necessary to discharge the duties placed upon the department by this title. The Commissioner shall fix the compensation of all such personnel.
  2. The Commissioner or any deputy, examiner, actuary, clerk, or any employee of the department shall not be financially interested, directly or indirectly, in any insurer, agency, or insurance transaction except as a policyholder or claimant under a policy; however, as to such matters wherein a conflict of interests does not exist on the part of any such individual, the Commissioner may employ from time to time insurance actuaries or other technicians who are independently practicing their professions even though similarly employed by insurers and others.
  3. The Commissioner or any deputy, examiner, actuary, clerk, or employee of the department shall not be given or receive any fee, compensation, loan, gift, or other thing of value in addition to the compensation and expense allowance provided by law for any service or pretended service either rendered or to be rendered as such Commissioner, deputy, examiner, actuary, clerk, or employee.

    (Code 1933, § 56-207, enacted by Ga. L. 1960, p. 289, § 1.)

Cross references. - Conflicts of interest generally, § 45-10-20 et seq.

33-2-6. Delegated authority.

  1. Any authority, power, or duty vested in the Commissioner by any provision of this title may be exercised, discharged, or performed by any deputy, assistant, examiner, or employee of the department acting in the Commissioner's name and by his delegated authority.
  2. The Commissioner shall be responsible for the official acts of such persons who act in his name and by his authority.

    (Code 1933, § 56-213, enacted by Ga. L. 1960, p. 289, § 1.)

JUDICIAL DECISIONS

Cited in Blue Cross & Blue Shield of Ga., Inc. v. Deal, 244 Ga. App. 700 , 536 S.E.2d 590 (2000).

OPINIONS OF THE ATTORNEY GENERAL

Limitation on authority of Commissioner to delegate duties. - Commissioner of Insurance may not delegate to the chief deputy insurance commissioner his membership or duties on the State Depository Board, the State Indemnification Commission, the Board of Trustees for the Subsequent Injury Trust Fund, or the State Commission on Condemnation of Public Property. 1995 Op. Att'y Gen. No. 95-11.

RESEARCH REFERENCES

ALR. - Personal liability of public officials or bond for permitting insurance company or other corporation to engage or continue in business without complying with statutory requirement, 131 A.L.R. 275 .

33-2-7. Maintenance of records, books, or papers by Commissioner generally; furnishing of copies; disposal of records.

  1. The Commissioner shall enter in permanent form records of the official transactions, filings, examinations, investigations, and proceedings of his office and shall keep all records, books, and papers pertaining thereto in his office. Such records, books, and papers shall be deemed public records of the state except as may be provided otherwise in this chapter.
  2. Upon the request of any person and the payment of the applicable fee, the Commissioner shall supply a certified copy of any record in his office which is then subject to public inspection.
  3. The Commissioner may destroy or otherwise dispose of all records entered in his office in accordance with the rules and procedures provided for in Part 1A of Article 2 of Chapter 3 of Title 20; provided, however, that filings may be destroyed by direction of the Commissioner when superseded.

    (Code 1933, § 56-203, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 2013, p. 594, § 2-6/HB 287.)

Cross references. - Management, printing, and public inspection of state documents, T. 50, C. 18.

OPINIONS OF THE ATTORNEY GENERAL

Editor's notes. - In light of the similarity of the statutory provisions, opinions rendered under former Code 1933, §§ 56-504a and 56-504b are included in the annotations for this Code section.

Copyrighted filings may be copied without infringement. - Copying of copyrighted manuals, rates, and rules which must be filed with the Insurance Commissioner would not constitute an unfair use and hence would not amount to an infringement, but to the contrary would constitute a fair use and one within the purpose for which the filing was made with the Commissioner. 1965-66 Op. Att'y Gen. No. 66-178 (rendered under former Code 1933, §§ 56-504a and 56-504b, repealed by Ga. L. 1967, p. 684).

List of licensed agents. - Insurance Department is not required to create a list of all licensed insurance agents in order to provide copies of such a list of requesting citizens. 1982 Op. Att'y Gen. No. 82-50.

33-2-8 through 33-2-8.2

Reserved. Repealed by Ga. L. 2019, p. 337, §§ 1-11 - 1-13/SB 132, effective July 1, 2019.

Editor's notes. - These Code sections, relating to reports of the Commissioner, were based on Ga. L. 1960, p. 289, § 1; Ga. L. 1976, p. 538, § 1; Ga. L. 1989, p. 885, § 1; Ga. L. 1990, p. 8, § 33; Ga. L. 1990, p. 1496, § 1; Ga. L. 1996, p. 705, § 1; Ga. L. 2000, p. 136, § 33; Ga. L. 2005, p. 1036, § 25/SB 49; Ga. L. 2012, p. 218, § 8/HB 397; Ga. L. 2013, p. 135, § 12/HB 354.

33-2-9. Rules and regulations.

  1. The Commissioner shall have full power and authority to make rules and regulations for the following purposes:
    1. To organize the department and to assign duties to members of the staff;
    2. To promulgate any rules and regulations as are reasonably necessary to implement this title;
    3. To promulgate any rules and regulations as are reasonably necessary to conform with the requirements of the federal Health Insurance Portability and Accountability Act of 1996, P.L. 104-191, as said federal Act existed on January 1, 1997;
    4. To issue interpretative rulings or to prescribe forms required to carry out the responsibilities of his or her office; or
    5. To govern the procedure to be followed in the proceedings before the department.
  2. Before any rule or regulation shall become effective or before any amendment or repeal of any rule shall become effective, the proposed rule or regulation or amendment or repeal shall have been on file as a public record in the office of the Commissioner for at least ten days.
  3. Prior to the adoption of any rule or regulation or the amendment or repeal thereof, the Commissioner shall publish or otherwise circulate notice of his intended action and afford interested persons opportunity to submit data or views either orally or in writing.
  4. The Commissioner shall compile and keep on file in his office as a public record a set of such rules and regulations which are in effect and shall prepare copies of such rules and regulations which shall be available upon request. The Commissioner shall fix a price covering such compilation which shall cover costs of preparation and mailing.
  5. Neither the Commissioner, whether acting as Commissioner of Insurance or Safety Fire Commissioner, nor the department, nor the Safety Fire Division of the office of the Commissioner shall propose or adopt rules or regulations relating to the sale or dispensing of gasoline or diesel fuel to the general public by any business entity unless such rules or regulations require such sale or dispensing to be under the direct control and visual supervision of an on-site employee of such business entity.

    (Code 1933, § 56-216, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1997, p. 1462, § 2; Ga. L. 1998, p. 1064, § 2; Ga. L. 2019, p. 474, § 2/SB 156.)

The 2019 amendment, effective July 1, 2019, deleted "shall be approved as to legality by the Attorney General and" preceding "shall have been on file" in subsection (b).

Cross references. - Rules and regulations of Safety Fire Commissioner, § 25-2-4 .

Filing requirements for regulations, standards, and plans of Commissioner, § 50-13-21 .

Editor's notes. - Ga. L. 1997, p. 1462, § 1, not codified by the General Assembly, provides that the Act, which amended this Code section, is intended to comply with the requirements of the federal Health Insurance Portability and Accountability Act of 1996, P.L. 104-191, as well as to provide an acceptable alternative mechanism for the availability of individual health insurance coverage as contemplated by that federal Act. Section 1 further provides that the Georgia Act shall be narrowly construed to achieve such purpose without otherwise limiting the state's legislative or regulatory powers with respect to insurance.

Administrative Rules and Regulations. - Regulations regarding agents, subagents, counselors, adjusters, surplus lines brokers, and agencies, Official Compilation of the Rules and Regulations of the State of Georgia, Rules of Comptroller General, Commissioner of Insurance, Chapter 120-2-3.

Life and annuity tables, Official Compilation of the Rules and Regulations of the State of Georgia, Rules of Comptroller General, Commissioner of Insurance, Chapter 120-2-39.

Readability standards for personal lines policies, Official Compilation of the Rules and Regulations of the State of Georgia, Rules of Comptroller General, Commissioner of Insurance, Chapter 120-2-42.

Administrative supervision, Official Compilation of the Rules and Regulations of the State of Georgia, Rules of Comptroller General, Commissioner of Insurance, Chapter 120-2-55.

Law reviews. - For review of 1998 legislation relating to insurance, see 15 Ga. St. U.L. Rev. 153 (1998).

JUDICIAL DECISIONS

Cited in Standard Guar. Ins. Co. v. Davis, 145 Ga. App. 147 , 243 S.E.2d 531 (1978); Ferguson v. United Ins. Co. of Am., 163 Ga. App. 282 , 293 S.E.2d 736 (1982); White v. State Farm Fire & Casualty Co., 291 Ga. 306 , 728 S.E.2d 685 (2012).

OPINIONS OF THE ATTORNEY GENERAL

Rules and regulations may be made as to reciprocal or interinsurance exchange. - The general power to make rules and regulations conferred upon the Insurance Commissioner by this section is ample authority for the making of appropriate rules and regulations with respect to reciprocal or interinsurance exchange. 1950-51 Op. Att'y Gen. p. 101.

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, § 27 et seq.

C.J.S. - 44 C.J.S., Insurance, § 56.

33-2-10. Issuance and service of orders and notices.

  1. Orders and notices of the Commissioner shall be effective only when they are in writing and signed by him or by his authority.
  2. Every such order shall state its effective date and shall state concisely:
    1. Its intent or purpose;
    2. The grounds on which it is based; and
    3. The provisions of this title pursuant to which action is taken or proposed to be taken; but failure to designate any provision shall not deprive the Commissioner of the right to rely thereon.
  3. An order or notice may be served by delivery to the person to be ordered or notified or by mailing it, postage prepaid, addressed to him at his principal place of business or last address of record in the Commissioner's office.
  4. In addition to the service provisions set forth in subsection (c) of this Code section, any order of the Commissioner issued to multiple recipients in the form of a general directive, data call, or bulletin may be served by sending it by electronic mail, so that receipt is acknowledged by the recipient, to the electronic mail address on record in the Commissioner's office. The Commissioner shall also post such general directive, data call, or bulletin contemporaneously on the department's website.

    (Code 1933, § 56-217, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 2004, p. 754, § 1.)

JUDICIAL DECISIONS

Editor's notes. - In light of the similarity to provisions of this title, decisions under former Code 1933, Chs. 20 and 21, repealed by Ga. L. 1960, p. 289, which, as amended, enacted this title, are included in the annotations for this section.

Ex parte suspension of previously approved rate filings held void. - Commissioner's ex parte order purporting to suspend rate filings which had previously been approved by him, without notice or hearing provided for by statute, was issued without lawful authority and void. Cravey v. Southeastern Underwriter's Ass'n, 214 Ga. 450 , 105 S.E.2d 497 (1958); Cravey v. General Accident Fire & Life Ins. Co., 214 Ga. 460 , 105 S.E.2d 504 (1958).

Cited in Caldwell v. Liberty Mut. Ins. Co., 248 Ga. 282 , 282 S.E.2d 885 (1981).

RESEARCH REFERENCES

C.J.S. - 44 C.J.S., Insurance, § 56.

33-2-11. Examination of insurers and organizations; effect of insurer's change of domicile from Georgia.

  1. Whenever the Commissioner shall deem it expedient, the Commissioner shall examine, either in person or by some examiner duly authorized by the Commissioner, the affairs, transactions, accounts, records, documents, and assets of each insurer authorized to do business in this state and any other facts relative to its business methods, management, and dealings with policyholders. At least once every five years, the Commissioner shall so examine each domestic insurer. Examination of an alien insurer shall be limited to its insurance transactions in the United States.
  2. Whenever he shall deem it necessary at least once in five years, the Commissioner shall fully examine each rating organization which is licensed in this state. As often as he shall deem it necessary, he may examine each advisory organization and each joint underwriting or joint reinsurance group, association, or organization.
  3. The Commissioner shall in like manner examine each insurer or rating organization applying for authority to do business in this state.
  4. In lieu of an examination under this Code section of any foreign or alien insurer licensed in this state, the Commissioner may accept an examination report on such insurer as prepared by the insurance department of such insurer's state of domicile or port-of-entry state until January 1, 1994. On and after January 1, 1994, such reports may be accepted only if:
    1. The insurance department was, at the time the examination was conducted, accredited under the National Association of Insurance Commissioners' financial regulation standards and accreditation program; or
    2. The examination was performed under the supervision of an accredited insurance department or with the participation of one or more examiners who are employed by an accredited state insurance department and who, after a review of the examination work papers and report, state under oath that the examination was performed in a manner consistent with the standards and procedures required by their insurance department.
  5. Any insurer authorized to transact insurance in this state which changes its domicile from Georgia to another state on or after April 1, 1988, may be examined by the Commissioner once a year for five years, beginning on or after the occurrence of the change in domicile; provided, however, this subsection shall not apply to an insurer which changes its domicile from Georgia to another state as long as it retains in this state its principal place of business and the complete records of its assets, transactions, and affairs.

    (Code 1933, § 56-208, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1988, p. 692, § 1; Ga. L. 1989, p. 562, § 1; Ga. L. 1990, p. 8, § 33; Ga. L. 1992, p. 2877, § 1; Ga. L. 2000, p. 1246, § 1; Ga. L. 2008, p. 1090, § 1/SB 471.)

Law reviews. - For comment on Bankers Life & Cas. Co. v. Cravey, 208 Ga. 682 , 69 S.E.2d 87 (1952), see 14 Ga. B.J. 468 (1952).

JUDICIAL DECISIONS

Editor's notes. - In light of the similarity of the statutory provisions, a decision under former Code 1933, § 56-104, repealed by Ga. L. 1960, p. 289, which, as amended, enacted this title, are included in the annotations for this Code section.

Commissioner has power and duty to examine records. - By conferring the power to examine records on the Commissioner, the law, in equal measure, lays upon him the duty to do so whenever there is an apparent need for information concerning a company. Bankers Life & Cas. Co. v. Cravey, 208 Ga. 682 , 69 S.E.2d 87 (1952), commented on in 14 Ga. B.J. 468 (1952).

Commissioner may not require insurer to copy them. - Having the power and duty to investigate an insurance company, to inspect its original records, and to take the sworn testimony of its agents, the Commissioner has a duty to do so and is unauthorized to impose upon the company a duty to copy its records and refuse a renewal of its license upon its failure in that respect. Bankers Life & Cas. Co. v. Cravey, 208 Ga. 682 , 69 S.E.2d 87 (1952), commented on in 14 Ga. B.J. 468 (1952).

Full performance of Commissioner's duties will give Commissioner all information. - There is nothing in the law placing upon the insurance company a duty to copy its records and mail them to the Commissioner; when he has fully performed his duties and employed the powers given him by law, he will have all the information that he could obtain by requiring copies of the company's records to be mailed to him. Bankers Life & Cas. Co. v. Cravey, 208 Ga. 682 , 69 S.E.2d 87 (1952), commented on in 14 Ga. B.J. 468 (1952).

OPINIONS OF THE ATTORNEY GENERAL

Editor's notes. - In light of the similarity of the statutory provisions, opinions rendered under former Code 1933, § 56-104 are included in the annotations for this Code section.

Examination of organization operating like fraternal benefit society authorized. - The Insurance Commissioner may legally cause an investigation and examination of unlicensed and unincorporated organizations doing business in this state and operating in a manner similar to that of fraternal benefit societies, upon notice and an opportunity for a hearing being provided. 1952-53 Op. Att'y Gen. p. 373 (rendered under former Code 1933, § 56-104, repealed by Ga. L. 1960, p. 289).

RESEARCH REFERENCES

C.J.S. - 44 C.J.S., Insurance, §§ 56, 129.

33-2-12. Examination of agents, solicitors, brokers, counselors, adjusters, managers, and promoters.

For the purpose of ascertaining their compliance with this title, when he deems it necessary in the public interest, the Commissioner may examine the affairs, accounts, records, documents, and transactions of:

  1. Any insurance agent, subagent, broker, counselor, adjuster, or any other person licensed under this title;
  2. Any person having a contract under which he enjoys in fact the exclusive or dominant right to control an insurer;
  3. Any person holding the shares of capital stock or policyholder proxies of a domestic insurer for the purpose of control of its management either as voting trustee or otherwise;
  4. Any person engaged in the promotion or formation of a domestic insurer, or insurance holding corporation, or corporation to finance a domestic insurer or the production of its business;
  5. Any other person transacting the business of insurance, whether authorized or unauthorized;
  6. Any person or affiliate of such person who proposes or makes application to acquire any domestic insurer or any affiliate of a domestic insurer; and
  7. Any person seeking to acquire any other person subject to the jurisdiction of the Commissioner pursuant to this title.

    (Code 1933, § 56-209, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1992, p. 2877, § 2.)

JUDICIAL DECISIONS

Cited in Clinton v. State Farm Mut. Auto. Ins. Co., 110 Ga. App. 417 , 138 S.E.2d 687 (1964); Southeastern Adjusters, Inc. v. Caldwell, 229 Ga. 4 , 189 S.E.2d 76 (1972).

RESEARCH REFERENCES

C.J.S. - 44 C.J.S., Insurance, § 56.

ALR. - Public regulation or control of insurance agents or brokers, 10 A.L.R.2d 950.

33-2-13. Access of Commissioner to records; correction of inadequate or incorrect accounts.

  1. Every person being examined, its officers, employees, and representatives shall produce and make freely accessible to the Commissioner the accounts, records, documents, and files in his possession or control relating to the subject of the examination. Such officers, employees, and representatives shall facilitate such examination and aid the examiners as far as it is in their power in making the examination.
  2. If the Commissioner finds the accounts to be inadequate or incorrectly kept or posted, he may employ experts to rewrite, post, or balance such records at the expense of the person being examined, if such person has failed to correct such accounting within 60 days after the Commissioner has given him notice to do so.

    (Code 1933, § 56-210, enacted by Ga. L. 1960, p. 289, § 1.)

Cross references. - Inspection of public records, § 50-18-70 et seq.

JUDICIAL DECISIONS

Cited in Southeastern Adjusters, Inc. v. Caldwell, 229 Ga. 4 , 189 S.E.2d 76 (1972).

RESEARCH REFERENCES

C.J.S. - 44 C.J.S., Insurance, § 56.

33-2-14. Preparation of written reports of examinations generally; certification of reports; admissibility in evidence; notice and hearing on reports; use of examination documents.

  1. The Commissioner may make a full written report of each examination made by him containing only facts ascertained from the accounts, records, and documents examined and from the sworn testimony of witnesses.
  2. The report shall be certified by the Commissioner or by the examiner in charge of the examination and when so certified, after filing as provided in subsection (c) of this Code section, shall be admissible in evidence in any proceeding brought by the Commissioner against the person examined or any officer or agent of such person and shall be prima-facie evidence of the facts stated therein.
  3. The Commissioner shall furnish a copy of the proposed report to the person examined not less than 20 days prior to filing the report. If such person so requests in writing within such 20 day period or such longer period as the Commissioner may grant, the Commissioner shall grant a hearing with respect to the report and shall not so file the report until after the hearing and such modifications have been made therein as the Commissioner may deem proper.
  4. The Commissioner may withhold from public inspection the report of any examination or investigation for so long as he deems it to be in the public interest or necessary to protect the person examined from unwarranted injury.
  5. Nothing contained in this Code section shall be construed to limit the Commissioner's authority to terminate or suspend any examination in order to pursue other legal or regulatory action pursuant to the insurance laws of this state.  In such event, the findings of fact and conclusions made pursuant to said examination and prior to any hearing as set forth in subsection (c) of this Code section shall be prima-facie evidence in any legal or regulatory action.
  6. In the event the Commissioner determines that regulatory action is appropriate as a result of any examination, he or she may initiate any proceeding or actions as provided by law.
  7. Notwithstanding the provisions of Article 4 of Chapter 18 of Title 50, relating to the inspection of public records, all work papers, analysis, information, documents, information received from another state, and any other materials created, produced, or obtained by or disclosed to the Commissioner or any other person in the course of an examination made under this chapter or in the course of analysis by the Commissioner of the financial condition or market conduct of a company must be given confidential treatment and are not subject to subpoena and may not be made public by the Commissioner or any other person. Access may be granted to authorized representatives of the National Association of Insurance Commissioners. Such representatives must agree in writing prior to receiving the information to treat such information confidentially as required by this Code section, unless the prior written consent of the company to which it pertains has been obtained.
  8. Nothing contained in this Code section shall be construed to limit the Commissioner's authority to use any  preliminary or final examination or company work papers or other documents, or any other information discovered or developed during the course of any examination in the furtherance of any legal or regulatory action which the Commissioner may, in his or her sole discretion, deem appropriate.
  9. Nothing contained in this Code section shall prevent or be construed as prohibiting the Commissioner from disclosing the work papers, analysis, information, or a document described in subsection (g) of this Code section to state, federal, or international regulatory agencies or state, federal, or international law enforcement authorities so long as such recipient agrees in writing to treat such report confidentially and in a manner consistent with this title.

    (Code 1933, § 56-211, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1992, p. 2877, § 3; Ga. L. 2008, p. 1090, § 2/SB 471; Ga. L. 2012, p. 1117, § 1/SB 385.)

Cross references. - Inspection of public records, § 50-18-70 et seq.

RESEARCH REFERENCES

C.J.S. - 44 C.J.S., Insurance, § 57.

33-2-15. Payment of expenses of examinations; immunity of examiners.

  1. At the direction of the Commissioner, the insurer or other person so examined shall pay all the actual travel and living expenses of the examination. When the examination is made by an examiner who is not a regular employee of the department, the person examined shall pay the proper charges for the services of the examiner and his or her assistants and the actual travel and living expenses incurred by such examiners and assistants in an amount approved by the Commissioner. A consolidated account for the examination shall be filed by the examiner with the Commissioner. No person shall pay and no examiner shall accept any additional emolument on account of any examination. When the examination is conducted in whole or in part by regular salaried employees of the department, payment for such services and proper expenses shall be made by the person examined to the Commissioner, and such payment shall be deposited in the state treasury; provided, however, that, when an agent, broker, solicitor, counselor, or adjuster is examined because of a complaint filed against such agent, broker, solicitor, counselor, or adjuster and when the Commissioner finds that the complaint was not justified, the expenses of the examination shall not be assessed against the agent, broker, solicitor, counselor, or adjuster but shall be borne by the department.
  2. An examiner or other person appointed or authorized by the Commissioner, while participating in an examination conducted under this chapter, shall enjoy the same immunities as those of a regular employee of the department under similar circumstances.

    (Code 1933, § 56-212, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1982, p. 3, § 33; Ga. L. 1985, p. 1087, § 1; Ga. L. 2008, p. 1090, § 3/SB 471.)

RESEARCH REFERENCES

C.J.S. - 44 C.J.S., Insurance, § 57.

33-2-16. Powers of Commissioner as to evidence and witnesses; payment of witness fees and expenses; subpoenas; giving of false testimony.

  1. With respect to the subject of any examination, investigation, or hearing conducted by him or his duly authorized representative, the Commissioner may take depositions, subpoena witnesses, administer oaths or affirmations, examine any individual under oath, and compel the production of records, books, papers, and other documents.
  2. Witness fees and mileage, if claimed, shall be allowed as for witnesses appearing in superior court. Witness fees, mileage, and the actual expense necessarily incurred in securing attendance of witnesses and their testimony shall be itemized and shall be paid by the person being examined or investigated, if in the proceedings in which the witness is called such person is found to be in violation of the law, or paid by the person, if other than the Commissioner, at whose request the hearing is held.
  3. Subpoenas of witnesses shall be served in the same manner as if issued by a superior court. If any individual fails to obey a subpoena issued and served under this subsection with respect to any matter concerning which he may be lawfully interrogated, on application of the Commissioner the superior court of the county in which the proceeding is pending at which such individual was so required to appear may issue an order requiring such individual to comply with the subpoena and to testify.
  4. Any person willfully testifying falsely under oath as to any matter material to any such examination, investigation, or hearing shall have committed the offense of false swearing.
  5. In addition to any other liability or punishment prescribed, any person who without just cause fails or refuses to attend and testify or to answer any lawful inquiry or to produce any books, papers, or records in obedience to a lawful subpoena issued by the Commissioner or by his authority shall be guilty of a misdemeanor.

    (Code 1933, § 56-215, enacted by Ga. L. 1960, p. 289, § 1.)

Cross references. - Penalty for false swearing, § 16-10-71 .

Subpoenas for attendance of witnesses, § 24-13-20 et seq.

Witness fees and mileage, § 24-13-25 .

JUDICIAL DECISIONS

Subsection (c) provides an adequate remedy to contest the lawfulness of the Commissioner's subpoena action. Southeastern Adjusters, Inc. v. Caldwell, 229 Ga. 4 , 189 S.E.2d 76 (1972).

33-2-17. Conduct of hearings by Commissioner generally; demands for hearings.

  1. The Commissioner may hold hearings for any purpose within the scope of this title as he may deem necessary.
  2. He shall hold a hearing:
    1. If required by any provision of this title; or
    2. Upon written demand for a hearing made by any person aggrieved by any act, threatened act, or failure of the Commissioner to act if such failure is deemed an act under any provision of this title or by any report, promulgation, or order of the Commissioner, other than an order on a hearing of which such person was given actual notice or at which such person appeared as a party or order pursuant to the order on such hearing.
  3. Any demand for a hearing pursuant to this Code section shall specify in what respects such person is aggrieved and the grounds to be relied upon as a basis for the relief to be demanded at the hearing; and, unless postponed by mutual consent, the hearing shall be held within 30 days after receipt by the Commissioner of the demand for a hearing. Such hearing shall be held only if the Commissioner shall find that the demand for a hearing is made in good faith, that the applicant would be aggrieved, and that such grounds otherwise justify holding such hearing.
  4. Pending the hearing and decision on holding the hearing, the Commissioner may suspend or postpone the effective date of his previous action.

    (Code 1933, § 56-218, enacted by Ga. L. 1960, p. 289, § 1.)

Cross references. - Administrative hearings in contested cases generally, § 50-13-13 et seq.

JUDICIAL DECISIONS

Editor's notes. - In light of the similarity of the statutory provisions, decisions under former Code 1933, Chs. 56-20 and 56-21, repealed by Ga. L. 1960, p. 289, which, as amended, enacted this title, are included in the annotations for this Code section.

Section inapplicable to workers' compensation rate hearing. - A hearing as to workers' compensation insurance rates before the Insurance Commissioner is rightly held pursuant to authority of former Code 1933, § 114-609 (see O.C.G.A. § 34-9-130 ) and pursuant to former Code Section 3A-114 (see O.C.G.A. § 50-13-13 ) and not pursuant to this Code section. This is so because the workers' compensation insurance rate-making function (although performed by the Insurance Commissioner) is not within the scope of this title, but is within the scope of T. 34, C. 9. National Council on Comp. Ins. v. Caldwell, 154 Ga. App. 528 , 268 S.E.2d 793 (1980).

Ex parte order suspending previously, approved rate filing held void. - Commissioner's ex parte order purporting to suspend rate filings which had previously been approved by him, without notice or hearing provided for by statute was issued without lawful authority, and void. Cravey v. Southeastern Underwriter's Ass'n, 214 Ga. 450 , 105 S.E.2d 497 (1958). See also Cravey v. General Accident Fire & Life Ins. Co., 214 Ga. 460 , 105 S.E.2d 504 (1958).

Entitlement to equitable relief. - Authorized rating organizations, having made substantial allegations showing that an invalid order issued by the Insurance Commissioner would work great hardship on them, causing irreparable injury to their business and property rights, and being without an adequate remedy at law, were entitled to equitable relief. Cravey v. Southeastern Underwriter's Ass'n, 214 Ga. 450 , 105 S.E.2d 497 (1958); Cravey v. General Accident Fire & Life Ins. Co., 214 Ga. 460 , 105 S.E.2d 504 (1958).

Administrative review not required. - Authorized rating organizations are not required to seek administrative review of a rate suspension order, alleged to be void for want of authority in the Commissioner to issue it, before resorting to the courts. Cravey v. Southeastern Underwriter's Ass'n, 214 Ga. 450 , 105 S.E.2d 497 (1958); Cravey v. General Accident Fire & Life Ins. Co., 214 Ga. 460 , 105 S.E.2d 504 (1958).

Cited in Southeastern Adjusters, Inc. v. Caldwell, 229 Ga. 4 , 189 S.E.2d 76 (1972); Caldwell v. Liberty Mut. Ins. Co., 248 Ga. 282 , 282 S.E.2d 885 (1981); Darden v. Ford Consumer Fin. Co., 200 F.3d 753 (11th Cir. 2000); Blue Cross & Blue Shield of Ga., Inc. v. Deal, 244 Ga. App. 700 , 536 S.E.2d 590 (2000).

33-2-18. Place of hearings; hearings to be open to public.

The hearing shall be held at the place designated by the Commissioner and shall be open to the public.

(Code 1933, § 56-219, enacted by Ga. L. 1960, p. 289, § 1.)

Cross references. - Administrative hearings in contested cases generally, § 50-13-13 et seq.

JUDICIAL DECISIONS

Cited in Southeastern Adjusters, Inc. v. Caldwell, 229 Ga. 4 , 189 S.E.2d 76 (1972).

33-2-19. Notice of hearings generally.

Not less than ten days in advance the Commissioner shall give notice of the time and place of the hearing stating the matters to be considered at the hearing. If the persons to be given notice are not specified in the provision pursuant to which the hearing is held, the Commissioner shall give notice to all persons directly affected by such hearing. In the event all persons directly affected are unknown, notice may be perfected by publication in a newspaper of general circulation in this state at least ten days prior to the hearing.

(Code 1933, § 56-220, enacted by Ga. L. 1960, p. 289, § 1.)

Cross references. - Notice requirements for administrative hearings generally, § 50-13-13 .

JUDICIAL DECISIONS

Cited in Southeastern Adjusters, Inc. v. Caldwell, 229 Ga. 4 , 189 S.E.2d 76 (1972).

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, § 27.

C.J.S. - 44 C.J.S., Insurance, § 57.

33-2-20. Notice to show cause.

If any person is entitled to a hearing by any provision of this title before any proposed action is taken, the notice of the proposed action may be in the form of a notice to show cause stating that the proposed action may be taken, unless such person shows cause at a hearing to be held as specified in the notice why the proposed action should not be taken and stating the basis of the proposed action.

(Code 1933, § 56-221, enacted by Ga. L. 1960, p. 289, § 1.)

Cross references. - Notice requirements for administrative hearings generally, § 50-13-13 .

JUDICIAL DECISIONS

Cited in Southeastern Adjusters, Inc. v. Caldwell, 229 Ga. 4 , 189 S.E.2d 76 (1972).

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, § 27.

C.J.S. - 44 C.J.S., Insurance, § 57.

33-2-21. Presiding officer at hearing; rights of parties; intervention; pleading and evidence; record of proceedings; rehearing or reargument.

  1. The hearing shall be presided over by the Commissioner or his designated representative.
  2. The Commissioner shall allow any party to the hearing to appear in person or by counsel, to be present during the giving of all evidence, to have a reasonable opportunity to inspect all documentary evidence and to examine witnesses, to present evidence in support of his interest, and to have subpoenas issued by the Commissioner to compel attendance of witnesses and production of evidence in his behalf.
  3. The Commissioner shall permit to become a party to the hearing by intervention, if timely, only such persons who may be aggrieved by the Commissioner's order made upon the hearing.
  4. Formal rules of pleading or evidence need not be observed at any hearing.
  5. Upon written request seasonably made by a party to the hearing and at such person's expense, the Commissioner shall cause a full record of the proceedings to be made. If transcribed, a copy of such record shall be furnished to the Commissioner without cost to the Commissioner or the state and shall be a part of the Commissioner's record of the hearing. If so transcribed, a copy of the record shall be furnished to any other party to the hearing at the request and expense of the other party. If no record is made or transcribed, the Commissioner shall prepare an adequate record of the evidence and of the proceedings.
  6. Upon written request of a party to a hearing filed with the Commissioner within 30 days after any order made pursuant to a hearing has been mailed or delivered to the persons entitled to receive the same, the Commissioner may in his discretion grant a rehearing or reargument of the matters involved in such hearing; and notice of the rehearing or reargument shall be given as provided in Code Section 33-2-19.

    (Code 1933, § 56-222, enacted by Ga. L. 1960, p. 289, § 1.)

Cross references. - Intervention in administrative hearings generally, § 50-13-14 .

Rules of evidence in administrative hearings generally, § 50-13-15 .

JUDICIAL DECISIONS

Cited in Southeastern Adjusters, Inc. v. Caldwell, 229 Ga. 4 , 189 S.E.2d 76 (1972).

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance § 27.

C.J.S. - 44 C.J.S., Insurance, § 57.

33-2-22. Adjournment of hearings; effect of nonattendance.

  1. The Commissioner may adjourn any hearing from time to time and from place to place without other notice of the adjourned hearing than announcement thereof at the hearing.
  2. The validity of any hearing held in accordance with the notice thereof shall not be affected by failure of any person to attend the hearing or to remain in attendance.

    (Code 1933, § 56-223, enacted by Ga. L. 1960, p. 289, § 1.)

JUDICIAL DECISIONS

Cited in Southeastern Adjusters, Inc. v. Caldwell, 229 Ga. 4 , 189 S.E.2d 76 (1972).

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, § 27.

C.J.S. - 44 C.J.S., Insurance, § 57.

33-2-23. Issuance of order on hearing; contents.

  1. Within 30 days after termination of the hearing or of any rehearing or reargument, the Commissioner shall make his order thereon covering matters involved in the hearing and in any rehearing or reargument and shall give a copy of the order to the same persons given notice of the hearing.
  2. The order shall contain a concise statement of the facts as found by the Commissioner, a concise statement of his conclusions therefrom, and the effective date of the order.
  3. The order may affirm, modify, or nullify action theretofore taken or may constitute the taking of new action within the scope of the notice of hearing.

    (Code 1933, § 56-224, enacted by Ga. L. 1960, p. 289, § 1.)

JUDICIAL DECISIONS

Thirty-day provision not mandatory. - Provision that the commissioner "shall" issue an order within 30 days after the hearing was not mandatory, but was directory, in the absence of injury to the defendant and in the absence of a penalty for failure to comply with O.C.G.A. § 33-2-23 . Commissioner of Ins. v. Stryker, 218 Ga. App. 716 , 463 S.E.2d 163 (1995).

Cited in Southeastern Adjusters, Inc. v. Caldwell, 229 Ga. 4 , 189 S.E.2d 76 (1972); Caldwell v. Insurance Co. of N. Am., 235 Ga. 141 , 218 S.E.2d 754 (1975).

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, § 20.

C.J.S. - 44 C.J.S., Insurance, § 57.

33-2-24. Enforcement of title and rules, regulations, and orders; issuance of orders without hearings; civil actions; criminal violations; penalties.

  1. Whenever it may appear to the Commissioner, either upon investigation or otherwise, that any person has engaged in, is engaging in, or is about to engage in any act, practice, or transaction which is prohibited by this title or by any rule, regulation, or order of the Commissioner promulgated or issued pursuant to this title or which is declared to be unlawful under this title, the Commissioner may at his discretion issue an order, if he deems it to be appropriate in the public interest or for the protection of policyholders or the citizens of this state, prohibiting such person from continuing such act, practice, or transaction.
  2. Notwithstanding any other provision of this title, in situations where persons otherwise would be entitled to a hearing prior to an order, the Commissioner may issue a proposed order to be effective upon a later date without hearing, unless persons subject to the order request a hearing within ten days after receipt of the order. Failure to make the request shall constitute a waiver of any provision of law for the hearing. The order shall contain or shall be accompanied by a notice of opportunity for hearing which clearly explains that the opportunity must be requested within ten days of receipt of the order and notice. The order and notice shall be served in person by the Commissioner or his agent or by registered or certified mail or statutory overnight delivery, return receipt requested.
  3. Notwithstanding any other provision of this title, in situations where persons otherwise would be entitled to a hearing prior to an order, the Commissioner may issue an order to be effective immediately, if the Commissioner has reasonable cause to believe: that an act, practice, or transaction is occurring or is about to occur; that the situation constitutes a situation of imminent peril to the public health, safety, or welfare; and that the situation therefore imperatively requires emergency action. The emergency order shall contain findings to this effect and reasons for the determination. The order shall contain or be accompanied by a notice of opportunity for hearing which may provide that a hearing will be held if and only if a person subject to the order requests a hearing within ten days of receipt of the order and notice. The order and notice shall be served by delivery by the Commissioner or his agent or by registered or certified mail or statutory overnight delivery, return receipt requested.
  4. The Commissioner may institute actions or other legal proceedings as may be required for the enforcement of any provisions of this title. If the Commissioner has reason to believe that any person has violated any provision of this title for which criminal prosecution is provided, he shall so inform the prosecuting attorney in whose circuit or jurisdiction such violation may have occurred.
  5. The Commissioner may prosecute an action in any superior court of proper venue to enforce any order made by him pursuant to this title.
  6. In cases in which the Commissioner institutes an action or other legal proceeding in a superior court of this state or prosecutes an action in a superior court to enforce his order, the superior court may among other appropriate relief issue an injunction restraining persons and those in active concert with them, including agents, employees, partners, officers, and directors, from engaging in acts prohibited by orders of the Commissioner or his rules or regulations or made unlawful or prohibited by this title.
  7. In addition to all other penalties provided for under this title, the Commissioner shall have the authority:
    1. To place any person duly licensed under this title on probation for a period of time not to exceed one year for each and every act in violation of this title or of the rules, regulations, or orders of the Commissioner; and
    2. To subject any person duly licensed or that should be licensed under this title to a monetary penalty of up to $2,000.00 for each and every act in violation of this title or of the rules, regulations, or orders of the Commissioner, unless such person knew or reasonably should have known he or she was in violation of this title or of the rules, regulations, or orders of the Commissioner, in which case the monetary penalty provided for in this paragraph may be increased to an amount up to $5,000.00 for each and every act in violation.
  8. The Commissioner may not institute any action or impose any penalty against an insurer because an insurer engages in transactions consistent with the provisions of Chapter 12 of Title 10, the "Uniform Electronic Transactions Act," or Code Section 33-24-14.

    (Code 1933, § 56-214, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1975, p. 1245, § 1; Ga. L. 1976, p. 411, § 1; Ga. L. 1982, p. 3, § 33; Ga. L. 2000, p. 136, § 33; Ga. L. 2000, p. 1589, § 3; Ga. L. 2005, p. 563, § 1/HB 407; Ga. L. 2010, p. 9, § 1-63/HB 1055; Ga. L. 2014, p. 818, § 1/HB 840; Ga. L. 2014, p. 829, § 1/HB 645.)

JUDICIAL DECISIONS

Cited in Consumer Life Ins. Co. v. United States, 524 F.2d 1167 (Ct. Cl. 1975); State Farm Fire & Cas. Co. v. Sweat, 547 F. Supp. 233 (N.D. Ga. 1982); Am. Ass'n of Cab Cos. v. Parham, 291 Ga. App. 33 , 661 S.E.2d 161 (2008); State Farm Mut. Auto. Ins. Co. v. Hernandez Auto Painting & Body Works, 312 Ga. App. 756 , 719 S.E.2d 597 (2011).

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, § 27 et seq.

C.J.S. - 44 C.J.S., Insurance, § 57.

ALR. - Personal liability of public officials or bond for permitting insurance company or other corporation to engage or continue in business without complying with statutory requirement, 131 A.L.R. 275 .

33-2-25. Effect of chapter upon power of Commissioner or superior courts to enforce title; construction of grants of power contained in chapter.

Nothing contained in this chapter is intended to limit or repeal any power or authority elsewhere granted the Commissioner or the superior courts in the enforcement of this title. Nor shall any grant of authority or power contained in this chapter be read to imply that such grant of authority or power was not conferred by a preexisting law.

(Ga. L. 1976, p. 411, § 2.)

33-2-26. Judicial review of actions of Commissioner - Persons entitled to appeal; procedure generally.

An appeal from the Commissioner shall be taken only from an order on hearing or with respect to a matter as to which the Commissioner has refused or failed to grant or hold a hearing after demand therefor under Code Section 33-2-17 or as to a matter as to which the Commissioner has refused or failed to make his order on hearing as required by Code Section 33-2-23. Any person who was a party to the hearing or whose pecuniary interests are directly and immediately affected by the refusal or failure to grant a hearing and who is aggrieved by the order, refusal, or failure may appeal from the order on hearing or as to any such matter within 30 days after:

  1. The order on hearing has been mailed or delivered to the persons entitled to receive the same;
  2. The Commissioner's order denying rehearing or reargument has been so mailed or delivered;
  3. The Commissioner has refused or failed to make his order on hearing as required under Code Section 33-2-23; or
  4. The Commissioner has refused or failed to grant or hold a hearing as required under Code Section 33-2-17.

    (Code 1933, § 56-225, enacted by Ga. L. 1960, p. 289, § 1.)

Cross references. - Judicial review of contested cases before administrative agencies generally, § 50-13-19 .

JUDICIAL DECISIONS

Editor's notes. - In light of the similarity of the statutory provisions, decisions under former Code 1933, Chs. 56-20 and 56-21, repealed by Ga. L. 1960, p. 289, which, as amended, enacted this title, are included in the annotations for this Code section.

Authorized rating organizations have the right to seek equitable relief in their own right as well as in their representative capacities for the insurers which are members of the various associations. Cravey v. Southeastern Underwriter's Ass'n, 214 Ga. 450 , 105 S.E.2d 497 (1958).

While the statutes do not expressly confer under rating bureaus the power to sue and be sued generally, since they do empower them to appeal from orders and decisions of the Commissioner after the proper administrative procedures have been taken, under a proper construction of these statutes authorized rating organizations are legal entities and have the necessary standing to seek to enjoin an alleged invalid order or decision of the Commissioner, provided, of course, that all prerequisites for such relief are established. Cravey v. Southeastern Underwriter's Ass'n, 214 Ga. 450 , 105 S.E.2d 497 (1958).

Against invalid order of Commissioner. - Authorized rating organizations, having made substantial allegations showing that an invalid order issued by the Insurance Commissioner would work great hardship on them, causing irreparable injury to their business and property rights, and being without an adequate remedy at law, were entitled to equitable relief. Cravey v. Southeastern Underwriter's Ass'n, 214 Ga. 450 , 105 S.E.2d 497 (1958). See also Cravey v. General Accident Fire & Life Ins. Co., 214 Ga. 460 , 105 S.E.2d 504 (1958).

Administrative review not required. - Authorized rating organizations are not required to seek administrative review of a rate suspension order, alleged to be void for want of authority in the Commissioner to issue it, before resorting to the courts. Cravey v. Southeastern Underwriter's Ass'n, 214 Ga. 450 , 105 S.E.2d 497 (1958). See also Cravey v. General Accident Fire & Life Ins. Co., 214 Ga. 460 , 105 S.E.2d 504 (1958).

Review of order on plan of conversion. - The orders encompassed by O.C.G.A. § 33-2-26 include hearings to determine the propriety of plans of conversion set forth in O.C.G.A. § 33-20-34 . Blue Cross & Blue Shield of Ga., Inc. v. Deal, 244 Ga. App. 700 , 536 S.E.2d 590 (2000).

Cited in First Union Nat'l Bank v. Independent Ins. Agents of Ga., Inc., 197 Ga. App. 227 , 398 S.E.2d 254 (1990).

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, § 32.

C.J.S. - 44 C.J.S., Insurance, § 60.

33-2-27. Judicial review of actions of Commissioner - Pleading and procedure; powers of reviewing court generally.

  1. The form of proceeding for judicial review shall be by a petition in the Superior Court of Fulton County, a copy of which shall be served upon the Commissioner immediately.
  2. The proceedings shall follow the course which is now or may hereafter be prescribed for civil actions in the superior courts, provided that the reviewing court may by order extend the time required for filing any pleadings or motions. In addition, the reviewing court may provide by order for expeditious hearing or trial of any such proceedings as justice or the public interest may require.
  3. The petition or other pleading in which judicial review shall be sought shall plainly specify the action complained of and shall set forth the relief sought and, without excessive detail, the facts and circumstances supporting the petitioner's right to such relief.
  4. Pending judicial review pursuant to any proceeding authorized for the purpose, the Commissioner, if the action has not become effective, may postpone the effective date of the action complained of. Upon such conditions as may be required and to the extent necessary to preserve the status of proceedings or the rights of the parties or to prevent irreparable injury, in any proceeding for judicial review the reviewing court or any appellate court is authorized to issue all necessary and appropriate orders to postpone the effective date of any action or temporarily to grant or extend relief denied or withheld.
  5. Whether or not prayed for, the court may remand the matter for further proceedings or findings on terms specified by order or may require the parties to complete any record found to be inaccurate or inadequate for decision.

    (Code 1933, § 56-226, enacted by Ga. L. 1960, p. 289, § 1.)

Law reviews. - For article surveying developments in Georgia workers' compensation law from mid-1980 through mid-1981, see 33 Mercer L. Rev. 323 (1981). For article, "Administrative Law," see 53 Mercer L. Rev. 81 (2001).

JUDICIAL DECISIONS

Review of order on plan of conversion. - The orders encompassed by O.C.G.A. § 33-2-26 on appeals from actions of the Commissioner include hearings to determine the propriety of plans of conversion set forth in O.C.G.A. § 33-20-34 . Blue Cross & Blue Shield of Ga., Inc. v. Deal, 244 Ga. App. 700 , 536 S.E.2d 590 (2000).

Cited in National Council on Comp. Ins. v. Caldwell, 154 Ga. App. 528 , 268 S.E.2d 793 (1980).

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, § 32.

C.J.S. - 44 C.J.S., Insurance, § 61.

33-2-28. Judicial review of actions of Commissioner - Scope of review; disposition of action by reviewing court.

  1. Unless review of the action complained of is required by law to be de novo:
    1. In cases in which proceedings have been held before the Commissioner, the Commissioner shall file with his reply to the reviewing court a certified transcript of all such proceedings and all evidence before him in such proceedings; provided, however, that the parties may by written stipulation agree to an abbreviated record including so much of the transcript as shall be necessary to determine the questions under review;
    2. The reviewing court's decision shall be upon the basis of the pleadings and the record so presented;
    3. The findings of the Commissioner as to any fact, if supported by substantial evidence upon consideration of the record as a whole, shall be conclusive;
    4. If issues of fact outside the record shall be made by the pleadings, they may be determined by the court.
  2. Judicial review of any fact determined by the Commissioner shall be de novo unless:
    1. The determination was made after a hearing required or authorized by this title; or
    2. The determination is one committed by law to the Commissioner's discretion.
  3. So far as necessary to decision and where presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of any department action. The court shall:
    1. Compel department action unlawfully withheld or unreasonably delayed; and
    2. Hold unlawful and set aside department action, findings, and conclusions found to be:
      1. Arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;
      2. Contrary to legal or constitutional right, power, privilege, or immunity;
      3. In excess of statutory jurisdiction, authority, or limitations or short of statutory right;
      4. Without observance of procedure required by law;
      5. Unsupported by substantial evidence upon consideration of the record as a whole in cases determined pursuant to paragraphs (2) and (3) of subsection (a) of this Code section;
      6. Unwarranted by the facts in cases in which the facts are subject to trial de novo by the reviewing court.
  4. In making the determinations called for in subparagraphs (A) through (F) of paragraph (2) of subsection (c) of this Code section, the court shall review the whole record or such portions of the record as may be cited by any party; and due account shall be taken of the rule of prejudicial error.
  5. The reviewing court may also grant such further relief either legal or equitable, or both, as the interest of the public and the aggrieved parties in such proceedings shall require.

    (Code 1933, § 56-227, enacted by Ga. L. 1960, p. 289, § 1.)

JUDICIAL DECISIONS

This section presents a broader scope for judicial inquiry on review than in most appeals from fact-finding bodies (e.g., those from the State Board of Workers' Compensation). Allstate Ins. Co. v. Bentley, 122 Ga. App. 738 , 178 S.E.2d 700 (1970), modified, 227 Ga. 708 , 182 S.E.2d 770 (1971).

Reviewing court is limited to pleadings and record made below. - Under paragraph (2) of subsection (a) of this section, the superior court in reviewing the merits of a ruling of the commissioner is limited to the pleadings and the record made before the Commissioner. Caldwell v. Insurance Co. of N. Am., 235 Ga. 141 , 218 S.E.2d 754 (1975).

Decision must be based on whole record. - A reviewing court's decision must be based on the record as a whole and not simply on those parts of it regarded as favorable to the commissioner's conclusion. Allstate Ins. Co. v. Bentley, 122 Ga. App. 738 , 178 S.E.2d 700 (1970), modified, 227 Ga. 708 , 182 S.E.2d 770 (1971).

It is the court's duty, when reviewing proceedings held before the Commissioner of Insurance, to consider evidence in the record that is favorable as well as that which is unfavorable to the commissioner's decision and then determine whether the decision is, in light of the whole record, supported by substantial evidence, and if it is not, it should be reversed. Allstate Ins. Co. v. Bentley, 122 Ga. App. 738 , 178 S.E.2d 700 (1970), modified, 227 Ga. 708 , 182 S.E.2d 770 (1971).

Findings not supported by substantial evidence in whole record are not binding. - Findings of fact arbitrarily, capriciously, or indifferently drawn without substantial evidence supporting them in the record as a whole are not binding on reviewing courts. Allstate Ins. Co. v. Bentley, 122 Ga. App. 738 , 178 S.E.2d 700 (1970), modified, 227 Ga. 708 , 182 S.E.2d 770 (1971).

Finding reasonable competition did not exist. - To authorize the Commissioner's conclusion of law that an insurer's rates were excessive because a reasonable degree of competition did not exist in the area with respect to the classification to which the rates were applicable, the evidence must substantially support the principle that the insurer was not reasonably competitive with other companies collectively. Allstate Ins. Co. v. Bentley, 122 Ga. App. 738 , 178 S.E.2d 700 (1970), modified, 227 Ga. 708 , 182 S.E.2d 770 (1971).

Cited in National Council on Comp. Ins. v. Caldwell, 154 Ga. App. 528 , 268 S.E.2d 793 (1980).

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, § 32.

C.J.S. - 44 C.J.S., Insurance, § 62.

33-2-29. Disposition of amounts collected under title generally; allowance of refunds and credits.

The Commissioner shall promptly pay all taxes, fees, dues, charges, and penalties and interest which he is authorized to collect under this title to the Office of the State Treasurer to the credit of the general fund. The Commissioner, however, is authorized to make refunds of or to allow credits for any amounts which have been illegally or erroneously paid or collected pursuant to any provision of this title; and such payments to the Office of the State Treasurer shall be less the amount of any such refunds or credits, provided that no refunds or credits shall be allowed under this Code section unless a written request for such refund or credit is filed with the Commissioner within seven years from the date of payment or collection of the amount for which a refund or credit is claimed.

(Code 1933, § 56-228, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1976, p. 1080, § 1; Ga. L. 1993, p. 1402, § 18; Ga. L. 2010, p. 863, § 2/SB 296.)

33-2-30. Limitation period for issuance of notice of deficiency assessment or execution thereon; waiver of limitations.

  1. Except in the case of fraud or failure to file a return required by this title, every notice of a deficiency assessment or the issuance of an execution thereon shall be given within seven years from the date on which such return is filed. In the case of failure to file a return, the notice of a deficiency assessment or the issuance of an execution thereon shall be given within ten years from the date on which such return is due. In the case of fraud there shall be no time limitation.
  2. If, before the expiration of the time prescribed in this Code section for giving of a notice of deficiency assessment or before the issuance of an execution thereon, the taxpayer has consented in writing to the giving of the notice after such time, the notice may be given at any time prior to the expiration of the time agreed upon. The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon.

    (Code 1933, § 56-228.1, enacted by Ga. L. 1976, p. 1080, § 1.)

RESEARCH REFERENCES

ALR. - Effect of fraud to toll the period for bringing action prescribed in statute creating the right of action, 15 A.L.R.2d 500.

Validity, and applicability to causes of action not already barred, of a statute enlarging limitation period, 79 A.L.R.2d 1080.

33-2-31. Extension of time for filing tax return or paying tax; payment of interest by taxpayer granted extension.

The Commissioner for good cause shown may extend for no more than 30 days the time for filing a tax return or paying any amount required to be paid with any return. The extension may be granted at any time, provided that a request therefor is filed with the Commissioner within or prior to the period for which the extension may be granted. Any taxpayer to whom an extension is granted shall pay, in addition to the tax, interest at the rate of 1 percent per month or fraction thereof until the date of payment.

(Code 1933, § 56-228.2, enacted by Ga. L. 1976, p. 1080, § 1.)

33-2-32. Fees.

  1. Each corporation or individual, of whatever name or class, which now has or which may hereafter have bonds or securities on deposit as the law provides, is required, on or before January 15 of each year, to pay fees in amounts as provided in Code Section 33-8-1.
  2. All fees collected under subsection (a) of this Code section shall be paid into the general fund of the state treasury.
  3. If a fee prescribed in subsection (a) of this Code section has not been paid on or before January 15, the Commissioner shall refuse to accept the deposits required by law and shall not certify their acceptance until the fee is fully paid. The Commissioner shall suspend or revoke the license of the delinquent company or individual until the fee is fully paid. (Ga. L. 1909, p. 145, § 2; Ga. L. 1927, p. 131, § 2; Code 1933, § 40-1202; Code 1981, § 33-2-32 , enacted by Ga. L. 1984, p. 22, § 33; Ga. L. 1992, p. 2725, § 7.)

Editor's notes. - The provisions of this Code section were previously enacted in substantially similar form by the Acts and codes listed in the historical citation. However, those provisions were not originally enacted as part of the O.C.G.A. by the Code enactment Act (Ga. L. 1981, Ex. Sess., p. 8).

33-2-33. List of written requests for assistance by citizens against insurers.

Reserved. Repealed by Ga. L. 2019, p. 337, § 1-14/SB 132, effective July 1, 2019.

Editor's notes. - This Code section was repealed prior to becoming effective and was based on Ga. L. 1989, p. 633, § 1.

33-2-34. Insurance compliance self-evaluative privilege.

  1. To encourage insurance companies and persons conducting activities regulated under this title, both to conduct voluntary internal audits of their compliance programs and management systems and to assess and improve compliance with state and federal statutes, rules, and orders, an insurance compliance self-evaluative privilege is recognized to protect the confidentiality of communications relating to voluntary internal compliance audits. The General Assembly hereby finds and declares that protection of insurance consumers is enhanced by companies' voluntary compliance with this state's insurance and other laws and that the public will benefit from incentives to identify and remedy insurance and other compliance issues. It is further declared that limited expansion of the protection against disclosure will encourage voluntary compliance and improve insurance market conduct quality and that the voluntary provisions of this Code section will not inhibit the exercise of the regulatory authority by those entrusted with protecting insurance consumers.
  2. As used in this Code section, the term:
    1. "Insurance compliance audit" means a voluntary, internal evaluation, review, assessment, or audit not otherwise expressly required by law of an insurer or an activity regulated under this title, or other state or federal law applicable to an insurer, or of management systems related to the insurer or activity, that is designed to identify and prevent noncompliance and to improve compliance with those statutes, rules, or orders. An insurance compliance audit may be conducted by the insurer, its employees, or independent contractors.
    2. "Insurance compliance self-evaluative audit document" means any document prepared as a result of or in connection with and not prior to an insurance compliance audit. An insurance compliance self-evaluative audit document may include a written response to the findings of an insurance compliance audit. An insurance compliance self-evaluative audit document may include, but is not limited to, as applicable, field notes and records of observations, findings, opinions, suggestions, conclusions, drafts, memoranda, drawings, photographs, computer generated or electronically recorded information, phone records, maps, charts, graphs, and surveys, provided that this supporting information is collected or developed for the primary purpose and in the course of an insurance compliance audit. An insurance compliance self-evaluative audit document may also include any of the following:
      1. An insurance compliance audit report prepared by an auditor, who may be an employee of the insurer or an independent contractor, which may include the scope of the audit, the information gained in the audit, and conclusions and recommendations, with exhibits and appendices;
      2. Memoranda and documents analyzing portions or all of the insurance compliance audit report and discussing potential implementation issues;
      3. An implementation plan that addresses correcting past noncompliance, improving current compliance, and preventing future noncompliance; or
      4. Analytic data generated in the course of conducting the insurance compliance audit.
    1. An insurance compliance self-evaluative audit document is privileged information and is not admissible as evidence in any legal action in any civil, criminal, or administrative proceeding, except as provided in subsections (d) and (e) of this Code section. Documents, communications, data, reports, or other information created as a result of a claim involving personal injury or workers' compensation made against an insurance policy are not insurance compliance self-evaluative audit documents and are admissible as evidence in civil proceedings as otherwise provided by applicable rules of evidence or civil procedure, subject to any applicable statutory or common law privilege, including, but not limited to, the work product doctrine, the attorney-client privilege, or the subsequent remedial measures exclusion.
    2. If any insurer, person, or entity performs or directs the performance of an insurance compliance audit, an officer or employee involved with the insurance compliance audit, or any consultant who is hired for the purpose of performing the insurance compliance audit, shall not be examined in any civil, criminal, or administrative proceeding as to the insurance compliance audit or any insurance compliance self-evaluative audit document, as defined in this Code section. This paragraph shall not apply if the privilege set forth in paragraph (1) of this subsection is determined under subsection (d) or (e) of this Code section not to apply.
    3. An insurer may voluntarily submit, in connection with examinations conducted under this Code section, an insurance compliance self-evaluative audit document to the Commissioner, or his or her designee, as a confidential document under subsection (g) of Code Section 33-2-14 without waiving the privilege set forth in this Code section to which the insurer would otherwise be entitled. However, the provision permitting the Commissioner to provide access to the National Association of Insurance Commissioners shall not apply to the insurance compliance self-evaluative audit document so voluntarily submitted. Nothing contained in this subsection shall give the Commissioner any authority to compel an insurer to disclose involuntarily or otherwise provide an insurance compliance self-evaluative audit document.
    1. The privilege set forth in subsection (c) of this Code section shall not apply to the extent that it is expressly waived by the insurer that prepared or caused to be prepared the insurance compliance self-evaluative audit document.
    2. In a civil or administrative proceeding, a court of record may, after an in camera review, require disclosure of material for which the privilege set forth in subsection (c) of this Code section is asserted, if the court determines that:
      1. The privilege is asserted for a fraudulent purpose;
      2. The material is not subject to the privilege; or
      3. Even if subject to the privilege, the material shows evidence of noncompliance with state or federal statutes, rules, and orders and the insurer failed to undertake reasonable corrective action or eliminate the noncompliance within a reasonable time.
    3. In a criminal proceeding, a court of record may, after an in camera review, require disclosure of material for which the privilege described in subsection (c) of this Code section is asserted, if the court determines that:
      1. The privilege is asserted for a fraudulent purpose;
      2. The material is not subject to the privilege;
      3. Even if subject to the privilege, the material shows evidence of noncompliance with state or federal statutes, rules, and orders and the insurer failed to undertake reasonable corrective action or eliminate such noncompliance within a reasonable time; or
      4. The material contains evidence relevant to the commission of a criminal offense under this title and:
        1. The Commissioner has a compelling need for the information;
        2. The information is not otherwise available; and
        3. The Commissioner is unable to obtain the substantial equivalent of the information by any means without incurring unreasonable cost and delay.
    1. Within 30 days after the Commissioner makes a written request by certified mail for disclosure of an insurance compliance self-evaluative audit document under this subsection, the insurer that prepared or caused the document to be prepared may file with the appropriate court a petition requesting an in camera hearing on whether the insurance compliance self-evaluative audit document or portions of the document are privileged under this Code section or subject to disclosure. The court has jurisdiction over a petition filed by an insurer under this subsection requesting an in camera hearing on whether the insurance compliance self-evaluative audit document or portions of the document are privileged or subject to disclosure. Failure by the insurer to file a petition waives the privilege.
    2. An insurer asserting the insurance compliance self-evaluative privilege in response to a request for disclosure under this subsection shall include in its petition for an in camera hearing all of the information set forth in paragraph (5) of this subsection.
    3. Upon the filing of a petition under this subsection, the court shall issue an order scheduling, within 45 days after the filing of the petition, an in camera hearing to determine whether the insurance compliance self-evaluative audit document or portions of the document are privileged under this Code section or subject to disclosure.
    4. The court, after an in camera review, may require disclosure of material for which the privilege in subsection (c) of this Code section is asserted if the court determines, based upon its in camera review, that any one of the conditions set forth in paragraph (2) of subsection (d) of this Code section is applicable as to a civil or administrative proceeding or that any one of the conditions set forth in paragraph (3) of subsection (d) of this Code section is applicable as to a criminal proceeding. Upon making such a determination, the court may only compel the disclosure of those portions of an insurance compliance self-evaluative audit document relevant to issues in dispute in the underlying proceeding. Any compelled disclosure will not be considered to be a public document or be deemed to be a waiver of the privilege for any other civil, criminal, or administrative proceeding. A party unsuccessfully opposing disclosure may apply to the court for an appropriate order protecting the document from further disclosure.
    5. An insurer asserting the insurance compliance self-evaluative privilege in response to a request for disclosure under this subsection shall provide to the Commissioner at the time of filing any objection to the disclosure:
      1. The date of the insurance compliance self-evaluative audit document;
      2. The identity of the entity conducting the audit;
      3. The general nature of the activities covered by the insurance compliance audit; and
      4. An identification of the portions of the insurance compliance self-evaluative audit document for which the privilege is being asserted.
    1. An insurer asserting the insurance compliance self-evaluative privilege set forth in subsection (c) of this Code section has the burden of demonstrating the applicability of the privilege. Once an insurer has established the applicability of the privilege, a party seeking disclosure under paragraph (2) or (3) of subsection (d) of this Code section has the burden of proving that the privilege is asserted for a fraudulent purpose or that the insurer failed to undertake reasonable corrective action or eliminate the noncompliance within a reasonable time. The Commissioner, in seeking disclosure under paragraph (3) of subsection (d) of this Code section, has the burden of proving the elements set forth in paragraph (3) of subsection (d) of this Code section.
    2. The parties may at any time stipulate in proceedings under subsection (d) or (e) of this Code section to entry of an order directing that specific information contained in an insurance compliance self-evaluative audit document is or is not subject to the privilege provided under subsection (c) of this Code section.
  7. The privilege set forth in subsection (c) of this Code section shall not extend to:
    1. Documents, communications, data, reports, or other information required to be collected, developed, maintained, reported, or otherwise made available to a regulatory agency pursuant to this title or other federal or state law, rule, or order;
    2. Information obtained by observation or monitoring by any regulatory agency; or
    3. Information obtained from a source independent of the insurance compliance audit.
  8. Nothing in this Code section shall limit, waive, or abrogate the scope or nature of any statutory or common law privilege, including, but not limited to, the work product doctrine, the attorney-client privilege, or the subsequent remedial measures exclusion. (Code 1981, § 33-2-34 , enacted by Ga. L. 2015, p. 839, § 1/HB 162; Ga. L. 2016, p. 864, § 33/HB 737; Ga. L. 2018, p. 1084, § 1/HB 592.)

The 2018 amendment, effective July 1, 2018, deleted former subsection (i), which read: "This Code section shall apply to self-evaluative audits completed before June 30, 2018, but shall not apply to any such audits completed on or after July 1, 2018, unless authorized by the General Assembly prior to that date."

CHAPTER 3 AUTHORIZATION AND GENERAL REQUIREMENTS FOR TRANSACTION OF INSURANCE

Sec.

Administrative Rules and Regulations. - Administrative supervision, Official Compilation of the Rules and Regulations of the State of Georgia, Rules of Comptroller General, Commissioner of Insurance, Chapter 120-2-55.

Business requirements, Official Compilation of the Rules and Regulations of the State of Georgia, Rules of Comptroller General, Commissioner of Insurance, Chapter 120-2-18.

JUDICIAL DECISIONS

Editor's notes. - In light of the similarity of the statutory provisions, annotations decided under former Civil Code 1910, §§ 2414, 2415, and 2553; Ga. L. 1912, p. 119, § 4, former Code 1933, § 56-901; and Ga. L. 1935, p. 139 are included in the annotations for this Code section. Thompson v. New York Life Ins. Co., 644 F.2d 439 (5th Cir. 1981).

Court restricted to determining whether challenged activity exempt from antitrust liability. - Whether restrictive covenants in an insurance agency contract precluding agent from engaging in any other business or occupation for remuneration or profit without written consent of insurance company is a good policy is not a decision for the United States Court of Appeals for the fifth circuit to make; rather, the United States Court of Appeals is merely required to determine if the challenged activity is the business of insurance and, thus, exempt from antitrust liability, because Congress has determined that the states are the proper regulators of such business activity. Thompson v. New York Life Ins. Co., 644 F.2d 439 (5th Cir. 1981).

33-3-1. Definitions.

As used in this chapter, the term:

  1. "Administrative supervision" means the continued operation of the company under supervision of the Commissioner in accordance with regulations promulgated by the Commissioner.
  2. "Alien" insurer means an insurer formed under the laws of a country other than the United States.
  3. "Charter" means articles of incorporation, articles of agreement, articles of association, or other basic constituent document of a corporation; subscribers' agreement and power of attorney of a reciprocal insurer; or underwriters' agreement and power of attorney of a Lloyd's insurer.
  4. "Domestic" insurer means an insurer formed under the laws of Georgia.
  5. "Foreign" insurer means an insurer formed under the laws of another state or government of the United States.
  6. "State" means any state, commonwealth, territory, or district of the United States.
  7. "United States" includes the states, territories, districts, and commonwealths of the United States.

    (Code 1933, § 56-301, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1992, p. 2877, § 4.)

Law reviews. - For article discussing restrictions on the establishment and transaction of business by a foreign insurer in Georgia with emphasis on threshold requirements for establishment by alien insurers, see 27 Mercer L. Rev. 629 (1976).

JUDICIAL DECISIONS

Cited in Aetna Cas. & Sur. Co. v. Sampley, 108 Ga. App. 617 , 134 S.E.2d 71 (1963).

33-3-2. Certificate of authority required for transaction of insurance within state; exceptions.

  1. No person shall act as an insurer and no insurer shall transact insurance in Georgia except as authorized by a subsisting certificate of authority granted to it by the Commissioner, except as to any transactions as are expressly otherwise provided for in this title.
  2. The mere investigation and adjustment of any claim in this state arising under an insurance contract and litigation in connection therewith shall not be deemed to constitute the transacting of insurance in this state.
  3. An insurer not transacting new insurance business in Georgia but continuing collection of premiums on and servicing of policies remaining in force as to residents of or risks located in Georgia is transacting insurance in Georgia for the purpose of premium tax requirements only and is not required to have a certificate of authority therefor.
  4. As to an insurance coverage on a subject of insurance not resident, located, or expressly to be performed in Georgia at time of issuance and solicited, written, and delivered outside Georgia, no certificate of authority shall be required of an insurer as to subsequent transactions in Georgia on account of such insurance; and this title shall not apply to such insurance or insurance coverage, except for the purpose of premium tax requirements.

    (Code 1933, § 56-302, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1982, p. 3, § 33.)

Cross references. - Persons deemed subject to laws regulating life insurance companies, § 33-7-10 .

JUDICIAL DECISIONS

Editor's notes. - In light of the similarity of the statutory provisions, annotations decided under former Civil Code 1910, §§ 2414, 2415, and 2553; Ga. L. 1912, p. 119, § 4, former Code 1933, § 56-901; and Ga. L. 1935, p. 139 are included in the annotations for this Code section.

State may not restrict citizen from contracting for insurance outside state. - There is a vital distinction between acts done within and acts done without the jurisdiction of the state; and since under the fourteenth amendment to the United States Constitution a citizen of a state has a right to contract outside of the state for insurance on his property, the power of the state does not extend to such extra-territorial transactions, and a statute imposing restrictions thereon is in violation of the due process provision of that amendment. Cooper Co. v. State, 187 Ga. 497 , 1 S.E.2d 436 (1939) (decided under Ga. L. 1935, p. 139).

State may constitutionally impose conditions on intrastate business. - As a necessary consequence of a state's possession of powers, the state has the right to enforce any conditions imposed by the laws as preliminary to the transaction of business within its confines by a foreign corporation, and the state has also the further right to prohibit a citizen from contracting within its jurisdiction with any foreign company which has not acquired the privilege of engaging in business therein, either in his own behalf or through an agent empowered to that end. Such an intrastate transaction does not fall within the guaranty of the Fourteenth Amendment of the federal Constitution. Cooper Co. v. State, 187 Ga. 497 , 1 S.E.2d 436 (1939) (decided under Ga. L. 1935, p. 139).

Preservation of right to raise untimely notice of objection. - Surplus insurers were authorized to file a declaratory judgment action to preserve their right to raise untimely notice of an occurrence as a defense to coverage even without a certificate of authority to conduct business in the State of Georgia. Kay-Lex Co. v. Essex Ins. Co., 286 Ga. App. 484 , 649 S.E.2d 602 (2007).

Nonresident fidelity companies must comply with limitations on domestic companies. - It is presumed that in providing for the licensing of nonresident companies it was the intention of the lawmakers to permit such companies to conduct a fidelity business only in the manner recognized by the Georgia laws and upon the terms and conditions prescribed for the conduct of such business by domestic companies. Nowell v. Mayor of Monroe, 177 Ga. 648 , 171 S.E. 136 , answer conformed to, 47 Ga. App. 665 , 171 S.E. 143 (1933) (decided under former Civil Code 1910, §§ 2414, 2415).

Insurance on local property by unlicensed insurer unenforceable. - No contract of insurance on property located in this state is enforceable in this state unless the insurer, when the policy was written, was duly licensed to do business in this state. Jalonick v. Greene County Oil Co., 7 Ga. App. 309 , 66 S.E. 815 (1910) (decided under former Civil Code 1910, § 2414).

Regulatory provisions held applicable to companies issuing funeral-service contracts. - Where it was shown that in consideration of the initial and installment payments provided by each contract the defendants had agreed that so long as the contract remained of force they would render to the person to whom the contract was issued all of the services customarily rendered by undertakers or funeral directors, including hearse service, all necessary embalming, directing, and conducting of funerals, etc., within a radius of 25 road miles, and to sell at wholesale cost price (plus transportation charges only) caskets, burial clothes, etc., to any contract holder for use in the funeral of any member of his or her family or dependents, the evidence authorized the grant of an interlocutory injunction on the ground that the contracts issued by the company constituted policies of life insurance, and that the company, in the issuance of such contracts, was doing a life insurance business contrary to law. Clark v. Harrison, 182 Ga. 56 , 184 S.E. 620 (1936) (decided under former Code 1933, § 56-901, repealed by Ga. L. 1960, p. 289); South Ga. Funeral Homes v. Harrison, 182 Ga. 60 , 184 S.E. 875 , later appeal, 183 Ga. 379 , 188 S.E. 529 (1936) (decided under former Code 1933, § 56-901, repealed by Ga. L. 1960, p. 289).

When undertaking business was executing contracts and issuing certificates to furnish funeral merchandise and funeral services upon death and purchasers were obligated to make installment payments, it was, for a consideration, assuming an obligation to be performed upon the death of the purchaser, namely, to furnish the goods and render the stipulated service, and the business was to be characterized as a life insurance business within the meaning of Ga. L. 1937, p. 702 (now repealed), and was subject to the legal regulatory provisions relating to life insurance generally. Harrison v. Tanner-Poindexter Co., 187 Ga. 678 , 1 S.E.2d 646 (1939) (decided under former Code 1933, § 56-901, repealed by Ga. L. 1960, p. 289).

Regulatory provisions inapplicable to contracts insuring against breakage of automobile gears using insurer's lubricant. - This section, requiring insurance companies to procure licenses, was not rendered applicable to the plaintiff by its contract insuring the defendants against breakage of gears of automobiles on which lubricant bought from it was used. Evans & Tate v. Premier Ref. Co., 31 Ga. App. 303 , 120 S.E. 553 (1923) (decided under former Ga. L. 1912, p. 119, § 4).

Illegal marketing of self-insurance plan. - Self-insured taxicab association's provision of insurance coverage to third parties involving the conveyance by taxicab owners of the title in their vehicles jointly to the association constituted the illegal sale or transaction of insurance without a license. Olukoya v. American Ass'n of Cab Cos., 219 Ga. App. 508 , 465 S.E.2d 715 (1995).

Unauthorized insurer doing business in state is subject to suit therein. - A life insurance company not authorized to transact business in Georgia because of failure to obtain a certificate of authority from the Insurance Commissioner is nevertheless doing business, although illegally, in the state by accepting an application for insurance from a resident of the state, delivering the application to the resident by mail, and by mailing premium notices to or accepting premiums from the resident during the life of the policy, so as to render it subject to suit and judgment in this state. Iowa State Travelers Mut. Ass'n v. Cadwell, 113 Ga. App. 128 , 147 S.E.2d 461 (1966).

Venue of foreign insurer lies where it has agent or place of doing business. - A foreign fidelity insurance company may be sued in any county in this state in which it has an agent or place of doing business; and the principal in a guardian's bond for which the company is surety, although living in another county, may be sued jointly with the surety in any county in which jurisdiction over the surety may be obtained. Gross v. Butler, 48 Ga. App. 750 , 173 S.E. 866 (1934) (decided under former Civil Code 1910, § 2553).

Using mails to collect premiums constitutes subsequent transactions. - Mere use of the mails to collect premiums from the insured was a "subsequent transaction" within the meaning of O.C.G.A. § 33-3-2 . Bishopsgate Ins. Co. v. Cactus Club, Inc., 176 Ga. App. 354 , 335 S.E.2d 685 (1985).

Cited in Chatham County Hosp. Auth. v. John Hancock Mut. Life Ins. Co., 325 F. Supp. 614 (S.D. Ga. 1971); Sollek v. Laseter, 126 Ga. App. 137 , 190 S.E.2d 148 (1972); Sloan v. Continental Cas. Co., 131 Ga. App. 377 , 205 S.E.2d 925 (1974); Ferguson v. United Ins. Co. of Am., 163 Ga. App. 282 , 293 S.E.2d 736 (1982).

OPINIONS OF THE ATTORNEY GENERAL

National bank issuing debt cancellation contract must comply with title. - A national bank operating in Georgia may not enter into a debt cancellation contract providing that the debt will be automatically canceled in the event of the borrower's death without complying with this title. 1963-65 Op. Att'y Gen. p. 457.

Credit unions may not issue insurance contracts. - If a credit union is issuing insurance contracts, then there can be little question but that such activity is unauthorized; such contracts generally may be issued only by licensed insurers under the provisions of this title. 1967 Op. Att'y Gen. No. 67-170 (credit union may not guarantee or insure loans and deposits).

License necessary for group variable annuity contracts. - Group variable annuity contracts must be issued by a life insurance company licensed to do business in this state. 1970 Op. Att'y Gen. No. 70-22.

Insurance license necessary for church property. - An insurance company writing insurance policies only for the church property of a certain denomination may not enter into these insurance contracts within this state without having first obtained a certificate of authority to transact insurance. 1971 Op. Att'y Gen. No. 71-142.

An insurance company that has not met the requirements imposed upon risk retention groups by the state in which it is chartered as an insurance company may not underwrite homeowners' warranties in Georgia without a certificate of authority authorizing the transaction of insurance in Georgia. 1982 Op. Att'y Gen. No. 82-104.

RESEARCH REFERENCES

ALR. - Full faith and credit provision as affecting contracts, 41 A.L.R. 1386 ; 114 A.L.R. 250 ; 119 A.L.R. 483 ; 173 A.L.R. 1138 .

What constitutes insurance, 63 A.L.R. 711 ; 100 A.L.R. 1449 ; 119 A.L.R. 1241 .

What constitutes doing business within state by foreign insurance corporation, 137 A.L.R. 1128 .

Collateral business activities incident to, or in aid of, interstate transportation as related to interstate commerce, 152 A.L.R. 1078 .

Decision of United States Supreme Court that insurance is interstate commerce as affecting state statutes relating to foreign insurance companies, 164 A.L.R. 500 .

Right to enjoin business competitor from unlicensed or otherwise illegal acts or practices, 90 A.L.R.2d 7.

Right of insurance agent to sue in his own name for unpaid premium, 90 A.L.R.2d 1291.

33-3-3. Qualifications for transaction of insurance generally; transaction of insurance by insurers owned by states, foreign governments.

  1. To qualify for and hold authority to transact insurance in Georgia an insurer must be otherwise in compliance with the provisions of this title and with its charter powers and must be an incorporated stock insurer, an incorporated mutual insurer, a fraternal benefit society, a farmers' mutual fire insurance company, a Lloyd's association, or a reciprocal insurer of the same general type as may be formed as a domestic insurer under this title, except that no foreign or alien insurer shall be authorized to transact insurance in Georgia which does not maintain reserves as required by Chapter 10 of this title applicable to the kind or kinds of insurance transacted in the United States by such insurer.
  2. No certificate of authority or license to transact any kind of insurance business in this state shall be issued, renewed, or continued in effect to any domestic, foreign, or alien insurance company or other insurance entity which is owned or financially controlled in whole or in substantial part by any state of the United States, by a foreign government, or by any political subdivision, instrumentality, or agency of either or which is an agency of such state or foreign government or any political subdivision, instrumentality, or agency of either unless such company or entity was so owned, controlled, or constituted prior to January 1, 1957, and was authorized to do business in this state on or prior to said date.
  3. Membership in a mutual insurer, subscribership in a reciprocal insurer, or supervision of an insurer by a public insurance supervisory authority shall not be deemed to be an ownership, control, or operation of the insurer for the purposes of subsection (b) of this Code section.

    (Code 1933, § 56-303, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1982, p. 3, § 33; Ga. L. 2017, p. 164, § 5/HB 127.)

Law reviews. - For article discussing restrictions on the establishment and transaction of business by a foreign insurer in Georgia with emphasis on threshold requirements for establishment by alien insurers, see 27 Mercer L. Rev. 629 (1976).

OPINIONS OF THE ATTORNEY GENERAL

Annual report required of all domestic and foreign corporations. - Each corporation, domestic and foreign, authorized to transact business in this state is required to file an annual report with the Secretary of State's office, regardless of where its authority to transact business may have originated. 1977 Op. Att'y Gen. No. 77-62 (rendered prior to 1989 revision of Chapter 2 of Title 14).

RESEARCH REFERENCES

ALR. - Power of mutual benefit society to waive restrictions upon eligibility to membership, 28 A.L.R. 93 .

33-3-4. Kinds of insurance in which insurers may transact.

An insurer which otherwise qualifies to transact insurance in Georgia may be authorized to transact any one kind or combination of kinds of insurance as defined in Chapter 7 of this title except:

  1. A reciprocal insurer shall not transact life insurance;
  2. A Lloyd's insurer shall not transact life insurance; and
  3. A title insurer shall be a stock insurer and shall be authorized to transact only title insurance and closing protection letters, pursuant to Code Section 33-7-8.1.

    (Code 1933, § 56-304, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1982, p. 3, § 33; Ga. L. 2012, p. 1077, § 1/SB 331; Ga. L. 2019, p. 337, § 1-15/SB 132.)

The 2019 amendment, effective July 1, 2019, deleted ", except that, if immediately prior to January 1, 1961, any title insurer lawfully held a subsisting certificate of authority granting it the right to transact in Georgia additional classes of insurance other than title insurance, so long as the insurer is otherwise in compliance with this title, the Commissioner shall continue to authorize such insurer to transact the same classes of insurance as those specified in such prior certificate of authority" following "Code Section 33-7-8.1" at the end of paragraph (3).

JUDICIAL DECISIONS

Cited in United States Life Title Ins. Co. v. Hutsell, 164 Ga. App. 443 , 296 S.E.2d 760 (1982).

OPINIONS OF THE ATTORNEY GENERAL

Paragraph (3) refers only to insurers licensed to transact title insurance in state. - The language used in this section with reference to title insurers was intended to mean only those insurers which had complied with the applicable provisions of the insurance laws, including the procuring of a license to transact title insurance in this state. 1963-65 Op. Att'y Gen. p. 334.

Foreign title insurer may be licensed to transact other classes. - An insurer which has charter power to write title insurance, along with one or more other classes of insurance, may be licensed in Georgia to write such other class or classes of insurance so long as it is not licensed to write title insurance in Georgia. 1963-65 Op. Att'y Gen. p. 334.

Company does not lose right if authorized to write title insurance elsewhere. - A company licensed in Georgia to write fire insurance or some other class of insurance would not lose that right upon being authorized by the state of its domicile to write title insurance. 1963-65 Op. Att'y Gen. p. 334.

Mobile homes as real property. - Mobile homes deemed by parties to sales transaction to be a part of real property upon which they are located may be the subjects of title insurance. 1982 Op. Att'y Gen. No. 82-52.

RESEARCH REFERENCES

ALR. - Power of mutual benefit society to waive restrictions upon eligibility to membership, 28 A.L.R. 93 .

33-3-5. Classification of kinds of insurance.

For the purpose of this chapter, the kinds of insurance defined in Chapter 7 of this title shall be arranged in the following six classes:

  1. Life, accident, and sickness;
  2. Property, marine, and transportation;
  3. Casualty;
  4. Surety;
  5. Title; and
  6. Health maintenance organization.

    Each of the groups numbered (1) through (6) shall constitute a class of insurance.

    (Code 1933, § 56-305, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1990, p. 1275, § 1; Ga. L. 2019, p. 337, § 1-16/SB 132.)

The 2019 amendment, effective July 1, 2019, substituted "Health maintenance organization" for "Health Maintenance Organization" in paragraph (6).

Editor's notes. - Ga. L. 1990, p. 1275, § 7, not codified by the General Assembly, provides that the 1990 amendment is "effective for purposes of application to new or newly admitted insurers on January 1, 1991, and effective for all purposes on July 1, 1992."

Law reviews. - For article discussing restrictions on the establishment and transaction of business by a foreign insurer in Georgia with emphasis on threshold requirements for establishment by alien insurers, see 27 Mercer L. Rev. 629 (1976).

JUDICIAL DECISIONS

Class (1) includes credit life insurance. - Credit life insurance, being a form of life insurance, is a part of that "class" of insurance as defined in this section, whether it is level or reducing term. Cullers v. Home Credit Co., 130 Ga. App. 441 , 203 S.E.2d 544 (1973).

Cited in United States Life Title Ins. Co. v. Hutsell, 164 Ga. App. 443 , 296 S.E.2d 760 (1982).

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, § 34.

C.J.S. - 44 C.J.S., Insurance, §§ 3, 4, 6, 9, 18, 20 et seq.

ALR. - Power of mutual benefit society to waive restrictions upon eligibility to membership, 28 A.L.R. 93 .

33-3-6. Requirements as to capital stock or surplus generally.

  1. On or after July 1, 2000, to qualify for an original certificate of authority to transact one or more classes of insurance, an insurer shall possess and thereafter maintain a minimum of $1.5 million in capital stock or in surplus.
  2. As to surplus required for initial qualification to transact one kind of insurance and thereafter to be maintained, domestic mutual insurers shall be governed by Chapter 14 of this title and domestic reciprocal insurers shall be governed by Chapter 17 of this title. Farmers' mutual fire insurance companies shall be governed by Chapter 16 of this title.

    (Code 1933, § 56-306, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1984, p. 1080, § 1; Ga. L. 1985, p. 149, § 33; Ga. L. 1990, p. 1275, § 2; Ga. L. 1992, p. 1539, § 1; Ga. L. 1995, p. 637, § 1; Ga. L. 2000, p. 1246, § 2; Ga. L. 2017, p. 164, § 6/HB 127.)

Code Commission notes. - Pursuant to Code Section 28-9-5, in 1988, a comma was inserted following "Chapters 19 and 18 of this title" near the end of the second sentence of subsection (b).

Pursuant to Code Section 28-9-5, in 1990, a comma was inserted following "insurance" in paragraph (1) of subsection (a).

Editor's notes. - Ga. L. 1990, p. 1275, § 7, not codified by the General Assembly, provides that the 1990 amendment is "effective for purposes of application to new or newly admitted insurers on January 1, 1991, and effective for all purposes on July 1, 1992."

Law reviews. - For article discussing restrictions on the establishment and transaction of business by a foreign insurer in Georgia with emphasis on threshold requirements for establishment by alien insurers, see 27 Mercer L. Rev. 629 (1976).

JUDICIAL DECISIONS

Capital requirement may not be lowered by special act. - An amendment to the charter of a corporation by the Legislature, reducing its capital below the amount required by a general law like this section before transacting business, is invalid. Georgia Empire Mut. Ins. Co. v. Wright, 118 Ga. 796 , 45 S.E. 606 (1903) (decided under former Civil Code 1895, § 2034).

A general law like this section being of force, it was not competent for the General Assembly to pass an amendment to the charter of an insurance company authorizing it to transact business without having the required amount of capital stock or assets. Such an amendment was a special law within the meaning of the Constitution in a case already provided for by a general law. Georgia Empire Mut. Ins. Co. v. Wright, 118 Ga. 796 , 45 S.E. 606 (1903) (decided under former Civil Code 1895, § 2034).

The selling of stock is not transacting or doing insurance business in the sense of this section. Piedmont Life Ins. Co. v. Bell, 109 Ga. App. 251 , 135 S.E.2d 916 (1964).

Regulatory provisions held applicable to funeral service contracts. - Where undertaking business was executing contracts and issuing certificates to furnish funeral merchandise and funeral services upon death and purchasers were obligated to make installment payments, it was, for a consideration, assuming an obligation to be performed upon the death of the purchaser, namely, to furnish the goods and render the stipulated service, and the business was to be characterized as a life insurance business within the meaning of Ga. L. 1937, p. 702 (now repealed), and was subject to the legal regulatory provisions relating to life insurance generally. Harrison v. Tanner-Poindexter Co., 187 Ga. 678 , 1 S.E.2d 646 (1939) (decided under former Code 1933, § 56-209, repealed by Ga. L. 1960, p. 289).

Cited in Retail Union Health & Welfare Fund v. Seabrum, 242 S.E.2d 18 (1978).

OPINIONS OF THE ATTORNEY GENERAL

Charter application need not set minimum capital for commencing business. - Since this section provides the minimum amount of capital with which the insurer may obtain a license and commence business, it would not be necessary to provide for a minimum in the application for a charter; it would only be necessary to set the authorized capital in accordance with the provisions of this Code section and former Code 1933, § 56-307 (see O.C.G.A. § 33-3-7 ). 1963-65 Op. Att'y Gen. p. 451.

If section met, all stock need not be subscribed. - An insurance corporation may perfect its organization and lawfully obtain a license and commence the insurance business provided it meets the capital paid-in and expendable surplus requirements of former Code 1933, §§ 56-306 and 56-307 (see O.C.G.A. §§ 33-3-6 and 33-3-7 ); it would not be necessary to have the entire authorized capital stock subscribed even though the charter states no minimum with which the corporation shall begin business, since the provisions of this chapter set the minimum. 1963-65 Op. Att'y Gen. p. 451.

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, § 36.

C.J.S. - 44 C.J.S., Insurance, § 157.

33-3-7. Requirement of surplus for new insurers.

In addition to the minimum paid-in capital or minimum surplus of insurers required by this title, an insurer shall possess when first authorized in this state and thereafter maintain surplus or additional surplus equal to the larger of $1.5 million if a stock, mutual, or reciprocal insurer or 50 percent of its paid-in capital stock if a stock insurer or of its surplus if a mutual or reciprocal insurer otherwise required under Code Section 33-3-6 for the kinds of insurance to be transacted.

(Code 1933, § 56-307, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1982, p. 3, § 33; Ga. L. 1984, p. 1080, § 2; Ga. L. 1990, p. 1275, § 3; Ga. L. 1992, p. 1539, § 2; Ga. L. 1995, p. 637, § 2.)

Editor's notes. - Ga. L. 1990, p. 1275, § 7, not codified by the General Assembly, provides that the 1990 amendment is "effective for purposes of application to new or newly admitted insurers on January 1, 1991, and effective for all purposes on July 1, 1992."

JUDICIAL DECISIONS

Insurance law not applicable to suretyship contract. - Insurance law was not applicable in a case involving liability under a suretyship contract. American Mfg. Mut. Ins. Co. v. Tison Hog Mkt., Inc., 182 F.3d 1284 (11th Cir. 1999), cert. denied, 531 U.S. 819, 121 S. Ct. 59 , 148 L. Ed. 2 d 26 (2000).

Cited in Piedmont Life Ins. Co. v. Bell, 109 Ga. App. 251 , 135 S.E.2d 916 (1964).

OPINIONS OF THE ATTORNEY GENERAL

Section governs in case of conflict with the more general mandatory refusal, revocation, or suspension provision. - As a matter of statutory construction, the more specific statute, i.e., this section, governs in case of a seeming conflict with a more general one such as paragraph (2) of former Code 1933, § 56-316 (see O.C.G.A. § 33-3-19 ). 1963-65 Op. Att'y Gen. p. 216.

Surplus is initial, but not continuing, requirement. - The surplus is required in order to ensure that newly formed insurance companies will be financially able to survive their first years of operation; therefore, it is an initial requirement but not a continuing one. 1963-65 Op. Att'y Gen. p. 216.

It is not synonymous with "capital." - The words "deficiency in assets" in paragraph (2) of former Code 1933, § 56-316 (see O.C.G.A. § 33-3-19 ) are intended to apply primarily to such items as "impairment of capital" and "insufficiency of policy reserves"; if both capital and expendable surplus were required to be maintained at all times they would be synonymous; the separate provisions for "capital" and for "expendable surplus" make it evident that the two are not synonymous. 1963-65 Op. Att'y Gen. p. 216.

Charter application need not set minimum capital. - Since former Code 1933, § 56-306 (see O.C.G.A. § 33-3-6 ) provides the minimum amount of capital with which the insurer may obtain a license and commence business, it would not be necessary to provide for a minimum in the application for a charter; it would only be necessary to set the authorized capital in accordance with the provisions of § 56-306 and this section. 1963-65 Op. Att'y Gen. p. 451.

Corporation may commence business on complying with statutes. - An insurance corporation may perfect its organization and lawfully obtain a license and commence the insurance business provided it meets the capital paid-in and expendable surplus requirements of former Code 1933, § 56-306 (see O.C.G.A. § 33-3-6 ) and this section; it would not be necessary to have the entire authorized capital stock subscribed even though the charter states no minimum with which the corporation shall begin business, since this chapter sets the minimum. 1963-65 Op. Att'y Gen. p. 451.

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, § 37.

C.J.S. - 44 C.J.S., Insurance, § 157.

33-3-7.1. Compliance with minimum surplus requirements for mutual insurers.

Repealed by Ga. L. 2000, p. 1246, § 3, effective July 1, 2000.

Editor's notes. - This Code section was based on Code 1981, § 33-3-7.1 , enacted by Ga. L. 1994, p. 1931, § 1.

33-3-8. Requirements as to deposit of securities generally.

  1. The Commissioner shall not issue a certificate of authority to transact insurance to any insurer unless the insurer has deposited in trust with this state securities eligible for the investment of capital funds of domestic insurers under this title in an amount not less than that required in subsection (b) of this Code section. This Code section does not apply to farmers' mutual fire insurance companies.
    1. Except as otherwise provided in this subsection, the amount of the deposit required under this Code section for a certificate to transact any one class of insurance shall be $100,000.00; to transact each additional class of insurance, the amount of deposit shall be $25,000.00, subject to the limitation that not more than $200,000.00 total deposit shall be required for any combination of classes.
    2. As to any foreign insurer, in lieu of such deposit or part of such deposit in this state, the Commissioner shall accept the current certificate in proper form of the public official having supervision over insurers in any other state to the effect that a like deposit or part of like deposit by such insurer is being maintained in public custody in such state in trust for the purpose, among other reasonable purposes, of protection of policyholders and creditors or of the protection of all the insurer's policyholders or of all of its policyholders and obligees.
    3. As to any alien insurer, other than a title insurer, which has entered through and the United States branch of which is licensed to transact insurance in another state, in lieu of such deposit or part thereof in this state, the Commissioner shall accept the certificate of the official having supervision over insurance of such other state in the United States, given under his or her hand and seal, that the insurer maintains within the United States by way of deposits with public depositories, or in trust institutions within the United States approved by such official, assets available for discharge of its United States insurance obligations, which assets shall be in an amount not less than the outstanding liabilities of the insurer arising out of its insurance transactions in the United States together with the larger of the following sums: the largest deposit required by this title to be made in this state by any type of domestic insurer transacting like kinds of insurance or $300,000.00.
    4. As to any alien insurer entering through this state to transact insurance in the United States through a United States branch, such insurer shall deposit in accordance with Chapter 12 of this title assets available for discharge of its United States insurance obligations, which assets shall be in an amount not less than the outstanding liabilities of the insurer arising out of its insurance transactions in the United States together with the larger of the following sums: the largest deposit required by this title to be made in this state by any type of domestic insurer transacting like kinds of insurance or $300,000.00.

      (Code 1933, § 56-309, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1982, p. 3, § 33; Ga. L. 1999, p. 584, § 1.)

Cross references. - Administration of deposits, T. 33, C. 12.

Law reviews. - For article discussing restrictions on the establishment and transaction of business by a foreign insurer in Georgia with emphasis on threshold requirements for establishment by alien insurers, see 27 Mercer L. Rev. 629 (1976).

JUDICIAL DECISIONS

Editor's notes. - In light of the similarity of the statutory provisions, annotations decided under former Civil Code 1895, §§ 2035-2043 and former Code 1933, § 22-1210 and Ch. 56-3 are included in the annotations for this Code section.

Purpose of foreign insurer's deposit. - The bonds which a foreign insurance corporation doing business in this state is required to deposit are to prevent a suit against a dissolved corporation from being futile and unavailing. Manufacturing Lumberman's Underwriters v. South Ga. Ry., 57 Ga. App. 699 , 196 S.E. 244 (1938) (decided under former Code 1933, Ch. 56-3, repealed by Ga. L. 1960, p. 289).

The statute as to the depositing of bonds and retaining them so long as there is a pending claim in the state (see O.C.G.A. §§ 33-3-8 , 33-3-10 , 33-12-1 , and 33-12-8 ) and the statute providing for the prosecution of pending suits after the dissolution of a foreign corporation are a part of the general scheme of the Georgia law to protect Georgia citizens in the collection of just claims against foreign corporations which are dissolved and which have their principal assets in another state. Manufacturing Lumbermen's Underwriters v. South Ga. Ry., 57 Ga. App. 699 , 196 S.E. 244 (1938) (decided under former Code 1933, § 22-1210, repealed by Ga. L. 1968, p. 585, and former Code 1933, Ch. 56-3, repealed by Ga. L. 1960, p. 289).

Local action necessary for appropriation of deposit. - A suit brought in a local court is a condition precedent to the appropriation of the bonds deposited by a foreign insurance corporation to the payment of a fire loss. Manufacturing Lumbermen's Underwriters v. South Ga. Ry., 57 Ga. App. 699 , 196 S.E. 244 (1938) (decided under former Code 1933, Ch. 56-3, repealed by Ga. L. 1960, p. 289).

Death of a nonresident fire insurance company does not terminate a suit. Manufacturing Lumbermen's Underwriters v. South Ga. Ry., 57 Ga. App. 699 , 196 S.E. 244 (1938) (decided under former Code 1933, Ch. 56-3, repealed by Ga. L. 1960, p. 289).

Deposit remains subject to claims of Georgia citizens over foreign receivers. - Nonresident fire insurance companies doing business in this state are required to deposit certain bonds. These bonds are for the protection of the citizens of Georgia who have insurance with the nonresident company, and if the foreign company ceases to do business, the bonds remain on deposit until such company shall have settled all claims against it in this state and are subject to the claims of Georgia citizens under certain prescribed conditions. As long as there are any claimants to these bonds under the laws of Georgia, a receiver in another state would have no right to interfere with proceedings of the courts of Georgia instituted to assert the rights of a Georgia claimant in whose behalf the bonds were deposited. Manufacturing Lumbermen's Underwriters v. South Ga. Ry., 57 Ga. App. 699 , 196 S.E. 244 (1938) (decided under former Code 1933, Ch. 56-3, repealed by Ga. L. 1960, p. 289).

Deposit primarily secures losses. - The primary purpose of the deposit is to secure the payment of fire losses, which are the only losses insured against, although it also secures, secondarily, other claims arising on policies, such as the repayment, after the termination of the risk, of unearned premiums paid; even when a company becomes insolvent and the deposit is brought into a court of equity for distribution, fire losses are entitled to priority of payment from the fund over claims for unearned premiums. Kelsey v. Cogswell, 112 F. 599 (N.D. Ga. 1901) (decided under former Civil Code 1895, §§ 2035-2043).

OPINIONS OF THE ATTORNEY GENERAL

Deposit and surplus requirements for fire insurer to issue "homeowner" policies. - Before a company presently writing fire insurance can be authorized to issue "homeowner" policies, it would be required to meet the surplus requirements of former Code 1933, § 56-1510 (see O.C.G.A. § 33-14-61 ), as to mutual insurers, that is $200,000.00 for each class of insurance written, and the deposit requirements of this section, that is $100,000.00 for one class and $25,000.00 for each additional class of insurance written. 1960-61 Op. Att'y Gen. p. 274.

Eligibility of securities on deposit in 1960. - The "savings clause" of former Code 1933, § 56-1002(2), expended to any securities which a domestic insurer may have had on deposit with this state prior to the enactment of this title by Ga. L. 1960, p. 289, and such securities were "eligible for the investment of capital funds of domestic insurers" within the meaning of this section, although such securities did not meet specific qualitative restrictions elsewhere contained in this title. 1971 Op. Att'y Gen. No. 71-170.

Former Code 1933, § 56-1036 (see O.C.G.A. § 33-11-42 ) vests in the Insurance Commissioner the discretionary determination whether securities deposited in this state by foreign or alien insurers are "of a quality substantially as high" as those required of domestic insurers under this section, as construed in conjunction with former Code 1933, § 56-1002(2), and this is true even though such securities may not meet the specific qualitative restrictions contained in this title, provided such securities are authorized by the law of the insurer's domicile. 1971 Op. Att'y Gen. No. 71-170.

Priority of claims. - Claims under policies for losses incurred take priority over claims for the refund of unearned premiums against general or special deposits posted by insurance companies pursuant to O.C.G.A. §§ 33-3-8(b) and 33-3-9 . 1984 Op. Att'y Gen. No. 84-5.

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, §§ 33, 37.

C.J.S. - 44 C.J.S., Insurance, §§ 72, 169, 179.

33-3-9. Requirement of additional deposits of securities by foreign and alien insurers.

In those instances in which the Commissioner in his or her judgment shall deem it to be in the best interests of the citizens of this state, no certificate of authority shall be issued by the Commissioner to any foreign and alien insurer nor shall any certificate of authority be renewed for any such insurer unless such insurer shall deposit with the Commissioner securities eligible for the investment of capital funds in such amount as the Commissioner shall require. This deposit and the deposit required by paragraph (1) of subsection (b) of Code Section 33-3-8 shall be administered as provided for in Chapter 12 of this title. Deposits under this Code section shall be held for the protection of the insurer's policyholders in this state and others in this state entitled to the proceeds of its policies.

(Code 1933, § 56-310, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1967, p. 765, § 1; Ga. L. 1972, p. 1015, § 14; Ga. L. 2016, p. 519, § 1/HB 884; Ga. L. 2019, p. 337, § 1-17/SB 132.)

The 2019 amendment, effective July 1, 2019, substituted "In those instances" for "On and after July 1, 1967, in those instances" at the beginning of this Code section.

Cross references. - Administration of deposits, T. 33, C. 12.

Law reviews. - For article discussing restrictions on the establishment and transaction of business by a foreign insurer in Georgia with emphasis on threshold requirements for establishment by alien insurers, see 27 Mercer L. Rev. 629 (1976).

JUDICIAL DECISIONS

Editor's notes. - In light of the similarity of the statutory provisions, decisions under former Code 1933, Ch. 56-3 are included in the annotations for this Code section.

Purpose of deposit. - The bonds which a foreign insurance corporation doing business in this state is required to deposit are to prevent a suit against a dissolved corporation from being futile and unavailing. Manufacturing Lumbermen's Underwriters v. South Ga. Ry., 57 Ga. App. 699 , 196 S.E. 244 (1938) (decided under former Code 1933, Ch. 56-3).

The former statute as to the depositing of bonds and retaining them so long as there is a pending claim in the state and the former statute providing for the prosecution of pending suits after the dissolution of a foreign corporation are a part of the general scheme of the Georgia law to protect Georgia citizens in the collection of just claims against foreign corporations which are dissolved and which have their principal assets in another state. Manufacturing Lumbermen's Underwriters v. South Ga. Ry., 57 Ga. App. 699 , 196 S.E. 244 (1938) (decided under former Code 1933, Ch. 56-3).

Local action necessary for appropriation of deposit. - A suit brought in a local court is a condition precedent to the appropriation of the bonds deposited by a foreign insurance corporation held by the state treasurer to the payment of a fire loss. Manufacturing Lumbermen's Underwriters v. South Ga. Ry., 57 Ga. App. 699 , 196 S.E. 244 (1938) (decided under former Code 1933, Ch. 56-3).

The death of a nonresident fire insurance company does not terminate a suit. Manufacturing Lumbermen's Underwriters v. South Ga. Ry., 57 Ga. App. 699 , 196 S.E. 244 (1938) (decided under former Code 1933, Ch. 56-3).

Deposit remains subject to claims of Georgia citizens over foreign receivers. - Nonresident fire insurance companies doing business in this state are required to deposit certain bonds. These bonds are for the protection of the citizens of Georgia who have insurance with the nonresident company, and if the foreign company ceases to do business, the bonds remain on deposit until such company shall have settled all claims against it in this state, and are subject to the claims of Georgia citizens under certain prescribed conditions. As long as there are any claimants to these bonds under the laws of Georgia, a receiver in another state would have no right to interfere with proceedings of the courts of Georgia instituted to assert the rights of a Georgia claimant in whose behalf the bonds were deposited. Manufacturing Lumbermen's Underwriters v. South Ga. Ry., 57 Ga. App. 699 , 196 S.E. 244 (1938) (decided under former Code 1933, Ch. 56-3).

Cited in Preferred Ins. Co. v. Bentley, 223 Ga. 735 , 157 S.E.2d 737 (1967); Garamendi v. Ryles, 204 Ga. App. 747 , 420 S.E.2d 633 (1992).

OPINIONS OF THE ATTORNEY GENERAL

General scheme of Georgia law to protect Georgia citizens. - This section and the provision requiring insurers to extinguish all liability before releasing deposits securing the liability are part of the general scheme of Georgia law to protect Georgia citizens in the collection of just claims against foreign corporations which are dissolved and which have their principal assets in other states. 1965-66 Op. Att'y Gen. No. 66-25.

Federal National Mortgage Association participation certificates are authorized securities and may be accepted for deposit under this section. 1969 Op. Att'y Gen. No. 69-346.

Termination of liability allowing release of deposit may be by reinsurance. - The extinguishment of liability provision of former Ga. L. 1887, p. 113; Civil Code 1895, §§ 2039, 2041; Civil Code 1910, §§ 2423, 2425; Code 1933, §§ 56-323, 56-324; Code 1933, § 56-1108, enacted by Ga. L. 1960, p. 289, § 1 (see O.C.G.A. § 33-12-8(1) ) was intended to mean that an insurer, before being allowed to take down its deposits, must extinguish, that is, put an end to all of its liability for the security of which the deposit is held and that, in addition to any other means by which this might be accomplished, it could also be accomplished by the means of reinsurance; to be accomplished by reinsurance would require a reinsurance contract whereby a second insurer is substituted for the first or withdrawing insurer, with the consent of the insured, which, of course, would release the first insurer from all liability to the insured. 1965-66 Op. Att'y Gen. No. 66-25.

Priority of claims. - Claims under policies for losses incurred take priority over claims for the refund of unearned premiums against general or special deposits posted by insurance companies pursuant to O.C.G.A. §§ 33-3-8(b) and 33-3-9 . 1984 Op. Att'y Gen. No. 84-5.

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, §§ 37, 46.

C.J.S. - 44 C.J.S., Insurance, §§ 72, 132, 169, 179.

33-3-10. Requirement of additional special deposits of securities by domestic, foreign, or alien insurers.

  1. In addition to the deposits required by Code Sections 33-3-8 and 33-3-9, the Commissioner may require any domestic, foreign, or alien insurer to make such additional special deposits of securities eligible for the investment of capital funds of domestic insurers under this title as he may deem reasonable and necessary for the protection of the public whenever the Commissioner shall determine that the adverse financial condition of the insurer requires such action.
  2. Such additional special deposits shall be deposited with the Commissioner in trust for the protection of all policyholders of the insurer and all others entitled to the proceeds of its policies except in the case of foreign or alien insurers, in which case such additional special deposits shall be deposited with the Commissioner in trust for the protection of all the insurer's policyholders in Georgia and all others in Georgia entitled to the proceeds of its policies.
  3. The deposits provided for under this Code section shall be administered by the Commissioner in accordance with Chapter 12 of this title.

    (Code 1933, § 56-310.1, enacted by Ga. L. 1977, p. 878, § 1.)

Cross references. - Administration of deposits, T. 33, C. 12.

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, §§ 37, 46.

C.J.S. - 44 C.J.S., Insurance, §§ 72, 132, 169, 179.

33-3-11. Requirement of licensed resident agent.

Reserved. Repealed by Ga. L. 1999, p. 578, § 1, effective July 1, 1999.

Editor's notes. - This Code section was based on Code 1933, § 56-320, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1982, p. 3, § 33; Ga. L. 1998, p. 1091, § 1.

33-3-12. Requirements as to name of insurer.

  1. No insurer shall be authorized to transact insurance in Georgia which has or uses a name so similar to that of any insurer already so authorized as to cause uncertainty or confusion, except that, in case of conflict of names between two insurers, the Commissioner may permit or require as a condition to the issuance of an original certificate of authority to an insurer making application therefor that the insurer use in Georgia any supplementation or modification of its name as may reasonably be necessary to avoid a conflict.
  2. No insurer shall be authorized to transact business in Georgia which has or uses a name which would deceptively mislead as to the type of organization of the insurer.

    (Code 1933, § 56-318, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1982, p. 3, § 33.)

Cross references. - Corporate names generally, §§ 14-2-401 et seq., 14-3-401 et seq.

OPINIONS OF THE ATTORNEY GENERAL

Changing name releases old name if not used. - An amendment of an insurance company's charter changing the name of that insurance company would automatically release that name for immediate use by another insurance company where the original company did no insurance business under its old name; that is, it neither issued policies, paid claims, nor advertised its name or reputation in any way with the general public. 1967 Op. Att'y Gen. No. 67-457.

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, § 1573.

33-3-13. Information required in or attached to application for certificate of authority.

To apply for an original certificate of authority an insurer shall file with the Commissioner its application therefor showing its name, location of its home office or its existing or proposed principal office in the United States if an alien insurer, kinds of insurance to be transacted, date of organization or incorporation, form of organization, state or country of domicile, the names and addresses of all general officers of the company with the number of shares of capital stock of the company held by or for each such general officer or by others for his or her benefit, and the percentage of the total capital stock of the company held by each such general officer, the date on which the company began to do business, the states in which it is admitted to do business, and such additional information as the Commissioner may require, together with the following applicable documents:

  1. A copy of its corporate charter with all amendments thereto certified by the public officer with whom the originals are on file in the state or country of domicile;
  2. A copy of its bylaws, as amended, certified by its secretary or other officer having custody thereof;
  3. If a foreign or alien insurer, a copy of its annual statement as of December 31 of the preceding year in a form approved for current use by the Commissioner and certified by two officers of the company. The annual statement of an alien insurer which has entered through and the United States branch of which is licensed to transact insurance in another state shall relate only to the transactions and affairs in the United States unless the Commissioner requires otherwise;
  4. A copy of report of the last examination, if any, made of the insurer, certified by the insurance supervisory official of its state or country of domicile or of entry into the United States;
  5. If a foreign or alien insurer, a copy of the appointment of the Commissioner as its attorney to receive service of legal process;
  6. If a foreign or alien insurer, a certificate of the public official having supervision of insurance in its state or country of domicile showing that it is authorized to transact the kinds of insurance proposed to be transacted in Georgia;
  7. If an alien insurer, a copy of the appointment and authority of its United States manager certified by its officer having custody of its records;
  8. If a foreign or alien insurer, certificate as to deposit if to be tendered pursuant to Code Section 33-3-8; and
  9. If an alien insurer entering through this state to transact insurance in the United States through a United States branch, an English language translation, as necessary, of any of the documents required under this Code section.

    (Code 1933, § 56-312, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1974, p. 465, § 1; Ga. L. 1999, p. 584, § 2.)

Law reviews. - For article discussing restrictions on the establishment and transaction of business by a foreign insurer in Georgia with emphasis on threshold requirements for establishment by alien insurers, see 27 Mercer L. Rev. 629 (1976).

JUDICIAL DECISIONS

Editor's notes. - In light of the similarity of the statutory provisions, annotations decided under former Civil Code 1910, §§ 2414, 2415 are included in the annotations for this Code section.

Nonresident fidelity companies must comply with limitations on domestic companies. - It is presumed that in providing for the licensing of nonresident companies it was the intention of the lawmakers to permit such companies to conduct a fidelity business only in the manner recognized by the Georgia laws and upon the terms and conditions prescribed for the conduct of such business by domestic companies. Nowell v. Mayor of Monroe, 177 Ga. 648 , 171 S.E. 136 , answer conformed to, 47 Ga. App. 665 , 171 S.E. 143 (1933) (decided under former Civil Code 1910, §§ 2414, 2415).

Cited in Cochran v. Paco, Inc., 409 F. Supp. 219 (N.D. Ga. 1975).

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, §§ 27, 31, 45.

C.J.S. - 44 C.J.S., Insurance, §§ 67 et seq., 129.

33-3-14. Application fee.

Every original application shall be accompanied by the fee required by Code Section 33-8-1, which shall be returned to the applicant if the application is finally denied.

(Code 1933, § 56-313, enacted by Ga. L. 1960, p. 289, § 1.)

JUDICIAL DECISIONS

Cited in Cochran v. Paco, Inc., 409 F. Supp. 219 (N.D. Ga. 1975).

33-3-15. Issuance or refusal of certificate of authority generally; determining whether insurer meets definition of reinsurer; designation on certificate.

  1. Upon filing of an application for an original certificate of authority, the Commissioner shall have 90 days in which to approve the application by issuing an appropriate certificate of authority or disapprove the application by issuing an order setting forth the grounds for such disapproval. The Commissioner may extend such 90 day period for an additional 90 days by notifying the applicant in writing of such extension. If the application is not approved or disapproved within such time period or periods, the application shall be deemed approved and the Commissioner shall thereupon issue the appropriate certificate of authority.
  2. The certificate, if issued, shall specify the kind or kinds of insurance the insurer is authorized to transact in Georgia. At the insurer's request, the Commissioner may issue a certificate of authority limited to particular types of insurance included within a kind of insurance as defined in this title.
  3. The Commissioner shall determine if the insurer is a reinsurer and shall so designate on the certificate. As used in this subsection, the term "reinsurer" means an insurer that is principally engaged in the business of reinsurance, does not conduct significant amounts of direct insurance as a percentage of its net premiums, and is not engaged in an ongoing basis in the business of soliciting direct insurance.

    (Code 1933, § 56-314, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 2011, p. 622, § 1/SB 252.)

JUDICIAL DECISIONS

Cited in Cochran v. Paco, Inc., 409 F. Supp. 219 (N.D. Ga. 1975).

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, §§ 27, 30.

C.J.S. - 44 C.J.S., Insurance, §§ 67 et seq., 129.

33-3-16. Expiration of certificate; procedure for renewal; amendment of certificate by Commissioner.

  1. All certificates of authority shall expire at 12:00 Midnight on June 30 of the year following date of issuance or renewal. An insurer desiring renewal shall file on March 1 preceding expiration a copy of its annual statement of December 31 of the preceding year in a form approved for current use by the Commissioner. On or before March 1 of each year, each insurer at its expense shall publish in a newspaper of general circulation published in this state a copy of such statement in short form showing income, assets, expenditures, and liabilities in gross as of December 31 of the preceding year to be sworn to by the officer or agent making the same; and such statement so published must be filed with the Commissioner with a copy of the statement as published attached thereto. Notwithstanding the March 1 deadline, the Commissioner may for good cause grant an extension of time for filing such annual statement not to exceed 60 days. If the insurer qualifies, its certificate shall be renewed annually; provided, however, that any certificate of authority shall continue in full force and effect until the new certificate is issued or specifically refused.
  2. The Commissioner may amend a certificate of authority at any time to accord with changes in the insurer's charter or insuring powers.

    (Code 1933, § 56-315, enacted by Ga. L. 1960, p. 289, § 1.)

JUDICIAL DECISIONS

Cited in Cochran v. Paco, Inc., 409 F. Supp. 219 (N.D. Ga. 1975).

OPINIONS OF THE ATTORNEY GENERAL

The Commissioner does not have the authority to issue permanent certificates of authority that would not expire or require renewal. 1979 Op. Att'y Gen. No. 79-78.

Renewal filing may be reviewed. - The Department of Insurance need not issue a renewal certificate of authority to an insurer automatically upon the submission of a completed renewal filing, but may instead review that filing prior to issuing a renewal certificate. 1979 Op. Att'y Gen. No. 79-78.

Subsection (a) of this section does not require the commissioner to issue an insurer's renewal certificate of authority as a routine matter upon completion of its requirements, but instead anticipates that the commissioner and his staff will review the filing prior to either issuing or refusing to issue a renewal certificate of authority. 1979 Op. Att'y Gen. No. 79-78.

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, §§ 27, 30.

C.J.S. - 44 C.J.S., Insurance, §§ 68, 129.

33-3-17. Discretionary refusal, revocation, or suspension of certificate generally.

In addition to any other grounds set forth in this title, the Commissioner may refuse to issue a certificate of authority or after a hearing refuse to renew or may revoke or suspend an insurer's certificate of authority or place an insurer under administrative supervision if the insurer:

  1. Violates any provision of this title other than those as to which refusal, suspension, or revocation is mandatory;
  2. Knowingly fails to comply with or violates any rule, regulation, or order of the Commissioner;
  3. Is found by the Commissioner to be in unsound condition or in such condition as to render its further transaction of insurance in Georgia hazardous to its policyholders or to the public;
  4. As a general scheme or plot without just cause compels claimants to accept less than the amount due them or to bring an action against it to secure full payment thereof;
  5. Refuses to be examined or to produce its accounts, records, and files for examination by the Commissioner when required; or refuses to furnish such other additional information as the Commissioner may deem necessary to consider the application for renewal of such insurer's certificate of authority;
  6. Fails to pay any final judgment rendered against it in Georgia within 30 days after such judgment becomes final; or
  7. Is affiliated with and under the same general management or interlocking directorate or ownership as another insurer which transacts direct insurance in Georgia without having a certificate of authority therefor, except as permitted to a surplus line insurer under Chapter 5 of this title or an insurance holding company under Chapter 13 of this title.

    (Code 1933, § 56-317, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1992, p. 2877, § 5.)

Law reviews. - For comment on Bankers Life & Cas. Co. v. Cravey, 208 Ga. 682 , 69 S.E.2d 87 (1952), see 14 Ga. B.J. 468 (1952).

JUDICIAL DECISIONS

Editor's notes. - In light of the similarity of the statutory provisions, decisions under former Code 1933, § 56-104 are included in the annotations to this Code section.

Commissioner may not arbitrarily refuse to renew license. - The law does not confer upon the individual who happens to be Commissioner unlimited power to entertain dissatisfaction or opinions arbitrarily and capriciously as a basis for refusal to renew the license. Bankers Life & Cas. Co. v. Cravey, 208 Ga. 682 , 69 S.E.2d 87 (1952), commented on in 14 Ga. B.J. 468 (1952).

Unjustified refusal is basis for mandamus. - Where the refusal of the Commissioner to renew an insurance company's license is without justification, the failure to perform this official duty will irreparably injure the company, and therefore its petition alleges a cause of action for mandamus. Bankers Life & Cas. Co. v. Cravey, 208 Ga. 682 , 69 S.E.2d 87 (1952), commented on in 14 Ga. B.J. 468 (1952).

Commissioner may not refuse renewal for failure to copy records. - Having the power to investigate an insurance company, to inspect its original records, and to take the sworn testimony of its agents, the Commissioner has a duty to do so and is unauthorized to impose upon the company a duty to copy its records and refuse a renewal of its license upon its failure in that respect. Bankers Life & Cas. Co. v. Cravey, 208 Ga. 682 , 69 S.E.2d 87 (1952), commented on in 14 Ga. B.J. 468 (1952).

Cited in Cochran v. Paco, Inc., 409 F. Supp. 219 (N.D. Ga. 1975).

OPINIONS OF THE ATTORNEY GENERAL

State Health Benefit Plan is not subject to the Georgia Insurance Code, and neither the State Personnel Board nor the entity administering self-insured plans for the State Personnel Board would be subject to any administrative fines or sanctions under the insurance code for administration of such plans. 1982 Op. Att'y Gen. No. 82-70.

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, §§ 42, 43.

C.J.S. - 44 C.J.S., Insurance, §§ 57, 69, 129.

33-3-18. Administrative supervision or suspension of certificate of authority for cause.

The Commissioner may, without advance notice or a hearing thereon, place an insurer under administrative supervision or suspend immediately the certificate of authority of any insurer:

  1. As to which proceedings for receivership, conservatorship, rehabilitation, or other delinquency proceedings have been commenced in any state by the public insurance supervisory official of such state;
  2. Whose authority to do business in any state has been revoked, suspended, or restricted in any way by the public insurance supervisory official of such state; or
  3. If upon examination or at any other time it appears in the Commissioner's discretion that:
    1. The insurer's condition renders the continuance of its business hazardous to the public or to its insureds;
    2. The insurer exceeded its powers granted under its certificate of authority and applicable law;
    3. The insurer has failed to comply with the applicable provisions of this title;
    4. The business of the insurer is being conducted fraudulently; or
    5. The insurer gives its consent.

      (Code 1933, § 56-317.2, enacted by Ga. L. 1969, p. 585, § 1; Ga. L. 1991, p. 1424, § 1; Ga. L. 1992, p. 2877, § 6.)

Law reviews. - For note on 1991 amendment of this Code section, see 8 Ga. St. U.L. Rev. 89 (1992).

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, § 30.

C.J.S. - 44 C.J.S., Insurance, § 57.

33-3-19. Mandatory refusal, revocation, or suspension of certificate.

The Commissioner shall refuse to issue or to renew or shall revoke or suspend an insurer's certificate of authority:

  1. If such action is required by any provision of this title; or
  2. If the insurer no longer meets the requirements for the authority originally granted on account of deficiency in assets or otherwise.

    (Code 1933, § 56-316, enacted by Ga. L. 1960, p. 289, § 1.)

JUDICIAL DECISIONS

Cited in Cochran v. Paco, Inc., 409 F. Supp. 219 (N.D. Ga. 1975).

OPINIONS OF THE ATTORNEY GENERAL

Former Code 1933, § 56-307 controlled in conflict with this section. - As a matter of statutory construction, the more specific statute, i.e., former Code 1933, § 56-307 (see O.C.G.A. § 33-3-7 ), governs in case of a seeming conflict with a more general one such as paragraph (2) of Ga. L. 1960, p. 289, § 1 (see O.C.G.A. § 33-3-19 ). 1963-65 Op. Att'y Gen. p. 216.

Words "deficiency in assets" are intended to apply primarily to such items as "impairment of capital" and "insufficiency of policy reserves"; if both capital and expendable surplus were required to be maintained at all times they would be synonymous; the separate provisions for "capital" and for "expendable surplus" make it evident that the two are not synonymous. 1963-65 Op. Att'y Gen. p. 216.

Commissioner may allow reduction of paid-in surplus. - Although paid-in surplus is required of all companies upon their authorization to do business in the State of Georgia, it is within the discretion of the Commissioner to determine at what time the particular company is in such sound financial position as to no longer require this account to be maintained at its original level. 1963-65 Op. Att'y Gen. p. 216.

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, §§ 30, 33.

C.J.S. - 44 C.J.S., Insurance, §§ 57, 69, 129.

33-3-20. Imposition of administrative fine upon insurer for certain acts of officers, employees, agents, or representatives.

  1. The Commissioner may, after a hearing, impose upon an insurer an administrative fine if he finds that such insurer through the acts of its officers, employees, agents, or representatives has with such frequency as to indicate its general business practice in this state:
    1. Failed to use due diligence in processing all claims, failed to pay claims in a timely manner, failed to provide proper notice when required with respect to the reasons for the insurer's failure to make claims payments when due, or refused without just cause to pay proper claims arising under coverage provided by its policies, whether the claim is in favor of an insured or in favor of a third person with respect to the liability of an insured to a third person or in favor of any other person entitled to the proceeds of a policy;
    2. Compelled, without just cause, insureds, claimants, or other persons entitled to the proceeds of its policies in this state to accept less than the amount due them or to bring an action against the insurer or an insured to secure full payment or settlement thereof; or
    3. Accepted money, trade stamps, gifts, or other remuneration of any kind in return for referring automobile and other property repair business including glass breakage to a particular automobile repairer, glass company, construction company, or other repair company of any kind.
  2. The administrative fine imposed for violations set forth in paragraph (1), (2), or (3) of subsection (a) of this Code section shall not exceed $1,000.00 for each act of misconduct constituting a violation; provided, however, a fine of not more than $5,000.00 for each act of willful misconduct constituting a violation may be imposed.
  3. For the purposes of this Code section, the term "insurer" shall include any insurer, nonprofit organization, or any other person authorized to sell accident and sickness insurance policies, subscriber contracts, certificates, or agreements of any form under Chapter 15, 20, 21, 29, or 30 of this title.

    (Code 1933, § 56-317.1, enacted by Ga. L. 1969, p. 585, § 1; Ga. L. 1973, p. 668, § 1; Ga. L. 1982, p. 3, § 33; Ga. L. 1982, p. 1678, §§ 1, 4; Ga. L. 1984, p. 22, § 33; Ga. L. 2019, p. 337, § 1-18/SB 132.)

The 2019 amendment, effective July 1, 2019, deleted "18, 19," following "Chapter 15," near the end of subsection (c).

Cross references. - Liability of insurer refusing in bad faith to pay claim, § 33-4-6 .

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, § 20.

C.J.S. - 44 C.J.S., Insurance, § 57.

ALR. - Necessity and sufficiency, or waiver, of demand as a condition of statutory liability of insurer for failure to pay delay in paying loss, 145 A.L.R. 343 .

33-3-21. Reports of business affairs and operations of insurers generally.

On or before March 1 in each year after it shall have commenced to do business pursuant to a certificate of authority, every insurer shall make and file with the Commissioner a report of its affairs and operations during the year ending on December 31 of the preceding year. This annual report shall be made in such form and contain such information as the Commissioner may prescribe by regulation from time to time and may require in protecting the public interest, the interest of the policyholders of any insurer, and the interest of the investors in the securities issued by any insurer. The Commissioner may require by regulation any additional periodic reports as he or she may prescribe from time to time as necessary or appropriate for the protection of policyholders, investors, and the public and necessary to ensure the solvency of any insurer, to inform and protect the investors in any insurer, and to assure fair dealing in the securities of any insurer. The Commissioner may require that the reports be verified under oath by any appropriate officers or agents as he or she may designate by regulation and may require the same to be published. Compliance with this Code section shall be a condition to the renewal of a certificate of authority under Code Section 33-3-16.

(Ga. L. 1887, p. 113, § 16; Civil Code 1895, § 2064; Civil Code 1910, § 2458; Ga. L. 1912, p. 119, § 9; Code 1933, §§ 56-108, 56-232; Code 1933, § 56-319, enacted by Ga. L. 1965, p. 378, § 1; Ga. L. 1992, p. 6, § 33; Ga. L. 2019, p. 337, § 1-19/SB 132.)

The 2019 amendment, effective July 1, 2019, deleted "of Insurance" following "the Commissioner" in the first sentence and inserted "or she" in the third and fourth sentences.

Administrative Rules and Regulations. - Business requirements, Official Compilation of the Rules and Regulations of the State of Georgia, Rules of Comptroller General, Commissioner of Insurance, Chapter 120-2-18.

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, § 35.

C.J.S. - 44 C.J.S., Insurance, § 56.

33-3-21.1. Submission of reports by property and casualty insurers; types of insurance to which requirement applies; contents of report; public inspection.

  1. By rule or regulation, the Commissioner may require each insurer licensed to write property and casualty insurance by the Commissioner to submit a report on a form furnished by the Commissioner showing its direct writings in this state.
  2. The report permitted by subsection (a) of this Code section may include but not be limited to the following types of insurance written by such insurer:
    1. Motor vehicle bodily injury liability insurance, including medical pay insurance;
    2. Products liability insurance;
    3. Medical malpractice insurance;
    4. Architect and engineer malpractice insurance;
    5. Attorney malpractice insurance;
    6. Motor vehicle personal injury protection insurance;
    7. Motor vehicle property liability insurance;
    8. Uninsured motorist insurance;
    9. Underinsured motorist insurance; and
    10. Commercial casualty or property insurance as defined in paragraph (1) of Code Section 33-7-3 or Code Section 33-7-6.
  3. Additionally, the report shall include the following information:
    1. Direct premiums written;
    2. Direct premiums earned;
    3. Net investment income, including net realized capital gains and losses, using appropriate estimates where necessary;
    4. Incurred claims, developed as a sum of, and with figures provided for, the following:
      1. Dollar amount of claims closed with payment; plus
      2. Reserves for reported claims at the end of the current year; minus
      3. Reserves for reported claims at the end of the previous year; plus
      4. Reserves for incurred but not reported claims at the end of the current year; minus
      5. Reserves for incurred but not reported claims at the end of the previous year; plus
      6. Reserves for loss adjustment expense at the end of the current year; minus
      7. Reserves for loss adjustment expense at the end of the previous year;
    5. Actual incurred expenses allocated separately to loss adjustment, commissions, other acquisition costs, general office expenses, taxes, licenses, fees, and all other expenses;
    6. Net underwriting gain or loss; and
    7. Net operation gain or loss, including net investment income.
  4. Any reports provided under this Code section shall be made available to the public for inspection. (Code 1981, § 33-3-21.1 , enacted by Ga. L. 1986, p. 896, § 1; Ga. L. 1987, p. 3, § 33; Ga. L. 2014, p. 128, § 1/HB 229.)

Administrative Rules and Regulations. - Life and annuity tables, Official Compilation of the Rules and Regulations of the State of Georgia, Rules of Comptroller General, Commissioner of Insurance, Chapter 120-2-39.

33-3-21.2. Analysis of adequacy of loss and loss adjustment expense reserves when reserves outside standard range.

  1. As used in this Code section, the term "qualified independent loss reserve specialist" means a person who is not an employee, principal, director, or indirect owner of the insurer and either is a member of the casualty actuarial society or possesses such other experience acceptable to the Commissioner to assure a professional opinion on the adequacy of the loss and loss adjustment expense reserves of the insurer.
  2. Every property and casualty insurer required to file an annual report with the Commissioner which has not filed a statement of opinion relating to loss and loss adjustment expense reserves in connection with its last annual statement on file with the department shall engage, whenever the insurer's loss and loss adjustment expense reserves are outside the standard or average range as designated by the Commissioner and based upon reliable and credible current information, a qualified independent loss reserve specialist to analyze the adequacy of such reserves and file a report with the Commissioner on a date to be specified by the Commissioner. (Code 1981, § 33-3-21.2 , enacted by Ga. L. 1989, p. 674, § 1.)

Law reviews. - For note on 1989 enactment of this Code section, see 6 Ga. St. U.L. Rev. 261 (1989).

33-3-21.3. Annual filings with National Association of Insurance Commissioners; agents of Commissioner not subject to civil liability; confidentiality of information.

  1. This Code section shall apply to all domestic, foreign, and alien insurers who are authorized to transact business in this state.
    1. Each domestic, foreign, and alien insurer who is authorized to transact insurance in this state shall file annually on or before March 1 of each year with the National Association of Insurance Commissioners a copy of its annual statement convention blank along with such additional filings as prescribed by the Commissioner for the preceding year.  The information filed with the National Association of Insurance Commissioners shall be in the same format and scope as that required by the Commissioner and shall include the signed jurat page and the actuarial certification.  Any amendments and addendums to the annual statement filing subsequently filed with the Commissioner shall also be filed with the National Association of Insurance Commissioners.
    2. Foreign insurers that are domiciled in a state which has a law substantially similar to paragraph (1) of this subsection shall be deemed in compliance with this subsection.
  3. In the absence of actual malice, members of the National Association of Insurance Commissioners; their duly authorized committees, subcommittees, and task forces; their delegates; employees of the National Association of Insurance Commissioners; and all others charged with the responsibility of collecting, reviewing, analyzing, and disseminating the information developed from the filing of the annual statement convention blanks shall be acting as agents of the Commissioner under the authority of this Code section and shall not be subject to civil liability for libel, slander, or any other cause of action by virtue of their collection, review, analysis, and dissemination of the data and information collected from the filings required under this Code section.
  4. Notwithstanding any provision of Article 4 of Chapter 18 of Title 50 to the contrary, all financial analysis ratios and examination synopses concerning insurance companies that are submitted to the department with an expectation of confidentiality by the National Association of Insurance Commissioners' Insurance Regulatory Information System shall be confidential and may not be disclosed by the department.
  5. The Commissioner may suspend, revoke, or refuse to renew the certificate of authority of any insurer failing to file its annual statement when due or within any extension of time which the Commissioner, for good cause, may have granted. (Code 1981, § 33-3-21.3 , enacted by Ga. L. 1991, p. 1424, § 2.)

Editor's notes. - Section 9 of SB 347 (Ga. L. 1991, p. 1424), not codified by the General Assembly, contained inconsistencies in references to the sections of the bill due to differences in the section numbers contained in the Senate version of the bill and the final version of the bill. Subsection (b) of Section 9 refers to Code Section 33-7-14 in the Senate version of SB 347.

Ga. L. 1991, p. 1424, § 9(b), not codified by the General Assembly, provides that this Code section is applicable to all reinsurance cessions after July 1, 1991, which have had an inception, anniversary, or renewal date not less than six months after July 1, 1991.

Law reviews. - For note on 1991 enactment of this Code section, see 8 Ga. St. U.L. Rev. 89 (1992).

33-3-22. Reports of insurers authorized to transact product liability insurance.

The Commissioner by rule and regulation may require each insurer providing product liability insurance in this state to provide reports of its affairs and operations regarding product liability insurance covering risks located in this state with such frequency and in such form as the Commissioner deems necessary.

(Code 1933, § 56-319.1, enacted by Ga. L. 1978, p. 2023, § 1; Ga. L. 1982, p. 3, § 33; Ga. L. 1985, p. 228, § 1.)

Cross references. - Product liability actions generally, § 51-1-11 .

Law reviews. - For article surveying Georgia cases in the area of tort law from June 1, 1977 through May 1978, see 30 Mercer L. Rev. 215 (1978). For comment, "Solving The Products Liability Insurance Crisis: A Study of the Role of Economic Theory in the Legislative Reform Process," see 31 Mercer L. Rev. 755 (1980).

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, § 35.

C.J.S. - 44 C.J.S., Insurance, §§ 56, 1114.

ALR. - Clause excluding "products liability" from coverage of liability insurance policy, 54 A.L.R.2d 518; 58 A.L.R.3d 12.

Aviation: helicopter accidents, 35 A.L.R.3d 707.

Products liability insurance coverage as extending only to product-caused injury to person or other property, as distinguished from mere product failure, 91 A.L.R.3d 921.

Validity and construction of "sistership" clause of products liability insurance policy excepting from coverage cost of product recall or withdrawal of product from market, 32 A.L.R.4th 630.

33-3-23. Restrictions as to transaction of insurance by certain organizations - Lending institutions and bank holding companies.

  1. For the purposes of this Code section, the term:
    1. "Bank holding company" means the definition as set forth in Code Section 7-1-600 and in Section 2 of an act of Congress entitled the Bank Holding Company Act of 1956, as amended.
    2. "Lending institution" means any domestic institution that accepts deposits from the public and lends money, including banks and savings and loan associations.
  2. A lending institution, bank holding company, or subsidiary or affiliate of either of the foregoing doing business in this state, or any officer or employee of any of the foregoing, may be licensed to sell insurance, including but not limited to credit insurance, in this state and may engage in underwriting and act as an underwriter for credit life insurance and credit accident and sickness insurance subject to the provisions of this title and in conformity with rules and regulations promulgated by the Commissioner.
  3. Nothing in this chapter shall prohibit the purchase of mortgage guaranty insurance, also called credit loss insurance, by a lending institution from a mortgage guaranty insurance company directly or indirectly.
  4. No lending institution, bank holding company, or any subsidiary or affiliate of any of the foregoing doing business in this state that was not in the business of selling title insurance on or before April 1, 2000, shall be permitted to sell title insurance.

    (Code 1933, § 56-322, enacted by Ga. L. 1974, p. 1101, §§ 1, 2; Ga. L. 1983, p. 3, § 24; Ga. L. 1989, p. 14, § 33; Ga. L. 2000, p. 1218, § 1; Ga. L. 2019, p. 337, § 1-20/SB 132.)

The 2019 amendment, effective July 1, 2019, deleted "of Insurance" following "Commissioner" at the end of subsection (b).

U.S. Code. - Section 2 of the federal Bank Holding Company Act of 1956, referred to in paragraph (a)(1) of this Code section, is codified as 12 U.S.C. § 1841.

For authority of states to regulate sales of insurance by depository institutions, see Gramm-Leach-Bliley Act, Pub. L. No. 106-102, § 104, 113 Stat. 1338, 1352 (1999).

JUDICIAL DECISIONS

Operation of general insurance agency. - The operation of a general insurance agency is not a power enumerated in O.C.G.A. § 7-1-261 and a state bank does not have either express statutory authority or an incidental power to operate a general insurance agency in a town with a population of less than 5,000. Independent Ins. Agents of Ga., Inc. v. Department of Banking & Fin., 248 Ga. 787 , 285 S.E.2d 535 (1982).

Cited in Alabama Ass'n of Ins. Agents v. Board of Governors, 533 F.2d 224 (5th Cir. 1976).

OPINIONS OF THE ATTORNEY GENERAL

Separation between banking and insurance businesses must be maintained. - While there is no express prohibition against ownership of insurance agency stock by bank officials and immediate family members, bank board members, or bank holding company members, such ownership must be compatible with this section and subjected to close scrutiny to insure that the separation between the banking and insurance businesses is maintained. 1989 Op. Att'y Gen. U89-18.

"Domestic" institutions. - The term domestic, as used in this section, should be read to limit this section's coverage to lending institutions doing business in this state. 1983 Op. Att'y Gen. No. 83-41.

Federally chartered banks and savings and loan associations are within the coverage of this section. 1983 Op. Att'y Gen. No. 83-41.

Federally chartered banks within a bank holding company system are covered by this section since such a bank would be an affiliate or subsidiary of a bank holding company. 1983 Op. Att'y Gen. No. 83-41.

Subsidiary of federal savings and loan association. - A subsidiary of a federal savings and loan association may not engage in the sale of insurance in Georgia in a municipality with a population greater than 5,000 unless it has been licensed and in continuous operation since January 1, 1974. 1983 Op. Att'y Gen. No. 83-72.

Acquisition of domestic company by foreign association. - A holding company which is a wholly-owned subsidiary of a foreign savings and loan association may not acquire a Georgia domestic insurance company if the foreign savings and loan association is doing business in Georgia. Any determination of whether a foreign savings and loan association, which does not itself have an office in Georgia, is doing business in the state through its Georgia mortgage company subsidiary could only be resolved on a case-by-case basis. 1988 Op. Att'y Gen. No. 88-20.

Employees of newly created subsidiaries or affiliates of lending institutions may not be licensed to sell insurance in Georgia if the subsidiary or affiliate is operating in a municipality which has a population that exceeds 5,000 persons. 1983 Op. Att'y Gen. No. 83-41.

Previously unlicensed employee of institution conducting business since January 1, 1974. - A previously unlicensed employee of a lending institution that has been conducting business in conformity with all state and federal laws continuously since January 1, 1974, may obtain a license to sell insurance in Georgia. 1983 Op. Att'y Gen. No. 83-41.

Entitlement to former subsection (f) grandfather status. - Financial institutions and related entities are not entitled to grandfather status under former subsection (f) of this section unless they were engaged in the insurance business on January 1, 1974. 1984 Op. Att'y Gen. No. 84-22.

Preemption by federal law. - The Gramm-Leach-Bliley Act (Pub. L. No. 106-102, 113 Stat. 1338 (1999)) preempts the provisions of this section restricting lending institutions, bank holding companies, and their subsidiaries and affiliates from selling insurance in municipalities with populations exceeding 5,000. 2000 Op. Att'y Gen. No. 2000-4.

33-3-24. Restrictions as to transaction of insurance by certain organizations - Institutions of Farm Credit System.

  1. No institution included in the Farm Credit System as set forth and identified in 12 U.S.C.A., Section 2002 (Pub. Law 92-181, Sec. 1.2, Dec. 10, 1971, 85 Stat. 583), any subsidiary or affiliate of such institution doing business in this state, any officer or employee of any institution included in the Farm Credit System, or any subsidiary or affiliate of any institution may directly or indirectly be licensed to sell or solicit any type of insurance, except the following:
    1. Credit life and accident and health in an amount appropriate to insure repayment of the loan;
    2. Crop hail, hail, or wind damage to crops; or
    3. Insurance against loss of any collateral securing a loan extended by an affiliate bank or association of the Farm Credit System for the full value of such collateral. The right to place collateral insurance, however, shall continue only so long as the underlying loan remains outstanding or until the expiration of the policy, but in no event longer than 12 months from the last day the loan was outstanding.
  2. For purposes of this Code section, "collateral securing a loan" shall include only that property which is subject to the formal security interest granted in connection with the secured loan and duly filed and recorded in the county where the debtor resides; provided, however, "collateral securing a loan" shall not include any property acquired by the debtor after the date the underlying loan was made unless the secured party shall make an advance to the debtor or otherwise give new value which is to be secured in whole or in part by after-acquired property.
  3. For the purposes of this Code section, institutions constituting the Farm Credit System shall include the federal land banks, the federal land bank associations, the federal intermediate credit banks, the production credit associations, the banks for cooperatives, and such other institutions as may be made part of the system, all of which are chartered by and subject to the supervision of the Farm Credit Administration; provided, however, that the types of insurance described in paragraphs (1), (2), and (3) of subsection (a) of this Code section may only be transacted, sold, or solicited for the purposes of protecting loans made for agricultural purposes to farmers by an institution of the Farm Credit System or any subsidiary or affiliate thereof doing business in this state.
  4. Any person holding a license to sell or solicit insurance on April 8, 1977, and disqualified under the terms of subsection (a) of this Code section upon termination of his association as an employee or officer, or both, of any Farm Credit System institution or affiliate or subsidiary thereof shall have his license reissued upon request without the necessity of taking or passing any examination. Applications shall be made within 60 days from the date of termination of such employment.

    (Code 1933, § 56-323, enacted by Ga. L. 1977, p. 1283, § 1; Ga. L. 1982, p. 3, § 33.)

33-3-25. Language simplification and reading ease standards; applicability of Code section.

  1. All homeowner's insurance policies, including tenant homeowner's insurance policies, personal automobile insurance policies, individual life or accident and sickness insurance policies, all certificates of group life or accident and sickness insurance coverage, and all coverage booklets provided by insurers to group life or accident and sickness insurance certificate holders which are issued, delivered, or issued for delivery in this state on or after July 1, 1988, shall be written in a simplified form, shall be divided into logically arranged, captioned sections, and shall contain readable language which complies with the standards prescribed in such rules and regulations as may be promulgated by the Commissioner after due notice and hearing.
  2. In establishing the policy language simplification and reading ease standards for such policies, certificates, and coverage booklets, the Commissioner may utilize a minimum score of 40 on the "Flesch reading ease test" as the basic standard, or such other nationally recognized reading ease standards or tests as would produce comparable policy language simplification and readability results, and may also provide for exceptions thereto by appropriate rules and regulations.
  3. This Code section shall apply to all insurers issuing the kinds of insurance policies described in subsection (a) of this Code section in this state, including all insurers, nonprofit corporations, or other organizations issuing policies or contracts of life or accident and sickness coverage under Chapter 15, 20, 21, 29, or 30 of this title. (Code 1981, § 33-3-25 , enacted by Ga. L. 1982, p. 1244, § 1; Ga. L. 1983, p. 3, § 24; Ga. L. 1983, p. 473, § 1; Ga. L. 1984, p. 22, § 33; Ga. L. 1987, p. 1047, § 1; Ga. L. 1988, p. 13, § 33; Ga. L. 2019, p. 337, § 1-21/SB 132.)

The 2019 amendment, effective July 1, 2019, deleted "of Insurance" following "Commissioner" near the end of subsection (a) and in subsection (b); in subsection (b), inserted a comma after "basic standard" and substituted "readability results, and may also provide" for "readability results and he may also provide"; and deleted "18, 19," following "Chapter 15," near the end of subsection (c).

Administrative Rules and Regulations. - Readability standards for personal lines policies, Official Compilation of the Rules and Regulations of the State of Georgia, Rules of Comptroller General, Commissioner of Insurance, Chapter 120-2-42.

33-3-26. Retaliation.

  1. When by or pursuant to the laws of any other state or foreign country any taxes, licenses, and other fees in the aggregate and any fines, penalties, deposit requirements, or other material obligations, prohibitions, or restrictions are or would be imposed upon Georgia insurers or upon the agents or representatives of such insurers which are in excess of such taxes, licenses, and other fees in the aggregate or which are in excess of the fines, penalties, deposit requirements, or other obligations, prohibitions, or restrictions directly imposed upon similar insurers or upon the agents or representatives of such insurers of such other state or country under the statutes of this state, so long as such laws of such other state or country continue in force or are so applied, the same taxes, licenses, and other fees in the aggregate or fines, penalties, deposit requirements, or other material obligations, prohibitions, or restrictions of whatever kind shall be imposed by the Commissioner upon the insurers or upon the agents or representatives of such insurers of such other state or country doing business or seeking to do business in Georgia. Any tax, license, or other fee or other obligation imposed by any city, county, or other political subdivision or agency of such other state or country on Georgia insurers or their agents or representatives shall be deemed to be imposed by such state or country within the meaning of this Code section.
  2. The Commissioner may waive any retaliatory obligations, prohibitions, or restrictions that would prohibit entry into this state of any insurer domiciled in another state and that would otherwise be imposed by subsection (a) of this Code section if, in his or her discretion, the entry of such insurer would be expected to enhance competition in this state and would be in the best interests of the citizens of this state. The discretion provided by this subsection shall not extend to any retaliatory taxes, fees, fines, penalties, or deposit requirements.
  3. This Code section shall not apply as to personal income taxes, as to ad valorem taxes on real or personal property, or as to special purpose obligations or assessments imposed by another state in connection with particular kinds of insurance other than property insurance, except that deductions from premium taxes or other taxes otherwise payable allowed on account of real estate or personal property taxes paid shall be taken into consideration by the Commissioner in determining the propriety and extent of retaliatory action under this Code section.
  4. For the purposes of this Code section, the domicile of an alien insurer other than insurers formed under the laws of Canada shall be that state designated by the insurer in writing filed with the Commissioner at the time of admission to this state and may be any one of the following states:
    1. This state if the insurer is entering through this state to transact insurance in the United States through a United States branch;
    2. That in which the insurer was first authorized to transact insurance;
    3. That in which is located the insurer's principal place of business in the United States; or
    4. That in which is held the larger deposit of trusteed assets of the insurer for the protection of its policyholders and creditors in the United States.
  5. If the insurer makes no such designation, its domicile shall be deemed to be that state in which is located its principal place of business in the United States.
  6. In the case of an insurer formed under the laws of Canada or a province thereof, its domicile shall be deemed to be that province in which its head office is situated. (Ga. L. 1869, p. 127, § 5; Code 1873, § 2848; Code 1882, § 2848; Ga. L. 1887, p. 124, § 12; Civil Code 1895, § 2060; Civil Code 1910, § 2449; Code 1933, § 56-315; Code 1933, § 56-321, enacted by Ga. L. 1960, p. 289, § 1; Code 1981, § 33-3-25 ; Ga. L. 1982, p. 3, § 33; Code 1981, § 33-3-26 , as redesignated by Ga. L. 1982, p. 1244, § 1; Ga. L. 1999, p. 584, § 3; Ga. L. 2008, p. 482, § 1/SB 213.)

Law reviews. - For article discussing restrictions on the establishment and transaction of business by a foreign insurer in Georgia with emphasis on threshold requirements for establishment by alien insurers, see 27 Mercer L. Rev. 629 (1976).

OPINIONS OF THE ATTORNEY GENERAL

Determination of amount of retaliatory tax. - Where the aggregate fee and tax burden imposed upon a Georgia insurer by another state exceeds the aggregate fee and tax burden imposed upon insurers by Georgia, this section imposes an additional retaliatory tax upon insurers from such other state in an amount equal to the amount by which the aggregate fees and taxes of the other state exceed the aggregate fees and taxes imposed upon similar insurers by Georgia. 1982 Op. Att'y Gen. No. 82-2.

Examination of foreign insurer's investments in Georgia is required in calculating the retaliatory tax liability imposed by this section if the foreign insurer's home state imposes a premium tax rate which varies with an insurer's investments in that state. 1982 Op. Att'y Gen. No. 82-2.

Retaliatory tax added after figuring abatement of gross premium tax. - This section and the provisions pertaining to abatement of taxes on insurance premiums (see O.C.G.A. § 33-8-5 ) are not mutually exclusive; a company having met the statutory standards could qualify for the abatement provisions allowed on the gross premium tax; the same company could also be subject to retaliation because of the existing tax structure of its home state; thus, a foreign insurer coming within both provisions, i.e., abatement and retaliation, would first have the gross premium tax figured at the applicable rate; to this dollar amount would be added the amount of retaliatory tax, if any, computed against the foreign insurer because of the existing differential between the Georgia aggregate tax and fee structure and that of the foreign state in which the company is based. 1963-65 Op. Att'y Gen. p. 138.

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, §§ 54, 55.

C.J.S. - 44 C.J.S., Insurance, § 126.

33-3-27. Reports of awards under medical malpractice insurance policies.

  1. For the purposes of this Code section, the term:
    1. "High/low agreement" means a settlement in which a defendant agrees to pay the plaintiff a minimum recovery in return for the plaintiff's agreement to accept a maximum amount regardless of the outcome of the trial.
    2. "Low payment" means the defendant pays the plaintiff the minimum recovery under a high/low agreement where the court rules in favor of the defendant.
    3. "Medical malpractice claim" means any claim for damages resulting from the death of or injury to any person arising out of health, medical, or surgical service, diagnosis, prescription, treatment, or care rendered by a person authorized by law to practice medicine in this state or by any person acting under such person's supervision and control.
  2. Every insurer providing medical malpractice insurance coverage in this state shall notify in writing the Georgia Composite Medical Board when it pays a judgment or enters into an agreement to pay an amount to settle a medical malpractice claim, other than a low payment under a high/low agreement, against a person authorized by law to practice medicine in this state. Such judgments or agreements shall be reported to the board regardless of the dollar amount. Such notice shall be sent within 30 days after the judgment has been paid or the agreement has been entered into by the parties involved in the claim. (Code 1981, § 33-3-27 , enacted by Ga. L. 1983, p. 882, § 2; Ga. L. 1992, p. 6, § 33; Ga. L. 2005, p. 1, § 8/SB 3; Ga. L. 2009, p. 859, § 2/HB 509; Ga. L. 2019, p. 826, § 1/HB 128.)

The 2019 amendment, effective July 1, 2019, rewrote subsection (a), which read: "For the purposes of this Code section, the term 'medical malpractice claim' means any claim for damages resulting from the death of or injury to any person arising out of health, medical, or surgical service, diagnosis, prescription, treatment, or care rendered by a person authorized by law to practice medicine in this state or by any person acting under such person's supervision and control."; and in subsection (b), inserted ", other than a low payment under a high/low agreement," in the first sentence.

Editor's notes. - Ga. L. 2005, p. 1, § 1/SB 3, not codified by the General Assembly, provides that: "The General Assembly finds that there presently exists a crisis affecting the provision and quality of health care services in this state. Hospitals and other health care providers in this state are having increasing difficulty in locating liability insurance and, when such hospitals and providers are able to locate such insurance, the insurance is extremely costly. The result of this crisis is the potential for a diminution of the availability of access to health care services and a resulting adverse impact on the health and well-being of the citizens of this state. The General Assembly further finds that certain civil justice and health care regulatory reforms as provided in this Act will promote predictability and improvement in the provision of quality health care services and the resolution of health care liability claims and will thereby assist in promoting the provision of health care liability insurance by insurance providers. The General Assembly further finds that certain needed reforms affect not only health care liability claims but also other civil actions and accordingly provides such general reforms in this Act."

Law reviews. - For article on 2005 amendment of this Code section, see 22 Ga. St. U. L. Rev. 221 (2005).

OPINIONS OF THE ATTORNEY GENERAL

Reporting payments in medical malpractice case. - A physician licensed by the Georgia Composite Medical Board is required to report to the Board a payment made as a result of a high-low agreement in a medical malpractice case, even if there is a judgment in favor of the physician. 2016 Op. Att'y Gen. No. 16-6.

33-3-28. Request by claimant for information as to name of insurer, name of each insured, and limits of coverage.

    1. Every insurer providing liability or casualty insurance coverage in this state and which is or may be liable to pay all or a part of any claim shall provide, within 60 days of receiving a written request from the claimant, a statement, under oath, of a corporate officer or the insurer's claims manager stating with regard to each known policy of insurance issued by it, including excess or umbrella insurance, the name of the insurer, the name of each insured, and the limits of coverage. Such insurer may provide a copy of the declaration page of each such policy in lieu of providing such information. The claimant's request shall set forth under oath the specific nature of the claim asserted and shall be mailed to the insurer by certified mail or statutory overnight delivery.
    2. The insured, within 30 days of receiving a written request from a claimant or the claimant's attorney, shall disclose to the claimant or his attorney the name of each known insurer which may be liable to the claimant upon such claim.
  2. If the request provided in subsection (a) of this Code section contains information insufficient to allow compliance, the insurer or insured upon whom the request was made may so state in writing, stating specifically what additional information is needed, and such compliance shall constitute compliance with this Code section.
  3. The information provided to a claimant or his attorney as required by subsection (a) of this Code section shall not create a waiver of any defenses to coverage available to the insurer and shall not be admissible in evidence unless otherwise admissible under Georgia law.
  4. The information provided to a claimant or his attorney as required by subsection (a) of this Code section shall be amended upon the discovery of facts inconsistent with or in addition to the information provided. (Code 1981, § 33-3-28 , enacted by Ga. L. 1989, p. 676, § 1; Ga. L. 2000, p. 136, § 33; Ga. L. 2000, p. 1589, § 3.)

Editor's notes. - Ga. L. 2000, p. 1589, § 16, not codified by the General Assembly, provided that the amendment to this Code section by Ga. L. 2000, p. 1589, § 3, was applicable with respect to notices delivered on or after July 1, 2000.

Law reviews. - For annual survey on insurance, see 65 Mercer L. Rev. 135 (2013).

JUDICIAL DECISIONS

Subsection (d) of O.C.G.A. § 33-3-28 did not create liability on the part of an insurer to a claimant for failure to timely amend previously furnished information from the insurer to the claimant. Generali-U.S. Branch v. Southeastern Sec. Ins. Co., 229 Ga. App. 277 , 493 S.E.2d 731 (1997).

A violation of subsection (d) of O.C.G.A. § 33-3-28 did not give rise to an action based on negligence per se. Generali-U.S. Branch v. Southeastern Sec. Ins. Co., 229 Ga. App. 277 , 493 S.E.2d 731 (1997).

Improper insurance reporting may result in liability. - Since defendant insurance company failed to disclose the existence of an umbrella policy until after the claimant had settled for what she thought were the policy limits, the trial court erred in granting summary judgment to the company on the claimant's allegations of fraud, misrepresentation and false swearing, based on its conclusion that the parties had no contract because the parties' settlement agreement was contingent on the company having disclosed all applicable policies. Merritt v. State Farm Mut. Auto. Ins. Co., 247 Ga. App. 442 , 544 S.E.2d 180 (2000).

Cause of action not found. - Insurer's breach of this section did not create a cause of action and the right to seek damages under O.C.G.A. §§ 51-1-6 and 51-1-8 . Parris v. State Farm Mut. Auto. Ins. Co., 229 Ga. App. 522 , 494 S.E.2d 244 (1997).

Failing to disclose existence of insurance was willful and malicious act. - Debtor performed a willful and malicious act, 11 U.S.C. § 523(a)(6), by failing to disclose the existence of insurance. Contrary to the mandate of O.C.G.A. § 33-3-28(a)(2), the debtor did not comply with the creditor's personal injury attorney's request for insurance information and instead gave the creditor false and misleading information; the debtor's concealment of insurance information caused harm to the creditor that was both willful and malicious. Blair v. Boughter (In re Boughter), 463 Bankr. 908 (Bankr. S.D. Ga. 2003).

Cited in State Farm Mut. Auto. Ins. Co. v. Hernandez Auto Painting & Body Works, 312 Ga. App. 756 , 719 S.E.2d 597 (2011).

OPINIONS OF THE ATTORNEY GENERAL

An insurance company may not bill a requesting claimant for the time and expense involved in complying with a request for coverage information pursuant to O.C.G.A. § 33-3-28 . 1990 Op. Att'y Gen. No. U90-10.

Providing a copy of the declaration page of each policy, in lieu of providing the requested information, is the only permissible statutory exception to the requirement that an insurance company disclose policy limits and other information within 60 days of receiving a request from a claimant. 1990 Op. Att'y Gen. No. U90-10.

33-3-29. Licensing of foreign state insurers as domestic insurers.

  1. Any insurer which is organized under the laws of any other state and is admitted to do business in this state for the purpose of writing insurance may become a domestic insurer by complying with all of the requirements of this title relative to the organization and licensing of a domestic insurer of the same type and by designating its principal place of business at a location in this state. Upon satisfaction of such requirements, the insurer shall be issued a certificate of authority and license to transact business in this state and shall be subject to the authority and jurisdiction of this state as a domestic insurer. The redomesticated insurer may choose to retain its original date of incorporation in lieu of its date of redomestication, provided that the retention of an earlier incorporation date shall not affect the operation or application of other laws.
  2. Any domestic insurer may, upon the approval of the Commissioner, transfer its domicile to any other state in which it is admitted to transact the business of insurance and, upon such a transfer, shall cease to be a domestic insurer and shall be admitted to this state if qualified as a foreign insurer. The Commissioner shall approve any such proposed transfer unless the Commissioner determines such transfer is not in the best interest of the policyholders of this state.
  3. The certificate of authority, agent appointments and licenses, rates, and other items which the Commissioner allows, in his discretion, and which are in existence at the time any insurer licensed to transact the business of insurance in this state transfers its corporate domicile to this or any other state by merger, consolidation, or any other lawful method shall continue in full force and effect upon such transfer if such insurer remains duly authorized to transact the business of insurance in this state. All outstanding policies of any transferring insurer shall remain in full force and effect and need not be endorsed as to the new name of the company or its new location unless so ordered by the Commissioner. Every transferring insurer shall file new policy forms with the Commissioner on or before the effective date of the transfer but may use existing policy forms with appropriate endorsements if allowed by, and under such conditions as approved by, the Commissioner. Every such transferring insurer shall notify the Commissioner of the details of the proposed transfer and shall file promptly any forms, documents, or amendments to forms or documents with the Commissioner. The Commissioner may promulgate rules and regulations necessary to carry out the purposes of this Code section. (Code 1981, § 33-3-29 , enacted by Ga. L. 1989, p. 1127, § 1.)

Code Commission notes. - This Code section was enacted as § 33-3-28 , but has been renumbered as § 33-3-29 , pursuant to Code Section 28-9-5 , since Ga. L. 1989, p. 676, § 1, also enacted a § 33-3-28 .

33-3-30. Principal United States place of business of alien insurer entering through this state.

  1. Each alien insurer which enters through this state to transact insurance in the United States through a United States branch shall establish and maintain in this state such insurer's principal place of business in the United States, and shall keep in such principal place of business complete records of the assets, transactions, and affairs in accordance with the methods and systems which are customary or suitable as to the kind or kinds of insurance transacted in the United States.
  2. Concealment from the Commissioner or removal from this state of any material part of the records required to be kept in this state under subsection (a) of this Code section, except for any reasonable purposes and periods of time as may be approved by the Commissioner in writing in advance of such removal, is prohibited. The certificate of authority to do business of any alien insurer which removes or attempts to remove any material part of such records from the principal place of business of the insurer in this state with the intent to remove the same from this state or conceals or attempts to conceal the same from the Commissioner in violation of this subsection shall be revoked. Upon any removal or attempted removal of such records or upon retention of such records or material part of such records outside this state beyond the period specified in the Commissioner's consent under which such records were permitted to be removed or upon concealment of or attempts to conceal such records in violation of this subsection, the Commissioner may institute proceedings against the insurer pursuant to Chapter 37 of this title.
  3. This Code section shall not be deemed to prohibit or prevent an alien insurer from establishing and maintaining branch offices or regional home offices in other states where necessary or convenient to the transaction of its business and keeping therein the detailed records customary and necessary for the servicing of the insurance in force in the jurisdiction served by such an office as long as such records are made readily available at such office for examination by the Commissioner at his request. (Code 1981, § 33-3-30 , enacted by Ga. L. 1999, p. 584, § 4.)

CHAPTER 4 ACTIONS AGAINST INSURANCE COMPANIES

Sec.

Law reviews. - For annual survey article discussing developments in insurance law, see 51 Mercer L. Rev. 313 (1999). For comment on McGee v. International Life Ins. Co., 355 U.S. 220, 78 S. Ct. 199 , 2 L. Ed. 2 d 223 (1957), holding that for a state to assert jurisdiction over a foreign insurance company it is sufficient for due process purposes if the contract on which the case is based has a substantial connection with that state, see 21 Ga. B.J. 113 (1958).

JUDICIAL DECISIONS

Proper plaintiff. - Absent the assignment of an insurance policy, a suit on the policy must be brought by the policyholder. Phillips v. Bacon, 245 Ga. 814 , 267 S.E.2d 249 (1980).

Judgment prerequisite to action. - Without some specific statutory authorization, an action cannot proceed directly against the liability insurance carrier until a judgment is obtained against the tortfeasor or his liability is otherwise fixed. Smith v. Commercial Union Assurance Co., 246 Ga. 50 , 268 S.E.2d 632 (1980).

RESEARCH REFERENCES

ALR. - Statutory or contractual limitation where presumption of death of the insured from seven years' absence is relied upon, 61 A.L.R. 686 ; 119 A.L.R. 1308 .

Right of owner to sue on fire or marine policy taken out by warehouseman, bailee, or carrier, 61 A.L.R. 720 .

Unincorporated association issuing insurance contract as subject to suit as entity in the name in which it contracts, 88 A.L.R. 164 .

Appraiser's award in insurance cases as subject to attack because appraiser had previously acted for party naming him, 104 A.L.R. 563 .

Conflict of laws as regards statutory or contractual provisions relating to right of injured person to maintain action against tortfeasor's insurer, 120 A.L.R. 855 .

Judgment in favor of tortfeasor's insurer in an action by injured person as res judicata in similar action by another person injured in same accident, 137 A.L.R. 1016 .

Burden of proof, in action upon an accident policy or accident feature of life policy, as regards conditions which, by the terms of the policy, limit or exclude coverage, 142 A.L.R. 742 .

Compromise by insured as affecting right to recover against liability or indemnity insurer, either where claim exceeds limit of liability under policy, or where insurer denies liability on policy, refuses to defend, or otherwise delays taking action, 142 A.L.R. 809 .

Different benefits or claims of benefit under a policy of insurance as constituting a single cause of action or separate causes, 159 A.L.R. 563 .

Basis and manner of distribution among multiple claimants of proceeds of liability insurance policy inadequate to pay all claims in full, 70 A.L.R.2d 416.

Timely suit to enforce policy as interrupting limitations against claimant's later suit or amended pleading to reform it, or vice versa, 92 A.L.R.2d 168.

Beneficiary's ignorance of existence of life or accident policy as excusing failure to give notice, make proofs of loss, or bring action within time limited by policy or statute, 28 A.L.R.3d 292.

Right of injured person recovering excess judgment against insured to maintain action against liability insurer for wrongful failure to settle claim, 63 A.L.R.3d 677.

Limitation of action against insurer for breach of contract to defend, 96 A.L.R.3d 1193.

Insurer's tort liability for consequential or punitive damages for wrongful failure or refusal to defend insured, 20 A.L.R.4th 23.

Policy provision limiting time within which action may be brought on the policy as applicable to tort action by insured against insurer, 66 A.L.R.4th 859.

Admissibility of polygraph or similar lie detector test results, or willingness to submit to test, on issues of coverage under insurance policy, or insurer's good-faith belief that claim was not covered, 7 A.L.R.5th 143.

33-4-1. Venue of actions.

Except for actions arising against unauthorized insurers or under surplus line contracts which are provided for in Chapter 5 of this title, whenever any person shall have a claim or demand on any insurer, such person may bring an action in any of the following places:

  1. In the county where the principal office of the company is located;
  2. In any county where the company shall have an agent or place of doing business;
  3. In any county where such agent or place of doing business was located at the time the cause of action accrued or the contract was made out of which such cause of action arose; or
  4. In any county where the property covered by an insurance contract upon which an action is brought is located or where the person entitled to the proceeds of an insurance contract upon which action is brought maintains his legal residence. For the purpose of this paragraph, personal property shall be deemed to be located in the county of the legal residence of the owner of such personal property, and, for the purpose of bringing an action under this paragraph, a company which has written a contract of insurance upon persons or property located in a particular county or which has become surety for the performance of an obligation in a particular county shall be deemed to be transacting business in such county and shall be deemed to be a legal resident of such county; provided, further, that any action on the bond of a sheriff or other arresting or law enforcement officer or superior court clerk or deputy clerk or clerk or deputy of any court of record, upon which any guaranty or surety company or fidelity insurance company is bound and obligated as surety, shall be instituted in the county of the residence of the officer and not in any other county; and the county of the residence of the officer is hereby fixed as the venue of any action on such bond; and the officer may be made a party defendant or may by intervention become a party defendant.

    (Ga. L. 1861, p. 58, § 1; Code 1868, § 3331; Code 1873, § 3408; Ga. L. 1878-79, p. 54, § 1; Code 1882, § 3408; Civil Code 1895, § 2145; Ga. L. 1902, p. 53, § 1; Civil Code 1910, § 2563; Code 1933, § 56-601; Code 1933, § 56-1201, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1969, p. 740, § 1.)

Cross references. - Venue generally, Ga. Const. 1983, Art. VI, Sec. II and § 9-10-30 et seq.

Law reviews. - For article surveying developments in Georgia insurance law from mid-1980 through mid-1981, see 33 Mercer L. Rev. 143 (1981). For annual survey article discussing trial practice and procedure, see 51 Mercer L. Rev. 487 (1999). For survey article on real property law for the period from June 1, 2002 to May 31, 2003, see 55 Mercer L. Rev. 397 (2003). For note discussing problems with venue in Georgia, and proposing statutory revisions to improve the resolution of venue questions, see 9 Ga. St. B.J. 254 (1972).

JUDICIAL DECISIONS

ANALYSIS

General Consideration

Constitutionality. - The constitutional power of the General Assembly to enact the provision authorizing action to be brought in any county where company has an agent or place of doing business at the time the cause of action accrued or contract out of which the cause of action arose was made has been recognized and settled by the Supreme Court. Davis v. Central R.R. & Banking Co., 17 Ga. 323 (1855); Merritt v. Cotton States Life Ins. Co., 55 Ga. 103 (1875), later appeal. 59 Ga. 664 (1877).

The provision authorizing action to be brought in any county where company has an agent or place of doing business at the time the cause of action accrued or contract out of which the cause of action arose was made is not in conflict with the Constitution of this state or with the federal Constitution. Jefferson Fire Ins. Co. v. Brackin, 140 Ga. 637 , 79 S.E. 467 (1913), later appeal, 147 Ga. 47 , 92 S.E. 930 (1917).

The provision authorizing action to be brought in any county where the insured property is located or where the person entitled to the insurance proceeds maintains a legal residence is not unconstitutional as violative of Ga. Const. 1976, Art. VI, Sec. XIV, Para. VI (see Ga. Const. 1983, Art. VI, Sec. II, Para. VI). Dependable Ins. Co. v. Gibbs, 218 Ga. 305 , 127 S.E.2d 454 (1962).

The provision authorizing action to be brought in any county where the insured property is located or where the person entitled to the insurance proceeds maintains a legal residence does not deny due process of law. Dependable Ins. Co. v. Gibbs, 218 Ga. 305 , 127 S.E.2d 454 (1962).

A classification of insurance companies, which excepts insurance companies which are bound and obligated as sureties upon the bonds of law enforcement officers is not unreasonable and does not violate Ga. Const. 1976, Art. I, Sec. II, Para. III (see Ga. Const. 1983, Art. I, Sec. I, Para. II). Dependable Ins. Co. v. Gibbs, 218 Ga. 305 , 127 S.E.2d 454 (1962).

The primary purpose of the proviso to the provision authorizing action to be brought in any county where the insured property is located or where the person entitled to the insurance proceeds maintains a legal residence is to protect sheriffs and law enforcement officers, whose duties are primarily performed in the county of their residence. The peculiar nature of their duties, requiring the arrest and imprisonment of those charged with violations of the laws, dealing with dangerous criminals, or with drunk or disorderly persons, lunatics and others of warped mind, subjecting them to unusual danger and requiring extraordinary action on their part, thereby increasing the risk of liability to unfounded actions against them, justifies the classification and renders it reasonable. Dependable Ins. Co. v. Gibbs, 218 Ga. 305 , 127 S.E.2d 454 (1962); Busbee v. Reserve Ins. Co., 147 Ga. App. 451 , 249 S.E.2d 279 (1978), rev'd on other grounds, 243 Ga. 371 , 254 S.E.2d 324 (1979).

Venue of action against a sheriff and his bondsman based on the provision authorizing action to be brought in any county where the insured property is located or where the person entitled to the insurance proceeds maintains a legal residence does not violate Ga. Const. 1976, Art. VI, Sec. XIV, Para. IV (see Ga. Const. 1983, Art. VI, Sec. II, Para. IV) since the General Assembly has declared the residence of the surety for the performance of the obligation to be the county in which the obligation is to be performed. White v. Fireman's Fund Ins. Co., 233 Ga. 919 , 213 S.E.2d 879 (1975).

Construction of paragraph (2). - Nothing in the language of paragraph (2) of O.C.G.A. § 33-4-1 indicates that it is intended to apply only to claims under insurance contracts. Patterman v. Travelers, Inc., 235 Ga. App. 784 , 510 S.E.2d 307 (1998), aff'd, 272 Ga. 251 , 527 S.E.2d 187 (2000).

To the extent that there is any limitation to the application of the statute, such limitation is not based on the words "claim or demand," but on the word "insurer." Patterman v. Travelers, Inc., 235 Ga. App. 784 , 510 S.E.2d 307 (1998), aff'd, 272 Ga. 251 , 527 S.E.2d 187 (2000).

Venue is proper under this Code section if a claim arises out of the defendant's "role as an insurer" or "business as an insurer." Patterman v. Travelers, Inc., 235 Ga. App. 784 , 510 S.E.2d 307 (1998), aff'd, 272 Ga. 251 , 527 S.E.2d 187 (2000).

Paragraph (2) of O.C.G.A. § 33-4-1 can be used to fix venue for a tort action in any county where a defendant insurance company has an agent, as long as the action involves the defendant's insurance business. Travelers, Inc. v. Patterman, 272 Ga. 251 , 527 S.E.2d 187 (2000).

Due process does not require that an action against a defendant be brought in the county of residence. Dependable Ins. Co. v. Gibbs, 218 Ga. 305 , 127 S.E.2d 454 (1962).

Contractual limitation of venue held unenforceable as against public policy. - The provisions of a labor and materials payment bond, limiting venue solely to forums of the county or other political subdivision where the project is situated, are unenforceable as contrary to public policy. Fidelity & Deposit Co. v. Gainesville Iron Works, Inc., 125 Ga. App. 829 , 189 S.E.2d 130 (1972).

Section does not conflict with former Civil Code 1895, § 2057. - Former Civil Code 1895, § 2057 (see O.C.G.A. § 33-4-3 ) merely requires insurance companies doing business here to file with the Insurance Commissioner a written power of attorney appointing some person who shall be authorized to acknowledge service for such company, or upon whom process may be served, and is entirely compatible with former Civil Code 1895, §§ 2145 and 2146 (see O.C.G.A. §§ 33-4-1 and 33-4-5 ). Gaines v. Bankers' Alliance, 113 Ga. 1138 , 39 S.E. 502 (1901).

All statutes as to venue must be strictly construed. Lumbermen's Underwriting Alliance v. First Nat'l Bank & Trust Co., 98 Ga. App. 289 , 105 S.E.2d 585 (1958).

The terms "law enforcement officer" and "peace officer" are synonymous for the purpose of paragraph (4) of this section. Busbee v. Reserve Ins. Co., 147 Ga. App. 451 , 249 S.E.2d 279 (1978), rev'd on other grounds, 243 Ga. 371 , 254 S.E.2d 324 (1979).

The state revenue commissioner is a "law enforcement officer" within the meaning of paragraph (4) of this section. Vandiver v. Williams, 106 Ga. App. 435 , 127 S.E.2d 168 , cert. dismissed, 218 Ga. 496 , 128 S.E.2d 749 (1962).

Venue provisions do not limit general jurisdiction. - Generally, constitutional and statutory provisions for venue confer a personal privilege upon defendants and do not limit the jurisdiction of courts having general jurisdiction. George Washington Life Ins. Co. v. Peacock, 90 Ga. App. 296 , 82 S.E.2d 875 (1954).

The General Assembly has the power to declare the residence of corporations. Dependable Ins. Co. v. Gibbs, 218 Ga. 305 , 127 S.E.2d 454 (1962); White v. Fireman's Fund Ins. Co., 233 Ga. 919 , 213 S.E.2d 879 (1975).

Cited in Vandiver v. Williams, 218 Ga. 60 , 126 S.E.2d 210 (1962); Aetna Cas. & Sur. Co. v. Sampley, 108 Ga. App. 617 , 134 S.E.2d 71 (1963); Lott v. Liberty Mut. Ins. Co., 154 Ga. App. 474 , 268 S.E.2d 686 (1980); Cloud v. Brantley Constr. Co., 163 Ga. App. 235 , 293 S.E.2d 510 (1982); Currahee Constr. Co. v. Rabun County Sch. Dist., 180 Ga. App. 471 , 349 S.E.2d 487 (1986); Klein v. Allstate Ins. Co., 202 Ga. App. 188 , 413 S.E.2d 777 (1991); Jackson v. Sluder, 256 Ga. App. 812 , 569 S.E.2d 893 (2002).

Application

Section applies to action involving unknown uninsured motorist. - As former Code 1933, § 56-407A (see O.C.G.A. § 33-7-11 ) did not contain any provisions in respect of venue of an action against an unknown uninsured motorist, this section relating to such actions against insurance companies, is applicable. Mercer v. Doe, 134 Ga. App. 818 , 216 S.E.2d 339 , cert. dismissed, 235 Ga. 207 , 219 S.E.2d 144 (1975).

Insureds were authorized to bring their action against their insurer, seeking uninsured motorist coverage, in the county of their residence pursuant to O.C.G.A. § 33-4-1(4) and, accordingly, the trial court erred in transferring their case to another county pursuant to the insurer's motion alleging improper venue; the matter of whether venue was proper was reviewable by the appellate court pursuant to O.C.G.A. § 5-6-34(d) where the insureds' matter had been dismissed by the trial court and they sought review thereof. Morton v. Fuller, 264 Ga. App. 799 , 592 S.E.2d 460 (2003).

Section does not apply to tort actions. - The provisions of the introduction and paragraph (3) of this section, authorizing venue for actions on any "claim or demand" on insurance companies in any county where the company's "agent or place of doing business was located at the time the cause of action accrued or the contract was made out of which such cause of action arose," do not apply to tort actions. The object of the legislation is to fix the venue of actions against insurers on their contracts of insurance. Mavity v. First of Ga. Ins. Co., 115 Ga. App. 763 , 156 S.E.2d 191 (1967).

Pleading seeking equitable relief. - The provisions of this section do not authorize the filing of a pleading seeking purely equitable relief against an insurance company having its principal office in this state, as the sole defendant, in a county other than where such principal office is located. Porter v. State Mut. Life Ins. Co., 145 Ga. 543 , 89 S.E. 609 (1916).

Columbia County Superior Court did not have personal jurisdiction over an insurance policy beneficiary who resided in another county sufficient to impose equitable relief against the beneficiary, pursuant to Ga. Const. 1983, Art. VI, Sec. II, Para. III. Joinder of the beneficiary was not proper even if jurisdiction was proper as to the insurer under O.C.G.A. § 33-4-1(4) because the complaint did not seek equitable relief common to both the non-resident beneficiary and the insurer. Skaliy v. Metts, 287 Ga. 777 , 700 S.E.2d 357 (2010).

Claims arising out of business of insurance. - When plaintiffs' allegations involved claims that the defendants or their agents committed fraud and unfair or deceptive acts by inducing policyholders to surrender their existing policies and purchase policies issued by defendants, the claims constituted claims arising out of the business of insurance, and the trial court erred in holding that O.C.G.A. § 33-4-1 was inapplicable. Patterman v. Travelers, Inc., 235 Ga. App. 784 , 510 S.E.2d 307 (1998), aff'd, 272 Ga. 251 , 527 S.E.2d 187 (2000).

Former O.C.G.A. § 46-7-17 (see O.C.G.A. § 40-1-117 ) did not have the effect of making a motor carrier and its insured joint tortfeasors or joint obligors for purposes of venue so that proper venue as to a suit against one is the proper venue in a suit against the other. Thomas v. Bobby Stevens Hauling Contractors, 165 Ga. App. 710 , 302 S.E.2d 585 (1983).

Having agent or place of business in county determines venue. - Since the passage of Ga. L. 1902, p. 53, the venue of an action against an insurance company has been determined by the fact of the company having an "agent" or place of doing business in the county. Great E. Cas. Co. v. Haynie, 16 Ga. App. 643 , 85 S.E. 938 (1915).

Insurer may be sued where it had agent when contract was executed. - Under this section the city court of La Grange had jurisdiction in an action against a nonresident insurance company of the subject-matter and of the defendant, inasmuch as the defendant had an agency (now agent) at that city at the time of the execution of the contract sued on. United States Cas. Co. v. Newman, 137 Ga. 447 , 73 S.E. 667 (1912) (service not properly effected).

A petition (now complaint) against an insurance company, where it is alleged that at the time of the issuance of the policy sued on the defendant was represented by named agents in the county in which the suit was filed, alleges jurisdiction in that county, as provided in this section. Process issued thereon is valid. Hagler v. Pacific Fire Ins. Co., 36 Ga. App. 530 , 137 S.E. 293 , cert. denied, 36 Ga. App. 825 , S.E. (1927).

When an action is brought against an insurance company and plaintiff's pleading shows that at the time of the issuance of the policy on which suit was brought, the defendant was represented by an agent in the county in which the suit was filed, jurisdiction lies in such county. Lumbermen's Underwriting Alliance v. First Nat'l Bank & Trust Co., 98 Ga. App. 289 , 105 S.E.2d 585 (1958).

Even though it has no agent there at time of suit. - Under paragraph (3) of this section a nonresident insurance company may be sued in the county where the company had an agent and place of doing business when the contract of insurance was made and the cause of action arose, although the company has abandoned its agency in that county and has no agent there at the time of the suit. Peters v. Queen Ins. Co., 137 Ga. 440 , 73 S.E. 664 , answer conformed to, 10 Ga. App. 479 , 73 S.E. 856 (1912); Guarantee Trust Life Ins. Co. v. Ricker, 93 Ga. App. 554 , 92 S.E.2d 323 (1956).

Paragraph (3), to the effect that an insurance company can be sued, inter alia, in the county where its agent or place of business was located at the time the cause of action arose or the contract was made, is applicable to a reciprocal exchange, and venue is properly laid in county in which defendant had an agent at the time of the loss, even though when suit is filed, this agent has left and service is had upon individual designated by defendant for acceptance of service. Lumbermen's Underwriting Alliance v. First Nat'l Bank & Trust Co., 98 Ga. App. 289 , 105 S.E.2d 585 (1958); Lumbermen's Underwriting Alliance v. Jessup, 98 Ga. App. 305 , 105 S.E.2d 596 (1958).

Section does not apply if there is no agent or place of business in state. - When there was no agency and no place of doing business in this state or any principal office located in this state, former Civil Code 1910, § 2563 (see O.C.G.A. § 33-4-1 ) did not apply to an action against an insurer doing business under former Civil Code 1910, § 2446 (see O.C.G.A. § 33-4-3 ). Export Ins. Co. v. Womack, 165 Ga. 815 , 142 S.E. 851 , answer conformed to, 38 Ga. App. 75 , 143 S.E. 151 (1928).

Federal preemption of state law claims. - Because policies purchased by a clinic association for the benefit of doctors constituted a plan governed by the Employee Retirement Income Security Act, and the plaintiff's state law claims "related to" the plan, the state law claims (e.g., to recover benefits, bad-faith refusal to pay, and attorney fees under O.C.G.A. § 33-4-1 ) were preempted by 29 U.S.C. § 1144(a). Stefansson v. Equitable Life Assur. Soc'y, F. Supp. 2d (M.D. Ga. Sept. 19, 2005).

Licensed agent with headquarters in county suffices. - An authorized agent of an insurance company who at the time the suit against the company was instituted, and at the time the cause of action accrued, and at the time of the making of the contract out of which the cause of action arose, was acting, under a state agent for the company and had his headquarters and place of business as such agent of the insurance company in that county within the meaning of paragraph (3) of this section. Great E. Cas. Co. v. Haynie, 16 Ga. App. 643 , 85 S.E. 938 (1915).

Legal residence of agent is immaterial. - It is immaterial that the agent had in another county his legal residence for voting, etc., as indicated by the domicile of his family. Great E. Cas. Co. v. Haynie, 16 Ga. App. 643 , 85 S.E. 938 (1915).

Subordinate lodge may be agent of fraternal benefit society. - Under this section a subordinate lodge was the agent of a fraternal benefit society in the county in which the suit was pending, and the court had jurisdiction. Hurley v. District Grand Lodge No. 1, 24 Ga. App. 197 , 100 S.E. 233 (1919).

Depending on constitution and bylaws of superior lodge. - Whether a subordinate lodge is an agent depends on the constitution and bylaws of the superior lodge. Jones v. District Grand Lodge No. 18, 12 Ga. App. 273 , 76 S.E. 279 (1913).

If venue against surety is proper, principals may be joined. - The principals in an administrator's bond on which a nonresident fidelity insurance company is surety may be joined with the surety in a suit brought in any county wherein jurisdiction over the surety may be obtained. Morris v. George, 3 Ga. App. 413 , 59 S.E. 1116 (1908).

Surety living in another county. - A foreign fidelity insurance company may be sued in any county in this state in which it has an agent or place of doing business; and the principal in a guardian's bond for which the company is surety, although living in another county, may be sued jointly with the surety in any county in which jurisdiction over the surety may be obtained. Gross v. Butler, 48 Ga. App. 750 , 173 S.E. 866 (1934).

Insurer cannot claim improper venue merely because insured cannot be sued in venue selected. - Just as a motor carrier cannot be required to defend a tort suit in a county solely because venue in that county would otherwise be proper as to its insurer, the insurer cannot avoid defending an ex contractu action otherwise properly brought in that county under this section solely because its insured cannot be sued there on the underlying tort. Thomas v. Bobby Stevens Hauling Contractors, 165 Ga. App. 710 , 302 S.E.2d 585 (1983).

Waiver of objection to venue. - Appearance and pleading to the merits without objecting to the venue of the suit or reserving the right to do so as is a waiver of the right to be sued in the place provided by law. George Washington Life Ins. Co. v. Peacock, 90 Ga. App. 296 , 82 S.E.2d 875 (1954).

If a defendant waives his right to be sued in the venue provided by law, he cannot afterwards attack the judgment rendered. George Washington Life Ins. Co. v. Peacock, 90 Ga. App. 296 , 82 S.E.2d 875 (1954).

A defendant cannot later withdraw his responsive pleading and move to dismiss the petition on the ground that it does not show the proper venue. George Washington Life Ins. Co. v. Peacock, 90 Ga. App. 296 , 82 S.E.2d 875 (1954). See § 9-11-12(h) .

Paragraph (2) makes foreign insurer's liability asset of deceased insured's estate in county of place of business. - Since under paragraph (2) of this section a foreign insurance company doing business within the state may be sued in any county of the state where it maintains an agent or place of business, the potential liability of an insurance company to the decedent's estate was an asset of that estate located in Bartow County, in which the company had an agent and place of business, for the purpose of founding an administration on that estate in that county under the provision of former Code 1933, § 113-1211. Tweed v. Houghton, 103 Ga. App. 57 , 118 S.E.2d 496 (1961) (decided under former Code 1933, § 56-1201).

Where an owner's suit did not arise out of a title insurance company's business as an insurer, pursuant to Ga. Const. 1983, Art. VI, Sec. II, Para. III, the trial court erred in finding venue under O.C.G.A. § 33-4-1(2) ; in addition, the grant of an interlocutory injunction was error because there was no showing that the title company had any opportunity to challenge the applicability of an amendment to add a quiet title action under O.C.G.A. § 23-3-62 to the complaint. First Am. Title Ins. Co. v. Broadstreet, 260 Ga. App. 705 , 580 S.E.2d 676 (2003).

33-4-2. Service of process - Domestic insurers.

Service of process against a domestic insurer may be made upon the insurer corporation in the manner provided by laws applying to corporations generally or upon the insurer's attorney in fact if a reciprocal insurer or a Lloyd's association.

(Code 1933, § 56-1202, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1982, p. 3, § 33.)

Cross references. - Service of process generally, § 9-11-4 .

JUDICIAL DECISIONS

Cited in Thaxton v. Georgia Insurer's Insolvency Pool, 158 Ga. App. 407 , 280 S.E.2d 421 (1981); Kirkpatrick v. Mackey, 162 Ga. App. 876 , 293 S.E.2d 461 (1982).

RESEARCH REFERENCES

ALR. - Validity of substituted service of process upon liability insurer of unavailable tortfeasor, 17 A.L.R.4th 918.

33-4-3. Service of process - Alien or foreign insurers - Generally.

Each authorized alien or foreign insurer shall make the following appointments for service of process:

  1. Each insurer shall file with the Commissioner a power of attorney appointing a person who is a resident of this state to receive service of legal process issued against it in this state upon any cause of action arising from its transactions of business in this state. The power of attorney shall be irrevocable and may only be terminated by the filing of a new appointment by the insurer; and
  2. Each insurer shall appoint the Commissioner as its attorney to receive service of legal process issued against it in this state upon any cause of action arising from its transactions of business in this state. The appointment shall be irrevocable, shall bind any successor, and shall remain in effect as long as there is in force in this state any contract made by the insurer or obligations arising therefrom. Each insurer at time of application for a certificate of authority shall file with the Commissioner the designation of the name and address of the person to whom process against it served upon the Commissioner is to be forwarded. The insurer may change such designation by a new filing. Service of process upon the Commissioner, however, shall only be made when service cannot be effected in this state by serving the attorney in fact appointed by the insurer as provided under paragraph (1) of this Code section.

    (Ga. L. 1887, p. 113, § 10; Civil Code 1895, § 2057; Civil Code 1910, § 2446; Code 1933, § 56-603; Code 1933, § 56-1203, enacted by Ga. L. 1960, p. 289, § 1.)

Cross references. - Service of process on unauthorized insurers, § 33-5-50 et seq.

JUDICIAL DECISIONS

The evident purpose of the General Assembly in providing for the appointment of some person resident in this state who should be authorized to acknowledge or receive service of process was to require every foreign insurance company, as a condition precedent to acquiring a right to carry on business in Georgia, to submit itself to the jurisdiction of the courts of this state and the federal courts located therein. Equity Life Ass'n v. Gammon, 118 Ga. 236 , 44 S.E. 978 (1903).

It was the purpose of the legislature to remove the hazards of uncertainty and delay attendant upon efforts to perfect service by requiring each foreign insurance company desiring to transact business in this state to appoint in writing some person as its resident agent or attorney in fact upon whom service might be perfected, and to file the power of attorney with the insurance commissioner as authentic information to any person interested. Seminole County Bd. of Educ. v. American Ins. Co., 180 Ga. 661 , 180 S.E. 229 (1935).

Section does not conflict with former Civil Code 1895, §§ 2145 and 2146. - Former Civil Code 1895, § 2057 (see O.C.G.A. § 33-4-3 ) merely required insurance companies doing business in this state to file with the insurance commissioner a written power of attorney appointing some person who shall be authorized to acknowledge service for such company, or upon whom process may be served, and is entirely compatible with former Civil Code 1895, §§ 2145 and 2146 (see O.C.G.A. §§ 33-4-1 and 33-4-5 ). Gaines v. Bankers' Alliance, 113 Ga. 1138 , 39 S.E. 502 (1901) (decided under former Civil Code 1895, § 2057).

This section patently applies only to insurance companies authorized to do business in Georgia, and substituted service lies only in an action arising from the insurance company's transaction of business in Georgia. Smith v. Lloyd's of London, 568 F.2d 1115 (5th Cir. 1978).

Former Code 1933, §§ 56-1203 and 56-1204 (see O.C.G.A. §§ 33-4-3 and 33-4-4 ) provide an independent mode of service, which may be pursued by any plaintiff, regardless of whether the company may have an agent in the county where the suit is filed. Seminole County Bd. of Educ. v. American Ins. Co., 180 Ga. 661 , 180 S.E. 229 (1935).

Appointment does not give foreign insurer residence in agent's county. - A foreign insurance company which fails to maintain an agency does not, by appointing, or having the Commissioner of Insurance to appoint, an agent upon whom service may be perfected under this section, acquire a fixed residence in the county of such agent's residence. Equity Life Ass'n v. Gammon, 119 Ga. 271 , 46 S.E. 100 (1903).

Failure of agent to notify insurer not grounds for vacating default judgment. - Failure of the agent upon whom service was perfected to inform the nonresident corporation of the service, thus preventing it from making a defense to the action, is not an unavoidable casualty, accident, or misfortune so as to authorize the vacation of a default judgment. United Bonding Ins. Co. v. Bray Lumber Co., 226 Ga. 765 , 177 S.E.2d 227 (1970).

Service proper although no power of attorney appointing agent was filed. - Service of process on the Insurance Commissioner, who then forwarded a copy to the defendant foreign insurance carrier by registered mail in accordance with O.C.G.A. § 33-4-4 , was proper when a power of attorney appointing an agent for service had not been filed. American Bankers Ins. Co. v. Andre, 157 Ga. App. 661 , 278 S.E.2d 427 (1981).

Purported agent's refusal to admit to agency status. - When the person believed to be the defendant's designated agent for service of process refuses to accept such service on the grounds that the person is not the defendant's designated agent, this is an insufficient showing that service could not be made upon the proper agent, and service of process upon the Insurance Commissioner pursuant to O.C.G.A. § 33-4-3 is not justified. Wilkerson v. Voyager Cas. Ins. Co., 171 Ga. App. 834 , 321 S.E.2d 346 (1984).

Cited in Aetna Cas. & Sur. Co. v. Sampley, 108 Ga. App. 617 , 134 S.E.2d 71 (1963).

RESEARCH REFERENCES

ALR. - Full faith and credit provision as affecting insurance contracts, 41 A.L.R. 1386 ; 114 A.L.R. 250 ; 119 A.L.R. 483 ; 173 A.L.R. 1138 .

Statute regarding automobile liability or indemnity insurance of state where injury occurred as applicable to a pol of another state, 137 A.L.R. 656 .

Foreign insurance company as subject to service of process in action on policy, 44 A.L.R.2d 416.

33-4-4. Service of process - Alien or foreign insurers - Service of duplicate copies of process upon designated agent or Commissioner.

  1. In addition to other methods of service provided by law, a foreign or alien insurer may be served with legal process by service of duplicate copies of the legal process on the agent for service designated under Code Section 33-4-3 or upon the Commissioner.  At the time of service the plaintiff shall pay a fee in an amount as provided in Code Section 33-8-1, taxable as cost in the action.  Upon receiving such service the Commissioner shall promptly forward a copy of such service by registered or certified mail or statutory overnight delivery to the person last so designated by the insurer to receive the same.
  2. Process served upon the Commissioner and a copy of such process forwarded as provided in this Code section shall constitute service of such legal process upon the insurer so long as the insurer shall have any obligations or liabilities outstanding, although the company may have withdrawn, have been excluded from, or have ceased to do business in this state.

    (Code 1933, § 56-1204, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1985, p. 1399, § 1; Ga. L. 1992, p. 2725, § 8; Ga. L. 2000, p. 1589, § 3.)

Editor's notes. - Ga. L. 2000, p. 1589, § 16, not codified by the General Assembly, provided that the amendment to this Code section by Ga. L. 2000, p. 1589, § 3, was applicable with respect to notices delivered on or before July 1, 2000.

JUDICIAL DECISIONS

Long-arm jurisdiction established over withdrawing insurers. - This section establishes long-arm jurisdiction over any insurance company that, having done business in Georgia, withdraws from the state and leaves behind outstanding obligations. Smith v. Lloyd's of London, 568 F.2d 1115 (5th Cir. 1978).

Substituted service may be used although no agent in county of suit. - Former Code 1933, §§ 56-603, 56-1203, and 56-1204 (see O.C.G.A. §§ 33-4-3 and 33-4-4 ) provide an independent mode of service which may be pursued by any plaintiff, regardless of whether the company may have an agent in the county where the suit is filed. Seminole County Bd. of Educ. v. American Ins. Co., 180 Ga. 661 , 180 S.E. 229 (1935).

Section permits service by methods not provided in title. - The phrase "in addition to other methods of service provided by law" in this section means methods provided by law other than in this title. Aetna Cas. & Sur. Co. v. Sampley, 108 Ga. App. 617 , 134 S.E.2d 71 (1963).

Service under laws as to corporations. - The reference to other methods of service in this section included that of serving "any agent" of the company as provided in former Code 1933, § 22-1101 (see O.C.G.A. § 9-11-4 ). Aetna Cas. & Sur. Co. v. Sampley, 108 Ga. App. 617 , 134 S.E.2d 71 (1963).

This chapter authorizes service on a foreign insurance company by methods of service provided by law other than in this title, hence on its local agent as provided by former Code 1933, § 22-1101 (see O.C.G.A. § 9-11-4(d) ), as well as on the appointed process agent. Beard v. Calvert Fire Ins. Co., 114 Ga. App. 249 , 150 S.E.2d 711 (1966).

Alternative recipient, not alternative manner of service. - The purpose of this section is to specify an alternative recipient of legal process, and not an alternative manner of service, and formal service of process is required. Wilkerson v. Voyager Cas. Ins. Co., 171 Ga. App. 834 , 321 S.E.2d 346 (1984).

Service proper although no power of attorney appointing agent was filed. - Service of process on the Insurance Commissioner, who then forwarded a copy to the defendant foreign insurance carrier by registered mail in accordance with this section, was proper where a power of attorney appointing an agent for service had not been filed. American Bankers Ins. Co. v. Andre, 157 Ga. App. 661 , 278 S.E.2d 427 (1981).

RESEARCH REFERENCES

ALR. - Foreign insurance company as subject to service of process in action on policy, 44 A.L.R.2d 416.

33-4-5. Service of process - Alien or foreign insurers - Service upon chief executive officer.

In actions upon any certificate or policy issued by a nonresident religious or mutual aid society, cooperative, or assessment life insurance company or society, service upon the chief executive officer, or the person acting officially for or as the chief executive officer of a local lodge, shall be sufficient service upon the society or company. In carrying out the purpose of this Code section, officers of local lodges are deemed to be agents of the nonresident societies or companies and the local lodges are deemed to be agencies of said companies or societies.

(Ga. L. 1861, p. 58, § 2; Code 1868, § 3332; Code 1873, § 3409; Code 1882, § 3409; Ga. L. 1890-91, p. 75, § 1; Civil Code 1895, § 2146; Civil Code 1910, § 2564; Code 1933, § 56-604; Code 1933, § 56-1205, enacted by Ga. L. 1960, p. 289, § 1.)

JUDICIAL DECISIONS

No conflict. - Former Civil Code 1895, § 2057 (see O.C.G.A. § 33-4-3 ) merely required insurance companies doing business here to file with the Insurance Commissioner a written power of attorney appointing some person who shall be authorized to acknowledge service for such company, or upon whom process may be served, and was entirely compatible with former Civil Code 1895, §§ 2145 and 2146 (see O.C.G.A. §§ 33-4-1 and 33-4-5 ). Gaines v. Bankers' Alliance, 113 Ga. 1138 , 39 S.E. 502 (1901).

33-4-6. Liability of insurer for damages and attorney's fees; notice to Commissioner of Insurance and consumers' insurance advocate.

  1. In the event of a loss which is covered by a policy of insurance and the refusal of the insurer to pay the same within 60 days after a demand has been made by the holder of the policy and a finding has been made that such refusal was in bad faith, the insurer shall be liable to pay such holder, in addition to the loss, not more than 50 percent of the liability of the insurer for the loss or $5,000.00, whichever is greater, and all reasonable attorney's fees for the prosecution of the action against the insurer. The action for bad faith shall not be abated by payment after the 60 day period nor shall the testimony or opinion of an expert witness be the sole basis for a summary judgment or directed verdict on the issue of bad faith. The amount of any reasonable attorney's fees shall be determined by the trial jury and shall be included in any judgment which is rendered in the action; provided, however, that the attorney's fees shall be fixed on the basis of competent expert evidence as to the reasonable value of the services based on the time spent and legal and factual issues involved in accordance with prevailing fees in the locality where the action is pending; provided, further, that the trial court shall have the discretion, if it finds the jury verdict fixing attorney's fees to be greatly excessive or inadequate, to review and amend the portion of the verdict fixing attorney's fees without the necessity of disapproving the entire verdict. The limitations contained in this Code section in reference to the amount of attorney's fees are not controlling as to the fees which may be agreed upon by the plaintiff and the plaintiff's attorney for the services of the attorney in the action against the insurer.
  2. In any action brought pursuant to subsection (a) of this Code section, and within 20 days of bringing such action, the plaintiff shall, in addition to service of process in accordance with Code Section 9-11-4, mail to the Commissioner of Insurance a copy of the demand and complaint by first-class mail. Failure to comply with this subsection may be cured by delivering same.

    (Ga. L. 1872, p. 43, § 1; Code 1873, § 2850; Code 1882, § 2850; Civil Code 1895, § 2140; Civil Code 1910, § 2549; Code 1933, § 56-706; Code 1933, § 56-1206, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1962, p. 712, § 1; Ga. L. 2001, p. 784, § 1; Ga. L. 2015, p. 1088, § 21/SB 148; Ga. L. 2016, p. 864, § 33/HB 737.)

Cross references. - Imposing administrative fine for acts of representatives, including refusal to pay claims without cause, § 33-3-20 .

Liability of unauthorized foreign or alien insurer failing to pay according to terms of insurance contract, § 33-5-58 .

Liability for failing or refusing in bad faith to pay under uninsured motorist coverage, § 33-7-11(j) .

Prompt payment of health benefit claims, § 33-24-59.5 .

Code Commission notes. - Pursuant to Code Section 28-9-5, in 2001, "consumers' insurance advocate" was substituted for "Consumers' Insurance Advocate" and "first-class mail" was substituted for "first class mail" in subsection (b).

Law reviews. - For article surveying recent legislative and judicial developments regarding Georgia's insurance laws, see 31 Mercer L. Rev. 117 (1979). For article discussing Georgia provisions concerning damages for insurer's failure to pay first-party claims, see 14 Ga. L. Rev. 497 (1980). For article surveying Georgia cases in the area of insurance from June 1979 through May 1980, see 32 Mercer L. Rev. 79 (1980). For article discussing imposition of liability on insurer, "The Liability Insurance Policy - Above and Beyond Coverage: Extra-Contractual Rights and Duties," see 22 Ga. St. B.J. 134 (1986). For annual survey of insurance law, see 42 Mercer L. Rev. 259 (1990). For article, "Insurance," see 53 Mercer L. Rev. 281 (2001). For article, "Bad Faith in Insurance Claim Handling in Georgia: An Overview and Update," see 9 Ga. St. B.J. 10 (2003). For annual survey of insurance law, see 56 Mercer L. Rev. 253 (2004). For survey article on insurance law, see 59 Mercer L. Rev. 195 (2007). For annual survey on insurance, see 61 Mercer L. Rev. 179 (2009). For article, "What Does ERISA Have to do with Insurance?," see 14 (No. 7) Ga. St. B.J. 19 (2009). For annual survey on insurance law, see 64 Mercer L. Rev. 151 (2012). For annual survey on insurance law, see 66 Mercer L. Rev. 93 (2014). For annual survey of insurance law, see 67 Mercer L. Rev. 73 (2015). For article, "An Insurer's Duty to Settle: The Law in Georgia," see 22 Ga. St. B.J. 19 (Aug. 2016). For article, "The Peculiarities of Georgia Insurance Law," see 24 Ga. St. B.J. 18 (April 2019). For note, "Wrongful Refusal to Pay Insurance Claims in Georgia," see 13 Ga. L. Rev. 935 (1979). For note on the 2001 amendment to this Code section, see 18 Ga. St. U.L. Rev. 167 (2001). For comment on Life & Cas. Ins. Co. v. Freemon, 80 Ga. App. 443 , 56 S.E.2d 303 (1949), see 12 Ga. B.J. 337 (1950). For comment on Spicer v. American Home Assurance Co., 292 F. Supp. 27 (N.D. Ga. 1967), see 6 Ga. St. B.J. 225 (1969).

JUDICIAL DECISIONS

ANALYSIS

General Consideration

Section is constitutional. - This section is not violative of U.S. Const. amend. 14, § 1, nor of Ga. Const. 1976, Art. I, Sec. I, Paras. I, IX, and Sec. II, Para. III (see Ga. Const. 1983, Art. I, Sec. I, Paras. I, XII, and Sec. V, Para. II). Harp v. Fireman's Fund Ins. Co., 130 Ga. 726 , 61 S.E. 704 , 14 Ann. Cas. 299 (1908).

It is intention of O.C.G.A. § 33-4-6 to penalize insurers for resisting and delaying payment unless good cause is shown. Georgia Int'l Life Ins. Co. v. Harden, 158 Ga. App. 450 , 280 S.E.2d 863 (1981).

Specific penalty provisions control. - Where the General Assembly has provided a specific procedure and a limited penalty for noncompliance with a specific enactment (e.g., uninsured motorist coverage), the specific procedure and limited penalty are intended by the General Assembly to be the exclusive procedure and penalty, and recovery under general penalty provisions, such as O.C.G.A. §§ 13-6-11 , 33-4-6 (now subsection (a)), 51-12-5 , and 51-12-6 , will not be allowed. McCall v. Allstate Ins. Co., 251 Ga. 869 , 310 S.E.2d 513 (1984); Howell v. Southern Heritage Ins. Co., 214 Ga. App. 536 , 448 S.E.2d 275 (1994); United Servs. Auto. Ass'n v. Carroll, 226 Ga. App. 144 , 486 S.E.2d 613 (1997).

As an insured's counterclaim for tortious interference with a contract failed against an insurer due to the lack of evidence regarding direct inducement, the insured's counterclaims for lost profits and punitive damages that were necessarily predicated on that counterclaim failed; the counterclaims for lost profits and punitive damages were not predicated on a bad faith refusal to pay counterclaim pursuant to O.C.G.A. § 33-4-6 , as the penalties provided therein were the exclusive remedies for any liability on the part of an insurer. Great Southwest Express Co. v. Great Am. Ins. Co., 292 Ga. App. 757 , 665 S.E.2d 878 , cert. denied, 293 Ga. App. 365 , 667 S.E.2d 192 (2008).

Because an insurer obligated itself under the terms of its policy to pay all expenses, attorney fees and expenses constituted a "loss that was covered by the policy of insurance" within the purview of a O.C.G.A. § 33-6-4 award; the coverage under the terms of the policy, which was expressly in addition to and above the liability limits of the policy, contemplated "all expenses" in the defense of a covered suit, as well as "all reasonable expenses" incurred by the insured in assisting in the defense, which would both of necessity include attorney fees. Transp. Ins. Co. v. Piedmont Constr. Group, LLC, 301 Ga. App. 17 , 686 S.E.2d 824 (2009), cert. denied, No. S10C0507, 2010 Ga. LEXIS 312 (Ga. 2010).

Section is virtually identical to O.C.G.A. § 10-7-30 , except that it deals with the liability of insurance companies on their insurance contracts rather than the liability of corporate sureties on their suretyship contracts. Columbus Fire & Safety Equip. Co. v. American Druggist Ins. Co., 166 Ga. App. 509 , 304 S.E.2d 471 (1983).

Construction with § 33-4-7 . - Because a party mischaracterized O.C.G.A. § 33-4-7 as a "companion" to O.C.G.A. § 33-4-6 and erroneously contended that the General Assembly intended to extend the same rights to a third party, or a party other than the policy holder, and thus, the appellate court should therefore read § 33-4-7 as applying, like § 33-4-6 , in the event of any covered loss, those arguments were rejected as specious. Mills v. Allstate Ins. Co., 288 Ga. App. 257 , 653 S.E.2d 850 (2007).

Section is not exclusive avenue for recovery of attorney's fees. - O.C.G.A. § 33-4-6 is not the exclusive avenue for recovery of attorney's fees in Georgia; O.C.G.A. § 13-6-11 imposes liability for attorney's fees on a party in a contract action for bad faith or stubborn litigiousness. American Family Life Assurance Co. v. United States Fire Co., 885 F.2d 826 (11th Cir. 1989); American Family Life Assurance Co. v. United States Fire Co., 885 F.2d 826 (11th Cir. 1989); Colonial Oil Indus., Inc. v. Underwriters Subscribing to Policy Nos. T031504670 & T031504671, 910 F. Supp. 655 (S.D. Ga. 1995).

Section provides exclusive remedy for bad faith refusal to pay. - Claims for attorney fees and expenses are not authorized under O.C.G.A. § 13-6-11 ; the penalties contained in O.C.G.A. § 33-4-6 are the exclusive remedies for an insurer's bad faith refusal to pay insurance proceeds. American Family Life Assurance Co. v. United States Fire Co., 885 F.2d 826 (11th Cir. 1989); Colonial Oil Indus., Inc. v. Underwriters Subscribing to Policy Nos. T031504670 & T031504671, 910 F. Supp. 655 (S.D. Ga. 1995).

Because the penalties contained in O.C.G.A. § 33-4-6 were the exclusive remedies for an insurer's bad faith refusal to pay insurance proceeds, attorney fees under O.C.G.A. § 13-6-11 were unavailable to an insured who prevailed on the insured's coverage claim before a jury. Johnston v. Companion Prop. & Cas. Ins. Co., 318 Fed. Appx. 861 (11th Cir. 2009)(Unpublished).

In a suit by a mortgagee against an insurer for bad faith, the insurer should have been granted summary judgment on the mortgagee's claims for bad faith damages and attorney fees under O.C.G.A. § 33-4-6 for a refusal to pay and attorney fees under O.C.G.A. § 13-6-11 because the insurer had paid the claim to the mortgagor and the mortgagee jointly and the mortgagor's agent had fraudulently endorsed the check; attorney's fees were not available because penalties were the exclusive remedy. Auto-Owners Ins. Co. v. Hale Haven Props., 346 Ga. App. 39 , 815 S.E.2d 574 (2018), cert. denied, No. S18C1423, 2019 Ga. LEXIS 75, cert. denied, No. S18C1418, 2019 Ga. LEXIS 88, cert. denied, No. S18C1421, 2019 Ga. LEXIS 92 (Ga. 2019), cert. denied, No. S18C1417, 2019 Ga. LEXIS 93 (Ga. 2019).

Penalties exclusive. - Trial court erred in denying the insurer's motion for summary judgment on the insured's claim for attorney fees under O.C.G.A. § 13-6-11 because the penalties contained in O.C.G.A. § 33-4-6 were the exclusive remedies for a bad faith claim. Thompson v. Homesite Insurance Company of Ga., 345 Ga. App. 183 , 812 S.E.2d 541 (2018), cert. denied, No. S18C1044, 2018 Ga. LEXIS 738 (Ga. 2018).

Section provides exclusive remedy for bad faith denial of benefits. - O.C.G.A. § 33-4-6 is the exclusive remedy for bad faith denial of benefits and did not apply in an action involving negligent representations by an insurer in connection with the issuance of a policy. Collins v. Life Ins. Co., 228 Ga. App. 301 , 491 S.E.2d 514 (1997).

The damages set forth in O.C.G.A. § 33-4-6 are the exclusive remedy for bad faith denial of insurance benefits, so that litigation expenses under O.C.G.A. § 13-6-11 are not recoverable. Atl. Title Ins. Co. v. Aegis Funding Corp., 287 Ga. App. 392 , 651 S.E.2d 507 (2007), cert. denied, No. S08C0137, 2008 Ga. LEXIS 107 (Ga. 2008).

The recovery of attorney's fees under this section is a penalty, not favored in the law, and the right thereto must clearly appear. Love v. National Liberty Ins. Co., 157 Ga. 259 , 121 S.E. 648 (1924); Canal Ins. Co. v. Woodard, 121 Ga. App. 356 , 173 S.E.2d 727 (1970); Progressive Cas. Ins. Co. v. Avery, 165 Ga. App. 703 , 302 S.E.2d 605 (1983).

Penalty must be strictly construed. The provision for damages and attorney's fees, being in the nature of a penalty, must be strictly construed. Interstate Life & Accident Ins. Co. v. Williamson, 220 Ga. 323 , 138 S.E.2d 668 , answer conformed to, 110 Ga. App. 557 , 139 S.E.2d 429 (1964); Progressive Cas. Ins. Co. v. Avery, 165 Ga. App. 703 , 302 S.E.2d 605 (1983).

Since the provision for damages and attorney's fees is in the nature of a penalty, it must be strictly construed, and in order for these items of recovery to be authorized, it must first appear that the company acted in bad faith in refusing to pay the claim. United States Fid. & Guar. Co. v. Biddy Lumber Co., 114 Ga. App. 358 , 151 S.E.2d 466 (1966).

Section sets forth insured's remedy for insurer's bad faith refusal to pay loss. - The remedy provided a plaintiff on an unliquidated claim for damages under an insurance policy, where the defendant refuses in bad faith to pay the amount of the loss within 60 days after demand, is set forth in this section. Insurance Co. of N. Am. v. Folds, 42 Ga. App. 306 , 155 S.E. 782 (1930).

Which remedy is exclusive. Damages sought to be recovered in an attempt tort action based upon an insurance contract are in the nature of a penalty, which the plaintiff claimed the defendant owed him because of its failure to promptly settle his claim. The penalties imposed against insurance companies doing business in Georgia for their failure or refusal to pay claims within a reasonable time after demand has been made are fixed by this section, which remedy is exclusive. Leonard v. Firemen's Ins. Co., 100 Ga. App. 434 , 111 S.E.2d 773 (1959).

When the insured sought to recover $10.00 per day from the insurer for the loss of the insured vehicle, which the insured claimed was owed the insured because of failure of insurer to promptly settle the insured's claim, the trial court did not err in dismissing the action, since the damages sought to be recovered were in the nature of a penalty and the penalties imposed against insurance companies for failure or refusal to pay claims within a reasonable time after demand has been made are fixed by O.C.G.A. § 33-4-6 , which provides the exclusive remedy. Leonard v. Firemen's Ins. Co., 100 Ga. App. 434 , 111 S.E.2d 773 (1959); Globe Life & Accident Ins. Co. v. Ogden, 182 Ga. App. 803 , 357 S.E.2d 276 , cert. denied, 182 Ga. App. 910 , 357 S.E.2d 276 (1987).

Insured's claim for penalties and attorney fees under O.C.G.A. § 33-4-6 was the insured's exclusive remedy for any failure of the insurer to pay benefits within 60 days of the insured's demand. Lincoln Nat'l Life Ins. Co. v. Davenport, 201 Ga. App. 175 , 410 S.E.2d 370 (1991).

It is exception to rule disallowing exemplary damages in contract cases. - Former Civil Code 1910, § 4393 (see O.C.G.A. § 13-6-10 ) declared that exemplary damages can never be allowed in cases arising on contracts, but, while this rule is a very strict and well-nigh universal one, it is still not a rule without any exception whatever, such as this section. Copeland v. Dunehoo, 36 Ga. App. 817 , 138 S.E. 267 (1927).

This section provides for punitive damages where an insurer is guilty of bad faith in refusing to pay under the terms of an insurance policy, and the plaintiff's petition elsewhere seeks to recover such damages, but in the absence of such authority, exemplary or punitive damages are not recoverable for the breach of a contract. Kilgore v. National Life & Accident Ins. Co., 110 Ga. App. 280 , 138 S.E.2d 397 (1964).

Where the trial court found that defendant insurer was not liable to the insured since the plaintiff breached three separate conditions precedent in the policy, plaintiff's claim for bad faith penalties likewise failed. Hill v. Safeco Ins. Co. of Am., 93 F. Supp. 2d 1375 (M.D. Ga. 1999).

Reasonable grounds to contest preclude bad faith penalties. - When as a matter of law, insurer had reasonable grounds to contest claim, then insurer could not have been held liable, under O.C.G.A. § 33-4-6 , either for the imposition of bad faith penalties or for attorney fees. Rice v. State Farm Fire & Cas. Co., 208 Ga. App. 166 , 430 S.E.2d 75 (1993).

Evidence adduced upon insurer's motion for summary judgment was sufficient to demonstrate that insurer had reasonable grounds to contest claimant's action for bad faith penalties, as insurer demonstrated that it did not refuse payment on policy for "frivolous" or "unfounded" reasons. Southern Fire & Cas. Ins. Co. v. Northwest Ga. Bank, 209 Ga. App. 867 , 434 S.E.2d 729 (1993).

Insured's duty to cooperate as condition precedent. - Because the insurance policy provided that the insured had to cooperate in an investigation of a claim, but the insured refused to provide the requested financial information to the insurer after the insured's home was destroyed by fire and the insurer believed the timing was suspicious and fraudulent, the insured's suit to recover under the policy and under O.C.G.A. § 33-4-6 failed. Farmer v. Allstate Ins. Co., 396 F. Supp. 2d 1379 (N.D. Ga. 2005).

Failure to pay loss gives cause of action under section, not in tort. - Where the duties in question arose out of the insurance contract and there was a breach of contract on the part of the defendant by failing to pay the plaintiff the full amount of damages owed under the terms thereof, the damages sought to be recovered by the plaintiff are limited to the "bad faith" provisions of this section and the plaintiff does not have a cause of action in tort. Tate v. Aetna Cas. & Sur. Co., 149 Ga. App. 123 , 253 S.E.2d 775 (1979).

Contract may supersede general statutory limitations on right of action. - Regardless of the form of the action, if the source of the right claimed has evolved from a written contract of insurance, the limitations contained in it supersede any other general statutory limitations. Modern Carpet Indus., Inc. v. Factory Ins. Ass'n, 125 Ga. App. 150 , 186 S.E.2d 586 (1971).

Contractual postponement of right to bring suit. - Where the policy provides that no suit shall be brought for a recovery on the policy prior to the expiration of 60 days after proof of loss has been filed in accordance with the requirements of the policy, there can be no recovery by the beneficiary for damages and attorney's fees as provided by law for bad faith on the part of the insurance company in failing to pay the loss unless the company had failed to pay the loss within 60 days after the right to bring suit upon the policy and accrued and a demand for payment made. Adams v. Washington Fid. Nat'l Ins. Co., 48 Ga. App. 753 , 173 S.E. 247 (1934).

Section does not apply to contract made out of state. - This section does not apply to contract made in another state under the laws of that state covering property located in Georgia where insured resides. Coffin v. London & Edinburgh Ins. Co., 27 F.2d 616 (N.D. Ga. 1928). But see O.C.G.A. § 33-5-58 , as to contracts with unauthorized foreign or alien insurers issued or delivered in this state or to resident or corporation authorized to do business in this state.

Recovery authorized by other state can be recovered by Georgia citizens. - Such damages and attorney's fees as would be recoverable by citizens of another state can likewise be recovered by citizens of this state, where the contract sought to be enforced is to be performed in such sister state. Missouri State Life Ins. Co. v. Lovelace, 1 Ga. App. 446 , 58 S.E. 93 (1907).

Section applies if policy arises out of business transacted in state. - Where the policy sued on arises out of business transacted within this state, whether the contract of insurance be concluded here or elsewhere, this section applies. Travelers Ins. Co. v. Sheppard, 85 Ga. 751 , 12 S.E. 18 (1890).

Application of Erie Doctrine. - In contractor's action against the subcontractor's insurer for damages the contractor paid to the clubhouse owner resulting from the subcontractor's defective installation of windows, the district court, sitting in diversity, held that O.C.G.A. § 33-4-6 was not applicable, as it was substantive for purposes of the Erie Doctrine, and the parties agreed that the policy was governed by Florida law. Pinkerton & Law, Inc. v. Royal Ins. Co., 227 F. Supp. 2d 1348 (N.D. Ga. 2002).

Preemption by federal law. - A state law that relates to insurance provided pursuant to an Employee Retirement Income Security Act (ERISA) of 1974, 29 U.S.C. §§ 1001-1461, plan but which is not part of the state insurance regulatory scheme is preempted by ERISA. Cockey v. Life Ins. Co. of N. Am., 804 F. Supp. 1571 (S.D. Ga. 1992).

Claims for bad faith damages and attorney's fees were preempted by federal law because the accidental death policy at issue was subject to Employee Retirement Income Security Act (ERISA). The bad faith claim was foreclosed, but attorney's fees could be recovered under ERISA itself. Cockey v. Life Ins. Co. of N. Am., 804 F. Supp. 1571 (S.D. Ga. 1992).

Section only applies between insureds and insurers. - The "bad faith" claims under this section are available only as between insureds and their insurers. Spicer v. American Home Assurance Co., 292 F. Supp. 27 (N.D. Ga. 1967), aff'd, 402 F.2d 988 (5th Cir. 1968), cert. denied, 394 U.S. 946, 89 S. Ct. 1275 , 22 L. Ed. 2 d 479 (1969), commented on in 6 Ga. St. B.J. 225 (1969).

This section applies only to an "insurer," defined by former Code 1933, § 56-103 (see O.C.G.A. § 33-1-2 ). McGhee v. Kroger Co., 150 Ga. App. 291 , 257 S.E.2d 361 (1979).

The victim of an automobile accident lacked standing to bring an action against a liability insurer as assignee of the insured's claims against the insurer. Owens v. Allstate Ins. Co., 216 Ga. App. 650 , 455 S.E.2d 368 (1995); Southern Gen. Ins. Co. v. Ross, 227 Ga. App. 191 , 489 S.E.2d 53 (1997).

When an injured party sued the insurer of a motorist against whom the injured party obtained a judgment, both to collect on the judgment and to assert a claim, as assignee of the motorist, for bad faith failure to settle, while the motorist could not assign any claim the motorist might have against the insurer for a bad faith failure to settle under O.C.G.A. § 33-4-6 , or any claim for punitive damages, the motorist could assign any tort claim the motorist might have had for bad faith for compensatory damages. Canal Indem. Co. v. Greene, 265 Ga. App. 67 , 593 S.E.2d 41 (2003).

In an insured's suit asserting claims for bad faith breach of contract under O.C.G.A. § 33-4-6 in connection with an insurer's denial of the insured's claim for proceeds of a long-term disability insurance policy, the parent corporation of the insurer was not liable under an alter ego theory; because the insurer was not insolvent and had funds sufficient to satisfy any judgment for the insured, the insurer's corporate veil could not be pierced so as to hold the parent liable, even if the insurer and the parent failed to maintain separate corporate existences. Adams v. UNUM Life Ins. Co. of Am., 508 F. Supp. 2d 1302 (N.D. Ga. 2007).

In an insured's suit asserting claims for bad faith breach of contract under O.C.G.A. § 33-4-6 in connection with an insurer's denial of the insured's claim for proceeds of a long-term disability insurance policy, the insured's claim against the parent corporation of the insurer failed because § 33-4-6 does not provide for a separate claim against a policy administrator such as the parent. Adams v. UNUM Life Ins. Co. of Am., 508 F. Supp. 2d 1302 (N.D. Ga. 2007).

O.C.G.A. § 33-4-6 only provides for a claim against an insurer; it does not provide for a separate claim against the administrator of an insurance plan. Adams v. UNUM Life Ins. Co. of Am., 508 F. Supp. 2d 1302 (N.D. Ga. 2007).

In an insured's suit asserting claims for bad faith breach of contract under O.C.G.A. § 33-4-6 in connection with an insurer's denial of the insured's claim for proceeds of a long-term disability insurance policy, the parent corporation of the insurer, which administered the insurer's policies, was not liable under a joint venture theory because the insured's claims sounded in contract, not negligence. Adams v. UNUM Life Ins. Co. of Am., 508 F. Supp. 2d 1302 (N.D. Ga. 2007).

Section does not apply to employer. - When an employer was not an insurer as defined by former Code 1933, §§ 56-102, 56-103, 56-104, 56-105, 56-106, 56-107 (see O.C.G.A. § 33-1-2 ), it cannot be held liable for penalty and attorney fees provided for under statute covering workers' compensation insurer's initial failure to pay employee's indebtedness to a hospital. McGhee v. Kroger Co., 150 Ga. App. 291 , 257 S.E.2d 361 (1979).

Section does not apply to fraternal benefit order. - Fraternal benefit orders are not liable for attorney's fees and damages imposed on "insurance companies of this state" (now "insurer") under terms of this section for refusal, in bad faith, to pay losses. Brown v. Travelers' Protective Ass'n of Am., 45 Ga. App. 410 , 165 S.E. 143 (1932).

Section applied broadly if contract is in essence insurance. - There is a tendency in the courts of Georgia to apply this section broadly where the relation of insured and the insurer exists, as in the case where the contract under consideration is in its essence a contract of insurance. Bankers' Health & Life Ins. Co. v. Knott, 41 Ga. App. 639 , 154 S.E. 194 (1930).

Third party beneficiary clearly intended. - In an insurance dispute, the grant of summary judgment to the homeowner and house insurer was affirmed against the secondary insurer because the homeowner was specifically named on an endorsement as an additional insured on the secondary insurer's policy and that policy was a contract that clearly intended, on the contract's face, to benefit the homeowner as a third-party beneficiary. Southern Trust Insurance Company v. Cravey, 345 Ga. App. 697 , 814 S.E.2d 802 (2018), cert. denied, No. S18C1319, 2018 Ga. LEXIS 820 (Ga. 2018).

Applies to fidelity insurance company. - This section is not restricted in its application to any particular class of insurance companies, but applies to fidelity insurance companies, and to policies insuring employers against the defalcations of their employees. Bankers' Health & Life Ins. Co. v. Knott, 41 Ga. App. 639 , 154 S.E. 194 (1930).

Applies to fidelity bond. - This section is applicable to refusal to pay on a fidelity bond, because such a bond is a contract of fidelity insurance and is governed by insurance law. Bank of Acworth v. Firemen's Ins. Co., 339 F. Supp. 1229 (N.D. Ga. 1972).

Prisoner's wife is not "holder" of sheriff's official bond. - This section, allowing the "holder" of an insurance policy to recover, in addition to the sum named in the policy, reasonable attorney's fees, under certain conditions, was not applicable to a suit on a sheriff's official bond by wife of a prisoner beaten to death by sheriff and deputies. Hall v. National Sur. Corp., 72 Ga. App. 644 , 34 S.E.2d 628 (1945).

Assignment of benefits by insured. - After an insured assigned the right to insurance benefits to a hospital, the hospital, in effect, became the holder of the policy for all purposes, including the right to demand payment of the assigned benefits, and not until the right to benefits was reassigned did the insured become entitled to demand payment under O.C.G.A. § 33-4-6 . Blue Cross & Blue Shield v. Bennett, 223 Ga. App. 291 , 477 S.E.2d 442 (1996).

Section does not apply to actions for breach of duty. - The penalty provisions of this section are inapplicable and provide no measure of recovery where the insured's suit is not upon the contract but rather in tort and naturally involves a duty and an alleged breach of that duty. United States Fid. & Guar. Co. v. Evans, 116 Ga. App. 93 , 156 S.E.2d 809 , aff'd, 223 Ga. 789 , 158 S.E.2d 243 (1967).

Section does not apply to actions for fraud or return of premiums. - This section, as to the recovery of attorney's fees and damages in a suit on an insurance policy, contemplates a loss for which the insurer is liable under the terms of the policy and does not apply to a suit to recover premiums which the insured paid when they ought to have been waived under a clause providing for their waiver in case of disability. Metropolitan Life Ins. Co. v. Saul, 182 Ga. 284 , 185 S.E. 266 (1936).

This section has reference to claims on policies of insurance and not to actions for fraud and for the return of premiums. Bankers Health & Life Ins. Co. v. Plumer, 67 Ga. App. 720 , 21 S.E.2d 515 (1942).

Right to attorney's fees is not part of original claim. - The provision for attorney's fees is no part of the original demand against the insurance company and cannot apply until at least 60 days after any loss shall have occurred, and then only can apply when it is made to appear to the jury that the refusal was in bad faith; such fees cannot be awarded except when the matter is brought before a jury for its determination, and they are not a part of the claim sued on, but may be awarded as costs or smart money. National-Ben Franklin Fire Ins. Co. v. Darby, 48 Ga. App. 394 , 172 S.E. 819 (1934).

An insurance company is not liable for damages and attorney's fees for bad faith in refusing to settle under this section. Cotton States Mut. Ins. Co. v. Phillips, 110 Ga. App. 581 , 139 S.E.2d 412 (1964), later appeal, 112 Ga. App. 600 , 145 S.E.2d 643 (1965).

Bad faith attorney fees unavailable when insurer's reasons for denying coverage are not unreasonable. - Bad faith attorney fees were unavailable under O.C.G.A. § 33-4-6 based on a jury finding that an insurer wrongfully denied an insured's claim for roof damage to a commercial building caused by decayed roof trusses because the insurer's unsuccessful argument that the trusses were not "hidden from view" and that the damage could have been visually detected was not unreasonable. Johnston v. Companion Prop. & Cas. Ins. Co., 318 Fed. Appx. 861 (11th Cir. 2009)(Unpublished).

Liable only for failure to pay loss covered by policy. - This section does not provide for damages for a refusal to settle a claim, but only for failure to pay a loss covered by a policy. Cotton States Mut. Ins. Co. v. Phillips, 110 Ga. App. 581 , 139 S.E.2d 412 (1964), later appeal, 112 Ga. App. 600 , 145 S.E.2d 643 (1965).

Insurer may be liable for damages for bad faith refusal to settle. - If the insurance company in bad faith refused to settle the judgments, which exceeded the limits of the policy, for an amount within the limits of the policy plus an additional amount provided by the insured, the insurance company would be liable for the full amount of the judgments. Cotton States Mut. Ins. Co. v. Phillips, 110 Ga. App. 581 , 139 S.E.2d 412 (1964), later appeal, 112 Ga. App. 660 , 145 S.E.2d 643 (1965).

Insurer's obligation to pay settlement is not greater than obligation to pay judgment. - An insurer's obligation to pay on behalf of its insured an amount agreed upon in settlement is not any greater than its obligation to pay legally determined damages as embodied in a judgment. Tennessee Corp. v. Hartford Accident & Indem. Co., 326 F. Supp. 520 (N.D. Ga. 1971), aff'd, 463 F.2d 548 (5th Cir. 1972).

Payment of emergency medical expenses held loss incurred under policy. - Where the authority given by a policy of insurance does not only specifically authorize, but might reasonably be construed to require, the insured to safeguard the interests of the insurer by providing reasonable medical relief to persons to whom the insured is liable in all cases of emergency where it is not palpably clear and plain that the insured would not be liable for the injury, the liability assumed and paid by the insured as agent for the insurer amounts to a loss incurred by the insured under the terms of the policy within the meaning of this section. Employers' Liab. Assurance Corp. v. Manget Bros. Co., 45 Ga. App. 721 , 165 S.E. 770 (1932).

Refusal to defend and pay costs held to make insurer liable for penalty. - Where the policy shows on its face that the defendant, if it should have defended another action against the plaintiff, would be liable for the costs of defense, including court costs and attorney fees, and the defendant's refusal to undertake this duty was in bad faith within the meaning of this section, it would be liable for the statutory penalty also. Hughes v. State Farm Mut. Auto. Ins. Co., 101 Ga. App. 443 , 114 S.E.2d 61 (1960).

Insured held entitled to monthly benefit multiplied by ten. - When insurance policy describes the period of benefit payments in the very plainest of words as ten months, and not for up to ten months or during loss of employment or during disability, the insured is correct in the insured's contention that the insured is entitled to a payment equal to the stipulated monthly benefit multiplied by ten. Guarantee Trust Life Ins. Co. v. Davis, 244 Ga. 541 , 261 S.E.2d 336 (1979).

Demand on recovery in excess of liability does not justify denial of any liability. - The fact that the plaintiff demanded only $432.00 benefits, recovered $580.80, and was entitled to recover only $360.00, does not justify the defendant's refusal to pay any amount of the claim or to tender the proper amount, where it based its refusal solely upon a denial of any liability whatever. Metropolitan Life Ins. Co. v. Lovett, 50 Ga. App. 763 , 179 S.E. 253 (1935).

Penalty is not precluded although full claim is not recovered. - A failure on the part of the insured to recover the full amount claimed and sued for will not, after a denial of any liability whatsoever by the insurance company, preclude the insured from recovering against the insurance company penalty or attorney's fees under this section. Central Mfrs. Mut. Ins. Co. v. Graham, 24 Ga. App. 199 , 99 S.E. 434 (1919); Hanover Ins. Co. v. Hallford, 127 Ga. App. 322 , 193 S.E.2d 235 (1927); New York Life Ins. Co. v. Williamson, 53 Ga. App. 28 , 184 S.E. 755 (1936).

Recovery of under this section is not prevented by failure to recover full amount of claim. Atlantic Mut. Fire Ins. Co. v. Laney, 38 Ga. App. 1 , 142 S.E. 571 , cert. denied, 38 Ga. App. 816 (1928).

Penalty not precluded unless recovery is substantially less than claim. - The evidence fails to show bad faith on the part of the defendant where the plaintiff claimed the full amount of the policy and the jury found the defendant was justified in resisting this claim, the amount found by them as due under the policy being considerably less than the amount claimed. Southern Mut. Ins. Co. v. Turnley, 100 Ga. 296 , 27 S.E. 975 (1897).

Where the amount of the verdict is substantially less than the amount claimed in the proofs of loss and sued for, a verdict for attorney's fees and damages is unauthorized under this section. Queen Ins. Co. v. Peters, 10 Ga. App. 289 , 73 S.E. 536 (1912); Love v. National Liberty Ins. Co., 157 Ga. 259 , 121 S.E. 648 (1924); Firemen's Ins. Co. v. Larsen, 52 Ga. App. 140 , 182 S.E. 677 (1935); Georgia Farm Bureau Mut. Ins. Co. v. Boney, 113 Ga. App. 459 , 148 S.E.2d 457 (1966).

Recovery of attorney fees barred if underlying claims fail. - In an insured's suit asserting claims for breach of contract and bad faith breach of contract in connection with an insurer's denial of the insured's claim for proceeds of a disability insurance policy, the parent corporation of the insurer, which administered the insurer's policies, was not liable upon the insured's claim for attorney fees and expenses under O.C.G.A. § 33-4-6 because the insured had not succeeded on its underlying claims against the parent, which was determined not to be an alter ego of the insurer. Adams v. UNUM Life Ins. Co. of Am., 508 F. Supp. 2d 1302 (N.D. Ga. 2007).

No interest recoverable on unliquidated amount. - Interest from the date of the loss was not a recoverable item where the amount sought was not liquidated. Fidelity & Cas. Co. v. Mangum, 102 Ga. App. 311 , 116 S.E.2d 326 (1960).

Penalty is based on loss without including attorney's fees. - Where the amount recovered is the amount sought including attorney's fees and interest, as well as the loss under the policies it was held that this section did not authorize the penalty of 25 percent to be based on the total amount recovered. Fidelity & Cas. Co. v. Mangum, 102 Ga. App. 311 , 116 S.E.2d 326 (1960).

The amount recoverable for attorney's fees under this section should be regarded as "costs," and hence, where a reasonable amount for attorney's fees was necessary to bring the amount in controversy up to the minimum set by federal statute, the action, though between citizens of different states, was not within the jurisdiction of the federal court. Peters v. Queen Ins. Co. of Am., 182 F. 113 (S.D. Ga. 1910).

Attorney's fees recoverable only in accordance with section, not actual charges. - For refusal in bad faith to pay, the insurer is liable for "reasonable attorney's fees," the amount of which is to be determined in accordance with the standards set forth in this section and not by what the attorney actually charged the insured. Motors Ins. Corp. v. Roper, 136 Ga. App. 224 , 221 S.E.2d 55 (1975).

Attorney's work to meet unfounded defense may be considered. - In the event bad faith is shown in the refusal to pay the claim by the insurance company, the additional work, time, and effort by the plaintiff's attorney to meet an unfounded affirmative defense by the defendant would be a proper element to consider in awarding reasonable attorney's fees for the prosecution of the case against the company. Reserve Life Ins. Co. v. Ayers, 101 Ga. App. 887 , 115 S.E.2d 477 (1960).

Merely pleading unfounded defense does not justify punitive damages and attorney's fees. - There is no provision of law which allows punitive damages and attorney's fees because the defendant pleads an unfounded defense. Reserve Life Ins. Co. v. Ayers, 101 Ga. App. 887 , 115 S.E.2d 477 (1960).

A contingent fee may or may not be "reasonable." Old Equity Life Ins. Co. v. Barnard, 120 Ga. 596 , 171 S.E.2d 636 (1969).

Contingent fee is limited to recovery, not amount sued for. - A contingent fee is by definition a proportionate part of a judgment recovered by the attorney for his client. It cannot, however, mean a proportionate amount of the sum sued for, whether recovered or not, because the amount sued for is not contingent; it is known from the time of inception of the suit. Old Equity Life Ins. Co. v. Barnard, 120 Ga. App. 596 , 171 S.E.2d 636 (1969).

Insurer's default insufficient to establish liability. - That a title insurer defaulted by failing to answer the insureds' complaint did not require the trial court to award the insureds' attorney fees and penalties under O.C.G.A. § 33-4-6 because the complaint did not establish by well-pled facts, nor the fair inferences to be drawn therefrom, the insurer's liability for fees and penalties under § 33-4-6 . Jimenez v. Chi. Title Ins. Co., 310 Ga. App. 9 , 712 S.E.2d 531 (2011).

Failure to state claim. - Claims under O.C.G.A. § 33-4-6 for bad faith and derivative liability were properly dismissed because the plaintiff was not entitled to relief under any state of provable facts as allegations established that investigation into and adjustment of the claim was ongoing when the plaintiff demanded payment from the insurance company on January 16, 2015. Villa Sonoma at Perimeter Summit Condo. Ass'n v. Commercial Indus. Bldg. Owners Alliance, Inc., 349 Ga. App. 666 , 824 S.E.2d 738 (2019).

Cited in South Carolina Ins. Co. v. Hunnicutt, 107 Ga. App. 366 , 130 S.E.2d 239 (1963); GEICO v. Hardin, 108 Ga. App. 230 , 132 S.E.2d 513 (1963); GEICO v. Hardin, 219 Ga. 474 , 133 S.E.2d 873 (1963); Nationwide Mut. Ins. Co. v. Barnes, 108 Ga. App. 643 , 134 S.E.2d 552 (1963); Newark Ins. Co. v. Smith, 108 Ga. App. 839 , 135 S.E.2d 339 (1964); American Family Life Ins. Co. v. Glenn, 109 Ga. App. 122 , 135 S.E.2d 442 (1964); Cotton States Mut. Ins. Co. v. Davis, 110 Ga. App. 601 , 139 S.E.2d 427 (1964); Sun Ins. Co. v. League, 112 Ga. App. 625 , 145 S.E.2d 768 (1965); Iowa State Travelers Mut. Ass'n v. Cadwell, 113 Ga. App. 128 , 147 S.E.2d 461 (1966); Hartford Accident & Indem. Co. v. Grant, 113 Ga. App. 795 , 149 S.E.2d 712 (1966); Starling v. Gulf Life Ins. Co., 382 F.2d 701 (5th Cir. 1967); Nationwide Mut. Fire Ins. Co. v. Jenkins, 389 F.2d 373 (5th Cir. 1967); Travelers Ins. Co. v. Page, 120 Ga. App. 72 , 169 S.E.2d 682 (1969); Climatrol Indus., Inc. v. Home Indem. Co., 316 F. Supp. 314 (N.D. Ga. 1970); Ramsden v. GEICO, 123 Ga. App. 163 , 179 S.E.2d 671 (1971); Harvey v. Travelers Ins. Co., 339 F. Supp. 262 (N.D. Ga. 1971); Cash v. Balboa Ins. Co., 130 Ga. App. 60 , 202 S.E.2d 252 (1973); State Farm Mut. Ins. Co. v. Potts, 131 Ga. App. 26 , 205 S.E.2d 43 (1974); Allstate Ins. Co. v. Harris, 133 Ga. App. 567 , 211 S.E.2d 783 (1974); Roper v. Motors Ins. Corp., 139 Ga. App. 788 , 229 S.E.2d 481 (1976); Piedmont Life Ins. Co. v. Lea, 140 Ga. App. 400 , 231 S.E.2d 147 (1976); Interstate Life & Accident Ins. Co. v. Brown, 141 Ga. App. 195 , 233 S.E.2d 44 (1977); Jones v. Associated Indem. Corp., 143 Ga. App. 139 , 237 S.E.2d 651 (1977); United Ins. Co. of Am. v. Dixon, 143 Ga. App. 133 , 237 S.E.2d 661 (1977); Bains v. Hartford Fire Ins. Co., 440 F. Supp. 15 (N.D. Ga. 1977); Lee v. Safeco Ins. Co., 144 Ga. App. 519 , 241 S.E.2d 627 (1978); Georgia Farm Bureau Mut. Ins. Co. v. Washington, 145 Ga. App. 216 , 243 S.E.2d 639 (1978); Kennesaw Life & Accident Ins. Co. v. Hall, 147 Ga. App. 221 , 248 S.E.2d 524 (1978); Blue Cross of Georgia/Atlanta, Inc. v. Grenwald, 148 Ga. App. 486 , 251 S.E.2d 585 (1978); Southern United Life Ins. Co. v. Nelson, 151 Ga. App. 798 , 261 S.E.2d 742 (1979); Georgia-Carolina Brick & Tile Co. v. Brown, 153 Ga. App. 747 , 266 S.E.2d 531 (1980); Ken-Mar Constr. Co. v. Bowen, 245 Ga. 676 , 266 S.E.2d 796 (1980); Security Life Ins. Co. v. Blitch, 155 Ga. App. 167 , 270 S.E.2d 349 (1980); Sentry Indem. Co. v. Sharif, 156 Ga. App. 828 , 280 S.E.2d 354 (1980); Hutsell v. U.S. Life Title Ins. Co., 157 Ga. App. 845 , 278 S.E.2d 730 (1981); Allstate Ins. Co. v. Ammons, 160 Ga. App. 257 , 286 S.E.2d 765 (1981); Nationwide Mut. Fire Ins. Co. v. Rhee, 160 Ga. App. 468 , 287 S.E.2d 257 (1981); Travelers Ins. Co. v. King, 160 Ga. App. 473 , 287 S.E.2d 381 (1981); Davis v. Cincinnati Ins. Co., 160 Ga. App. 813 , 288 S.E.2d 233 (1982); Hawkins v. Travelers Ins. Co., 162 Ga. App. 231 , 290 S.E.2d 348 (1982); Allstate Ins. Co. v. Ammons, 163 Ga. App. 385 , 294 S.E.2d 610 (1982); Shepherd v. Metropolitan Property & Liab. Ins. Co., 163 Ga. App. 650 , 294 S.E.2d 638 (1982); Cummings v. Prudential Ins. Co. of Am., 542 F. Supp. 838 (S.D. Ga. 1982); Binns v. Metropolitan Atlanta Rapid Transit Auth., 168 Ga. App. 261 , 308 S.E.2d 674 (1983); Southern Trust Ins. Co. v. First Fed. Sav. & Loan Ass'n, 168 Ga. App. 899 , 310 S.E.2d 712 (1983); Bowers v. Continental Ins. Co., 753 F.2d 1574 (11th Cir. 1985); Consulting Eng'rs Group, Inc. v. Pace Constr., 613 F. Supp. 1192 (N.D. Ga. 1985); All Am. Assurance Co. v. Brown, 177 Ga. App. 402 , 339 S.E.2d 611 (1985); Gibbs v. Jefferson-Pilot Fire & Cas. Ins. Co., 178 Ga. App. 544 , 343 S.E.2d 758 (1986); Northern Assurance Co. of Am. v. Karp, 257 Ga. 40 , 354 S.E.2d 129 (1987); Hall v. Time Ins. Co., 663 F. Supp. 599 (M.D. Ga. 1987); Liberty Nat'l Fire Ins. Co. v. F & M Bank & Trust Co., 189 Ga. App. 759 , 377 S.E.2d 528 (1989); Vulcan Life Ins. Co. v. Davenport, 191 Ga. App. 79 , 380 S.E.2d 751 (1989); Claussen v. Aetna Cas. & Sur. Co., 754 F. Supp. 1576 (S.D. Ga. 1990); Mimbs v. Commercial Life Ins. Co., 832 F. Supp. 354 (S.D. Ga. 1993); Blue Cross & Blue Shield of Ga., Inc. v. Sheehan, 215 Ga. App. 228 , 450 S.E.2d 228 (1994); Department of Transp. v. Hardaway Co., 216 Ga. App. 262 , 454 S.E.2d 167 (1995); Georgia Farm Bureau Mut. Ins. Co. v. Richardson, 217 Ga. App. 201 , 457 S.E.2d 181 (1995); Southern Fire & Cas. Co. v. Freeman, 222 Ga. App. 308 , 474 S.E.2d 195 (1996); Caribbean Lumber Co. v. Phoenix Assurance Co., 227 Ga. App. 236 , 488 S.E.2d 718 (1997); Burt Co. v. Clarendon Nat'l Ins. Co., 385 Fed. Appx. 892 (11th Cir. 2010)(Unpublished); Auto Owners Ins. Co. v. Gay Constr. Co., 332 Ga. App. 757 , 774 S.E.2d 798 (2015).

Demand for Payment

Demand for payment necessary for attorney's fees or penalty. - To render an insurance company liable for attorney's fees under the provisions of this section, a demand and a refusal to pay, 60 days before suit is brought, must be plainly averred, and the truth of such averment must be established on the trial. Lester v. Piedmont & Arlington Life Ins. Co., 55 Ga. 475 (1875); Ancient Order United Workmen v. Brown, 112 Ga. 545 , 37 S.E. 890 (1901); Globe & Rutgers Fire Ins. Co. v. Jewell-Loudermilk Co., 36 Ga. App. 538 , 137 S.E. 286 , cert. denied, 36 Ga. App. 825 , S.E. (1927).

The liability of an insurer for attorney's fees and damages cannot accrue until the lapse of 60 days from the date of a demand made when there was a right to demand. National Cas. Co. v. Borochoff, 45 Ga. App. 745 , 165 S.E. 905 (1932).

Action on an insurance policy cannot be amended for the purpose of recovering damages and attorney's fees against the defendant, where at the time of the commencement of the suit there was not liability upon the part of the defendant therefor, in that it appears that there was no demand for payment of the amount due under the policy, and refusal to pay, more than 60 days before the commencement of the suit. Massachusetts Mut. Life Ins. Co. v. Montague, 63 Ga. App. 137 , 10 S.E.2d 279 (1940).

To recover attorney's fees or penalty for bad faith, a demand for payment of the loss must be made more than 60 days prior to filing of the suit. Hanover Ins. Co. v. Hallford, 127 Ga. App. 322 , 193 S.E.2d 235 (1972).

Where the plaintiffs sent their demand for payment to the defendant insurance company on the very day they filed suit, the insurance company was entitled to summary judgment on the plaintiffs' claims under the statute. Cagle v. State Farm Fire & Cas. Co., 236 Ga. App. 726 , 512 S.E.2d 717 (1999).

Since insured did not make a demand for payment before filing suit, he was not entitled to maintain a claim for bad faith penalties and attorney fees against his insurer for nonpayment of an alleged loss under a policy. Stedman v. Cotton States Ins. Co., 254 Ga. App. 325 , 562 S.E.2d 256 (2002).

Standing alone, a proof of loss is not a demand for payment thereof under this section. Guarantee Reserve Life Ins. Co. v. Norris, 219 Ga. 573 , 134 S.E.2d 774 (1964).

Petition did not allege failure to pay loss. - In an action upon an insurance policy, when the only allegation as to a demand upon the insurance company for payment of the loss was contained in the allegation as to the filing of the proof of loss, which was filed prior to December 7, 1925, on which date the insurance company acknowledged receipt of proof of loss and denied liability and refused payment of loss, and when the action was filed on January 12, 1926, the petition did not allege a failure of the insurance company to pay the loss within 60 days after demand. Continental Life Ins. Co. v. Wilson, 36 Ga. App. 540 , 137 S.E. 403 (1927).

Inadequate bad faith demand by insured. - Due to the inadequacies of an insured's bad faith demand, as its attempt to equate the submission of a claim with the demand for payment required by O.C.G.A. § 33-4-6 was directly contravened by case law, and the fact that the insurer met all its obligations under the policy the insurer issued to its insured, the trial court did not err in denying summary judgment to the insured and granting summary judgment on the insurer's cross-motion, authorizing the insurer to quitclaim the refinanced property to the insurer in full satisfaction of its duties and obligations under the policy. BayRock Mortg. Corp. v. Chi. Title Ins. Co., 286 Ga. App. 18 , 648 S.E.2d 433 (2007), cert. denied, 2008 Ga. LEXIS 108 (Ga. 2008).

No particular language is necessary to constitute a demand under this section. Hanover Ins. Co. v. Hallford, 127 Ga. App. 322 , 193 S.E.2d 235 (1972).

This section does not prescribe any particular form in which such demand shall be made, nor whether it shall be in writing or a verbal demand will suffice. Hull v. Alabama Gold Life Ins. Co., 79 Ga. 93 , 3 S.E. 903 (1887).

Ample evidence of demand. - When proofs of death were promptly made out upon company forms, and repeated demands for payment were thereafter made by the agent of the beneficiary, who was recognized and treated as such by both parties, and after the time for payment fixed by the policy the beneficiary notified the company and sent a person to its principal office, who made a direct demand for payment, there was ample evidence of a demand made under this section. Hull v. Alabama Gold Life Ins. Co., 79 Ga. 93 , 3 S.E. 903 (1887).

Transactions constituted demand and refusal to pay. - When the insured presented the insured's policies to the insurance company for payment; the insured also had prepared and sent in proofs of loss and was informed by the company that they had no liability as to the accidental death policy; the company again denied liability on the ground of accord and satisfaction in answer to a letter written by the insured's attorneys inquiring the reason for denial of the claim; and all of these acts took place at a time when the policy was due and payable, the transactions constituted a demand and refusal to pay within the purview of this section. Mutual Sav. Life Ins. Co. v. Hines, 96 Ga. App. 442 , 100 S.E.2d 466 (1957).

No particular language is necessary to constitute a demand, and the insistence of the plaintiff that the plaintiff be paid even if it meant resorting to the courts after the adjuster informed the plaintiff that the insurer would not pay the plaintiff anything unless the plaintiff signed a "nonwaiver" agreement was a sufficient demand to comply with this section. Cotton States Mut. Ins. Co. v. Clark, 114 Ga. App. 439 , 151 S.E.2d 780 (1966).

Pre-suit demand insufficient. - Trial court properly determined that the insured's pre-suit communications with the insurer as to the expenses incurred for tree and debris removal did not satisfy the pre-suit demand requirement because the threat of litigation pertained only to those items and did not cover other expenses sought by the insured. Thompson v. Homesite Insurance Company of Ga., 345 Ga. App. 183 , 812 S.E.2d 541 (2018), cert. denied, No. S18C1044, 2018 Ga. LEXIS 738 (Ga. 2018).

Failure to name particular sum does not make demand insufficient. - The demand made by plaintiff's attorney more than 60 days prior to the action would be sufficient, and the failure to demand payment in any particular sum would not render the demand insufficient. Hanover Ins. Co. v. Hallford, 127 Ga. App. 322 , 193 S.E.2d 235 (1927).

Failure to assert bad faith. - Beneficiary's telephone call demanding payment of life insurance proceeds two days after her husband's death, before the insurer received formal evidence of the loss, and not asserting a bad faith claim, was not a sufficient demand under O.C.G.A. § 33-4-6 . Primerica Life Ins. Co. v. Humfleet, 217 Ga. App. 770 , 458 S.E.2d 908 (1995).

Including unauthorized item in demand held not to bar penalty and attorney's fees. - The fact that the insured who was liable to an injured third party and had paid the party's medical expenses, when demanding payment from the insurer, might have included in the demand a specified amount disbursed by the insured for the burial expenses of the person injured, who had afterwards died, would not defeat the right to sue for and recover the penalty and attorney's fees authorized under this section, where the response to such a demand was failure to pay any amount and a statement that it appeared to the insurer that the insured had "paid these various charges not on account of the liability involved, but on account of the contracts you made with various parties for the treatment of this injured," and where there was no objection to the amount of the claim because it included the burial expenses of the injured person in addition to the itemized amounts paid for her medical treatment. Employers' Liab. Assurance Corp. v. Manget Bros. Co., 45 Ga. App. 721 , 165 S.E. 770 (1932).

Demand made after counterclaim filed is improper. - When, in insurer's declaratory judgment action, insured's counterclaim seeking penalties for insurer's bad faith refusal to pay claim was filed before his demand for payment, the demand was not proper. Howell v. Southern Heritage Ins. Co., 214 Ga. App. 536 , 448 S.E.2d 275 (1994).

Demand must be made when there is right to demand payment. - Under this section, the liability of the insurer for attorney's fees and damages cannot accrue until the lapse of 60 days from the date of a demand made when there is a right to demand payment. New Zealand Fire Ins. Co. v. Brewer, 29 Ga. App. 773 , 116 S.E. 922 (1923); American Nat'l Ins. Co. v. Brantley, 38 Ga. App. 505 , 144 S.E. 332 (1928); Life Ins. Co. v. Burke, 219 Ga. 214 , 132 S.E.2d 737 (1963).

As a finding of bad faith in refusal to pay insurance benefits is dependent upon the demand being made at a time when the right to make demand exists, so also is a finding of bad faith in refusal to pay no-fault insurance benefits dependent upon the claim being made at a time when it is a valid claim. Doran v. Travelers Indem. Co., 254 Ga. 63 , 326 S.E.2d 221 (1985).

Immediate payment is in order. - The penalties accrue by virtue of a demand, and the demand must be made at a time when a demand for immediate payment is in order. American Nat'l Ins. Co. v. Brantley, 38 Ga. App. 505 , 144 S.E. 332 (1928); National Cas. Co. v. Borochoff, 45 Ga. App. 745 , 165 S.E. 905 (1932); Napp v. American Cas. Co., 110 Ga. App. 673 , 139 S.E.2d 425 (1964).

Demand is not in order if made when policy gives insurer time to investigate. - The demand for payment of the proceeds of an insurance policy must be made at a time when a demand for immediate payment is in order. It is not in order if the insurer, under the terms of the insurance policy, has additional time left in which to investigate or adjust the loss and therefore has no legal duty to pay at the time the demand is made. Buffalo Ins. Co. v. Star Photo Finishing Co., 120 Ga. App. 697 , 172 S.E.2d 159 (1969).

Demand failed to include critical facts regarding insured's loss. - Based upon a lender's failure to notify the lender's title insurer of critical facts pertaining to the lender's loss in the lender's bad faith demand letter, including the actual amount of the lender's loss from the defect in title, the court could not hold the title insurer liable for bad faith under O.C.G.A. § 33-4-6 . Doss & Assocs. v. First Am. Title Ins. Co., 325 Ga. App. 448 , 754 S.E.2d 85 (2013).

Demand made before time set by policy for payment after proof of loss. - The liability of the insurer for attorney's fees and damages could not accrue until the lapse of 60 days from the date of a demand made when there was a right to demand; thus, where by the terms of the policy it was not payable until 60 days from the submission of proofs of loss and it appeared that the only demand for payment was made with the proof of loss, which was before the plaintiff had a right to make an absolute demand for payment, the evidence did not authorize a recovery of attorney's fees and damages. Philadelphia Fire & Marine Ins. Co. v. Burroughs, 176 Ga. 260 , 168 S.E. 36 (1932).

Where it appears from the record and the admissions of counsel for the plaintiff that demand, if any, was made before or at the time proofs of loss were filed, which time was before the plaintiff had a right to make an absolute demand for payment, the recovery of damages and attorney's fees was not authorized by the evidence. Life Ins. Co. v. Burke, 219 Ga. 214 , 132 S.E.2d 737 (1963).

Proof of loss filing waived. Whether a demand was good under former Code 1933, §§ 56-706 and 56-1206 depends on whether it was made at a time when immediate payment could be exacted, which in turn depends on whether the filing (not merely the time of filing) of proof of loss forms was waived under former Code 1933, § 56-2427 (see O.C.G.A. § 33-24-39 ). Buffalo Ins. Co. v. Star Photo Finishing Co., 120 Ga. App. 697 , 172 S.E.2d 159 (1969); Britt v. Independent Fire Ins. Co., 184 Ga. App. 225 , 361 S.E.2d 226 (1987).

Proof of loss filed after bad faith demand improper. - Bad faith claim brought by an insured against an insurer for failure to pay a claim for extra expenses incurred by the insured after the insured suffered a fire loss at one of the insured's bakeries failed because the insured made the insured's bad faith demand before the insured filed any proof of loss, and therefore, no right to demand immediate payment existed. Lavoi Corp. v. Nat'l Fire Ins. of Hartford, 293 Ga. App. 142 , 666 S.E.2d 387 (2008).

Demand may accompany proof of loss where policy made payable then. - Where the policy became due and payable immediately upon proof of loss, a contemporaneous demand made at the time of the filing of the proof of loss meets the requirements of a demand when there was a right to demand. American Nat'l Ins. Co. v. Brantley, 38 Ga. App. 505 , 144 S.E. 332 (1928).

There is no equitable exception to the 60-day rule for instances in which the lawsuit is filed shortly before the expiration of a limitations period. Cagle v. State Farm Fire & Cas. Co., 236 Ga. App. 726 , 512 S.E.2d 717 (1999).

Submission of medical bill does not constitute demand. - The mere submission of medical bills does not necessarily constitute an actual demand for payment within the meaning of O.C.G.A. § 33-4-6 . Blue Cross & Blue Shield of Georgia/Atlanta, Inc. v. Merrell, 170 Ga. App. 86 , 316 S.E.2d 548 (1984).

An insurer's denial of a claim does not waive the 60-day statutory period, and the insured's filing suit within this period, without making a demand for payment, precludes the recovery of a statutory penalty and attorney's fees. Kilpatrick Marine Piling v. Fireman's Fund Ins. Co., 795 F.2d 940 (11th Cir. 1986).

Bad Faith Refusal to Pay

Exclusive remedy. - O.C.G.A. § 33-4-6 provided the exclusive remedy for an insurer's bad faith refusal to pay insurance proceeds. As a result, the insured had no independent claim for consequential damages, and summary judgment was granted to the insurance company on that claim. B.S.S.B., Inc. v. Owners Ins. Co., F. Supp. 2d (M.D. Ga. Jan. 20, 2010).

No recovery under section unless refusal to pay made in bad faith. - Where the evidence fails to authorize a finding of bad faith, the jury is not authorized to find an amount against the company representing attorney's fees. New York Life Ins. Co. v. Ittner, 64 Ga. App. 806 , 14 S.E.2d 203 (1941).

Where it is made to appear that the refusal of the company to pay the loss was in bad faith, attorney's fees may be authorized. American Fire & Cas. Co. v. Barfield, 81 Ga. App. 887 , 60 S.E.2d 383 (1950).

Attorney's fees and the penalty provided for should never be permitted unless the defendant acts in bad faith - that is, that the defense is frivolous and unfounded. Continental Cas. Co. v. Owen, 90 Ga. App. 200 , 82 S.E.2d 742 (1954).

Unless the jury finds the action to have been in bad faith, the penalty is not assessed. Reserve Life Ins. Co. v. Gay, 96 Ga. App. 601 , 101 S.E.2d 158 (1957), rev'd on other grounds, 214 Ga. 2 , 102 S.E.2d 492 (1958).

The insurance company is liable for attorney's fees and penalty only where the refusal to pay is in bad faith, frivolous, and unfounded. Mead Corp. v. Liberty Mut. Ins. Co., 107 Ga. App. 167 , 129 S.E.2d 162 (1962), rev'd on other grounds, 219 Ga. 6 , 131 S.E.2d 534 (1963).

Insured was not entitled to proceeds of a business buy out expense insurance policy, because the insured was not employed full-time prior to becoming disabled and the buy out was not accomplished through the practice and pursuant to a buy-sell agreement. Oak Rd. Family Dentistry, P.C. v. Provident Life & Accident Ins. Co., 370 F. Supp. 2d 1317 (N.D. Ga. Feb. 4, 2005).

Even assuming an administratrix's original complaint was deficient for not setting forth allegations that, if proven, would have established the notice requirements to recover extra-contractual damages against a life insurance company for bad faith in denying a claim for insurance death benefits under O.C.G.A. § 33-4-6 , it was clear that the administratrix's proposed amended complaint cured any defects that might have existed; thus, the administratrix adequately pleaded a breach of contract claim, including a claim for extra-contractual damages and attorney fees. Garrett v. Unum Life Ins. Co. of Am., 427 F. Supp. 2d 1158 (M.D. Ga. 2005).

Summary judgment for an insurance company on a motorist's claim against it was proper since there was no evidence of bad faith; the insurance company did not settle the motorist's property damage claim because its adjuster believed that, at the motorist's request, the motorist's insurer was assuming responsibility for settling the claim; an adjuster with the motorist's insurer confirmed that the motorist's insurer had "handled" the motorist's claim, and, further, the motorist sent a demand letter to the motorist's insurer on the same day that the motorist sent a demand letter to the insurance company, indicating that the motorist was still looking to the motorist's own insurer for payment. King v. Atlanta Cas. Ins. Co., 279 Ga. App. 554 , 631 S.E.2d 786 (2006).

Trial court erred in denying the insured's motion for summary judgment as to the insured's request for attorney's fees for bad-faith refusal to pay only as to the refusal to pay for the burglary damage and not the lost rent claim. Auto-Owners Ins. Co. v. Neisler, 334 Ga. App. 284 , 779 S.E.2d 55 (2015).

Although the general contractor's new claim against the surety for surety bad faith, arguing that the surety stubbornly refused to meet the surety's obligations under the bonds despite clear and undisputed evidence of the surety's liability under the bond because there were genuine issues of material fact as to whether the general contractor was entitled to coverage under the payment and performance bonds, the surety had reasonable grounds to contest the general contractor's claims and bad-faith penalties were not warranted. Choate Constr. Co. v. Auto-Owners Ins. Co., 335 Ga. App. 331 , 779 S.E.2d 465 (2015).

Absence of bad faith prevents punitive and attorney fees awards. - Because the trial court's ruling that neither the insurance agent or company had a contract of insurance with the tree service company owner in effect on the date of the accident, no bad faith claim could be asserted against either defendant for failure to pay a claim arising from the accident; thus, the claims for punitive damages and attorney fees also failed since those claims were derivative of the underlying claims. Popham v. Landmark Am. Ins. Co., 340 Ga. App. 603 , 798 S.E.2d 257 (2017).

"Acting in bad faith" in breach of contract. - Refusal to pay in "bad faith" under former Code 1933, §§ 56-706 and 56-1206 (see O.C.G.A. § 33-4-6 ) was not the legal equivalent of "having acted in bad faith" under former Civil Code 1895, § 3796 (see O.C.G.A. § 13-6-11 ). Traders Ins. Co. v. Mann, 118 Ga. 381 , 45 S.E. 426 (1903); New York Life Ins. Co. v. Bradford, 57 Ga. App. 657 , 196 S.E. 92 (1938).

The "bad faith" referred to in former Code 1933, §§ 20-1404 56-706, and 56-1206 (see O.C.G.A. §§ 13-6-11 and 33-4-6 ) was not the same. Canal Ins. Co. v. Lawson, 123 Ga. App. 376 , 181 S.E.2d 91 (1971).

Motion to dismiss a breach of contract claim against an insurer was denied because an insured could have brought a breach of contract case and a claim for bad faith refusal to pay under O.C.G.A. § 33-4-6 simultaneously. Estate of Thornton v. Unum Life Ins. Co. of Am., 445 F. Supp. 2d 1379 (N.D. Ga. 2006).

Claim not good under this section may be good under section on breach. - Although the plaintiff's allegations did not support the claim for attorney's fees under former Civil Code 1910, §§ 2549 and 4392 (see O.C.G.A. §§ 13-6-11 and 33-4-6 ), the allegations of bad faith on the part of the defendant relative to the transaction and dealings out of which the cause of action arose rendered the claim for attorney's fees good as against demurrer (now motion to dismiss). Glover v. Bankers' Health & Life Ins. Co., 30 Ga. App. 308 , 117 S.E. 665 (1923).

"Bad faith" by officer justifying exemplary damages on bond. - The "bad faith" referred to in former Civil Code 1910, § 299 (see O.C.G.A. § 45-4-29 ) may be of a different character from that which under certain conditions will authorize a recovery under former Code 1933, §§ 56-706 and 56-1206 (see O.C.G.A. § 33-4-6 ). Copeland v. Dunehoo, 36 Ga. App. 817 , 138 S.E. 267 (1927).

"Bad faith" under this section means frivolous and unfounded denial of liability. - Refusal of an insurance company "in bad faith" to pay means a frivolous and unfounded denial of liability. Albergotti v. Equitable Life Assurance Soc'y of United States, 48 F. Supp. 290 (S.D. Ga. 1942); Pearl Assurance Co. v. Nichols, 73 Ga. App. 452 , 37 S.E.2d 227 (1946); Life & Cas. Ins. Co. v. Freemon, 80 Ga. App. 443 , 56 S.E.2d 303 (1949) (For comment, see 12 Ga. B.J. 337 (1950)); North British & Mercantile Ins. Co. v. Mercer, 90 Ga. App. 143 , 82 S.E.2d 41 , aff'd, 211 Ga. 161 , 84 S.E.2d 570 (1954); Gulf Life Ins. Co. v. Moore, 90 Ga. App. 791 , 84 S.E.2d 696 (1954); Dependable Ins. Co. v. Gibbs, 218 Ga. 305 , 127 S.E.2d 454 (1962); Georgia Cas. & Sur. Co. v. Seaboard Sur. Co., 210 F. Supp. 644 (N.D. Ga. 1962), aff'd, 327 F.2d 666 (5th Cir. 1964); Belch v. Gulf Life Ins. Co., 219 Ga. 823 , 136 S.E.2d 351 (1964); Lanier v. American Cas. Co., 226 F. Supp. 630 (N.D. Ga. 1964); Dorsey v. State Mut. Life Assurance Co., 238 F. Supp. 391 (N.D. Ga. 1964), aff'd, 357 F.2d 600 (5th Cir. 1966); American Cas. Co. v. Ten Tex Corp., 357 F.2d 269 (5th Cir. 1966); United States Fid. & Guar. Co. v. Woodward, 118 Ga. App. 591 , 164 S.E.2d 878 (1968); Pioneer Nat'l Title Ins. Co. v. American Cas. Co., 459 F.2d 963 (5th Cir. 1972); Bohannon v. Manhattan Life Ins. Co., 555 F.2d 1205 (5th Cir. 1977); Canal Ins. Co. v. Savannah Bank & Trust Co., 181 Ga. App. 520 , 352 S.E.2d 835 (1987).

To authorize imposition of the penalty and attorney's fees, it must appear that the basis of the insurance company's position as to the amount of liability was frivolous and unfounded. Georgia Farm Bureau Mut. Ins. Co. v. Boney, 113 Ga. App. 459 , 148 S.E.2d 457 (1966).

"Bad faith" in refusing to pay claim. - "Bad faith" means a frivolous and unfounded refusal to pay a claim. Business Men's Assurance Co. of Am. v. Tilley, 109 Ga. App. 529 , 136 S.E.2d 514 (1964); Fidelity Bankers Life Ins. Co. v. Renew, 121 Ga. App. 883 , 176 S.E.2d 103 (1970); Public Sav. Life Ins. Co. v. Wilder, 123 Ga. App. 754 , 182 S.E.2d 536 (1971); Dixie Constr. Prods. Inc. v. WMH, Inc., 179 Ga. App. 658 , 347 S.E.2d 303 (1986).

Refusal to pay means a frivolous and unfounded failure to pay a valid claim. Phillips v. State Farm Mut. Auto. Ins. Co., 437 F.2d 365 (5th Cir. 1971).

"Bad faith" is shown by evidence that, under the terms of the policy upon which the demand is made and under the facts surrounding the response to that demand, the insurer had no "good cause" for resisting and delaying payment. Georgia Int'l Life Ins. Co. v. Harden, 158 Ga. App. 450 , 280 S.E.2d 863 (1981).

Facts alleged by an administratrix in the complaint, alleging an improper denial of insurance death benefits, set forth a simple claim for a breach of contract; there was no suggestion that the parties had a special relationship; absent a special relationship between parties to a contract, Georgia law did not support a tort claim for negligent infliction of emotional distress and O.C.G.A. § 33-4-6 was the administratrix's exclusive remedy. Garrett v. Unum Life Ins. Co. of Am., 427 F. Supp. 2d 1158 (M.D. Ga. 2005).

There was evidence that an insurance company that denied a claim relating to a stolen bulldozer acted in bad faith; correspondence put the company on notice of the difficulty of construing its policy. Certain Underwriters at Lloyd's of London v. Rucker Constr., Inc., 285 Ga. App. 844 , 648 S.E.2d 170 (2007).

In a case wherein mortgage lenders obtained title insurance policies from an insurer to guard against defects in title, where the policies required the insurer to pay or otherwise cure the title problem in the event of such defects, and such defects clearly existed, triggering the insurer's obligations under the policies, a judgment against the insurer was upheld on appeal as it was shown that the insurer failed to comply with its obligations until after it had named its policy holders as defendants in a protracted lawsuit; the trial court was authorized to find that the lawsuit was filed by the insurer to delay or avoid legitimate claims payment. Atl. Title Ins. Co. v. Aegis Funding Corp., 287 Ga. App. 392 , 651 S.E.2d 507 (2007), cert. denied, No. S08C0137, 2008 Ga. LEXIS 107 (Ga. 2008).

Trial court did not err in granting summary judgment to an insured on the issue of liability for bad faith penalties and attorney fees under O.C.G.A. § 33-4-6 because a finding of bad faith as a matter of law was eminently justified when the insurer failed to set forth any defense to a determination of bad faith other than its meritless reliance on the business-risk clauses of the insured's comprehensive general liability policy; the insurer simply submitted no admissible evidence to defend itself on the insured's bad faith claims, and the insurer neglected even to protect itself by defending under a reservation of rights while filing a declaratory judgment action in order to determine the extent of coverage and its duty to defend. Transp. Ins. Co. v. Piedmont Constr. Group, LLC, 301 Ga. App. 17 , 686 S.E.2d 824 (2009), cert. denied, No. S10C0507, 2010 Ga. LEXIS 312 (Ga. 2010).

"Bad faith" in refusing to pay loss after demand. - "Bad faith," within the meaning of this section, is any frivolous or unfounded refusal in law or in fact to pay a loss according to the insurance contract after legal demand. Cimarron Ins. Co. v. Pace, 212 Ga. 427 , 93 S.E.2d 593 (1956); Millers Nat'l Ins. Co. v. Waters, 97 Ga. App. 103 , 102 S.E.2d 193 (1958); Reserve Life Ins. Co. v. Ayers, 217 Ga. 206 , 121 S.E.2d 649 (1961).

The term "bad faith," as used in this section, means any frivolous and unfounded refusal in law or in fact to comply with the demand of the policyholder to pay according to the terms of the policy. Royal Ins. Co. v. Cohen, 105 Ga. App. 746 , 125 S.E.2d 709 (1962); Interstate Life & Accident Ins. Co. v. Williamson, 220 Ga. 323 , 138 S.E.2d 668 , answer conformed to, 110 Ga. App. 557 , 139 S.E.2d 429 (1964); United States Fid. & Guar. Co. v. Biddy Lumber Co., 114 Ga. App. 358 , 151 S.E.2d 466 (1966); Interstate Life & Accident Ins. Co. v. Brown, 146 Ga. App. 622 , 247 S.E.2d 205 (1978); Smith v. New York Life Ins. Co., 579 F.2d 1267 (5th Cir. 1978); Progressive Cas. Ins. Co. v. Avery, 165 Ga. App. 703 , 302 S.E.2d 605 (1983).

"Bad faith" means any frivolous or unfounded refusal in law or in fact to comply with the terms of the contract under the conditions imposed by statute. Life Ins. Co. v. Burke, 219 Ga. 214 , 132 S.E.2d 737 (1963); Lincoln Life Ins. Co. v. Anderson, 109 Ga. App. 238 , 136 S.E.2d 1 (1964).

When damages and attorney fees are sought under this section, the term "bad faith" means any frivolous or unfounded refusal in law or in fact to comply with the demand of the policyholder to pay according to the terms of the policy and the conditions imposed by statute. Witt v. Pennsylvania Nat'l Mut. Cas. Ins. Co., 117 Ga. App. 838 , 162 S.E.2d 251 (1968).

Manufacturer's demand for payments pursuant to O.C.G.A. § 33-4-6 was valid because the manufacturer delivered a letter to the insurance company demanding reimbursement for payments the manufacturer had made on the warranty claims. The claims were denied because the claims had become too costly; as such, the insurance company's refusal to pay was not reasonable as a matter of law. Lloyd's Syndicate No. 5820 v. AGCO Corp., 319 Ga. App. 260 , 734 S.E.2d 899 (2012).

Failure to completely investigate. - Trial court did not err in denying an insurer's motion for a directed verdict on whether the insurer denied the insured's claim in bad faith in the face of evidence that the claim was not completely investigated. United Servs. Auto. Ass'n v. Carroll, 226 Ga. App. 144 , 486 S.E.2d 613 (1997).

Only one penalty recoverable from one accident. - When a trial court erroneously granted an insured statutory damages against an insurer, for bad faith, under O.C.G.A. § 33-4-6 , for each of 26 medical bills arising from one automobile accident, this was a nonamendable defect which appeared on the face of the record, so the trial court could correct its judgment in the term of court after the term in which the judgment was entered by granting one statutory damages award for all claims arising from the accident. Byrd v. Regal Ins. Co., 275 Ga. App. 779 , 621 S.E.2d 758 (2005).

"Bad faith" is not equivalent of fraud. - The term "bad faith" in this section is not the equivalent of actual fraud, but means any frivolous or unfounded refusal in law or in fact to comply with the requisition of the policyholder to pay according to the terms of his contract and the conditions imposed by statute. Cotton States Life Ins. Co. v. Edwards, 74 Ga. 220 (1884); Missouri State Life Ins. Co. v. Lovelace, 1 Ga. App. 446 , 58 S.E. 93 (1907); Bankers' Health & Life Ins. Co. v. Brown, 49 Ga. App. 294 , 175 S.E. 387 (1934); Sentinel Fire Ins. Co. v. McRoberts, 50 Ga. App. 732 , 179 S.E. 256 (1934); Life & Cas. Ins. Co. v. Smith, 51 Ga. App. 122 , 179 S.E. 744 (1935); Mutual Life Ins. Co. v. Barron, 70 Ga. App. 454 , 28 S.E.2d 334 (1943); Southeastern Constr. Co. ex rel. Beckham v. Glens Falls Indem. Co., 81 Ga. App. 770 , 59 S.E.2d 751 , rev'd on other grounds, 207 Ga. 488 , 62 S.E.2d 149 (1950).

"Bad faith," within the meaning of this section, is not the equivalent of actual fraud, but is any frivolous or unfounded refusal in law or in fact to pay according to the insurance contract, after a demand. Metropolitan Life Ins. Co. v. Lovett, 50 Ga. App. 763 , 179 S.E. 253 (1935); American Cas. Co. v. Callaway, 75 Ga. App. 799 , 44 S.E.2d 400 (1947).

Agent's bad faith held bad faith of insurer. - Where insurer refused payment of policy after loss occurred, relying on contentions which were admitted on the trial to be untrue and on further ground that its agent had never been paid for the policy, if in fact he was paid, his bad faith in making this denial became the bad faith of the company, for he was its agent with authority to act in the premises. Kansas City Life Ins. Co. v. Williams, 62 Ga. App. 707 , 9 S.E.2d 680 (1940).

Insurer may have real issues of fact submitted to jury. - The test for the payment of damages and attorney's fees, under this section, is whether the refusal is frivolous and unfounded, and the statute never intended to penalize insurance companies for desiring to have real issues of fact submitted to a jury. Life & Cas. Co. v. Jordan, 69 Ga. App. 287 , 25 S.E.2d 103 (1943).

Penalties for bad faith are not authorized where there is a disputed question of fact. United States Fid. & Guar. Co. v. Woodward, 118 Ga. App. 591 , 164 S.E.2d 878 (1968).

Gross discrepancies between facts appearing in the plaintiff's signed application and those which investigation discloses after a claim is made on a policy gives an insurance company good reason to take issue with the policy owner. Public Sav. Life Ins. Co. v. Wilder, 123 Ga. App. 754 , 182 S.E.2d 536 (1971).

Whether deceased insured was drunk. - As to double indemnity benefit, insurance company was within its rights in having a jury pass upon the question as to whether or not at the time the insured met his death he was under the influence of intoxicating liquors. Progressive Life Ins. Co. v. Smith, 71 Ga. App. 157 , 30 S.E.2d 411 (1944).

Contesting payment where questions of law are intricate. - Where the questions of law involved in a case are intricate and difficult of solution, the insurer has the right to contest payment of the claim and is not guilty of bad faith in refusing to pay it. United States Fid. & Guar. Co. v. Woodward, 118 Ga. App. 591 , 164 S.E.2d 878 (1968).

Insured's refusal to pay based on material misrepresentations in the application did not constitute bad faith where, even though it waived its defense that the policy was void, the question of waiver was complicated, and was not evidence of bad faith. Florida Int'l Indem. Co. v. Osgood, 233 Ga. App. 111 , 503 S.E.2d 371 (1998).

Close questions of liability adjudicated without penalty. - There being no evidence of any frivolous or unfounded refusal by the defendant insurance company to pay the plaintiff and the question of liability being a close one under the law and facts, the defendant was reasonably entitled to have the matter adjudicated without being subject to the charge of bad faith, and the award of attorney's fees as a penalty under this section was therefore unauthorized. American Nat'l Ins. Co. v. Holbert, 50 Ga. App. 527 , 179 S.E. 219 (1935); Bankers Health & Life Ins. Co. v. Hamilton, 56 Ga. App. 569 , 193 S.E. 477 (1937).

Where the question of liability is close or the facts are in dispute, so that the insurer has reasonable grounds to contest the claim, no penalty should be permitted. Hartford Fire Ins. Co. v. Lewis, 112 Ga. App. 1 , 143 S.E.2d 556 (1965).

The purpose of this section was not to penalize an insurer for appealing to the courts where there are questions concerning an insurance contract which are sufficiently doubtful to justify adjudication. Morris v. Mutual Benefit Life Ins. Co., 258 F. Supp. 186 (N.D. Ga. 1966).

When a bona fide dispute exists concerning liability, recovery of damages and attorney fees because of bad faith is not authorized. Norfolk & Dedham Mut. Fire Ins. Co. v. Cumbaa, 128 Ga. App. 196 , 196 S.E.2d 167 (1973).

No "bad faith" exists where there is a doubtful question of law involved. - The evidence did not show bad faith on the part of the company in refusing to pay the loss, where the legal questions involved were sufficiently doubtful and important to justify the insurer in litigating the matter. Continental Life Ins. Co. v. Wells, 38 Ga. App. 99 , 142 S.E. 900 (1928).

No "bad faith" exists where there is a doubtful question of law involved. Brown v. Seaboard Lumber & Supply Co., 221 Ga. 35 , 142 S.E.2d 842 (1965); United States Fid. & Guar. Co. v. Woodward, 118 Ga. App. 591 , 164 S.E.2d 878 (1968); Federal Ins. Co. v. National Distrib. Co., 203 Ga. App. 763 , 417 S.E.2d 671 (1992), cert. denied, 203 Ga. App. 906 , 417 S.E.2d 671 (1992).

Trial court erred in denying summary judgment to the insurer on the insured's bad faith claim because the insurer had a reasonable factual and legal basis for denying coverage such that bad faith penalties were not allowed as the question of whether the previous reservations of rights were still effective had not been squarely answered, and it may have appeared from a review of the insurer's records that the reservation of rights letters had been sent out once the insurer agreed to cover the litigation. American Safety Indemnity Co. v. Sto Corp., 342 Ga. App. 263 , 802 S.E.2d 448 (2017).

Insurer may contest liability on undecided legal question. - The insurer has a right to contest liability depending on a legal question which has not heretofore been decided by the courts of this state. Reserve Life Ins. Co. v. Bearden, 96 Ga. App. 549 , 101 S.E.2d 120 (1957), aff'd, 213 Ga. 904 , 102 S.E.2d 494 (1958).

The questions of law as to the proper construction of the double indemnity provision of the policy of insurance not having been decided by the courts of Georgia, and having been decided contrary to the contentions of the plaintiff by other courts, the defendant insurance company was not subject to damages and attorney's fees on the ground of bad faith, since its defense was not frivolous or unfounded. Life Ins. Co. v. Burke, 219 Ga. 214 , 132 S.E.2d 737 (1963).

An insurance company is not guilty of bad faith in seeking a judicial determination of an issue involving a question of law previously undecided in this state. Georgia Farm Bureau Mut. Ins. Co. v. Calhoun, 127 Ga. App. 213 , 193 S.E.2d 35 (1972).

Where the issue raised in the case is one of first impression, and the Court of Appeals divided 6-3 on the issue, and the Supreme Court granted an application for a writ of certiorari to resolve the issue, the insurer was legally justified in litigating the issue and cannot, as a matter of law, be liable for the statutory penalty under this section. State Farm Mut. Auto. Ins. Co. v. Bass, 231 Ga. 269 , 201 S.E.2d 444 (1973); Bass v. State Farm Mut. Auto. Ins. Co., 130 Ga. App. 393 , 203 S.E.2d 379 (1973).

Work product documents discoverable for bad faith counterclaim. - Even though documents in an insurer's claim file were prepared in anticipation of litigation under the work product doctrine of Fed. R. Civ. P. 26(b)(3), an additional insured showed substantial need because the documents were the only reliable indication of the insurer's bad faith for the insurer's counterclaim under O.C.G.A. § 33-4-6 , except that the insurer was entitled to redact information showing mental impressions. Underwriters Ins. Co. v. Atlanta Gas Light Co., 248 F.R.D. 663 (N.D. Ga. 2008).

Insurer could dispute applicability of clause. - Trial court properly entered summary judgment for the insurer in business's bad faith claim under O.C.G.A. § 33-4-6 since there was no evidence that the insurer acted in bad faith as there was a genuine dispute as to the applicability of the civil authority clause in a business insurance policy. Assurance Co. v. BBB Serv. Co., 259 Ga. App. 54 , 576 S.E.2d 38 (2002).

Insurer may seek declaratory judgment. - Where an action is instituted by an insurance company in federal court seeking a declaratory judgment as to its ultimate liability under a policy, the insurance company is not liable for attorney's fees and expenses incurred by the insured in such a proceeding in the absence of policy provisions to the contrary, or in the absence of fraud, bad faith, and stubborn litigiousness. Maryland Cas. Co. v. Sammons, 63 Ga. App. 323 , 11 S.E.2d 89 (1940).

Actions initiated before expiration of 60 days from demand. - Where the insurance company initiates a declaratory judgment action well before the expiration of 60 days from demand, the applicant has no action for attorney's fees for a bad faith refusal to pay under this section. Allstate Ins. Co. v. Anderson, 121 Ga. App. 582 , 174 S.E.2d 591 (1970).

Declaratory judgment action must do more than ask determination of liability. - An insurer will not be absolved of the bad faith penalty provided by this section merely by the fact that a declaratory judgment action is brought by it, where the action does no more than ask the court to determine whether the insurer is liable upon an insurance policy which it issued. State Farm Fire & Cas. Co. v. Gosdin, 147 Ga. App. 156 , 248 S.E.2d 216 (1978).

Insurer's filing of a declaratory judgment action that disputed coverage under an insured's policy did not insulate the insurer from a counterclaim filed by the insured under O.C.G.A. § 33-4-6 for bad faith refusal to pay. Great Southwest Express Co. v. Great Am. Ins. Co., 292 Ga. App. 757 , 665 S.E.2d 878 , cert. denied, 293 Ga. App. 365 , 667 S.E.2d 192 (2008).

Where there is a reasonable basis for so doing, an insurer is entitled to maintain and defend its position as to the amount of its liability without the imposition of penalty and attorney's fees, even if doing so results in considerable delay in bringing the matter to a conclusion. Any rule or principle which would deny to the company the right of full and free litigation on the question of its liability or of the amount thereof is wrong. Georgia Farm Bureau Mut. Ins. Co. v. Boney, 113 Ga. App. 459 , 148 S.E.2d 457 (1966).

Delay in settlement does not justify penalty where insurer's offer is fair. - Where the insurer disagrees with the insured as to the amount of his damage, offering to pay a sum which, in the light of the facts available to it and of proposals from reputable people engaged in the repairing of automobiles, it deems to be fair and reasonable as damages for the loss sustained and the insured declines the offer, insisting upon the payment of a sum substantially in excess of the amount offered, the matter thus reaching a stalemate, a recovery of damages and attorney's fees because of delay in making settlement is not authorized. Georgia Farm Bureau Mut. Ins. Co. v. Boney, 113 Ga. App. 459 , 148 S.E.2d 457 (1966).

Insurer need not proceed with appraisal if insured will not cooperate. - Where, after unsuccessful negotiations to settle the claim, the insurer requested the insured to appoint an appraiser and before any appraiser was appointed learned from the insured that he had disposed of the car, but the insured declined to inform the insurer as to whom he had sold the car or where it might be found for the purpose of having an appraisal made, the insurer was under no duty to proceed further with the proposed appraisal. Georgia Farm Bureau Mut. Ins. Co. v. Boney, 113 Ga. App. 459 , 148 S.E.2d 457 (1966).

Use of 17(c) formula for motor vehicle claim not bad faith. - Trial court erred when the court denied the defense insurer's motion for partial summary judgment as to the plaintiffs' bad faith claim under O.C.G.A. § 33-4-7 because the insurer's proposed adjustment of the plaintiffs' diminished value claim was reasonable and provided the insurer with good cause as a matter of law for the insurer's refusal to pay the amount demanded by the plaintiffs since it was undisputed that the insurer's adjuster used the 17(c) formula as part of the subjective determination of the lost value of the car at issue. Amica Mut. Ins. Co. v. Sanders, 335 Ga. App. 245 , 779 S.E.2d 459 (2015).

Bad faith will be implied from any frivolous and unfounded refusal to pay the benefits of an insurance policy within 60 days after demand. Independent Life & Accident Ins. Co. v. Thornton, 102 Ga. App. 285 , 115 S.E.2d 835 (1960).

Defenses not showing reasonable and probable cause. - Any defense not manifesting reasonable and probable cause would expose the company to the imputation of bad faith and to the assessment of damages therefor. Travelers Ins. Co. v. Sheppard, 85 Ga. 751 , 12 S.E. 18 (1890); New York Life Ins. Co. v. Ittner, 59 Ga. App. 89 , 200 S.E. 522 (1938), later appeal, 62 Ga. App. 31 , 8 S.E.2d 582 (1940); Reserve Life Ins. Co. v. Peavy, 98 Ga. App. 268 , 105 S.E.2d 465 (1958); Interstate Life & Accident Ins. Co. v. Williamson, 110 Ga. App. 557 , 139 S.E.2d 429 (1964); Colonial Life & Accident Ins. Co. v. McClain, 144 Ga. App. 201 , 240 S.E.2d 759 (1977); Colonial Life & Accident Ins. Co. v. McClain, 243 Ga. 263 , 253 S.E.2d 745 (1979); Cincinnati Ins. Co. v. Kastner, 233 Ga. App. 594 , 504 S.E.2d 496 (1998).

Probable cause negatives imputation of bad faith. - Probable cause for refusing payment will negative the imputation of bad faith, but without such probable cause, refusal will be at the company's peril. Life & Cas. Ins. Co. v. Smith, 51 Ga. App. 122 , 179 S.E. 744 (1935); Reserve Life Ins. Co. v. Peavy, 98 Ga. App. 268 , 105 S.E.2d 465 (1958); Interstate Life & Accident Ins. Co. v. Hopgood, 133 Ga. App. 6 , 209 S.E.2d 703 (1974).

If there is any reasonable ground for contesting the claim, there is no bad faith. Albergotti v. Equitable Life Assurance Soc'y of United States, 48 F. Supp. 290 (S.D. Ga. 1942); Pearl Assurance Co. v. Nichols, 73 Ga. App. 452 , 37 S.E. 227 (1946); Life & Cas. Ins. Co. v. Freemon, 80 Ga. App. 443 , 56 S.E.2d 303 (1949), (for comment, see 12 Ga. B.J. 337 (1950)); Gulf Life Ins. Co. v. Moore, 90 Ga. App. 791 , 84 S.E.2d 696 (1954); Georgia Cas. & Sur. Co. v. Seaboard Sur. Co., 210 F. Supp. 644 (N.D. Ga. 1962), aff'd, 327 F.2d 666 (5th Cir. 1964); Belch v. Gulf Life Ins. Co., 219 Ga. 823 , 136 S.E.2d 351 (1964); Lanier v. American Cas. Co., 226 F. Supp. 630 (N.D. Ga. 1964); Dorsey v. State Mut. Life Assurance Co., 238 F. Supp. 391 (N.D. Ga. 1964), aff'd, 357 F.2d 600 (5th Cir. 1966); American Cas. Co. v. Ten Tex Corp., 357 F.2d 269 (5th Cir. 1966); Morris v. Mutual Benefit Life Ins. Co., 258 F. Supp. 186 (N.D. Ga. 1966); Witt v. Pennsylvania Nat'l Mut. Cas. Ins. Co., 117 Ga. App. 838 , 162 S.E.2d 251 (1968); United States Fid. & Guar. Co. v. Woodward, 118 Ga. App. 591 , 164 S.E.2d 878 (1968); Home Indem. Co. v. Godley, 122 Ga. App. 356 , 177 S.E.2d 105 (1970); Boston-Old Colony Ins. Co. v. Warr, 127 Ga. App. 364 , 193 S.E.2d 624 (1972); Pioneer Nat'l Title Ins. Co. v. American Cas. Co., 459 F.2d 963 (5th Cir. 1972); Progressive Cas. Ins. Co. v. West, 135 Ga. App. 1 , 217 S.E.2d 310 (1975); Bohannon v. Manhattan Life Ins. Co., 555 F.2d 1205 (5th Cir. 1977); Wright v. Hartford Accident & Indem. Co., 442 F. Supp. 155 (N.D. Ga. 1977); Smith v. New York Life Ins. Co., 579 F.2d 1267 (5th Cir. 1978); Grange Mut. Cas. Co. v. Law, 223 Ga. App. 748 , 479 S.E.2d 357 (1996).

In an insurance coverage dispute, there was not sufficient grounds upon which a jury could find that the insurer acted in bad faith by failing to pay a claim because the insurer was not unreasonable in relying on its adjuster's findings, following inspection, that rainwater had entered the building through openings caused by unsecured roofing work. Mock v. Cent. Mut. Ins. Co., 158 F. Supp. 3d 1332 (S.D. Ga. Jan. 25, 2016).

Disputed questions of fact. - To support a cause of action under O.C.G.A. § 33-4-6 , the insured bears the burden of proving that the refusal to pay the claim was made in bad faith. A defense going far enough to show reasonable and probable cause for making it would vindicate the good faith of the company as effectually as would a complete defense to the action. Penalties for bad faith are not authorized where the insurance company has any reasonable ground to contest the claim and where there is a disputed question of fact. Moon v. Mercury Ins. Co. of Ga., 253 Ga. App. 506 , 559 S.E.2d 532 (2002).

As to the insured's claim for bad faith breach of an insurance contract under O.C.G.A. § 33-4-6 , summary judgment was warranted in favor of defendants. The insurer utilized independent medical examiners (IMEs), the insurer's IMEs provided the medical bases for their conclusions; the insurer tested its IMEs' conclusions with the insured's information; and further, under Georgia law, the absence of bad faith was buttressed by the existence of a genuine issue of material fact whether defendants owed the insured coverage. Worsham v. Provident Cos., 249 F. Supp. 2d 1325 (N.D. Ga. 2003).

Trial court properly granted the title insurance company's motion for summary judgment as to the insured's allegation of bad faith refusal to pay under O.C.G.A. § 33-4-6 because genuine issues of material fact existed as to whether the bank was aware of Exhibit C addressing the environmental problems with the property prior to closing and, thus, whether the insured's claim was excluded under the insurance policy as an assumed title defect. Old Republic Nat'l Title Ins. Co. v. RM Kids, LLC, 337 Ga. App. 638 , 788 S.E.2d 542 (2016), cert. denied, No. S16C1843, 2017 Ga. LEXIS 117 (Ga. 2017).

Defense showing reasonable and probable cause vindicates insurer's good faith. - A defense going far enough to show reasonable and probable cause for making it would vindicate the good faith of the company as effectually as would a complete defense to an action under this section. Travelers Ins. Co. v. Sheppard, 85 Ga. 751 , 12 S.E. 18 (1890); New York Life Ins. Co. v. Ittner, 59 Ga. App. 89 , 200 S.E. 522 (1938), later appeal, 62 Ga. App. 31 , 8 S.E.2d 582 (1940); Reserve Life Ins. Co. v. Peavy, 98 Ga. App. 268 , 105 S.E.2d 465 (1958); Interstate Life & Accident Ins. Co. v. Williamson, 110 Ga. App. 557 , 139 S.E.2d 429 (1964); Whitlock v. Interstate Life & Accident Ins. Co., 112 Ga. App. 235 , 144 S.E.2d 541 (1965); Georgia Farm Bureau Mut. Ins. Co. v. Calhoun, 127 Ga. App. 213 , 193 S.E.2d 35 (1972); Colonial Life & Accident Ins. Co. v. McClain, 144 Ga. App. 201 , 240 S.E.2d 759 (1977); Colonial Life & Accident Ins. Co. v. McClain, 243 Ga. 263 , 253 S.E.2d 745 (1979).

Refusal to pay medical benefits not unreasonable. - Insurer's refusal to pay medical benefits on the basis of an opinion by an independent medical provider that there was no causal connection between the treatment and the accident was not unreasonable. Jones v. State Farm Mut. Auto. Ins. Co., 228 Ga. App. 347 , 491 S.E.2d 830 (1997); Shaffer v. State Farm Mut. Auto. Ins. Co., 246 Ga. App. 244 , 540 S.E.2d 227 (2000).

Insurer's cancellation of insured's medical benefits on the basis of report from an independent medical examiner was not unreasonable where the insured failed to prove that the examiner's opinion was patently wrong. Lancaster v. USAA Cas. Ins. Co., 232 Ga. App. 805 , 502 S.E.2d 752 (1998).

Suspension of payments of lost wage benefits not unreasonable. - Summary judgment on the question of plaintiff's claim for bad faith damages under subsection (a) of O.C.G.A. § 33-4-6 was proper where it was undisputed that the insurer suspended payment of plaintiff's lost wage benefits relying upon the opinion of a board certified orthopedic surgeon. Wallace v. State Farm Fire & Cas. Co., 247 Ga. App. 95 , 539 S.E.2d 509 (2000).

Good faith shown by reasonable and probable cause is complete defense. - Should the insurance company show a reasonable and probable cause for refusing to pay, the company's good faith would be a complete defense to an action under this section. Independent Life & Accident Ins. Co. v. Thornton, 102 Ga. App. 285 , 115 S.E.2d 835 (1960).

Breach of duty to defend. - Insurer breached the insurer's duty to defend under O.C.G.A. § 33-4-6(a) against a nightclub guest's personal injury complaint; the guest's claims at least arguably would have been covered by a provision in the nightclub's insurance policy that provided coverage for an assault or battery by an employee that was committed to protect persons or property. Landmark Am. Ins. Co. v. Khan, 307 Ga. App. 609 , 705 S.E.2d 707 (2011).

Even though defense is not accepted. - The insurer's defense must be evaluated, because if there was reasonable and probable cause to make it, an award for damages and attorney fees for bad faith is not authorized. Not every defense bars a finding of bad faith. It is a defense which raises a reasonable question of law or a reasonable issue of fact even though not accepted by the trial court or jury. Colonial Life & Accident Ins. Co. v. McClain, 243 Ga. 263 , 253 S.E.2d 745 (1979).

If defense is rejected, jury may find it was not made in good faith. - Where insurance company gave as a reason for refusal to pay claim on a life insurance policy a contention that the first premium had never been paid or the policy delivered to the insured and the jury found against such contention, it was within their power to find from the evidence that such contention was not in good faith. Kansas City Life Ins. Co. v. Williams, 62 Ga. App. 707 , 9 S.E.2d 680 (1940).

Refusal to pay justified at time of refusal shows no bad faith. - Where it appears from the evidence that the insurer's refusal to pay was justified on the basis of the facts appearing in the insurer at the time of the refusal, bad faith is now shown. Lincoln Life Ins. Co. v. Anderson, 109 Ga. App. 238 , 136 S.E.2d 1 (1964); National-Ben Franklin Ins. Co. v. Prather, 109 Ga. App. 459 , 136 S.E.2d 499 (1964); Old Colony Ins. Co. v. Dressel, 109 Ga. App. 465 , 136 S.E.2d 525 , aff'd, 220 Ga. 354 , 138 S.E.2d 886 (1964).

Given an insurer's initial and prolonged payment of disability benefits to the insured during its investigation of the insured's claim, and its eventual termination of benefits only after the insured failed to respond to inquiries requesting an explanation of how the insured's disability prevented the insured from engaging in the insured's purported occupations, the decision to terminate the benefits could not be characterized as either frivolous or unreasonable. Giddens v. Equitable Life Assur. Soc'y of the United States, 356 F. Supp. 2d 1313 (N.D. Ga. 2004), aff'd in part and rev'd in part, 445 F.3d 1286, 2006 U.S. App. LEXIS 8970 (11th Cir. Ga. 2006).

Insurer's filing of a 28 U.S.C. § 1335 interpleader suit was done in good faith as was the insurer's denial of a trustee's claim for payment of a decedent's life insurance policies as the insurer was unable to determine, due to a myriad of events that occurred between the decedent's establishment of a revocable trust, whether the trust, the decedent's children with his first wife, or the decedent's second wife and any children they may have had together were entitled to the decedent's life insurance policy proceeds, and the parties were scattered through several different countries, making it more difficult for the insurer to determine who was entitled to the proceeds; that the children later averred that the proceeds belonged to the trust and the second wife disclaimed any interest in the proceeds did not mean that the insurer acted in bad faith under O.C.G.A. § 33-4-6 in denying payment of the trustee's claim. Nat'l Life Ins. Co. v. Alembik-Eisner, 582 F. Supp. 2d 1362 (N.D. Ga. 2008).

The test of bad faith within the meaning of this section is as of the time of trial, and not at the time of refusal to pay upon demand. Interstate Life & Accident Ins. Co. v. Williamson, 110 Ga. App. 557 , 139 S.E.2d 429 (1964).

Whatever the facts are at the time of a refusal to pay, if at the trial there is a reasonable ground for the insurer to contest the claim, there can be no finding against the insurance company for bad faith and attorney's fees regardless of the outcome of the case. Interstate Life & Accident Ins. Co. v. Williamson, 110 Ga. App. 557 , 139 S.E.2d 429 (1964).

The question of bad faith must be determined by the defense made at the time of trial. Phillips v. State Farm Mut. Auto. Ins. Co., 437 F.2d 365 (5th Cir. 1971).

Discovery of defense showing probable cause after refusal vindicates insurer. - Where, at the expiration of 60 days after a demand by an insured for the amount claimed to be due under an insurance policy, the insurance company knows of no good reason for refusing to pay the claim, a defense later discovered and made, on the trial of the case, going far enough to show probable cause of making such defense vindicates the insurer's refusal to pay the claim so as to preclude the insured from recovering attorney's fees and penalty provided in this section. Interstate Life & Accident Ins. Co. v. Williamson, 220 Ga. 323 , 138 S.E.2d 668 , answer conformed to, 110 Ga. App. 557 , 139 S.E.2d 429 (1964).

Insurer need not pay claim prior to judgment being entered against uninsured motorist. Allstate Ins. Co. v. McCall, 166 Ga. App. 833 , 305 S.E.2d 413 (1983), aff'd, 251 Ga. 869 , 310 S.E.2d 513 (1984).

Insurer need not pay beyond limits of uninsured motorist policy. - The insurer is not guilty of bad faith in failing to pay the insured the full amount of the verdict, which is beyond the limits of an uninsured motorist policy of which she is the beneficiary, where the insurer tenders the limit of the policy to the insured after judgment is entered in the case. Allstate Ins. Co. v. McCall, 166 Ga. App. 833 , 305 S.E.2d 413 (1983), aff'd, 251 Ga. 869 , 310 S.E.2d 513 (1984).

A defense which would bar a finding of bad faith is one which raises a reasonable question of law or a reasonable issue of fact. Giles v. National Union Fire Ins. Co., 578 F. Supp. 376 (M.D. Ga. 1984).

After an insurer paid a borrower for mortgaged equipment destroyed in a fire, without knowing that the insurer should have paid the predecessor bank, which was later closed by the FDIC, the record did not show evidence of unfounded reasons for nonpayment, so the bad faith claim failed. Ameris Bank v. Lexington Ins. Co., F. Supp. 2d (S.D. Ga. Sept. 25, 2015).

Defense reasonable where insurer not aware of change in medical opinion as to preexisting condition. - Where insured's coverage was expressly limited to loss resulting directly, independently, and exclusively from accidental injury, where insurer made disability payments until being informed by insured's own physician that insured's accident had aggravated a preexisting condition, and where there was no indication that insurer knew that insured's doctor had changed his opinion prior to the litigation, insurer's defense was reasonable and an award of attorney fees was in error. Colonial Life & Accident Ins. Co. v. Donaldson, 172 Ga. App. 211 , 322 S.E.2d 510 (1984).

Where the court determines that the coverage is void ab initio under § 33-24-6(a) and there is no evidence of bad faith on behalf of the insurance company, a beneficiary is not entitled to recover under this section. Connecticut Gen. Life Ins. Co. v. Wood, 631 F. Supp. 9 (N.D. Ga. 1984), questions certified to Georgia Supreme Court and proceedings stayed upon appeal, 758 F.2d 1459 (11th Cir. 1985); Wood v. New York Life Ins. Co., 631 F. Supp. 3 (N.D. Ga. 1984).

Former rule. - Prior to 1964, it was held that the bad faith on the part of an insurance company necessary to support a claim for attorney fees had to occur at the time the company failed to pay the benefit provided for in a policy of full force and effect at the expiration of the 60-day period after proof of loss and demand for payment had been made, rather than at the time of the trial. Independent Life & Accident Ins. Co. v. Hopkins, 80 Ga. App. 348 , 56 S.E.2d 177 (1949); North British & Mercantile Ins. Co. v. Mercer, 90 Ga. App. 143 , 82 S.E.2d 41 , aff'd, 211 Ga. 161 , 84 S.E.2d 570 (1954); Life & Cas. Ins. Co. v. Brown, 95 Ga. App. 354 , 98 S.E.2d 68 , rev'd on other grounds, 213 Ga. 390 , 99 S.E.2d 98 (1957); Reserve Life Ins. Co. v. Bearden, 96 Ga. App. 549 , 101 S.E.2d 120 (1957), aff'd, 213 Ga. 904 , 102 S.E.2d 494 (1958); Reserve Life Ins. Co. v. Ayers, 101 Ga. App. 887 , 115 S.E.2d 477 (1960).

The question of bad faith was to be judged upon the facts that they appeared prior to the time of the trial as they bore upon the insurer's reason, or absence of reason, for refusing to pay the claim upon demand. Calvert Fire Ins. Co. v. Mack, 88 Ga. App. 617 , 76 S.E.2d 829 (1953).

Liability for the penalty and attorney's fees attached at the time when the insurer in bad faith and within 60 days after demand for payment of the loss failed or refused to pay the fees; this was true regardless of whether at a later date there was reasonable cause to refuse the claim of loss. Reserve Life Ins. Co. v. Peavy, 98 Ga. App. 268 , 105 S.E.2d 465 (1958).

Whether there was any reasonable grounds for contesting the claim was a matter which depended upon the circumstances existing when liability was declined or not admitted, not by the event of the ultimate determination. Georgia Cas. & Sur. Co. v. Seaboard Sur. Co., 210 F. Supp. 644 (N.D. Ga. 1962), aff'd, 327 F.2d 666 (5th Cir. 1964); Dorsey v. State Mut. Life Assurance Co., 238 F. Supp. 391 (N.D. Ga. 1964), aff'd, 357 F.2d 600 (5th Cir. 1966).

Case of first impression. - Where case was one of first impression in which fireman's fund presented a legal defense adopted by other courts, the trial court erred in failing to grant fireman's fund's motion for directed verdict on the issue of bad faith and attorney fees. Fireman's Fund Ins. Co. v. Dean, 212 Ga. App. 262 , 441 S.E.2d 436 (1994).

No bad faith in refusal to pay on fire insurance policy. - In a dispute in a fire insurance case in which the insurer failed to pay for over seven months and denied coverage because the home was not the insured's primary residence, although an appellate court concluded that coverage was provided, the trial court did not err in granting summary judgment for the insurer on the issue of bad faith. Lee v. Mercury Ins. Co., 343 Ga. App. 729 , 808 S.E.2d 116 (2017), cert. denied, No. S18C0518, 2018 Ga. LEXIS 491 (Ga. 2018).

Insurance coverage demanded, but not provided. - The exclusive remedy for an insurance company's bad faith refusal to pay a claim was set forth in O.C.G.A. § 33-4-6 and penalties against the insurance company and agents were not available for their alleged bad faith as the fire insurance policy they issued to the insured did not provide the insurance coverage demanded. Anderson v. Ga. Farm Bureau Mut. Ins., 255 Ga. App. 734 , 566 S.E.2d 342 (2002).

Closing protection letter not an insurance policy. - A trial court properly ruled that a mortgage lender was not entitled to statutory penalties authorized by O.C.G.A. § 33-4-6 in a suit asserting the bad faith denial on the part of a title insurance company in paying for a fraud claim as the closing protection letter relevant was not a policy of insurance so as to authorize imposition of the penalties. Lawyers Title Ins. Corp. v. New Freedom Mortg. Corp., 288 Ga. App. 642 , 655 S.E.2d 269 (2007), cert. denied, 2008 Ga. LEXIS 384 (Ga. 2008).

Insured party excluded from coverage by terms of policy. - Because the driver was excluded from coverage under the insurance policy, the driver could not maintain an action for bad faith penalties and attorney fees under O.C.G.A. § 33-4-6 . Progressive Ins. Co. v. Horde, 259 Ga. App. 769 , 577 S.E.2d 835 (2003).

District court did not err when the court found that an insurance company was entitled to summary judgment on an insured's claims that the company committed breach of contract and was liable for bad faith penalties under O.C.G.A. § 33-4-6 because the court denied the insured's claim seeking compensation for damages that occurred to the insured's home and personal property when water, mud, and debris entered the home during a rainstorm; damages the insured sustained were caused by "surface water," as that term was defined under Georgia law, and a provision in the insured's homeowner's policy excluded coverage for damage to the insured's home and personal property that was caused by surface water. Williams v. State Farm Fire & Cas. Ins. Co., F.3d (11th Cir. July 17, 2014)(Unpublished).

Insured precluded damage recovery by failure to provide records to insurer. - Where insured breached insurance contract by failing to fulfill conditions precedent to commencement of suit by failing to provide insurer with any records, insured was precluded from recovery and insurer had reasonable grounds to refuse payment of the claim; accordingly, damages under O.C.G.A. § 33-4-6 were not warranted. Hall v. Liberty Mut. Fire Ins. Co., F. Supp. 2d (S.D. Ga. Mar. 21, 2008), aff'd, No. 08-12051, 2009 U.S. App. LEXIS 2075 (11th Cir. Ga. 2009).

Summary judgment for insurer proper on bad faith claim. - Although a worker making a claim under a disability policy was able to perform light duties, whether the worker was wholly disabled from performing "material" duties within 180 days of the injury, as required by the policy, was a jury question, and summary judgment on this issue was improper; however, the worker was not entitled to bad faith penalties under O.C.G.A. § 33-4-6 because, in light of the policy language and the underlying facts, the insurer had reasonable grounds to contest coverage for total disability. Fountain v. Unum Life Ins. Co. of Am., 297 Ga. App. 458 , 677 S.E.2d 334 (2009).

Because the master policy of insurance liability did not provide indemnification for the extended protection plan (EPP) claims for which the manufacturer was "legally liable," only claims for which it had been "held legally liable," the manufacturer's claim for indemnification did not, and would not, accrue until its legal liability for the EPP claims had been established by a court holding, and the insurer was entitled to summary judgment on the bad faith denial of insurance coverage claim. Lloyd's Syndicate No. 5820 v. AGCO Corp., 294 Ga. 805 , 756 S.E.2d 520 (2014).

Insurer had reasonable grounds to contest homeowners' claims. - Insureds' bad faith claim under O.C.G.A. § 33-4-6 against an insurer that alleged the insurer acted in bad faith in underpaying for tree damage and in refusing to pay for water damage failed under summary judgment because the insurer had reasonable grounds to contest the claims; the insureds' request for additional payment for the tree damage was based on estimates for repairs that exceeded the scope of the tree damages, and there was no indication that the insureds properly asserted a new claim for the water damage. Matthews v. State Farm Fire & Cas. Co., 500 Fed. Appx. 836 (11th Cir. 2012)(Unpublished).

Bad faith not found. - Because of an "impaired property" exclusion in a commercial general liability policy, an insurer did not breach its duty to indemnify or defend where an auto parts store filed a claim with the insurer after customers sued the store for its failure to deliver conforming goods (store allegedly filled its customers' orders for freon with a freon substitute and illegally imported freon); the court granted summary judgment in favor of the insurer on the issues of bad faith and failure to defend and indemnify. JLM Enters. v. Houston Gen. Ins. Co., 196 F. Supp. 2d 1299 (S.D. Ga. 2002).

Insured who tried to recover damages for injuries the insured sustained in a motor vehicle accident in Florida, but who alleged that the insured's claim was denied because she did not have the right to sue under Florida's no-fault statute, was entitled to collect uninsured motorist benefits from the insured's own insurance company, pursuant to O.C.G.A. § 33-7-11 . However, the trial court, which heard the insured's action against the insurance company, erred when it denied the company's motion for summary judgment on the insured's claim seeking penalties and attorney fees, pursuant to O.C.G.A. § 33-4-6 , because the case presented a unique issue of law and there was no evidence that the company acted in bad faith when it denied the insured's claim. Ga. Farm Bureau Mut. Ins. Co. v. Williams, 266 Ga. App. 540 , 597 S.E.2d 430 (2004).

Award in favor of an insured was reversed as the insurer refused to pay the insured's claim based on an investigation which produced evidence that the insured's claim under the policy was fraudulent. As the insured denied the fraud claim, there was a genuine conflict over whether the claim was legitimate, and since the insurer's grounds for refusing to pay the claim were reasonable and not frivolous or unfounded, there was a lack of evidence to support the jury's verdict finding that the insurer refused to pay the claim in bad faith. Allstate Ins. Co. v. Smith, 266 Ga. App. 411 , 597 S.E.2d 500 (2004).

Trial court properly granted summary judgment as to the successor in interest to an insurance company as to claims of bad faith pursuant to O.C.G.A. § 33-4-6 , as the insurer reasonably based its denial of coverage on a decedent's failure to make the required premium payments. Guideone Life Ins. Co. v. Ward, 275 Ga. App. 1 , 619 S.E.2d 723 (2005).

Where an insurer was found to have improperly rescinded a directors and officers insurance policy with its insured, the insured was not liable for bad faith damages because the insurer's decision to rescind the policy was reasonable; the insurer promptly initiated and conducted an investigation of the circumstances surrounding the issuance of the policy, which reasonably led it to conclude that the policy had been procured on the basis of material misrepresentations. Exec. Risk Indem. v. AFC Enters., 510 F. Supp. 2d 1308 (N.D. Ga. 2007), aff'd, 279 Fed. Appx. 793 (11th Cir. 2008).

Insurer was not liable for attorney fees based on bad faith failure to pay a corporate insured's claim for inspections and repairs to faulty industrial boilers because the business risk exclusions contained in the insured's general commercial liability policy exempted such matters from recovery. Gentry Mach. Works, Inc. v. Harleysville Mut. Ins. Co., 621 F. Supp. 2d 1288 (M.D. Ga. 2008).

Insured settled a claim without its insurer's consent, contrary to a provision in the parties' policy. As the insurer was liable under the policy to pay only those sums the insured was legally obligated to pay, and neither policy provision was illegal or contrary to public policy, the insured could not sue the insurer for bad faith failure to settle, O.C.G.A. § 33-4-6 , in the absence of an excess verdict or an agreed-upon settlement. Trinity Outdoor, LLC v. Cent. Mut. Ins. Co., 285 Ga. 583 , 679 S.E.2d 10 (2009).

Insurance company presented evidence showing that the reason for the payment delay was because there was a dispute over how much was owed under the lost business income provision of the policy. From that evidence, the court granted the insurance company's motion for summary judgment on the insured's claim for bad faith under O.C.G.A. § 33-4-6 . B.S.S.B., Inc. v. Owners Ins. Co., F. Supp. 2d (M.D. Ga. Jan. 20, 2010).

Trial court erred by denying an insurer's motion for summary judgment dismissing a mortgagee's claims for bad faith damages under O.C.G.A. § 33-4-6 in its action seeking payment of insurance proceeds because the insurer had good reason for delaying payment until the insurer acquired the necessary information about the foreclosure of the insured residence less than 60 days before suit was filed; the mortgagee ultimately showed that after foreclosing on and obtaining title to the residence, the mortgagee incurred a net loss that gave the mortgagee a right to the entire $103,000 of insurance proceeds, but the information necessary for the insurer to conclude that the mortgagee had a right to claim the entire $103,000 of insurance proceeds was provided to the insurer less than 60 days before suit was filed, and the mortgagee made no demand for payment of all the insurance proceeds after that information was provided. Balboa Life & Cas., LLC v. Home Builders Fin., 304 Ga. App. 478 , 697 S.E.2d 240 (2010).

Homeowner could not prevail on a bad-faith claim based on an insurer's denial of coverage for water damage to a house, as the insurer reasonably denied the claim; the policy unambiguously contained a residency requirement, and the homeowner never resided there. Mahens v. Allstate Ins. Co., 447 Fed. Appx. 51 (11th Cir. 2011)(Unpublished).

Trial court did not err in granting an insurer summary judgment on a widow's claim for bad faith penalties and attorney fees under O.C.G.A. § 33-4-6 because the insurer's reasons for refusing to pay the insurance proceeds to the widow were erroneous but not frivolous or unreasonable. Flynt v. Life of the South Ins. Co., 312 Ga. App. 430 , 718 S.E.2d 343 (2011), cert. denied, No. S12C0461, 2012 Ga. LEXIS 305 (Ga. 2012).

In an insurance dispute coverage claim, the homeowners' contention on appeal that the insurance company denied the homeowners' claim in bad faith, in violation of O.C.G.A. § 33-4-6 , was not ruled on by the trial court; thus, the appellate court was presented with nothing to review on appeal, but stated that the homeowners failed to state the particular statutory or contractual provision the homeowners contended the insurance company intentionally omitted from the homeowner's policy. Bell v. Liberty Mut. Fire Ins. Co., 319 Ga. App. 302 , 734 S.E.2d 894 (2012).

Trial court erred by denying a title company's motion for summary judgment on a lender's claim for coverage under the title insurance policy and for bad faith damages because the policy stated that the title company was liable for the lesser amount of the difference between the value of the insured estate and the value of the insured estate subject to the defect insured against, thus, since the lender received more in the foreclosure sale than the value, the title company was liable for zero. Doss & Assocs. v. First Am. Title Ins. Co., 325 Ga. App. 448 , 754 S.E.2d 85 (2013).

Procedure
1. Generally

No damages absent allegations of fraud, special circumstances. - The plaintiff's request for both the 25 percent penalty and unspecified punitive damages was at least redundant, where he alleged only his entitlement to the disputed proceeds and the defendant's bad faith failure to pay them, no allegations of fraud or other special circumstances having been pleaded. Hall v. Travelers Ins. Co., 691 F. Supp. 1406 (N.D. Ga. 1988).

Allegation of "bad faith" sufficient, not mere conclusion. - In an action on an insurance contract, if definite facts are well pleaded which in law make a case of liability against the insurer and disclose a duty to pay the damage and if it is further alleged that on timely demand by the insured the insurer within 60 days thereafter refused to compensate for the loss sustained, the pleader may allege that the refusal was in "bad faith," and that the defendant is therefore subject to a penalty provided by law, without subjecting this allegation to the complaint that it is a mere conclusion of the pleader. Rogers v. American Nat'l Ins. Co., 145 Ga. 570 , 89 S.E. 700 (1916); North British & Mercantile Ins. Co. v. Parnell, 53 Ga. App. 178 , 185 S.E. 122 (1936); Glens Falls Indem. Co. v. Gottlieb, 76 Ga. App. 70 , 44 S.E.2d 706 (1947).

It is proper to allege liability for penalty as legal result. - The allegation following that of "bad faith," that "making the defendant liable for said penalty of 25 percent as (sic) attorney's fees," is an allegation of legal result which will be judicially recognized by the Court of Appeals as arising from the allegation of refusal in "bad faith," and, as such, is not objectionable. North British & Mercantile Ins. Co. v. Parnell, 53 Ga. App. 178 , 185 S.E. 122 (1936).

Reason for refusal in "bad faith" need not be alleged. - Whether there is any reason given, or whether there are other insinuating facts in connection with the refusal of the insurer to compensate for loss sustained, is purely a matter of evidence tending to support the ultimate issue of fact as to "bad faith" and need not be pleaded. North British & Mercantile Ins. Co. v. Parnell, 53 Ga. App. 178 , 185 S.E. 122 (1936).

The pleadings made a case for submission to a jury as to whether the defendant was liable for the damages and attorney's fees provided for under this section by its refusal to defend suit brought against plaintiff railroad in accordance with its contractual obligations. Liberty Mut. Ins. Co. v. Atlantic C.L.R.R., 66 Ga. App. 826 , 19 S.E.2d 377 (1942).

Allegations held sufficient to authorize finding of no good faith. - Where from the allegations and admissions in the pleadings, which it was the duty of the jury to accept as true, the jury was authorized to find that at the time of the refusal to pay the claim after the expiration of the 60-day period, as well as at the time the suit was filed and the answer filed thereto, no investigation had been made by the defendant insurer to determine whether payment should have been made, the jury was authorized to find the defendant lacking in the exercise of good faith. Independent Life & Accident Ins. Co. v. Hopkins, 80 Ga. App. 348 , 56 S.E.2d 177 (1949).

Demand at time payment due and refusal continuing 60 days must be alleged. - In order for the insured to recover under this section the demand ought to be averred as taking place at a time when the plaintiff had a right to exact present payment, and the plaintiff's pleading should show that refusal, in "bad faith," was made and persisted in for 60 days. Twin City Fire Ins. Co. v. Wright, 46 Ga. App. 537 , 167 S.E. 891 (1933).

Violation of 60-day waiting period. - Where insurer sued to cancel contract within 60-day period following demand, the insured's compulsory counterclaim did not violate the 60-day waiting period so as to foreclose claim for damages and attorneys fees. Sawyer v. Citizens & S. Nat'l Bank, 164 Ga. App. 177 , 296 S.E.2d 134 (1982).

Waiver of 60-day notice requirement. - Insurer waived the 60-day coverage demand requirement under this section in an action by the insured to recover judgments and the costs of defending a wrongful death action, where the insurer filed a declaratory judgment action to determine its duty to defend under the policy prior to the initiation of the suit by the insured. Leader Nat'l Ins. Co. v. Kemp & Son, 189 Ga. App. 115 , 375 S.E.2d 231 (1988), aff'd, 259 Ga. 329 , 380 S.E.2d 458 (1989).

Insurer's waiver of defenses. - Where the insurer sent notice of termination and nonrenewal after it learned of the insured's fraud, it waived its defense that the insured's misrepresentations in his application voided the policy ab initio; however, such waiver with regard to the insurer's liability under the policy did not waive its defense to a bad faith claim under this section. Florida Int'l Indem. Co. v. Osgood, 233 Ga. App. 111 , 503 S.E.2d 371 (1998).

Allegations as to demand held sufficient. - Pleading showing that plaintiff made due proof of death of insured, that payment had been refused, and that upon being informed, only after she had fraudulently been induced to sign release, that the sum of $3.30 was all she was entitled to recover, she expressed her dissatisfaction, stated that she did not understand the transaction which she was fraudulently induced to enter into, and tendered back the amount she had received, making the offer a continuous one, set a cause of action for recovery of the amount of the policy, and of damages and attorney's fees under this section. Industrial Life & Health Ins. Co. v. Johnson, 62 Ga. App. 630 , 9 S.E.2d 121 (1940).

Admission of liability and small offer held to justify penalty. - Where the defendant in its answer admitted that it was indebted to the plaintiff and since the amount offered the plaintiff was a small portion of the lowest estimate of the repairs necessary as a result of the incident out of which the claim under the policy arose, it cannot be said that the finding of the penalty and attorney's fees under this section was unauthorized. Fidelity & Cas. Co. v. Mangum, 102 Ga. App. 311 , 116 S.E.2d 326 (1960).

Denial of defendant's motion for continuance held not abuse of discretion. - Where in view of history of the insurance case before it and the evidence on the hearing for a continuance, the trial court was authorized to determine that the defendant would not by a continuance be placed in any better position than it was at the trial to defend against the demand for the statutory penalty and attorney's fees, made in the plaintiff's amendment, the trial court did not abuse its discretion in overruling the motion for a continuance. National Life & Accident Ins. Co. v. Moore, 86 Ga. App. 618 , 72 S.E.2d 141 (1952).

Amendment of complaint allowed. - Plaintiff insured was allowed to amend a second time to clarify a claim for a bad faith breach of an insurance contract under O.C.G.A. § 33-4-6 , based on a refusal to pay disability benefits, because defendant insurers were on notice of the claim, and in fact, the parties had conducted discovery on its merits; however, the court granted the insurers leave to file a motion for summary judgment on the claim, if they chose, because briefing the issue was an efficient use of judicial resources. Worsham v. Provident Cos., 249 F. Supp. 2d 1325 (N.D. Ga. 2002).

Insured was allowed to amend the insured's complaint, which alleged that several insurers violated O.C.G.A. § 33-4-6 in the handling of the insured's claim under a homeowners' policy, so as to add claims for negligence in the handling of the insured's claim; Georgia law was ambiguous as to whether the insured could recover for negligent, as well as bad faith, failure to settle the insured's claim, and thus, the amendment was not futile. Cordell v. Pac. Indem., F. Supp. 2d (N.D. Ga. July 11, 2006).

Amount in controversy for jurisdiction. - Motion to remand was denied because the amount in controversy satisfied 28 U.S.C. § 1332 since an insurer proved by a preponderance of the evidence that the benefit payable under a life insurance policy was $51,000, which, when added with the statutory penalty of $25,500 under O.C.G.A. § 33-4-6 , totaled $76,500. Estate of Thornton v. Unum Life Ins. Co. of Am., 445 F. Supp. 2d 1379 (N.D. Ga. 2006).

Bifurcation of claims proper. - Trial court was authorized to conclude, after extensive discussion with the parties, that bifurcation of an insured's breach of an insurance contract and bad faith failure to pay benefits claims were appropriate under O.C.G.A. § 9-11-42(b) because coverage turned on whether the insured's debilitating condition arose from an injury or sickness, and the discrete coverage issue had to be resolved first since bad faith was irrelevant absent coverage; even if a single action was required under O.C.G.A. § 33-4-6 , nothing in the case violated the requirement because the insured brought the claims against the insurer in a single civil action, and the claims were resolved in that action, albeit through a bifurcated proceeding. Saye v. Provident Life & Accident Ins. Co., 311 Ga. App. 74 , 714 S.E.2d 614 (2011), cert. denied, No. S11C1857, 2011 Ga. LEXIS 984 (Ga. 2011).

2. Burden of Proof and Evidence

Proper demand must be shown by evidence. - Such a demand as required by this section in order for the insured to recover damages in addition to the loss not being shown by the evidence, the verdict for damages given by the section was unauthorized. The judgment overruling the defendant's motion for a new trial was affirmed on condition that such damages be written off. Alliance Ins. Co. v. Williamson, 36 Ga. App. 497 , 137 S.E. 277 , cert. denied, 36 Ga. App. 825 , 138 S.E. 267 (1927).

Evidence held not to prove demand at proper time. - The plaintiff having failed to prove any demand for payment at a time when she had the absolute right to make such demand, a verdict for damages and attorney's fees was unauthorized by the evidence and the applicable rules of law. Life Ins. Co. v. Burke, 219 Ga. 214 , 132 S.E.2d 737 (1963).

Prior to 1979 bad faith was held fact to be proved. - Bad faith in refusing to pay a claim within 60 days after demand was a fact to be proved in order to recover the penalty and attorney's fees provided by this section. Pearl Assurance Co. v. Nichols, 73 Ga. App. 452 , 37 S.E.2d 227 (1946); Glens Falls Indem. Co. v. Gottlieb, 76 Ga. App. 70 , 44 S.E.2d 706 (1947).

Unless there was evidence of a frivolous and unfounded denial of liability, no recovery could be had under this section. Morris v. Mutual Benefit Life Ins. Co., 258 F. Supp. 186 (N.D. Ga. 1966).

Burden of showing bad faith was on the insured. Reserve Life Ins. Co. v. Bearden, 96 Ga. App. 549 , 101 S.E.2d 120 (1957), aff'd, 213 Ga. 904 , 102 S.E.2d 494 (1958); Whitlock v. Interstate Life & Accident Ins. Co., 112 Ga. App. 235 , 144 S.E.2d 541 (1965); Georgia Farm Bureau Mut. Ins. Co. v. Calhoun, 127 Ga. App. 213 , 193 S.E.2d 35 (1972).

To support a cause of action under O.C.G.A. § 33-4-6 , the insured bears the burden of proving that the refusal to pay the claim was made in bad faith. Central Nat'l Ins. Co. v. Dixon, 188 Ga. App. 680 , 373 S.E.2d 849 (1988); Massachusetts Bay Ins. Co. v. Hall, 196 Ga. App. 349 , 395 S.E.2d 851 , cert. denied, 196 Ga. App. 908 , 395 S.E.2d 851 (1990).

In a policy holder's suit asserting breach of contract, bad faith refusal to advance defense costs, and declaratory judgment, the policy holder could not establish the first element of a bad faith claim because the underlying litigation, which alleged that the trustees breached the trustees' fiduciary duties, was not covered under the claims-made policy. Langdale Co. v. Nat'l Union Fire Ins. Co., 110 F. Supp. 3d 1285 (N.D. Ga. 2014).

Plaintiff must show bad faith. - In actions brought under this section the burden of showing bad faith on the part of the defendant was on the plaintiff. Pearl Assurance Co. v. Nichols, 73 Ga. App. 452 , 37 S.E.2d 227 (1946); Witt v. Pennsylvania Nat'l Mut. Cas. Ins. Co., 117 Ga. App. 838 , 162 S.E.2d 251 (1968).

The burden was on the plaintiff to show bad faith on the part of the defendant in refusing to pay the claim within 60 days after demand. Life & Cas. Ins. Co. v. Freemon, 80 Ga. App. 443 , 56 S.E.2d 303 (1949). For comment, see 12 Ga. B.J. 337 (1950).

The burden was on the plaintiff to show bad faith on the part of the defendant in refusing to pay a claim or in offering an amount in settlement of the claim which was less than the amount of the loss found by the jury. Security Ins. Co. v. Hudgins, 87 Ga. App. 711 , 75 S.E.2d 267 (1953).

In an action to recover penalties and attorney's fees for the refusal of an insurer to pay a claim, it had to be shown that the refusal was in "bad faith," and the burden was on the insured to show that such refusal had been made in bad faith. Interstate Life & Accident Ins. Co. v. Williamson, 220 Ga. 323 , 138 S.E.2d 668 , answer conformed to, 110 Ga. App. 557 , 139 S.E.2d 429 (1964); Interstate Life & Accident Ins. Co. v. Brown, 146 Ga. App. 622 , 247 S.E.2d 205 (1978).

The burden of proof is on the insured to establish bad faith. Winningham v. Centennial Ins. Co., 708 F.2d 658 (11th Cir. 1983).

In an action to recover penalties and attorney fees for the refusal of an insurer to pay a claim it must be shown that the refusal was in "bad faith," and the burden is on the insured to show that such refusal was made in bad faith. Republic Ins. Co. v. Martin, 182 Ga. App. 390 , 355 S.E.2d 694 (1987).

When insured fails to meet initial burden, no damage award. - When insured failed to meet the insured's initial burden of producing "any" evidence of insurer's "bad faith" refusal to pay the insured's demand, the award of damages pursuant to O.C.G.A. § 33-4-6 could not stand. Canal Ins. Co. v. Bryant, 173 Ga. App. 173 , 325 S.E.2d 839 (1984).

Compliance with requirements as to demand. - The plaintiff having alleged bad faith in her petition, the burden was on her to prove bad faith under the applicable rules of law, and that she had complied with the law and decisions of the Supreme Court as to "demand" for payment. Life Ins. Co. v. Burke, 219 Ga. 214 , 132 S.E.2d 737 (1963).

Failure to comply with demand did not shift burden as to bad faith. - The mere fact that an insurer did not comply with a demand was not evidence of bad faith nor was any burden thereby cast on the insurer to prove good faith. Interstate Life & Accident Ins. Co. v. Williamson, 220 Ga. 323 , 138 S.E.2d 668 , answer conformed to, 110 Ga. App. 557 , 139 S.E.2d 429 (1964); Interstate Life & Accident Ins. Co. v. Brown, 146 Ga. App. 622 , 247 S.E.2d 205 (1978).

Unless delay was unusual and unnecessary. - The burden of proof, where unusual and unnecessary delay is shown, should be upon the company to give reason for the delay. Missouri State Life Ins. Co. v. Lovelace, 1 Ga. App. 446 , 58 S.E. 93 (1907); Piedmont S. Life Ins. Co. v. Gunter, 108 Ga. App. 236 , 132 S.E.2d 527 (1963) ("burden of proof" used in sense of "risk of nonpersuasion").

Where unusual and apparently unnecessary delay in paying the claim is shown, the burden is upon the company to show that the refusal was made in good faith. Georgia Life Ins. Co. v. McCranie, 12 Ga. App. 855 , 78 S.E. 1115 (1913).

Supreme Court held insurer must show good cause. - The intention of this section was to penalize insurers for resisting and delaying payment unless good cause was shown. Colonial Life & Accident Ins. Co. v. McClain, 243 Ga. 263 , 253 S.E.2d 745 (1979), answer conformed to, 150 Ga. App. 883 , 258 S.E.2d 655 (1979).

Denying penalty because evidence would support verdict for insurer is incorrect. - The rule that a finding of bad faith is not authorized if the evidence would have supported a verdict in accordance with the contentions of the defendant is incorrect. Colonial Life & Accident Ins. Co. v. McClain, 243 Ga. 263 , 253 S.E.2d 745 (1979), answer conformed to, 150 Ga. App. 883 , 258 S.E.2d 655 (1979).

Former rule. - Where the jury would have been authorized, under the evidence, to have found that the insured came to his death by reason of riding or operating a motorcycle, in which case his death would have been covered by the policy, or that the insured did not so come to his death, the plaintiff failed to prove bad faith on the part of the defendant in refusing to pay. Life & Cas. Ins. Co. v. Freemon, 80 Ga. App. 443 , 56 S.E.2d 303 (1949).

Prior to 1979 it was held that if the evidence could be said to have authorized a finding in accordance with the contentions of the defendant, a finding of bad faith was not authorized. Lincoln Life Ins. Co. v. Anderson, 109 Ga. App. 238 , 136 S.E.2d 1 (1964); Old Colony Ins. Co. v. Dressel, 109 Ga. App. 465 , 136 S.E.2d 525 , aff'd, 220 Ga. 354 , 138 S.E.2d 886 (1964); United States Fid. & Guar. Co. v. Woodward, 118 Ga. App. 591 , 164 S.E.2d 878 (1968); Fidelity Bankers Life Ins. Co. v. Renew, 121 Ga. App. 883 , 176 S.E.2d 103 (1970); Phillips v. State Farm Mut. Auto. Ins. Co., 437 F.2d 365 (5th Cir. 1971); Boston-Old Colony Ins. Co. v. Warr, 127 Ga. App. 364 , 193 S.E.2d 624 (1972).

At the time of the trial the insurer has the right to show good faith in refusing to pay in reply to the plaintiff's charge and evidence that the refusal was in bad faith. Interstate Life & Accident Ins. Co. v. Williamson, 220 Ga. 323 , 138 S.E.2d 668 , answer conformed to, 110 Ga. App. 557 , 139 S.E.2d 429 (1964).

Insurer's judgment on former trial not evidence of good faith without record. - A verdict and judgment in the insurer's favor on a former trial, without the aid of the record of the trial in which the verdict was returned and the judgment entered, would constitute no proof that the defense interposed by the insurer on the former trial was upon probable cause or made in good faith. Reserve Life Ins. Co. v. Peavy, 98 Ga. App. 268 , 105 S.E.2d 465 (1958).

The faith of an insurance company should not be judged by the preliminary proofs or other ex parte affidavits, but by the case made at the trial. Interstate Life & Accident Ins. Co. v. Williamson, 110 Ga. App. 557 , 139 S.E.2d 429 (1964).

Questions can only be determined by admissible evidence. - The question of good or bad faith on the part of the insurance company in refusing to make payment to the beneficiary can only be determined from evidence that is relevant and admissible for a determination of the case on its merits. New York Life Ins. Co. v. Ittner, 59 Ga. App. 89 , 200 S.E. 522 (1938), later appeal, 62 Ga. App. 31 , 8 S.E.2d 582 (1940).

Evidence of cancellation of insurance held inadmissible. - Where, in an action on a policy of insurance for the loss, by fire, or an automobile insured thereunder, the plaintiff seeks to recover the value of the automobile, attorney's fees, and the statutory penalty for bad faith, under this section, it is such error as to require the grant of a new trial to permit the introduction of evidence, for the purpose of demonstrating bad faith, that some ten and one-half months after the loss and some five months after the commencement of action to recover for the loss of the automobile, the insurer, without denying liability for the loss of the automobile, canceled the insurance for the unexpired term. Calvert Fire Ins. Co. v. Mack, 88 Ga. App. 617 , 76 S.E.2d 829 (1953).

Failure to prove any defense is evidence of bad faith. - The complete failure of the insurer to prove any defense to an action on the policy is evidence of the bad faith contemplated by this section and subjects the insurer to a verdict for the statutory penalty and attorney's fees. Reserve Life Ins. Co. v. Ayers, 217 Ga. 206 , 121 S.E.2d 649 (1961); Hanover Ins. Co. v. Hallford, 127 Ga. App. 322 , 193 S.E.2d 235 (1972); Key Life Ins. Co. v. Mitchell, 129 Ga. App. 192 , 198 S.E.2d 919 (1973); Cincinnati Ins. Co. v. Gwinnett Furn. Mart, Inc., 138 Ga. App. 444 , 226 S.E.2d 283 (1976).

When no evidence substantiates pled defense, bad faith may be found. - When the insurer introduced no evidence in explanation of its varied changes of position in its defenses to an action by the beneficiary, and the answers to such questions as to whether the policy had been issued, the application approved, and the premium paid, were certainly within its knowledge or easily ascertainable, and when the insurer had ample time to investigate and establish some basis, if basis there was, for its contention that the applicant insured had misrepresented his use of intoxicants on the application, but failed to do so, the jury was authorized to find that the insurer's refusal to pay the loss covered by the contract of insurance was in bad faith. National Life & Accident Ins. Co. v. Moore, 86 Ga. App. 618 , 72 S.E.2d 141 (1952).

Where the insurance company pleaded that the policy was obtained by fraud on the part of the plaintiff and there was no evidence introduced on the trial of the case to substantiate this, the jury was authorized to find for the plaintiff on the issue raised by the pleadings that the insurance company's failure to pay the loss was in "bad faith." Guaranty Life Ins. Co. v. Brown, 92 Ga. App. 847 , 90 S.E.2d 97 (1955).

Where the insured notified the insurer that he had not received a premium due notice after discovering that the insurer had cancelled his policy, and the insurer could produce nothing from its records showing that it had sent the notice and continued to refuse to pay the insured's claim, the jury was authorized to find bad faith on the part of the insurer. State Farm Mut. Auto. Ins. Co. v. Drury, 222 Ga. App. 196 , 474 S.E.2d 64 (1996).

Refusal to adjust or pay any loss evidences bad faith. - Refusal upon the part of the insurance company to adjust or pay for any loss or damage claimed, after having received notice of loss and demand for payment, constitutes evidence of bad faith in an action based upon this section. Central Mfrs. Mut. Ins. Co. v. Graham, 24 Ga. App. 199 , 99 S.E. 434 (1919).

A failure upon the part of the insurance company to investigate the alleged loss or damage and a denial upon the part of the company of any liability whatsoever upon the ground that such loss or damage was not recoverable under the policy, but arose from some cause not covered by the policy, may be considered as evidence of bad faith. Central Mfrs. Mut. Ins. Co. v. Graham, 24 Ga. App. 199 , 99 S.E. 434 (1919).

Refusal to pay until other claimant is satisfied. - Where the agents of a life insurance company show active sympathy with one who claims the proceeds of a policy, against the legal representative of the insured, and refuse to pay any part of the proceeds until such claimant is satisfied, although such claim is for a portion only, it is evidence of bad faith, in the meaning of this section, and the company may be proceeded against for 25 percent damages and counsel fees. Mutual Life Ins. Co. v. Watson, 30 F. 653 (S.D. Ga. 1887).

Evidence that burglary charges were pending against the insured and that he had been released on bond at the time of the fires was admissible where presented in a noninflammatory manner by the insurance company which was defending against the insured's claim of bad-faith denial of coverage, such evidence being admissible to prove the insured's poor financial condition and therefore falling within a specific exception to the federal rule prohibition on use of evidence of other crimes. Aetna Cas. & Sur. Co. v. Gosdin, 803 F.2d 1153 (11th Cir. 1986).

Evidence held to show bad faith. - Where a policy of fire insurance contains a stipulation that "the assured is the sole and undisputed owner, absolutely in fee simple, of the land on which the insured buildings stand, unless it is otherwise expressed in writing hereon," and where in the same policy it is provided that "privilege is granted for any of the above-described buildings to stand on leased ground, or ground the property of others, or upon ground to which the title may be questioned," and where the evidence shows that, at the time application for insurance was made, the insurance company, through its solicitor or agent, knew that the applicant did not own the land on which the building sought to be insured was situated, the jury is authorized to find for the insured damages and attorney's fees. Globe & Rutgers Fire Ins. Co. v. Walker, 150 Ga. 163 , 103 S.E. 407 (1920).

The insurer's denial of the existence of the policy, and denial of the payment of premiums thereon, up to and including the trial and until the premium receipt book was shown in court by the beneficiary, was sufficient basis for the trial judge to find that the insurer acted in "bad faith." Interstate Life & Accident Ins. Co. v. Hopgood, 133 Ga. App. 6 , 209 S.E.2d 703 (1974).

Where the evidence supported a finding that the insurer alternately led the insured and his daughter, who inquired frequently about the status of their claim, to believe that the claim would be paid, and thus lulled them into forbearing suit to protect their interests, the jury was authorized to award plaintiffs bad faith penalties and attorney fees. Republic Ins. Co. v. Martin, 182 Ga. App. 390 , 355 S.E.2d 694 (1987).

Even assuming that investigation of the insured's fire loss led to some delay, the insured was not notified of it nor of the insurer's desire to rebuild rather than pay under the policies' limits until seven months after the fire. This time lag and the extent of the insurer's offer were evidence supporting a bad faith finding. Southern Ins. Underwriters, Inc. v. Ray, 188 Ga. App. 469 , 373 S.E.2d 236 , cert. denied, 188 Ga. App. 912 , 373 S.E.2d 236 (1988).

Evidence was sufficient to support a finding of bad faith and an award of attorney's fees where the defendant insurer failed to follow industry procedures for contesting coverage and failed to maintain proper reserves to pay claims, the president of the defendant insurer admitted that he used the insurer's funds for himself, and the defendant insurer failed to investigate any of the plaintiff's medical bills for over 4 years and never attempted to verify some of them. American Ass'n of Cab Cos. v. Olukoya, 233 Ga. App. 731 , 505 S.E.2d 761 (1998).

Evidence held not to show bad faith. - In an action to recover upon a fire insurance policy for damage to personal property such as a piano, caused by fire, where the defendant denies liability under the policy, and where it appears from the evidence that after the damage to the property the plaintiff contended that although the property was not totally destroyed it was nevertheless a total loss and that the property could not be restored by being repaired, and where the defendant contended that the property was not a total loss but could be repaired, and offered to repair the property in compliance with a provision of the policy that the defendant had an option to repair the property, the evidence is insufficient to authorize an inference that the defendant's refusal to pay the loss was in bad faith. National Fire Ins. Co. v. Shuman, 50 Ga. App. 846 , 178 S.E. 758 (1935).

Where it appears that the defendant insurance company, prior to the commencement of the action, offered to pay the plaintiff the full amount to which the plaintiff was entitled under the provisions of the policy, and that the plaintiff refused to accept said sum, there was no evidence of bad faith on the part of the company, nor a refusal to pay the amount due under the provisions of the policy, and the judgment in favor of the plaintiff against the defendant for attorney's fees was unauthorized. Life & Cas. Ins. Co. v. McLeod, 70 Ga. App. 181 , 27 S.E.2d 871 (1943).

As a title insurer did not deny coverage; hired an appraiser to evaluate the insureds' loss; and tendered the insureds a check based on that evaluation, which the insureds' rejected, the trial court was entitled to find that the insurer did not act in bad faith. Jimenez v. Chi. Title Ins. Co., 310 Ga. App. 9 , 712 S.E.2d 531 (2011).

Evidence as to amount of attorney's fee. - The evidence of what amount of counsel fee would be reasonable should be confined to a certain fee, and inquiry should not extend to a conditional fee, in the particular case. Nor can any estimate be made to cover future litigation by motion for a new trial, writ of error, etc., there being no certainty that such future litigation will occur. If witnesses estimate fees on a basis which is too comprehensive, or on a misconception as to what the nature of the case involves, they should be requested on cross-examination to eliminate the superfluous elements and correct their estimates accordingly. Travelers Ins. Co. v. Sheppard, 85 Ga. 751 , 12 S.E. 18 (1890).

Similar transaction evidence on failure to pay. - Trial court did not abuse the court's discretion in ruling that a widow could not introduce evidence of an insurer's conduct towards insureds in two prior cases in which the court refused to honor incontestability clauses to demonstrate bad faith because the trial court was entitled to find that the prior cases were materially dissimilar from the widow's case, given that neither of those cases involved coverage under the group policy at issue and the revisions to the certificate of insurance forms made that year. Flynt v. Life of the South Ins. Co., 312 Ga. App. 430 , 718 S.E.2d 343 (2011), cert. denied, No. S12C0461, 2012 Ga. LEXIS 305 (Ga. 2012).

3. Questions for Jury or Court

Jury decides if insurer has given proper consideration to insured's interest in settlement. - In deciding whether to accept an offer of settlement within policy coverage the insurer must accord the interest of its insured the same faithful consideration it gives its own interest, and it is for the jury to decide whether the insurer has or has not so acted. Great Am. Ins. Co. v. Exum, 123 Ga. App. 515 , 181 S.E.2d 704 (1971).

Bad faith is usually a jury question. Liberty Mut. Ins. Co. v. Atlantic C.L.R.R., 66 Ga. App. 826 , 19 S.E.2d 377 (1942); American Cas. Co. v. Callaway, 75 Ga. App. 799 , 44 S.E.2d 400 (1947); Life & Cas. Ins. Co. v. Freemon, 80 Ga. App. 443 , 56 S.E.2d 303 (1949), for comment, see 12 Ga. B.J. 337 (1950); Life & Cas. Ins. Co. v. Brown, 95 Ga. App. 354 , 98 S.E.2d 68 , rev'd on other grounds, 213 Ga. 390 , 99 S.E.2d 98 (1957); Jackson v. Motors Ins. Corp., 97 Ga. App. 658 , 104 S.E.2d 253 (1958); American Family Life Assurance Co. v. United States Fire Co., 885 F.2d 826 (11th Cir. 1989).

Jury should determine bad faith. - Whether there was such bad faith as would authorize the recovery of attorney's fees, was, under the facts of this case, a question for the jury. Continental Aid Ass'n v. Hand, 22 Ga. App. 726 , 97 S.E. 206 (1918).

Where plaintiff submitted proof of disability and defendant insurance company waited six months and then refused payment, it was a question for the jury to determine whether the refusal to pay was in bad faith or not and whether the plaintiff was entitled to recover damages and attorney's fees. Liner v. Travelers Ins. Co., 50 Ga. App. 643 , 180 S.E. 383 (1935).

It is usually a question for the jury whether an insurance company, in refusing to pay, acted in bad faith and thereby subjected itself to the penalty and attorney's fees as provided by this section. New York Life Ins. Co. v. Williamson, 53 Ga. App. 28 , 184 S.E. 755 (1936); Glens Falls Indem. Co. v. Gottlieb, 76 Ga. App. 70 , 44 S.E.2d 706 (1947); Guaranty Life Ins. Co. v. Brown, 92 Ga. App. 847 , 90 S.E.2d 97 (1955); Millers Nat'l Ins. Co. v. Waters, 97 Ga. App. 103 , 102 S.E.2d 193 (1958).

Whether or not the defendant acted in bad faith in stopping disability payments and in refusing to continue them was for the jury. New York Life Ins. Co. v. Bradford, 57 Ga. App. 657 , 196 S.E. 92 (1938).

Ordinarily, questions of an insurer's bad faith in refusing to pay a claim for the jury. Pearl Assurance Co. v. Nichols, 73 Ga. App. 452 , 37 S.E.2d 227 (1946).

Bad faith is a question for the jury to pass on, and it may arise from the facts and circumstances of the case, that is, from the whole complexion of the case as presented to the jury. North British & Mercantile Ins. Co. v. Mercer, 90 Ga. App. 143 , 82 S.E.2d 41 , aff'd, 211 Ga. 161 , 84 S.E.2d 570 (1954).

In an action to recover benefits for total disability under the provisions of an insurance policy where the insurer presents no evidence and relies in defense solely on the undisputed facts as brought out by the insured and his witnesses on direct and cross-examination as the basis of its refusal to make total disability payments, and such facts, upon application of long-standing decisions of the Supreme Court, seemingly afford no substantial basis for regarding the insured as other than totally disabled, it is not error to submit the issue of bad faith and attorney's fees to the jury, and a verdict for attorney's fees is not unauthorized as a matter of law. Travelers Ins. Co. v. Stanley, 117 Ga. App. 445 , 160 S.E.2d 876 (1968).

If, at trial, the plaintiff presents evidence showing the insurance company's bad faith and the company's defense meets the "reasonable and probable cause" standard, the question of bad faith must be submitted to the jury for final resolution. Colonial Life & Accident Ins. Co. v. McClain, 144 Ga. App. 201 , 240 S.E.2d 759 (1977); Colonial Life & Accident Ins. Co. v. McClain, 150 Ga. App. 883 , 258 S.E.2d 655 (1979).

The question of bad faith is for the jury unless it can be said that as a matter of law there was a reasonable defense which vindicates the insurer's good faith. St. Paul Fire & Marine Ins. Co. v. Snitzer, 183 Ga. App. 395 , 358 S.E.2d 925 (1987).

Trial court did not err in denying the insured's motion for summary judgment on the issue of whether the insured was entitled to bad faith penalties under O.C.G.A. § 33-4-6 for the insurer's refusal to pay its vandalism claim because there were disputed questions of fact as to whether the insured sufficiently cooperated with the investigation of the vandalism claim, and thus whether the insured breached the insurance policy and was barred from recovery on that basis. R&G Invs. & Holdings, LLC v. Am. Family Ins. Co., 337 Ga. App. 588 , 787 S.E.2d 765 (2016), cert. denied, No. S16C1830, 2017 Ga. LEXIS 144 (Ga. 2017).

Bad faith not a question of law. - The question of bad faith is a question for the jury and not a question of law. National Cas. Co. v. Tanner, 100 Ga. App. 618 , 112 S.E.2d 232 (1959).

Bad faith issue not subject to motion for directed verdict. - The existence of bad faith is a jury question and not subject to a motion for a directed verdict. Atlantic Am. Life Ins. Co. v. Morris, 144 Ga. App. 577 , 241 S.E.2d 463 (1978).

Unless no evidence of bad faith is introduced. - If there is no evidence of a frivolous or unfounded refusal to pay, the court, for the furtherance of justice, should see to it that a verdict which illegally carries a penalty for bad faith is not allowed to stand. Pearl Assurance Co. v. Nichols, 73 Ga. App. 452 , 37 S.E.2d 227 (1946); Life & Cas. Ins. Co. v. Freemon, 80 Ga. App. 443 , 56 S.E.2d 303 (1949). For comment, see 12 Ga. B.J. 337 (1950).

Where no evidence of bad faith is introduced, the issue should not be presented to the jury, and an award under this section is unjustified. Interstate Life & Accident Ins. Co. v. Brown, 146 Ga. App. 622 , 247 S.E.2d 205 (1978).

Prior to 1979 defense authorizing verdict for insurer made bad faith question for court. - Where the defense presented by the defendant insurance company, if believed, would authorize a verdict for it, the issue of "bad faith" in refusing to pay the claim should not be submitted to the jury. Hermitage Health & Life Ins. Co. v. Baggs, 115 Ga. App. 138 , 154 S.E.2d 270 (1967).

Where the evidence adduced showed a reasonable and probable cause for denial of a claim, it was error to submit the issue of bad faith to the jury. Witt v. Pennsylvania Nat'l Mut. Cas. Ins. Co., 117 Ga. App. 838 , 162 S.E.2d 251 (1968).

If question of liability close. - If the question of liability was a close one, the court had to see to it that a verdict illegally carrying a penalty for bad faith was not allowed to stand. Pearl Assurance Co. v. Nichols, 73 Ga. App. 452 , 37 S.E.2d 227 (1946); Life & Cas. Ins. Co. v. Freemon, 80 Ga. App. 443 , 56 S.E.2d 303 (1949), for comment, see 12 Ga. B.J. 337 (1950).

Justiciable controversy was presented. - Where the evidence adduced presented a justiciable controversy, the trial judge was authorized to conclude that there was a reasonable ground for contesting the claim so as to remove the issue from the jury and direct a verdict for the insurer. Ware v. Nationwide Mut. Ins. Co., 140 Ga. App. 660 , 231 S.E.2d 556 (1976); Smith v. New York Life Ins. Co., 579 F.2d 1267 (5th Cir. 1978).

Former rule was held incorrect by Supreme Court in 1979. - The rule that a finding of bad faith is not authorized if the evidence would have supported a verdict in accordance with the contentions of the defendant is incorrect. Colonial Life & Accident Ins. Co. v. McClain, 243 Ga. 263 , 253 S.E.2d 745 , answer conformed to, 150 Ga. App. 883 , 258 S.E.2d 655 (1979).

In any case, jury is not required if not demanded. - It was not error for the judge, sitting without a jury, to render judgment for damages and attorney's fees under this section as well as for the amount stated in the face of the insurance policy, the case being in default, and no jury having been demanded. Great E. Cas. Co. v. Haynie, 147 Ga. 119 , 92 S.E. 939 (1917).

Bad faith to be judged by case made at trial. - The trial court erred in awarding summary judgment to an insurance company as to liability for bad-faith damages and attorney fees, as the issue of bad faith should be judged by the case made at trial, not by preliminary proofs or other ex parte affidavits. Stegall v. Guardian Life Ins. Co. of Am., 171 Ga. App. 576 , 320 S.E.2d 575 (1984).

The issue of bad faith should be judged by the case made at trial, not by the preliminary proofs or other ex parte affidavits. Blue Ridge Ins. Co. v. Maddox, 185 Ga. App. 153 , 363 S.E.2d 595 , cert. denied, 185 Ga. App. 909 , 363 S.E.2d 595 (1987).

Summary judgment held improper. - When the evidence of record did not establish as a matter of law that the insurer acted reasonably in refusing to honor the insured's claim, the trial court erred in granting the insurer summary judgment on a claim for a bad-faith penalty and attorney fees. Travillian v. Georgia Farm Bureau Mut. Ins. Co., 182 Ga. App. 241 , 355 S.E.2d 677 (1987).

Insurer's summary judgment motion denied even though reasonable factual dispute. - Insurer's motion for summary judgment on plaintiff's claim of bad faith penalties and attorney's fees was denied even though a reasonable dispute existed as to whether arson destroyed plaintiff's property since the faith of the company should not be judged by the preliminary proofs or other ex parte affidavits but at the case made at trial. Forbus v. Allstate Ins. Co., 603 F. Supp. 113 (N.D. Ga. 1984).

Summary judgment to insurer proper following theft by computer virus. - As an insurance coverage dispute arose from a theft of the insured's account by a key-logger virus, summary judgment was properly granted to the insurer on the insured's breach of contract and bad faith claims because the loss was within the policy's malicious-code exclusion. Metro Brokers, Inc. v. Transp. Ins. Co., F.3d (11th Cir. Mar. 5, 2015)(Unpublished).

Amount of penalties and attorney fees a jury question. - Trial court erred in determining the amount of bad faith penalties and attorney fees against an insured under O.C.G.A. § 33-4-6 because it was premature in determining the amount of the penalty without first submitting it to a jury as required by § 33-4-6(a) . Transp. Ins. Co. v. Piedmont Constr. Group, LLC, 301 Ga. App. 17 , 686 S.E.2d 824 (2009), cert. denied, No. S10C0507, 2010 Ga. LEXIS 312 (Ga. 2010).

Jury trial on attorney fees and expenses not error. - Although O.C.G.A. § 33-4-6 sets forth the exclusive remedy for bad faith denial of insurance benefits so that litigation expenses under O.C.G.A. § 13-6-11 are not recoverable, a trial court did not commit any reversible error by ordering a jury trial on issues relating only to attorney fees and not other litigation expenses. Atl. Title Ins. Co. v. Aegis Funding Corp., 287 Ga. App. 392 , 651 S.E.2d 507 (2007), cert. denied, No. S08C0137, 2008 Ga. LEXIS 107 (Ga. 2008).

4. Instructions

Charge on bad faith required when in issue. - Where the issue of bad faith is raised by the pleadings and supported by the evidence, it is the duty of the court to charge the jury the law relative to such issue. Templeton v. Kennesaw Life & Accident Ins. Co., 216 Ga. 770 , 119 S.E.2d 549 (1961).

Request for charge is necessary. - In the absence of a timely written request, it was not error for a trial court to charge this section without defining the term "bad faith" as applied to insurance companies. Hanover Fire Ins. Co. v. Elrod, 91 Ga. App. 403 , 85 S.E.2d 821 (1955).

Charge is properly given where insurer made low offer. - Where the defendant had offered the plaintiff less than 75 cents on the dollar of the lowest estimate proved on the trial of the case and this estimate did not include certain repairs claimed to be necessary by the plaintiff and which the witness making the estimate did not include because he did not know whether they were necessary or not, it cannot be said that a charge complained of, authorizing the jury to award attorney's fees and damages as provided in this section, was error when the complaint was based on there being no evidence of bad faith. Fidelity & Cas. Co. v. Mangum, 102 Ga. App. 311 , 116 S.E.2d 326 (1960).

The court errs in charging that the plaintiff would be entitled to recover the penalty merely on proof of refusal and regardless of whether bad faith had been proved to the satisfaction of the jury. Reserve Life Ins. Co. v. Gay, 96 Ga. App. 601 , 101 S.E.2d 158 (1957), rev'd on other grounds, 214 Ga. 2 , 102 S.E.2d 492 (1958).

Charge on section improper where insurer had reasonable ground to deny liability. - Where the defenses relied on by the insurance company cannot justly be said to be frivolous or obviously without merit, the court is not authorized to give in charge to the jury any instructions whatsoever with regard to the assessment of damages and attorney's fees against the company. Morris v. Imperial Ins. Co., 106 Ga. 461 , 32 S.E. 595 (1899).

Where the defendant insurer had reasonable ground for denying liability, charge relative to attorney fees was error. Gulf Life Ins. Co. v. Moore, 90 Ga. App. 791 , 84 S.E.2d 696 (1954).

If there is any reasonable ground for the insurer to contest the claim, there is no bad faith, and it is error for the trial court to charge the jury under this section that they may return a verdict for penalties and attorney's fees. Dependable Ins. Co. v. Gibbs, 218 Ga. 305 , 127 S.E.2d 454 (1962); Pioneer Nat'l Title Ins. Co. v. American Cas. Co., 459 F.2d 963 (5th Cir. 1972).

Charge on section held of proper scope. - Where the court charged this section and defined the meaning of the term "bad faith" as used in the section, and then clearly instructed the jury that they would have to find by a preponderance of the evidence that the failure and refusal to make payment was on account of bad faith on the part of the insurance company before it would be liable for damages or attorney's fees, and that if the company did not act in bad faith, the insured could not recover either damages or attorney's fees, the charge was not error. Palatine Ins. Co. v. Gilleland, 79 Ga. App. 18 , 52 S.E.2d 537 (1949).

Charge as to waiving proof of loss harmless if liability admitted. - Where the defendant's answer admitted liability in a lesser amount than the plaintiff claimed, a charge with reference to waiving a proof of loss was, if error, harmless, for the admission of some liability waived the technical requirements of a proof of loss. Fidelity & Cas. Co. v. Mangum, 102 Ga. App. 311 , 116 S.E.2d 326 (1960).

Jury bound to observe restrictive instructions on considering evidence. - Where instructions are given to consider certain exhibits in regard to the question of bad faith, the jury is bound to consider such evidence solely for that restricted purpose. Hermitage Health & Life Ins. Co. v. Baggs, 115 Ga. App. 138 , 154 S.E.2d 270 (1967).

5. Verdict and Judgment

An assessment of penalties is not a condition precedent to an award of attorney fees. Hardin v. Fireman's Fund Ins. Co., 150 Ga. App. 277 , 257 S.E.2d 300 (1979).

Award of attorney's fees. - That the jury awarded fees without also awarding damages of 25 percent or less, as provided for in this section, is no ground for setting aside their finding as to the attorney's fees. Continental Aid Ass'n v. Hand, 22 Ga. App. 726 , 97 S.E. 206 (1918).

Since this section does not require that penalty damages be paid, but merely limits the amount of liability, such an award is not a condition precedent to the award of reasonable attorney's fees. American Reliable Ins. Co. v. Woodward, 143 Ga. App. 652 , 239 S.E.2d 543 (1977).

Verdict denying damages for bad faith bars award of attorney's fees. - The language used in a verdict, that "we, the jury, do not award any damages to the plaintiff for bad faith on the part of the defendant," nullifies that part of the jury's verdict awarding attorney's fees. Union Cent. Life Ins. Co. v. Cofer, 103 Ga. App. 355 , 119 S.E.2d 281 (1961).

The award of attorney's fees is not authorized where the verdict states, "we, the jury, do not award any damages to the plaintiff for bad faith on the part of the defendant." Hardin v. Fireman's Fund Ins. Co., 150 Ga. App. 277 , 257 S.E.2d 300 (1979).

Award of damages in absence of finding of bad faith was error. - In a widow's suit against an insurer for failing to pay benefits under a life insurance policy, because the jury found the insurer was not guilty of bad faith in its refusal to pay these benefits but awarded the widow additional damages, the additional damages award was not authorized under O.C.G.A. § 33-4-6(a) because a finding of the insurer's bad faith was a condition precedent to such an award and there was no other authority for awarding additional damages for an insurer's failure to pay. Cherokee Nat'l Life Ins. Co. v. Eason, 276 Ga. App. 183 , 622 S.E.2d 883 (2005).

Part of verdict awarding penalty and attorney's fees properly written off if without evidence. - Where the evidence demands a finding that the insurance company did not act in bad faith in refusing to pay the claim, it is proper to write off that part of the verdict awarding a penalty and attorney's fees, where the verdict is otherwise supported by the evidence. Jackson v. Motors Ins. Corp., 97 Ga. App. 658 , 104 S.E.2d 253 (1958).

Pleadings not amended after judgment to allow claims for statutory damages. - After obtaining a judgment in its favor against uninsured motorist, the motorist could not amend pleadings to add claims for statutory damages, through O.C.G.A. §§ 33-4-6 and 33-7-11 , even though the judgment in the action in the motorist's favor held that the penalties and fees sought must be sought in an action against an uninsured motorist, because the trial court determined the court lacked authority to reopen the case after the judgment to allow amendment of the complaint. McCall v. Wyman, 173 Ga. App. 131 , 325 S.E.2d 629 (1984).

Modification of order denying attorney's fees not authorized. - When the trial court determined as a matter of law that there was no claim under an insurance policy, there could be no recovery of attorney's fees under O.C.G.A. § 33-4-6 , and the court was without power to modify the court's order denying an attorney's fees award to plaintiff after the term of court expired in which that order was made. State Farm Mut. Auto. Ins. Co. v. Johnson, 242 Ga. App. 591 , 530 S.E.2d 492 (2000).

6. Appeal

Damages and attorney's fees part of amount involved for appeal from justice of peace. - In an action in a justice of the peace court, where the plaintiff, as a beneficiary in a life insurance policy, brought suit against the insurer to recover in the sum of $30.00, representing the amount due the plaintiff under the terms of the policy, $7.50 representing 25 percent of the amount sued for as damages, and $50.00 representing reasonable attorney's fees as provided in this section, which authorizes a recovery for damages and attorney's fees where the insurer has acted in bad faith in failing to pay the amount due under a policy within the required time, the amount sued for and claimed in the suit was in excess of $50.00, for purposes of appeal. Tate v. Industrial Life & Health Ins. Co., 58 Ga. App. 305 , 198 S.E. 303 (1938).

Only damages counted in appeal from Civil Court of Fulton County. - The penalty allowable under this section where sued for is considered as part of the amount involved in the action in determining if appeal lies from Civil Court of Fulton County to Court of Appeals. General Assurance Corp. v. Roberts, 92 Ga. App. 834 , 90 S.E.2d 70 (1955).

Attorney's fees excluded from amount involved. - The attorney's fees allowable under this section are not part of the "amount involved" in an action in the Civil Court of Fulton County. General Assurance Corp. v. Roberts, 92 Ga. App. 834 , 90 S.E.2d 70 (1955).

Insured's verdict not disturbed if any evidence supports it. - The question as to whether or not an insurance company acted in bad faith in refusing to pay a loss, where the evidence was conflicting but sufficient to support either a verdict for or against the insurer, was a question solely for the jury, and the Court of Appeals cannot say as a matter of law that its finding of bad faith was not authorized. Hanover Fire Ins. Co. v. Elrod, 91 Ga. App. 403 , 85 S.E.2d 821 (1955).

In reviewing the determination of the issue of whether an insurer's refusal to pay is frivolous and unfounded, if there is some evidence to support the verdict of the trial court in favor of the insured, it will not be disturbed. National-Ben Franklin Ins. Co. v. Prather, 109 Ga. App. 459 , 136 S.E.2d 499 (1964).

Proper rule is that a judgment for "bad faith" penalties and attorney's fees should be affirmed if there is any evidence to support it unless it can be said as a matter of law that there was a reasonable defense which vindicates the good faith of the insurer. Progressive Cas. Ins. Co. v. Avery, 165 Ga. App. 703 , 302 S.E.2d 605 (1983); Republic Ins. Co. v. Martin, 182 Ga. App. 390 , 355 S.E.2d 694 (1987); First Fin. Ins. Co. v. American Sandblasting Co., 223 Ga. App. 232 , 477 S.E.2d 390 (1996).

Unless as matter of law reasonable defense vindicates good faith of insurer. - Judgment for the insured should be affirmed if there is any evidence to support it, unless it can be said as a matter of law that there was a reasonable defense which vindicates the good faith of the insurer. Colonial Life & Accident Ins. Co. v. McClain, 243 Ga. 263 , 253 S.E.2d 745 , answer conformed to, 150 Ga. App. 883 , 258 S.E.2d 655 (1979); State Farm Fire & Cas. Co. v. Mills Plumbing Co., 152 Ga. App. 531 , 263 S.E.2d 270 (1979); State Farm Mut. Auto. Ins. Co. v. Chadwick, 154 Ga. App. 394 , 268 S.E.2d 436 (1980); Canal Ins. Co. v. Bryant, 166 Ga. App. 483 , 304 S.E.2d 565 (1983).

Judgment to be affirmed absent defense indicating good faith of insurer. - The judgment should be affirmed if there is any evidence to support it unless it can be said as a matter of law that there was a reasonable defense which vindicates the good faith of the insurer. Georgia Int'l Life Ins. Co. v. Harden, 158 Ga. App. 450 , 280 S.E.2d 863 (1981).

Award of attorney's fees not disturbed if within range of evidence as to value. - Where loss is covered by the insurance policy and the insurer has refused to pay within 60 days after a demand has been made, an award of attorney's fees is not unauthorized as a matter of law; and an appellate court will not disturb the findings and judgment thereon when the award is within the range of evidence as to the reasonable value thereof. American Reliable Ins. Co. v. Woodward, 143 Ga. App. 652 , 239 S.E.2d 543 (1977).

Penalty part of verdict will be written off if defendant acquitted of bad faith. - Where the questions of law made in a case were of such character as to acquit the defendant of bad faith in refusing to pay the loss within the time limited by law, the Supreme Court will direct that, upon or before the entering of the remittitur, the plaintiff shall write off the items allowed for attorney's fees and damages in the finding of the jury and that the verdict thereupon will stand affirmed. Phenix Ins. Co. v. Clay, 101 Ga. 331 , 28 S.E. 853 , 65 Am. St. R. 307 (1897).

Defendant having judgment modified is entitled to cost of appeal. - Where there was no evidence to authorize a verdict for attorney's fees under this section, this will not require a reversal, but direction will be given to write off the attorney's fees, and the defendant, having obtained a material modification of the judgment of the court below, is entitled to the cost of bringing the case to the Supreme Court. Empire Life Ins. Co. v. Allen, 141 Ga. 413 , 81 S.E. 120 (1914).

Modification of penalty award when refusal not unfounded as to one claim. - In action to recover double indemnity benefits for alleged accidental death of insured, where jury found in favor of the plaintiff and awarded penalty and attorney's fees against the insurer, the appellate court would divide the penalty and attorney's fees as between the death benefit claim and the double indemnity claim, and direct a write-off of one-half this amount, where the refusal of the insurer to pay the double indemnity benefit did not appear to be frivolous or unfounded. Progressive Life Ins. Co. v. Smith, 71 Ga. App. 157 , 30 S.E.2d 411 (1944).

Finding evidence insufficient to show bad faith does not necessarily modify judgment. - A finding by the appellate court that the evidence was insufficient to show bad faith is not necessarily a modification of the original judgment. National-Ben Franklin Fire Ins. Co. v. Darby, 48 Ga. App. 394 , 172 S.E. 819 (1934).

Modifying award of fees set in notes modifies original judgment. - Attorney's fees in notes are fees which arise by contract, and a modification of a judgment awarding such fees is a modification of the judgment on the original contract. National-Ben Franklin Fire Ins. Co. v. Darby, 48 Ga. App. 394 , 172 S.E. 819 (1934).

Judgment on appeal reversed where not supported by record. - Where the Court of Appeals ruled that there was support in the record for determining that the insurer has followed a strained interpretation of its contract by always paying only the lesser amount, but nothing in the record supports the ruling of the Court of Appeals that the insurance company has followed any particular practice with reference to the payment of the claims of other persons under the policy, the resulting judgment of the Court of Appeals as to penalties and attorney's fees will be reversed. Guarantee Trust Life Ins. Co. v. Davis, 244 Ga. 541 , 261 S.E.2d 336 (1979).

Reversal on "bad faith" penalties and attorney's fees does not affect underlying award. - When the only error in the case is the award of "bad faith" penalties and attorney's fees, the judgment will be affirmed with direction that the portion thereof awarding such penalties and attorney's fees be written off. Progressive Cas. Ins. Co. v. Avery, 165 Ga. App. 703 , 302 S.E.2d 605 (1983).

RESEARCH REFERENCES

Am. Jur. 2d. - 44 Am. Jur. 2d, Insurance, §§ 107, 108.

C.J.S. - 46 C.J.S., Insurance, § 1641 et seq.

ALR. - Validity of statutory provision for attorneys' fees, 90 A.L.R. 530 .

Remedy and measure of recovery where insurer breaches its contract to pay indemnity periodically, 99 A.L.R. 1171 .

Validity, construction, and effect of statutory or policy provisions which give injured or damaged person right of action against insurer in respect of indemnity or liability insurance voluntarily carried, 106 A.L.R. 516 .

What persons or corporations, contracts or policies, are within statutory provisions allowing recovery of attorney's fee penalty against insurance companies or against companies dealing in specified kinds of insurance, 126 A.L.R. 1439 .

Refusal of automobile liability or indemnity insurer to assume defense of action against insured upon ground that claim upon which action is based is not within coverage, 133 A.L.R. 1516 ; 49 A.L.R.2d 694; 50 A.L.R.2d 458.

Effect of insurer's wrongful rejection of insured's claim under disability clause of life policy, 140 A.L.R. 781 .

Compromise by insured as affecting right to recover against liability or indemnity insurer, either where claim exceeds limit of liability under policy, or where insurer denies liability on policy, refuses to defend, or otherwise delays taking action, 142 A.L.R. 809 .

Necessity and sufficiency, or waiver, of demand as a condition of statutory liability of insurer for failure to pay delay in paying loss, 145 A.L.R. 343 .

Liability of insurer based upon its act of withdrawal after assumption of defense, 167 A.L.R. 243 .

Remedies of insured other than direct action on policy where fire or other property insurer refuses to comply with policy provisions for appointment of appraisers to determine amount of loss, 44 A.L.R.2d 850.

Consequences of liability insurer's refusal to assume defense of action against insured upon ground that claim upon which action is based is not within coverage of policy, 49 A.L.R.2d 694; 50 A.L.R.2d 458.

Insurer's liability under accident policy which terminated after accidental injury but prior to completion of medical treatment, hospitalization, and the like, 75 A.L.R.2d 876.

Liability insurer's liability for interest and costs on excess of judgment over policy limit, 76 A.L.R.2d 983.

Insurer's liability as affected by refusal of public authorities to permit reconstruction or repair after fire, 90 A.L.R.2d 790.

What constitutes "trial," "final trial," or "final hearing" under statute authorizing allowance of attorneys' fees as costs on such proceeding, 100 A.L.R.2d 397.

Beneficiary's ignorance of existence of life or accident policy as excusing failure to give notice, make proofs of loss, or bring action within time limited by policy or statute, 28 A.L.R.3d 292.

Insurer's failure to pay amount of admitted liability as precluding reliance on statute of limitations, 41 A.L.R.3d 1111.

Insurer's liability for consequential or punitive damages for wrongful delay or refusal to make payments due under contracts, 47 A.L.R.3d 314.

Amount of attorney's compensation, 57 A.L.R.3d 475; 57 A.L.R.3d 550; 57 A.L.R.3d 584; 58 A.L.R.3d 201; 58 A.L.R.3d 235; 58 A.L.R.3d 317; 17 A.L.R.5th 366; 23 A.L.R.5th 241.

Insured's payment of excess judgment, or portion thereof, as prerequisite of recovery against liability insurer for wrongful failure to settle claim against insured, 63 A.L.R.3d 627.

Right of injured person recovering excess judgment against insured to maintain action against liability insurer for wrongful failure to settle claim, 63 A.L.R.3d 677.

Construction and application of state statute or rule subjecting party making untrue allegations or denials to payment of costs or attorney's fees, 68 A.L.R.3d 209.

Validity of statute allowing attorney's fee to successful claimant but not to defendant, or vice-versa, 73 A.L.R.3d 515.

Recoverability of punitive damages in action by insured against liability insurer for failure to settle claim against insured, 85 A.L.R.3d 1211.

Insured's right to recover attorney's fees incurred in declaratory judgment action to determine existence of coverage under liability policy, 87 A.L.R.3d 429.

Allocation of defense costs between primary and excess insurance carriers, 19 A.L.R.4th 107.

Modern status of rules requiring liability insurer to show prejudice to escape liability because of insured's failure or delay in giving notice of accident or claim, or in forwarding suit papers, 32 A.L.R.4th 141.

What constitutes bad faith on part of insurer rendering it liable for statutory penalty imposed for bad faith in failure to pay, or delay in paying, insured's claim, 33 A.L.R.4th 579.

Excess carrier's right of action against primary carrier for improper or inadequate defense of claim, 49 A.L.R.4th 304.

Liability of independent or public insurance adjuster to insured for conduct in adjusting claim, 50 A.L.R.4th 900.

Duty of insurer to pay for independent counsel when conflict of interest exists between insured and insurer, 50 A.L.R.4th 932.

Credit life insurer's punitive damage liability for refusing payment, 55 A.L.R.4th 246.

Emotional or mental distress as element of damages for liability insurer's wrongful refusal to settle, 57 A.L.R.4th 801.

Liability insurance: third party's right of action for insurer's bad-faith tactics designed to delay payment of claim, 62 A.L.R.4th 1113.

Liability insurer's postloss conduct as waiver of, or estoppel to assert, "no-action" clause, 68 A.L.R.4th 389.

Computation of net "loss" for which fidelity insurer is liable, 5 A.L.R.5th 132.

Liability of insurer, or insurance agent or adjuster, for infliction of emotional distress, 6 A.L.R.5th 297.

Admissibility of polygraph or similar lie detector test results, or willingness to submit to test, on issues of coverage under insurance policy, or insurer's good-faith belief that claim was not covered, 7 A.L.R.5th 143.

Excessiveness or adequacy of attorneys' fees in matters involving real estate - modern cases, 10 A.L.R.5th 448.

What constitutes mental illness or disorder, insanity, or the like, within provision limiting or excluding coverage under health or disability policy, 19 A.L.R.5th 533.

Liability of insurer for prejudgment interest in excess of policy limits for covered loss, 23 A.L.R.5th 75.

What constitutes bad faith on part of insurer rendering it liable for statutory penalty imposed for bad faith in failure to pay, or delay in paying, insured's claim - Particular conduct of insurer, 115 A.L.R.5th 589.

What constitutes bad faith on part of insurer rendering it liable for statutory penalty imposed for bad faith in failure to pay, or delay in paying, insured's claim - Particular grounds for denial of claim: matters relating to policy, 116 A.L.R.5th 247.

Calculations of attorneys' fees under Federal Tort Claims Act - 28 USCS sec. 2678, 86 A.L.R. Fed. 866.

Pre-emption by Federal Longshore and Harbor Workers' Compensation Act of state law claims for bad-faith dealing by insurer or agent of insurer, 90 A.L.R. Fed. 723.

Construction and application of Longshore and Harbor Workers' Compensation Act (LHWCA) - Supreme Court cases, 72 A.L.R. Fed. 2d 1.

33-4-7. Affirmative duty to fairly and promptly adjust in incidents covered by motor vehicle liability policies; actions for bad faith; notice to Commissioner of Insurance and consumers' insurance advocate.

  1. In the event of a loss because of injury to or destruction of property covered by a motor vehicle liability insurance policy, the insurer issuing such policy has an affirmative duty to adjust that loss fairly and promptly, to make a reasonable effort to investigate and evaluate the claim, and, where liability is reasonably clear, to make a good faith effort to settle with the claimant potentially entitled to recover against the insured under such policy. Any insurer who breaches this duty may be liable to pay the claimant, in addition to the loss, not more than 50 percent of the liability of the insured for the loss or $5,000.00, whichever is greater, and all reasonable attorney's fees for the prosecution of the action.
  2. An insurer breaches the duty of subsection (a) of this Code section when, after investigation of the claim, liability has become reasonably clear and the insurer in bad faith offers less than the amount reasonably owed under all the circumstances of which the insurer is aware.
  3. A claimant shall be entitled to recover under subsection (a) of this Code section if the claimant or the claimant's attorney has delivered to the insurer a demand letter, by statutory overnight delivery or certified mail, return receipt requested, offering to settle for an amount certain; the insurer has refused or declined to do so within 60 days of receipt of such demand, thereby compelling the claimant to institute or continue suit to recover; and the claimant ultimately recovers an amount equal to or in excess of the claimant's demand.
  4. At the expiration of the 60 days set forth in subsection (c) of this Code section, the claimant may serve the insurer issuing such policy by service of the complaint in accordance with law. The insurer shall be an unnamed party, not disclosed to the jury, until there has been a verdict resulting in recovery equal to or in excess of the claimant's demand. If that occurs, the trial shall be recommenced in order for the trier of fact to receive evidence to make a determination as to whether bad faith existed in the handling or adjustment of the attempted settlement of the claim or action in question.
  5. The action for bad faith shall not be abated by payment after the 60 day period nor shall the testimony or opinion of an expert witness be the sole basis for a summary judgment or directed verdict on the issue of bad faith.
  6. The amount of recovery, including reasonable attorney's fees, if any, shall be determined by the trier of fact and included in a separate judgment against the insurer rendered in the action; provided, however, that the attorney's fees shall be fixed on the basis of competent expert evidence as to the reasonable value of the services based on the time spent and legal and factual issues involved in accordance with prevailing fees in the locality where the action is pending; provided, further, that the trial court shall have the discretion, if it finds the jury verdict fixing attorney's fees to be greatly excessive or inadequate, to review and amend the portion of the verdict fixing attorney's fees without the necessity of disapproving the entire verdict. The limitations contained in this Code section in reference to the amount of attorney's fees are not controlling as to the fees which may be agreed upon by the plaintiff and his or her attorney for the services of the attorney.
  7. In any action brought pursuant to subsection (b) of this Code section, and within 20 days of bringing such action, the plaintiff shall, in addition to service of process in accordance with Code Section 9-11-4 , mail to the Commissioner a copy of the demand and complaint by first-class mail. Failure to comply with this subsection may be cured by delivering same. (Code 1981, § 33-4-7 , enacted by Ga. L. 2001, p. 784, § 1; Ga. L. 2015, p. 1088, § 22/SB 148; Ga. L. 2016, p. 864, § 33/HB 737; Ga. L. 2019, p. 337, § 1-22/SB 132.)

The 2019 amendment, effective July 1, 2019, deleted "of Insurance" following "Commissioner" in the first sentence of subsection (g).

Code Commission notes. - Pursuant to Code Section 28-9-5, in 2001, a semicolon was substituted for a comma twice in subsection (c), "of this Code section" was inserted following "subsection (c)" in subsection (d), and "consumers' insurance advocate" was substituted for "Consumers' Insurance Advocate" and "first-class mail" was substituted for "first class mail" in subsection (g).

Law reviews. - For article, "Bad Faith in Insurance Claim Handling in Georgia: An Overview and Update," see 9 Ga. St. B.J. 10 (2003). For annual survey on insurance, see 65 Mercer L. Rev. 135 (2013). For annual survey on insurance law, see 68 Mercer L. Rev. 133 (2016). For note on the 2001 enactment of this Code section, see 18 Ga. St. U.L. Rev. 167 (2001).

JUDICIAL DECISIONS

Construction with § 33-4-6 . - Because a party mischaracterized O.C.G.A. § 33-4-7 as a "companion" to O.C.G.A. § 33-4-6 and erroneously contended that the General Assembly intended to extend the same rights to a third party, or a party other than the policy holder, and thus, the appellate court should therefore read § 33-4-7 as applying, like § 33-4-6, in the event of any covered loss, those arguments were rejected as specious. Mills v. Allstate Ins. Co., 288 Ga. App. 257 , 653 S.E.2d 850 (2007).

Use of 17(c) formula. - Trial court erred when the court denied the defense insurer's motion for partial summary judgment as to the plaintiffs' bad faith claim under O.C.G.A. § 33-4-7 because the insurer's proposed adjustment of the plaintiffs' diminished value claim was reasonable and provided it with good cause as a matter of law for the insurer's refusal to pay the amount demanded by the plaintiffs since it was undisputed that the insurer's adjuster used the 17(c) formula as part of the subjective determination of the lost value of the car at issue. Amica Mut. Ins. Co. v. Sanders, 335 Ga. App. 245 , 779 S.E.2d 459 (2015).

Proposed adjustment of diminished value claim is reasonable and provides good cause as a matter of law for the insurer's refusal to pay the amount demanded when it is undisputed that the adjuster used the 17(c) formula as part of the subjective determination of the lost value of the car at issue. Amica Mut. Ins. Co. v. Sanders, 335 Ga. App. 245 , 779 S.E.2d 459 (2015).

Bad faith not shown. - Summary judgment for an insurance company on a motorist's claim against it was proper since there was no evidence of bad faith; the insurance company did not settle the motorist's property damage claim because its adjuster believed that, at the motorist's request, the motorist's insurer was assuming responsibility for settling the claim; an adjuster with the motorist's insurer confirmed that the motorist's insurer had "handled" the motorist's claim, and, further, the motorist sent a demand letter to the motorist's insurer on the same day that the motorist sent a demand letter to the insurance company, indicating that the motorist was still looking to the motorist's own insurer for payment. King v. Atlanta Cas. Ins. Co., 279 Ga. App. 554 , 631 S.E.2d 786 (2006).

Statute applied to property, not personal injury, claims. - Because O.C.G.A. § 33-4-7 applied only to an insurer's bad faith in responding to claims for property damage, an insurer was properly granted a judgment on the pleadings as a complaint asserting that it acted in bad faith in responding to a claimant's claims for personal injury failed to state a claim upon which relief under the statute could be granted. Mills v. Allstate Ins. Co., 288 Ga. App. 257 , 653 S.E.2d 850 (2007).

Statute did not apply. - Because the damage claimed by the company was subject to a cargo liability policy that the underwriters had issued to the insured, and not a motor vehicle liability insurance policy, O.C.G.A. § 33-4-7 provided no authority for the imposition of any penalty for the underwriters' alleged bad faith in connection with the claim. Equipco Int'l, LLC v. Certain Underwriters at Lloyd's, 320 Ga. App. 345 , 739 S.E.2d 797 (2013).

CHAPTER 5 REGULATION OF UNAUTHORIZED INSURERS

Article 1

General Provisions.

Article 2

Surplus Line Insurance.

Part 1

G ENERAL PROVISIONS .

Part 2

Interstate Cooperation for Collection and

Disbursement of Premium Taxes.

Article 3

Unauthorized Insurers Process Act.

RESEARCH REFERENCES

ALR. - Constitutionality of statutes relating to insurance contracts made and to be performed out of state, upon property or life within state, 32 A.L.R. 636 .

Full faith and credit provision as affecting insurance contracts, 41 A.L.R. 1386 ; 114 A.L.R. 250 ; 119 A.L.R. 483 ; 173 A.L.R. 1138 .

Collateral business activities incident to, or in aid of, interstate transportation, as related to interstate commerce, 152 A.L.R. 1078 .

Decision of United States Supreme Court that insurance is interstate commerce as affecting state statutes relating to foreign insurance companies, 164 A.L.R. 500 .

ARTICLE 1 GENERAL PROVISIONS

33-5-1. Representation of unauthorized insurers prohibited.

  1. No person in this state shall:
    1. Represent an insurer who is not at the time duly authorized to transact insurance in this state in the solicitation, negotiation, or effectuation of insurance, inspection of risks, fixing of rates, investigation or adjustment of losses, collection of premiums, or in any other manner in the transaction of insurance with respect to subjects of insurance, resident, located, or to be performed in this state; or
    2. Represent any person in the procuring of insurance with an unauthorized insurer upon or with relation to any subject of insurance.
  2. This Code section shall not apply to:
    1. Surplus line insurance which is authorized by this chapter and transactions as to which a certificate of authority is not required of an insurer under Code Section 33-3-2;
    2. Reinsurance as authorized by Code Section 33-7-14;
    3. The services of an adjuster with respect to claims under policies lawfully solicited, issued, and delivered outside of Georgia;
    4. Acceptance of service by the Commissioner pursuant to this title;
    5. The professional services of an attorney; or
    6. Any insurance company or underwriter issuing contracts of insurance to nuclear insureds, nor to any contract of insurance issued to any one or more nuclear insureds, provided that such nuclear insured under a contract procured from an unauthorized insurer shall pay to the Commissioner before March 1 of the succeeding calendar year following the year in which the insurance was so effectuated, continued, or renewed, a premium receipts tax of 4 percent of the gross premiums charged for such insurance. For the purposes of this paragraph, a "nuclear insured" is an insured purchasing policies of insurance on risks on its own nuclear generating plants and other facilities at such plants in this state.

      (Code 1933, § 56-601, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1972, p. 476, § 1; Ga. L. 1982, p. 3, § 33; Ga. L. 2019, p. 337, § 1-23/SB 132.)

The 2019 amendment, effective July 1, 2019, deleted "of Insurance" following "Commissioner" in the first sentence of paragraph (b)(6).

Cross references. - Liability of persons making contracts for unauthorized insurers, § 33-23-42 .

JUDICIAL DECISIONS

Preservation of right to raise untimely notice objection. - Surplus insurers were authorized to file a declaratory judgment action to preserve their right to raise untimely notice of an occurrence as a defense to coverage even without a certificate of authority to conduct business in the State of Georgia. Kay-Lex Co. v. Essex Ins. Co., 286 Ga. App. 484 , 649 S.E.2d 602 (2007).

Cited in American Sur. Co. v. Smallon, 54 Ga. App. 45 , 186 S.E. 892 (1936); National Sur. Corp. v. Boney, 215 Ga. 271 , 110 S.E.2d 406 (1959); Service Cas. Co. v. Carr, 101 Ga. App. 70 , 113 S.E.2d 175 (1960); Gordy Tire Co. v. Dayton Rubber Co., 216 Ga. 83 , 114 S.E.2d 529 (1960); Chatham County Hosp. Auth. v. John Hancock Mut. Life Ins. Co., 325 F. Supp. 614 (S.D. Ga. 1971).

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, § 43.

ALR. - Personal liability of agents or brokers in respect of policies of foreign insurance companies not authorized to do business in the state, 131 A.L.R. 1079 .

33-5-2. Validity of contracts effectuated by unauthorized insurers; dissemination of advertising for or on behalf of unauthorized insurers.

  1. A contract of insurance effectuated by an unauthorized insurer in violation of this title shall be voidable except at the instance of the insurer unless during the life of such contract the insurer is authorized to transact the class or classes of insurance involved.
  2. No publication published in this state or radio or television broadcast or any other agency or means for the dissemination of information operated or located in this state shall publish, broadcast, or otherwise disseminate within this state advertising for or on behalf of any insurer not then authorized to transact insurance in this state; provided, however, that this subsection shall not apply as to publications published in this state principally for circulation in other states, wherein advertising by or on behalf of such unauthorized insurers is not expressly directed toward residents or subjects of insurance in this state.

    (Code 1933, § 56-602, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1982, p. 3, § 33; Ga. L. 2019, p. 337, § 1-24/SB 132.)

The 2019 amendment, effective July 1, 2019, substituted "television broadcast" for "television broadcaster" near the beginning of subsection (b).

JUDICIAL DECISIONS

Cited in Chatham County Hosp. Auth. v. John Hancock Mut. Life Ins. Co., 325 F. Supp. 614 (S.D. Ga. 1971); American Druggist Ins. Co. v. Georgia Power Co., 145 Ga. App. 104 , 243 S.E.2d 319 (1978).

RESEARCH REFERENCES

C.J.S. - 44 C.J.S., Insurance, § 70.

ALR. - Constitutionality of statutes relating to insurance contracts made and to be performed out of state, upon property life within state, 32 A.L.R. 636 .

Full faith and credit provision as affecting insurance contracts, 41 A.L.R. 1386 ; 114 A.L.R. 250 ; 119 A.L.R. 483 ; 173 A.L.R. 1138 .

33-5-3. Penalty for violations of chapter.

Any person, firm, or corporation violating any of the provisions of this chapter shall be guilty of a misdemeanor.

(Code 1933, § 56-9915, enacted by Ga. L. 1960, p. 289, § 1.)

ARTICLE 2 SURPLUS LINE INSURANCE

JUDICIAL DECISIONS

Coverage issued under article accords with provisions regulating unauthorized insurers. - Surplus line coverage issued in accordance with this article is issued in accordance with this chapter, while insurance written in a manner which authorizes service on the insurer under the Unauthorized Insurers Process Act (see O.C.G.A. § 33-5-50 et seq.) is written in violation of and not in accordance with this chapter. Reeves v. South Am. Managers, Inc., 110 Ga. App. 49 , 137 S.E.2d 700 (1964), aff'd, 220 Ga. 493 , 140 S.E.2d 201 (1965).

Cited in Kelley v. Montgomery, 108 Ga. App. 271 , 132 S.E.2d 857 (1963); Insurance Co. v. Dills, 145 Ga. App. 183 , 243 S.E.2d 549 (1978).

OPINIONS OF THE ATTORNEY GENERAL

This article does not transform an unauthorized insurer into an authorized insurer. 1969 Op. Att'y Gen. No. 69-498.

PART 1 G ENERAL PROVISIONS

Editor's notes. - Ga. L. 2011, p. 449, § 8/HB 413, effective July 1, 2011, designated Code Sections 33-5-20 through 33-5-35 as Part 1 of Article 2.

33-5-20. Short title.

This article shall constitute and may be referred to as "The Surplus Line Insurance Law."

(Code 1933, § 56-613, enacted by Ga. L. 1960, p. 289, § 1.)

OPINIONS OF THE ATTORNEY GENERAL

Surplus line insurance unacceptable as used car dealer licensure. - The State Board of Registration of Used Car Dealers may not accept surplus line insurance in lieu of the surety bond required by O.C.G.A. § 43-47-8(h) for proper licensure. 1994 Op. Att'y Gen. No. 94-5.

33-5-20.1. Definitions.

As used in this article, the term:

  1. "Domestic surplus lines insurer" means a nonadmitted insurer that is domiciled in this state with which a surplus lines broker may place surplus lines insurance;

    (1.1) "Exempt commercial purchaser" means any person purchasing commercial insurance that, at the time of placement, meets the following requirements:

    1. The person employs or retains a qualified risk manager to negotiate insurance coverage;
    2. The person has paid aggregate nation-wide commercial property and casualty insurance premiums in excess of $100,000.00 in the immediately preceding 12 months; and
      1. The person meets at least one of the following criteria:
        1. The person possesses a net worth in excess of $20 million as such amount is adjusted pursuant to division (ii) of this subparagraph;
        2. The person generates annual revenues in excess of $50 million as such amount is adjusted pursuant to division (ii) of this subparagraph;
        3. The person employs more than 500 full-time or full-time equivalent employees per individual insured or is a member of an affiliated group employing more than 1,000 employees in the aggregate;
        4. The person is a not for profit organization or public entity generating annual budgeted expenditures of at least $30 million as such amount is adjusted pursuant to division (ii) of this subparagraph; or
        5. The person is a municipality with a population in excess of 50,000.
      2. Effective on January 1, 2016, and every five years on January 1 thereafter, the amounts in subdivisions (I), (II), and (IV) of division (i) of this subparagraph shall be adjusted to reflect the percentage change for such five-year period in the Consumer Price Index for All Urban Consumers as reported by the Bureau of Labor Statistics of the United States Department of Labor.
  2. "Home state" means:
    1. The state in which an insured maintains its principal place of business or, in the case of an individual, the individual's principal residence; or
    2. If 100 percent of the insured risk is located outside the state referred to in subparagraph (A) of this paragraph, the state to which the greatest percentage of the insured's taxable premium for that insurance contract is allocated.

      If more than one insured from an affiliated group are named insureds on a single nonadmitted insurance contract, the term "home state" means the home state, as determined according to subparagraph (A) of this paragraph, of the member of the affiliated group that has the largest percentage of premium attributed to it under such insurance contract.

  3. "Nonadmitted insurance" means any property and casualty insurance permitted in a state to be placed directly or through a surplus line broker with a nonadmitted insurer eligible to accept such insurance.
  4. "Principal place of business" means the state where the insured maintains its headquarters and where the insured's high-level officers direct, control, and coordinate the business's activities.
  5. "Principal residence" means the state where the individual resides for the greatest number of days during a calendar year.
  6. "Qualified risk manager" means, with respect to a policyholder of commercial insurance, a person who meets all of the following requirements:
    1. The person is an employee of, or third-party consultant retained by, the commercial policyholder;
    2. The person provides skilled services in purchase of insurance and in loss prevention, loss reduction, or risk and insurance coverage analysis;
    3. The person has a bachelor's degree or higher from an accredited college or university in risk management, business administration, finance, economics, or any other field determined by a state insurance commissioner or other state regulatory official or entity to demonstrate minimum competence in risk management and:
      1. Has three years of experience in risk financing, claims administration, loss prevention, risk and insurance analysis, or purchasing commercial lines of insurance;
      2. Has a designation as a chartered property and casualty underwriter issued by the American Institute for CPCU/Insurance Institute of America;
      3. Has a designation as an associate in risk management issued by the American Institute for CPCU/Insurance Institute of America;
      4. Has a designation as certified risk manager issued by the National Alliance for Insurance Education & Research;
      5. Has a designation as a RIMS Fellow issued by the Global Risk Management Institute; or
      6. Has any other designation, certification, or license determined by the Commissioner to demonstrate minimum competency in risk management; and
    4. The person has:
      1. At least seven years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of insurance;
      2. Any one of the designations specified in subparagraph (C) of this paragraph; or
      3. A graduate degree from an accredited college or university in risk management, business administration, finance, economics, or any other field determined by a state insurance commissioner or other state regulatory official or entity to demonstrate minimum competence in risk management.
  7. "Surplus line insurance" means any property and casualty insurance permitted in a state to be placed through a surplus line broker with a nonadmitted insurer eligible to accept such insurance.
  8. "Surplus line broker" or "broker" means an individual who is licensed in this state to sell, solicit, or negotiate insurance on properties, risks, or exposures located or to be performed in this state with nonadmitted insurers. (Code 1981, § 33-5-20.1 , enacted by Ga. L. 2011, p. 449, § 1/HB 413; Ga. L. 2018, p. 744, § 1/SB 381; Ga. L. 2019, p. 337, § 1-25/SB 132; Ga. L. 2019, p. 1056, § 33/SB 52.)

The 2018 amendment, effective July 1, 2018, added paragraph (1); and redesignated former paragraph (1) as present paragraph (1.1)

The 2019 amendments. The first 2019 amendment, effective July 1, 2019, added "or" at the end of division (6)(D)(ii); deleted former division (6)(D)(iii), which read: "At least ten years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of insurance; or"; and redesignated former division (6)(D)(iv) as present division (6)(D)(iii). The second 2019 amendment, effective May 12, 2019, part of an Act to revise, modernize, and correct the Code, deleted "or" following "subparagraph;" at the end of subdivisions (1.1)(C)(i)(I) and (1.1)(C)(i)(II).

33-5-20.2. Criteria for domestic surplus lines insurer; construction with federal provisions; eligibility to write insurance; taxes; protection; financial and solvency requirements; exemption from statutory requirements.

  1. A nonadmitted insurer that is domiciled in this state shall be deemed a domestic surplus lines insurer if all of the following criteria are satisfied:
    1. The insurer shall possess a policyholder surplus of at least $15 million;
    2. The insurer is an eligible surplus lines insurer in at least one jurisdiction other than this state;
    3. The board of directors of the insurer has passed a resolution seeking to be a domestic surplus lines insurer in this state; and
    4. The Commissioner has issued a certificate of authority or otherwise provided written approval for the insurer to be a domestic surplus lines insurer.
  2. For the purposes of the federal Nonadmitted and Reinsurance Reform Act of 2010, 15 U.S.C Section 8201, et seq, a domestic surplus lines insurer shall be considered a nonadmitted insurer with respect to risks insured in this state.
  3. A domestic surplus lines insurer shall be deemed an eligible surplus lines insurer and authorized to write any kind of insurance that a nonadmitted insurer not domiciled in this state is eligible to write.
  4. Notwithstanding any other statute, the policies issued in this state by a domestic surplus lines insurer shall be subject to taxes assessed upon surplus lines policies issued by nonadmitted insurers, including the surplus lines premium tax, but will not be subject to other taxes levied upon admitted insurers, whether domestic or foreign.
  5. Policies issued by a domestic surplus lines insurer are not subject to the protections or other provisions of the Georgia Insurers Insolvency Pool created by Chapter 36 of this title or the Georgia Life and Health Insurance Guaranty Association created by Chapter 38 of this title.
  6. All financial and solvency requirements imposed by this state's laws upon domestic admitted insurers shall apply to domestic surplus lines insurers unless domestic surplus lines insurers are otherwise specifically exempted.
  7. Policies issued by a domestic surplus lines insurer shall be exempt from all statutory requirements relating to insurance rating plans, policy forms, premiums charged to insureds, and other statutory requirements in the same manner and to the same extent as a nonadmitted insurer domiciled in another state. (Code 1981, § 33-5-20.2 , enacted by Ga. L. 2018, p. 744, § 2/SB 381.)

Effective date. - This Code section became effective July 1, 2018.

33-5-21. Authorization of procurement of surplus line insurance; conditions; procuring or placing nonadmitted insurance for exempt commercial purchaser.

  1. Surplus line insurance may be procured from unauthorized insurers subject to the following conditions:
    1. The insurance must be procured through a licensed surplus line broker;
    2. The insurance may only be procured from insurers which meet the financial condition requirements of Code Section 33-5-25;
    3. The insured or the insured's agent has made an effort to procure the desired insurance coverage or benefits from authorized insurers, but such effort has been unsuccessful in obtaining insurance coverage or benefits which are satisfactory to the insured except as provided under subsection (b) of this Code section; and
    4. The insurance shall not be procured under this chapter for personal private passenger motor vehicle coverage or residential dwelling property coverage unless such insurance cannot be obtained from an authorized insurer.
  2. The broker shall not be required to make a due diligence search to determine whether the full amount or type of insurance can be obtained from authorized insurers when the surplus line broker is seeking to procure or place nonadmitted insurance for an exempt commercial purchaser, provided:
    1. The broker procuring or placing the surplus line insurance has disclosed to the exempt commercial purchaser that such insurance may be available from the admitted market that may provide greater protection with more regulatory oversight; and
    2. The exempt commercial purchaser has subsequently requested in writing for the broker to procure or place such insurance from a nonadmitted insurer.

      (Code 1933, § 56-614, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1992, p. 6, § 33; Ga. L. 1995, p. 1165, § 1; Ga. L. 2011, p. 449, § 2/HB 413; Ga. L. 2019, p. 337, § 1-26/SB 132.)

The 2019 amendment, effective July 1, 2019, inserted "private" in paragraph (a)(4).

JUDICIAL DECISIONS

Preservation of right to raise untimely notice objection. - Surplus insurers were authorized to file a declaratory judgment action to preserve their right to raise untimely notice of an occurrence as a defense to coverage even without a certificate of authority to conduct business in the State of Georgia. Kay-Lex Co. v. Essex Ins. Co., 286 Ga. App. 484 , 649 S.E.2d 602 (2007).

33-5-21.1. Application of Chapter 9 or Code Section 33-24-9.

Insurance placed in accordance with this article shall not be subject to the provisions of Chapter 9 of this title or Code Section 33-24-9.

(Code 1981, § 33-5-21.1 , enacted by Ga. L. 1997, p. 1581, § 1; Ga. L. 1997, p. 683, § 1.)

Editor's notes. - Ga. L. 1997, p. 1581, § 1 and Ga. L. 1997, p. 683, § 1 both enacted a Code section designated 33-5-21.1 and containing identical provisions.

33-5-22. Licensing of surplus line brokers generally.

A surplus lines broker shall be licensed in accordance with Code Section 33-23-37.

(Code 1933, § 56-618, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1965, p. 248, § 1; Ga. L. 1973, p. 499, § 1; Ga. L. 1985, p. 1239, § 1; Ga. L. 1988, p. 1519, § 1; Ga. L. 1992, p. 2725, § 9; Ga. L. 1997, p. 683, § 1; Ga. L. 2001, p. 925, § 2.)

Editor's notes. - Ga. L. 1985, p. 1239, § 3, provided that that Act would apply to insurance policies issued, delivered, issued for delivery, or renewed on and after July 1, 1985.

OPINIONS OF THE ATTORNEY GENERAL

Those seeking renewal of their licenses need not submit to examination; an individual is considered an applicant only when he makes his initial application for a license, so only those individuals seeking a license for a first time must submit to a personal examination. 1973 Op. Att'y Gen. No. 73-90.

RESEARCH REFERENCES

ALR. - Right to enjoin business competitor from unlicensed or otherwise illegal acts or practices, 90 A.L.R.2d 7.

33-5-23. Revocation or suspension of broker's license.

  1. The Commissioner shall revoke any surplus line broker's license:
    1. If the broker fails to file his quarterly affidavit or to remit the tax as required by law;
    2. If the broker fails to maintain an office in this state, or to keep records, or to allow the Commissioner to examine his records as required by law; or
    3. For any of the causes for which an agent's license may be revoked.
  2. The Commissioner may revoke or suspend any or all such licenses whenever he deems such suspension or revocation to be in the best interests of the people of this state.
  3. The procedures provided in Article 1 of Chapter 23 of this title for the suspension or revocation of agents' licenses shall be applicable to suspension or revocation of a surplus line broker's license.
  4. No broker whose license has been so revoked shall again be so licensed within five years thereafter nor until any penalties or delinquent taxes owing by him or her have been paid.

    (Code 1933, § 56-625, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1972, p. 1220, § 5; Ga. L. 1982, p. 3, § 33; Ga. L. 1993, p. 91, § 33; Ga. L. 2019, p. 337, § 1-27/SB 132.)

The 2019 amendment, effective July 1, 2019, in subsection (d), substituted "within five years" for "within two years" and inserted "or her".

33-5-24. Acceptance and placement of business by surplus line brokers generally.

A licensed surplus line broker may accept and place surplus line business for any insurance agent or broker licensed in this state for the kind of insurance involved and may compensate such agent or broker for the surplus line business.

(Code 1933, § 56-619, enacted by Ga. L. 1960, p. 289, § 1.)

33-5-25. Broker to ascertain financial condition of unauthorized insurer prior to placement of insurance therewith; placement of insurance with foreign or alien insurers.

  1. The broker shall ascertain the financial condition of the unauthorized insurer before placing insurance with the unauthorized insurer and shall not place surplus line insurance with any insurer who does not meet, according to current available reliable financial information, the requirements provided in subsection (b) of this Code section.
    1. The broker shall so insure only:
      1. With an insurance company domiciled in a United States jurisdiction that is authorized to write the type of insurance in its domiciliary jurisdiction and has a capital and surplus or its equivalent under the laws of its domiciliary jurisdiction which equals the greater of:
        1. The minimum capital and surplus requirements of this title; or
        2. Fifteen million dollars;

          The requirements of this subparagraph may be satisfied by an insurer that possesses less than the minimum capital and surplus upon an affirmative finding of acceptability by the Commissioner. The finding shall be based upon such factors as quality of management, capital and surplus of any parent company, company underwriting profit and investment income trends, market availability, and company record and reputation within the industry. In no event shall the Commissioner make an affirmative finding of acceptability when the unauthorized insurer's capital and surplus is less than $4.5 million;

      2. With any group of foreign individual underwriters licensed and domiciled in a state or United States territory if such group maintains a trust or security fund of at least $10 million as security to the full amount thereof for all policyholders and creditors in the United States of each member of the group. If the group includes incorporated and unincorporated underwriters, the incorporated members shall not be engaged in any business other than underwriting as a member of the group and shall be subject to the level of solvency regulation and control by the group's domiciliary regulatory agency as are the unincorporated members; or
      3. With an alien insurer or group of underwriters domiciled outside of the United States, including, but not limited to, any Lloyd's group, that is listed in the Quarterly Listing of Alien Insurers maintained by the International Insurers Department of the National Association of Insurance Commissioners.
    2. An insurer or group of foreign individual underwriters described in subparagraph (A) or (B) of paragraph (1) of this subsection shall annually furnish to the broker a copy of its current annual financial statement and, in the case of a group of foreign individual underwriters, evidence of compliance with required trust or security fund deposits.
  3. For any violation of this Code section, a broker's license may be suspended or revoked as provided in Code Section 33-5-23.

    (Code 1933, § 56-620, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1969, p. 609, § 1; Ga. L. 1985, p. 1239, § 2; Ga. L. 1989, p. 672, § 1; Ga. L. 1992, p. 6, § 33; Ga. L. 1995, p. 1165, § 2; Ga. L. 2002, p. 8, § 1; Ga. L. 2011, p. 449, § 3/HB 413; Ga. L. 2012, p. 775, § 33/HB 942.)

Editor's notes. - Ga. L. 1985, p. 1239, § 3, provided that that Act would apply to insurance policies issued, delivered, issued for delivery, or renewed on and after July 1, 1985.

33-5-26. Endorsement of insurance contract by broker.

  1. Every insurance contract procured and delivered as a surplus line coverage shall be initialed by or bear the name of the surplus line broker who procured it and shall have printed or stamped upon it the following: "This contract is registered and delivered as a surplus line coverage under the Surplus Line Insurance Law, O.C.G.A. Chapter 33-5."
  2. No surplus lines policy or certificate in which the policy premium is $5,000.00 per annum or less shall be delivered in this state unless a standard disclosure form or brochure explaining surplus lines insurance is attached to or made a part of the policy or certificate. The Commissioner shall prescribe by rule or regulation the format and contents of such form or brochure.

    (Code 1933, § 56-616, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 2002, p. 8, § 2; Ga. L. 2019, p. 337, § 1-28/SB 132.)

The 2019 amendment, effective July 1, 2019, deleted former subsection (c), which read: "Pursuant to Code Section 33-2-9, the Commissioner may promulgate rules and regulations which are necessary to implement the provisions of this article."

JUDICIAL DECISIONS

Cited in Tyson v. Scottsdale Indemnity Co., 343 Ga. App. 370 , 805 S.E.2d 138 (2017), cert. denied, 2018 Ga. LEXIS 318 (Ga. 2018).

33-5-27. Issuance to insured by broker of evidence of insurance; issuance of substitute certificate or endorsement; delivery of policy to insured; penalties.

  1. Upon placing a surplus line coverage, the broker shall promptly issue and deliver to the insured evidence of the insurance consisting either of the policy as issued by the insurer or, if the policy is not then available, the surplus line broker's certificate. The certificate shall be executed by the broker and shall show the description and location of the subject of the insurance, a general statement of the kind and type of insurance purchased, and the term of the insurance, the premium and date charged, taxes collected from the insured, and the name and address of the insured and the insurer. If the direct risk is assumed by more than one insurer, the certificate or the policy, when delivered, shall state the name and address and proportion of the entire direct risk assumed by each insurer.
  2. No broker shall issue any certificate or any cover note or purport to insure or represent that insurance will be or has been granted by any unauthorized insurer unless he has prior written authority from the insurer for the insurance or has received information from the insurer in the regular course of business that the insurance has been granted or an insurance policy providing the insurance actually has been issued by the insurer and delivered to the insured.
  3. If, after the issuance and delivery of any certificate, there is any change as to the identity of the insurers or the proportion of the direct risk assumed by the insurer as stated in the broker's original certificate or in any other material respect as to the insurance coverage evidenced by the certificate, the broker shall promptly issue and deliver to the insured a substitute certificate or endorsement accurately showing the current status of the coverage and the insurers responsible thereunder.
  4. If a policy issued by the insurer is not available upon placement of the insurance and the broker has issued and delivered his certificate as provided in subsection (a) of this Code section, upon request therefor by the insured, the broker shall as soon as reasonably possible procure from the insurer its policy evidencing the insurance and deliver the policy to the insured in replacement of the broker's certificate theretofore issued.
  5. Any surplus line broker who knowingly or negligently issues a false certificate of insurance or who fails promptly to notify the insured of any material change with respect to such insurance by delivery to the insured of a substitute certificate or endorsement as provided in subsection (c) of this Code section shall be subject to the penalties provided by Code Section 33-5-32 or to any greater applicable penalty provided by law.

    (Code 1933, § 56-621, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1995, p. 1165, § 3.)

JUDICIAL DECISIONS

Cited in Tyson v. Scottsdale Indemnity Co., 343 Ga. App. 370 , 805 S.E.2d 138 (2017), cert. denied, 2018 Ga. LEXIS 318 (Ga. 2018).

33-5-28. Maintenance by broker of records of policies written or renewed.

Each licensed surplus line broker shall keep in his office a separate account of each policy written or renewed showing the exact amount of insurance placed, the name and post office address of the insured, the name and home address of the insurer, the location of the insured property, the gross premium charged therefor, the amount of premium tax paid thereon, the nature of the risk, the number, date, and term of the policy, and any other information as the Commissioner may require. The record shall at all times be open to examination by the Commissioner.

(Code 1933, § 56-622, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1972, p. 1220, § 2.)

33-5-29. Filing of quarterly affidavits by surplus line brokers; filing of reports of affairs and operations by brokers.

  1. Each surplus line broker shall file with the Commissioner, on a quarterly basis, an affidavit executed by the surplus line broker setting forth the facts referred to in Code Section 33-5-21. Such affidavit shall furnish certificate or cover note number, name of insured, the amount of the premium, the tax paid thereon, and any other information as the Commissioner may require for all surplus line transactions in which premiums were paid to the surplus line broker during the previous quarter. The quarterly affidavit shall be filed with the Commissioner on or before the fifteenth day of April, July, October, and January. Each surplus line broker shall remit a 4 percent tax on direct premiums written, as described in Code Section 33-5-31. The tax shall be remitted with the surplus line broker's quarterly affidavit.
  2. In addition to the information required on the quarterly affidavit, each surplus line broker shall provide the Commissioner with such reports of its affairs and operations regarding insurance covering insured persons, resident or located in this state, for such periods of time as the Commissioner may require. The Commissioner may require from surplus line brokers who are the custodians of relevant records of surplus line insurers reports containing such information as the Commissioner may by regulation or by order prescribe which, as to product liability insurers, may include but shall not be required to be limited to the following information:
    1. The total number of product liability claims, broken down by:
      1. The type or category of claims; and
      2. Whether the claims were:
        1. Reported during a prior period and closed during the reporting period;
        2. Reported and closed during the reporting period; or
        3. Reported and not closed during the reporting period;
    2. The total amount paid in settlement or discharge of the claims for each type or category of claims;
    3. The total amount of reserves available to pay those product liability claims which were reported for the last preceding year; provided, however, the information on reserves shall be required to be maintained by the Commissioner in confidence, except that summaries of the combined totals of such reserves shall be subject to inspection by members of the General Assembly upon request;
    4. The total amount of premiums received from insured persons, resident or located in this state, which is attributable to product liability insurance and which must be classified separately with respect to manufacturers, wholesalers or distributors, and retailers;
    5. The total number of insured persons, resident or located in this state, for which the product liability insurance has been provided which must be classified separately with respect to manufacturers, wholesalers or distributors, and retailers;
    6. The total number of insured persons, resident or located in this state, whose product liability insurance coverage the insurer, with which the surplus line broker placed the coverage, canceled or refused to renew and the reasons therefor which must be classified separately with respect to manufacturers, wholesalers or distributors, and retailers; and
    7. The total number of insured persons, resident or located in this state, who failed to renew their product liability insurance policies during the reporting period which information must be classified separately with respect to manufacturers, wholesalers or distributors, and retailers.

      (Code 1933, § 56-615, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1972, p. 1220, § 1; Ga. L. 1974, p. 465, § 2; Ga. L. 1978, p. 2025, § 1; Ga. L. 1982, p. 3, § 33; Ga. L. 1995, p. 1165, § 4; Ga. L. 2019, p. 337, § 1-29/SB 132.)

The 2019 amendment, effective July 1, 2019, substituted "as described in" for "as defined in" near the end of the fourth sentence of subsection (a).

33-5-30. Validity and enforceability of contracts procured as surplus line insurance.

Insurance contracts procured as surplus line coverage from unauthorized insurers in accordance with this chapter shall be fully valid and enforceable as to all parties and shall be given recognition in all matters and respects to the same effect as like contracts issued by authorized insurers.

(Code 1933, § 56-617, enacted by Ga. L. 1960, p. 289, § 1.)

OPINIONS OF THE ATTORNEY GENERAL

Surplus line insurance unacceptable as used car dealer licensure. - Although O.C.G.A. § 33-5-30 gives validity to surplus line insurance, it does not transform an unauthorized insurer into an authorized insurer by rendering surplus line insurance acceptable for licensure as a used car dealer. 1994 Op. Att'y Gen. No. 94-5.

33-5-31. Payment by broker of tax for privilege of doing business; computation and allocation of tax.

  1. The surplus line broker shall remit to the Commissioner, on or before the fifteenth day of April, July, October, and January, at the time his or her quarterly affidavit is submitted, as a tax imposed for the privilege of doing business as a surplus line broker in this state, a tax of 4 percent on all premiums paid to the surplus line broker during the preceding quarter, less return premiums and exclusive of sums collected to cover state or federal taxes, on surplus line insurance subject to tax transacted by him or her during the preceding quarter as shown by his or her affidavit filed with the Commissioner.
  2. If this state participates in a cooperative agreement, compact, or reciprocal agreement with other states pursuant to Code Sections 33-5-40 through 33-5-44 and a surplus line policy covers risks or exposures located or to be performed both in and out of this state, the sum payable shall be computed based on an amount equal to 4 percent of that portion of the gross premiums allocated to this state plus an amount equal to the portion of premiums allocated to other states or territories on the basis of the tax rates and fees applicable to properties, risks, or exposures located or to be performed outside this state.

    (Code 1933, § 56-623, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1972, p. 1220, § 3; Ga. L. 1974, p. 465, § 3; Ga. L. 1995, p. 1165, § 5; Ga. L. 2011, p. 449, § 4/HB 413; Ga. L. 2012, p. 1117, § 2/SB 385.)

OPINIONS OF THE ATTORNEY GENERAL

No exemption of coverage for Metropolitan Atlanta Rapid Transit Authority. - Insurance companies and surplus line brokers who provide insurance coverage for the Metropolitan Atlanta Rapid Transit Authority are not exempt from paying tax on the premiums collected for such coverage. 1975 Op. Att'y Gen. No. 75-54.

Credit, not refund, may be granted when policy is cancelled "flat." - The Insurance Commissioner may not make a lump-sum refund of taxes paid, but he may grant a credit against future taxes due in the event that a surplus line broker has paid the required tax during a preceding quarter and the underlying policy, for which the taxes are due, is subsequently cancelled "flat" as of the date of its inception by mutual agreement of the parties. 1975 Op. Att'y Gen. No. 75-116.

33-5-32. Penalty for failure to file quarterly affidavit or remit tax within time prescribed by law; collection and disposition of penalty.

If any surplus line broker fails to file his or her quarterly affidavit or fails to remit the tax as provided by law within 30 days after the tax is due, he or she shall be liable for a penalty of either $25.00 for each day of delinquency commencing after the expiration of the 30 day period or an amount equal to 100 percent of the tax, whichever is less, except that for good cause shown, the Commissioner may grant a reasonable extension of time within which the affidavit may be filed and the tax may be paid. The tax may be recovered by distraint and the penalty and tax may be recovered by an action instituted by the Commissioner in any court of competent jurisdiction. The Commissioner shall pay to the Office of the State Treasurer any penalty so collected.

(Code 1933, § 56-624, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1972, p. 1220, § 4; Ga. L. 1982, p. 3, § 33; Ga. L. 1993, p. 1402, § 18; Ga. L. 2010, p. 863, § 2/SB 296; Ga. L. 2011, p. 449, § 5/HB 413.)

Law reviews. - For article, "Why Captives, Lord, What Have They Ever Done?: The Georgia Captive Insurance Company Act," see 26 Ga. St. B.J. 119 (1990).

33-5-33. Filing of report by persons procuring insurance with unauthorized insurers; levy, collection, and disposition of tax by persons procuring such insurance.

  1. Every insured who in this state procures or causes to be procured or continues or renews insurance with an unauthorized insurer upon a subject of insurance resident, located, or to be performed both within and outside this state, other than insurance procured through a surplus line broker pursuant to this article or exempted from this article under Code Section 33-5-35, shall within 30 days after the date such insurance was so procured, continued, or renewed file a report of the same with the Commissioner in writing and upon forms designated by the Commissioner and furnished to such an insured upon request. The report shall state the name and address of the insured or insureds, name and address of the insurer, the subject of the insurance, a general description of the coverage, the amount of premium currently paid thereon, and such additional information as reasonably requested by the Commissioner.
  2. If this state participates in a cooperative agreement, compact, or reciprocal agreement with other states pursuant to Code Sections 33-5-40 through 33-5-44, then for the general support of the government of this state, there is levied and there shall be collected from every such insured in this state for the privilege of so insuring his property or interests, a tax covering risks or exposures located or to be performed both in and out of this state, after deduction of return premiums, if any. The sum payable shall be computed based upon an amount equal to 4 percent of that portion of the gross premiums allocated to this state plus an amount equal to the portion of premiums allocated to other states or territories on the basis of the tax rates and fees applicable to properties, risks, or exposures located or to be performed outside this state. Such tax shall be paid to the Commissioner coincidentally with the filing of the report provided for in subsection (a) of this Code section.

    (b.1) If this state does not participate in a cooperative agreement, compact, or reciprocal agreement with other states pursuant to Code Sections 33-5-40 through 33-5-44, then for the general support of the government of this state, there is levied and there shall be collected from every such insured in this state for the privilege of so insuring his or her property or interests both in and out of this state, a tax at the rate of 4 percent of the gross premium paid for any such insurance, after deduction of return premiums, if any. Such tax shall be paid to the Commissioner coincidently with the filing of the report provided for in subsection (a) of this Code section.

  3. The tax imposed under subsection (b) of this Code section, if delinquent, shall bear interest at the rate of 6 percent per annum, compounded annually.
  4. Such tax shall be collectable by civil action brought by the Commissioner or by distraint and, if with respect to insurance of real property, the tax shall constitute a lien upon such real property while owned by the insured, enforceable in the same manner and through the same procedures as govern the collection of other taxes upon such real property under the laws of this state.
  5. This Code section shall not apply to life or accident and sickness insurance.

    (Code 1933, § 56-628, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 2011, p. 449, § 6/HB 413; Ga. L. 2012, p. 1117, § 3/SB 385; Ga. L. 2019, p. 337, § 1-30/SB 132.)

The 2019 amendment, effective July 1, 2019, substituted "sickness insurance" for "sickness insurances" at the end of subsection (e).

RESEARCH REFERENCES

ALR. - Constitutionality of statutes relating to insurance contracts made and to be performed out of state, upon property life within state, 32 A.L.R. 636 .

33-5-34. Venue of actions against unauthorized insurers issuing surplus line policies; service of process; filing of pleading by insurer.

  1. An action shall be brought against any unauthorized insurer under any contract issued by it as a surplus line contract pursuant to this chapter in the superior court of the county in which the cause of action arose.
  2. Every unauthorized insurer issuing or delivering a surplus line policy through a surplus line broker in this state shall be deemed thereby to have appointed the Commissioner as its attorney for acceptance of service of all legal process issued in this state in any action or proceeding arising out of the policy, and service of process upon the Commissioner shall be lawful personal service upon the insurer.
  3. Each surplus line policy shall contain a provision stating the substance of subsection (b) of this Code section and designating the person to whom the Commissioner shall mail process as provided in subsection (d) of this Code section.
  4. Duplicate copies of legal process against the insurers shall be served upon the Commissioner and at time of service the plaintiff shall pay a fee in an amount as provided in Code Section 33-8-1, taxable as costs in the action.  The Commissioner shall immediately mail one copy of the process so served to the person designated by the insurer in the policy for the purpose, by registered or certified mail or statutory overnight delivery with return receipt requested.
  5. The insurer shall have 30 days after the date of mailing within which to plead, answer, or otherwise defend the action.

    (Code 1933, § 56-626, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1985, p. 1399, § 2; Ga. L. 1992, p. 2725, § 10; Ga. L. 2000, p. 1589, § 3.)

Cross references. - Venue generally, Ga. Const. 1983, Art. VI, Sec. II and § 9-10-30 et seq.

Venue of actions against insurance companies generally, § 33-4-1 .

Editor's notes. - Ga. L. 2000, p. 1589, § 16, not codified by the General Assembly, provided that the amendment to this Code section by Ga. L. 2000, p. 1589, § 3, was applicable with respect to notices delivered on or after July 1, 2000.

Law reviews. - For comment on McGee v. International Life Ins. Co., 355 U.S. 220, 78 S. Ct. 199 , 2 L. Ed. 2 d 223 (1957), holding that for a state to assert jurisdiction over a foreign insurance company it is sufficient for due process purposes if the contract on which the case is based has a substantial connection with that state, see 21 Ga. B.J. 113 (1958).

JUDICIAL DECISIONS

Inapplicable to domestic primary insurers. - O.C.G.A. § 33-5-4 does not apply to a domestic primary insurer and further does not provide, even in that situation, for an "alternative manner" of service by certified mail, only an "alternative recipient." Lewis v. Southern Gen. Ins. Co., 209 Ga. App. 232 , 433 S.E.2d 80 (1993).

This section applies only to surplus line contracts. Smith v. Lloyd's of London, 568 F.2d 1115 (5th Cir. 1978).

Formal service upon Commissioner required. - Since subsection (a) of O.C.G.A. § 33-5-34 provides only for an alternative recipient of service and does not include a provision for an alternative manner of service, it follows that the plaintiff must have effected formal service upon the Insurance Commissioner in order to be subject to the jurisdiction of the trial court. If the record reveals neither a viable acknowledgment of service nor a return of service, there is no basis for a finding that process was legally served upon the Commissioner. Cheshire Bridge Enters., Inc. v. Lexington Ins. Co., 183 Ga. App. 672 , 359 S.E.2d 702 , cert. denied, 183 Ga. App. 905 , 359 S.E.2d 702 (1987).

Subsection (a) does not apply if surplus line insurer is only garnishee. - Where an alien surplus line insurance company is merely named as a garnishee in case against others and the action is not on a cause of action arising under a contract, the superior court where the cause of action arose is not the sole court having jurisdiction of the company under subsection (a) of this section. Lloyd's of London, Inc. v. Goldkist, Inc., 145 Ga. App. 478 , 243 S.E.2d 726 (1978).

Garnishee may be served by serving Commissioner. - Under subsection (b) of this section, an alien surplus line insurance company named as garnishee is properly served by process served on the Insurance Commissioner, the action being "a proceeding arising out of such policy." Lloyd's of London, Inc. v. Goldkist, Inc., 145 Ga. App. 478 , 243 S.E.2d 726 (1978).

Defendant normally has 30 days from mailing of process to answer. - In the normal litigations with which this section is concerned, the defendant has 30 days, commencing with the date on which the process is mailed by the Insurance Commissioner. Lloyd's of London, Inc. v. Goldkist, Inc., 145 Ga. App. 478 , 243 S.E.2d 726 (1978).

Time for answering in garnishment proceeding is different. - In all garnishment proceedings there is a different statutory directive than subsection (e) of this section: the garnishee may not answer before 30 days, and he must answer by the forty-fifth day. Lloyd's of London, Inc. v. Goldkist, Inc., 145 Ga. App. 478 , 243 S.E.2d 726 (1978).

Cited in Insurance Co. v. Dills, 145 Ga. App. 183 , 243 S.E.2d 549 (1978).

33-5-35. Applicability of article.

This article controlling the placing of insurance with unauthorized insurers shall not apply to reinsurance or to the following insurance when so placed by licensed agents or brokers of this state:

  1. Insurance on property or operation of railroads engaged in interstate commerce; or
  2. Insurance of aircraft owned or operated by manufacturers of aircraft or operated in scheduled interstate flight, or cargo of the aircraft, or against liability, other than workers' compensation and employer's liability, arising out of the ownership, maintenance, or use of the aircraft.

    (Code 1933, § 56-627, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1977, p. 1281, § 2; Ga. L. 2011, p. 449, § 7/HB 413; Ga. L. 2019, p. 337, § 1-31/SB 132.)

The 2019 amendment, effective July 1, 2019, substituted "following insurance" for "following insurances" in the introductory language of this Code section.

PART 2 I NTERSTATE COOPERATION FOR COLLECTION AND DISBURSEMENT OF PREMIUM TAXES

33-5-40. Legislative findings.

The General Assembly finds the federal Nonadmitted and Reinsurance Reform Act of 2010, which was incorporated into the federal Dodd-Frank Wall Street Reform and Consumer Protection Act, P.L. 111-203, provides that only an insured's home state may require premium tax payment for nonadmitted insurance and authorizes states to enter into a compact or otherwise establish procedures to allocate among the states the nonadmitted insurance premium taxes. The General Assembly further finds that as the states are still in flux as to which proposed plan is best for them to enter, or if any agreement should be entered into by the state, the Commissioner is in a unique position to weigh these options and to determine what is in the best interest of the state financially. Therefore, the General Assembly acknowledges that some flexibility is necessary to determine that the best financial interests of the state are met.

(Code 1981, § 33-5-40 , enacted by Ga. L. 2011, p. 449, § 8/HB 413; Ga. L. 2019, p. 337, § 1-32/SB 132.)

The 2019 amendment, effective July 1, 2019, deleted "of Insurance" following "Commissioner" in the second sentence of this Code section.

U.S. Code. - The Dodd-Frank Wall Street Reform and Consumer Protection Act, referred to in this Code section, is codified at 12 U.S.C. § 5381 et seq.

33-5-41. Governor authorized to enter into cooperative agreement, compact, or reciprocal agreement for collection of insurance premium taxes.

The Governor, on behalf of the state, advised by and in consultation with the Commissioner, is authorized to enter into a cooperative agreement, compact, or reciprocal agreement with another state or states for the purpose of the collection of insurance premium taxes imposed by Code Sections 33-5-31 and 33-5-33.

(Code 1981, § 33-5-41 , enacted by Ga. L. 2011, p. 449, § 8/HB 413; Ga. L. 2012, p. 1117, § 4/SB 385; Ga. L. 2019, p. 337, § 1-33/SB 132.)

The 2019 amendment, effective July 1, 2019, deleted "of Insurance" following "Commissioner" near the beginning of this Code section.

33-5-42. Agreement to substantially follow form of model Surplus Lines Insurance Multi-State Compliance Compact.

The cooperative agreement, compact, or reciprocal agreement for the purpose of the collection of insurance premiums imposed by Code Section 33-5-31 shall substantially follow the form of the model Surplus Lines Insurance Multi-State Compliance Compact, also known as SLIMPACT-lite, created by the National Conference of Insurance Legislators or the model Nonadmitted Insurance Multi-State Agreement, also known as NIMA, created by the National Association of Insurance Commissioners, as such documents exist on July 1, 2011.

(Code 1981, § 33-5-42 , enacted by Ga. L. 2011, p. 449, § 8/HB 413.)

33-5-43. Governor to select agreement providing best financial advantage.

The Governor with the consultation and advice of the Commissioner shall select the agreement, if any, that provides the best financial advantage to the state. In determining which agreement, if any, provides the best financial advantage to the state, the Governor with the consultation and advice of the Commissioner shall consider the impact on the state's gross receipt of premium tax, the potential additional administrative burden to the state and surplus line brokers procuring or placing surplus line insurance under this chapter, and such other criteria as determined by the Governor with the consultation and advice of the Commissioner.

(Code 1981, § 33-5-43 , enacted by Ga. L. 2011, p. 449, § 8/HB 413.)

33-5-44. Notice; report.

In the event the Governor enters into a cooperative agreement, compact, or reciprocal agreement with another state or states as authorized under this part, notice of such action shall be communicated to the chairperson of the House Committee on Insurance and the chairperson of the Senate Insurance and Labor Committee. The Commissioner shall thereafter annually issue a report to such committees that assesses whether, in his or her opinion, the agreement continues to be in the best financial interest of the state.

(Code 1981, § 33-5-44 , enacted by Ga. L. 2011, p. 449, § 8/HB 413.)

ARTICLE 3 UNAUTHORIZED INSURERS PROCESS ACT

Cross references. - Service of process on alien or foreign insurers, § 33-4-3 et seq.

Venue of actions against and service of process upon unauthorized insurers issuing surplus line policies, § 33-5-34 .

Law reviews. - For comment on McGee v. International Life Ins. Co., 355 U.S. 220, 78 S. Ct. 199 , 2 L. Ed. 2 d 223 (1957), holding that for a state to assert jurisdiction over a foreign insurance company it is sufficient for due process purposes if the contract on which the case is based has a substantial connection with that state, see 21 Ga. B.J. 113 (1958).

JUDICIAL DECISIONS

Purpose. - This article is not punitive in nature but is intended, among other purposes, to protect residents of Georgia from the often insuperable obstacle of resorting to distant forums for the purpose of asserting legal rights. Retail Union Health & Welfare Fund v. Seabrum, 240 Ga. 695 , 242 S.E.2d 18 (1978).

This article provides a method of suing in this state unauthorized insurers who write insurance on property having a situs in this state. Reeves v. South Am. Managers, Inc., 110 Ga. App. 49 , 137 S.E.2d 700 (1964), aff'd, 220 Ga. 493 , 140 S.E.2d 201 (1965).

This article does not purport to deal with the question of venue of suits against insurance companies, but only with the mode of service of process upon unauthorized insurers. Liberty Bell Mut. Fire Ins. Co. v. Exum, 209 Ga. 548 , 74 S.E.2d 738 (1953).

Insurance authorizing service under article is written in violation of chapter. - Surplus line coverage in accordance with the provisions of the Surplus Line Insurance Law (see O.C.G.A. § 33-5-20 et seq.) is issued in accordance with this chapter, while insurance written in a manner which authorizes service under this article is written in violation of and not in accordance with this chapter. Reeves v. South Am. Managers, Inc., 110 Ga. App. 49 , 137 S.E.2d 700 (1964), aff'd, 220 Ga. 493 , 140 S.E.2d 201 (1965).

Cited in Gordy Tire Co. v. Dayton Rubber Co., 216 Ga. 83 , 114 S.E.2d 529 (1960); Rossville Crushed Stone, Inc. v. Massey, 219 Ga. 467 , 133 S.E.2d 874 (1963).

RESEARCH REFERENCES

ALR. - Collateral business activities incident to, or in aid of, interstate transportation, as related to interstate commerce, 152 A.L.R. 1078 .

33-5-50. Short title; construction.

  1. This article constitutes and may be cited as the "Unauthorized Insurers Process Act."
  2. This article shall be so interpreted as to effectuate its general purpose to make uniform the law of those states which enact it.

    (Code 1933, § 56-603, enacted by Ga. L. 1960, p. 289, § 1.)

33-5-51. Purpose of article.

The purpose of this article is to subject certain insurers to the jurisdiction of the courts of this state in actions by or on behalf of insureds or beneficiaries under insurance contracts. The General Assembly declares that it is a subject of concern that many residents of this state hold policies of insurance issued or delivered in this state by insurers while not authorized to do business in this state, thus presenting to such residents the often insuperable obstacle of resorting to distant forums for the purpose of asserting legal rights under those policies. In furtherance of the state interest, the General Assembly herein provides a method of substituted service of process upon the insurers and declares that in so doing it exercises its power to protect its residents and to define, for the purpose of this article, what constitutes doing business in this state and also exercises power and privileges available to the state by virtue of Public Law 15, 79th Congress of the United States, Chapter 20, 1st Sess., S. 340, which declares that the business of insurance and every person engaged in the business of insurance shall be subject to the laws of the several states.

(Code 1933, § 56-604, enacted by Ga. L. 1960, p. 289, § 1.)

Cross references. - Service of process generally, § 9-11-4 .

U.S. Code. - Public Law 15, 79th Congress of the United States, Chapter 20, 1st Sess., S. 340, referred to in this Code section, is codified as 15 U.S.C. § 1011.

JUDICIAL DECISIONS

Acts held to constitute doing business and render insurer subject to suit in state. - A life insurance company not authorized to transact business in Georgia because of failure to obtain a certificate of authority from the Insurance Commissioner is nevertheless doing business, although illegally, in the state by accepting an application for insurance from a resident of the state, delivering the application to the resident by mail, and mailing premium notices to or accepting premiums from the resident during the life of the policy, so as to render it subject to suit and judgment in this state. Iowa State Travelers Mut. Ass'n v. Cadwell, 113 Ga. App. 128 , 147 S.E.2d 461 (1966).

Cited in Retail Union Health & Welfare Fund v. Seabrum, 240 Ga. 695 , 242 S.E.2d 18 (1978).

33-5-52. Acts by insurer which constitute appointment of Commissioner as agent for service.

Any of the following acts in this state effected, by mail or otherwise, by an unauthorized foreign or alien insurer:

  1. The issuance or delivery of contracts of insurance to residents of this state or to corporations authorized to do business in this state;
  2. The solicitation of applications for said contracts;
  3. The collection of premiums, membership fees, assessments, or other considerations for the contracts; or
  4. Any other transaction of business

    is equivalent to and shall constitute an appointment by the insurer of the Commissioner and his successors in office as its attorney upon whom may be served all lawful process in any action or proceeding instituted by or on behalf of an insured or beneficiary arising out of the contracts of insurance; and any such act shall be a signification of this agreement that the service of process is of the same legal force and validity as personal service of process in this state upon the insurer.

    (Code 1933, § 56-605, enacted by Ga. L. 1960, p. 289, § 1.)

JUDICIAL DECISIONS

Acts held to constitute doing business and render insurer subject to suit in state. - A life insurance company not authorized to transact business in Georgia because of failure to obtain a certificate of authority from the insurance commissioner is nevertheless doing business, although illegally, in the state by accepting an application for insurance from a resident of the state, delivering the application to the resident by mail, and mailing premium notices to or accepting premiums from the resident during the life of the policy, so as to render it subject to suit and judgment in this state. Iowa State Travelers Mut. Ass'n v. Cadwell, 113 Ga. App. 128 , 147 S.E.2d 461 (1966).

Cited in Bishopsgate Ins. Co. v. Cactus Club, Inc., 176 Ga. App. 354 , 335 S.E.2d 685 (1985).

RESEARCH REFERENCES

ALR. - Constitutionality of statutes relating to insurance contracts made and to be performed out of state, upon property life within state, 32 A.L.R. 636 .

33-5-53. Service of action and process upon Commissioner; sending of notice of service to defendant; applicability.

  1. Service shall be made by delivery to and leaving with the Commissioner or some person in apparent charge of his office two copies of the action and process.
  2. At the time of such service, the plaintiff shall pay the Commissioner the sum of $15.00, which shall be taxable as cost. The Commissioner shall immediately mail by registered or certified mail or statutory overnight delivery one of the copies of such action and process to the defendant at his last known principal place of business and shall keep a record of all process so served upon him. Such service is sufficient, provided that notice of the service and a copy of the action and process are sent within 15 days thereafter by registered or certified mail or statutory overnight delivery by plaintiff or plaintiff's attorney to the defendant at his last known principal place of business; and the defendant's receipt, or receipt issued by the post office with which the letter is registered or certified, showing the name of the sender of the letter and the name and address of the person to whom the letter is addressed and the affidavit of the plaintiff or plaintiff's attorney showing a compliance with service as provided in this Code section are filed with the clerk of the court in which such action is pending on or before the date the defendant is required to appear or within such further time as the court may allow.
  3. Service upon the Commissioner pursuant to this Code section shall only be made when service pursuant to the manner provided in Code Section 33-5-54 cannot be effectuated.

    (Code 1933, § 56-606, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1985, p. 1399, § 3; Ga. L. 1991, p. 1090, § 1; Ga. L. 2000, p. 1589, § 3.)

Cross references. - Service of process generally, § 9-11-4 .

Editor's notes. - Ga. L. 2000, p. 1589, § 16, not codified by the General Assembly, provided that the amendment to this Code section by Ga. L. 2000, p. 1589, § 3, was applicable with respect to notices delivered on or after July 1, 2000.

33-5-54. Service of process upon solicitor, collector, or other agent of insurer.

Service of process in any action or proceeding shall be valid if served upon any person within this state who, in this state on behalf of the insurer, is:

  1. Soliciting insurance;
  2. Making, issuing, or delivering any contract of insurance; or
  3. Collecting or receiving any premium, membership fee, assessment, or other consideration for insurance

    and a copy of the process is sent within ten days thereafter by registered or certified mail or statutory overnight delivery by the plaintiff or plaintiff's attorney to the defendant at the last known principal place of business of the defendant; and the defendant's receipt, or the receipt issued by the post office with which the letter is registered or certified, showing the name of the sender of the letter and the name and address of the person to whom the letter is addressed and the affidavit of the plaintiff or plaintiff's attorney showing a compliance with the requirements of this Code section are filed with the clerk of the court in which the action is pending on or before the date the defendant is required to appear or within such further time as the court may allow.

    (Code 1933, § 56-607, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1991, p. 1090, § 2; Ga. L. 2000, p. 1589, § 3.)

Cross references. - Service of process generally, § 9-11-4 .

Editor's notes. - Ga. L. 2000, p. 1589, § 16, not codified by the General Assembly, provided that the amendment to this Code section by Ga. L. 2000, p. 1589, § 3, was applicable with respect to notices delivered on or after July 1, 2000.

JUDICIAL DECISIONS

Cited in Congress Re-Insurance Corp. v. Archer-Western Contractors, 226 Ga. App. 829 , 487 S.E.2d 679 (1997).

33-5-55. Mode of service prescribed by article cumulative.

Nothing in this article shall limit or abridge the right to serve any process, notice, or demand upon any insurer in any other manner now or hereafter permitted by law.

(Code 1933, § 56-609, enacted by Ga. L. 1960, p. 289, § 1.)

Cross references. - Service of process generally, § 9-11-4 .

33-5-56. Right of plaintiff or complainant to default judgment or judgment with leave to prove damages.

No plaintiff or complainant shall be entitled to a judgment by default or to a judgment with leave to prove damages under this Code section until the expiration of 30 days from date of the filing of the affidavit of compliance.

(Code 1933, § 56-608, enacted by Ga. L. 1960, p. 289, § 1.)

33-5-57. Conditions precedent to filing of pleadings by insurer generally; granting of postponements; filing by insurer of motion to quash writ or set aside service.

  1. Before any unauthorized insurer shall file or cause to be filed any pleadings in any action or proceeding instituted against it, such unauthorized insurer shall either:
    1. Deposit with the clerk of the court in which such action or proceeding is pending cash or securities or file with the clerk a bond with good and sufficient sureties, to be approved by the court, in an amount to be fixed by the court sufficient to secure the payment of any final judgment which may be rendered in the action; provided, however, the court may in its discretion make an order dispensing with the deposit or bond where the insurer makes a showing satisfactory to the court that it maintains in a state of the United States funds or securities, in trust or otherwise, sufficient and available to satisfy any final judgment which may be entered in the action or proceeding; or
    2. Procure a certificate of authority to transact the business of insurance in this state.
  2. The court in any action or proceeding in which service is made in the manner provided in Code Section 33-5-53 or 33-5-54, in its discretion, may order any postponement as may be necessary to afford the defendant reasonable opportunity to comply with subsection (a) of this Code section and to defend the action.
  3. Nothing in subsection (a) of this Code section is to be construed to prevent an unauthorized insurer from filing a motion to quash a writ or to set aside service of such writ made in the manner provided in Code Section 33-5-53 or 33-5-54 on one or more of the following grounds:
    1. That such unauthorized insurer has not done any of the acts enumerated in Code Section 33-5-52;
    2. That the person on whom service was made pursuant to Code Section 33-5-54 was not doing any of the acts therein enumerated; or
    3. That it is otherwise not properly subject to the jurisdiction of court pursuant to this article.

      (Code 1933, § 56-610, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1982, p. 3, § 33.)

JUDICIAL DECISIONS

The purpose of this section is to provide assurance that any judgment rendered against the insurer may be collected by the insured or beneficiary. This purpose is found in the terms of the section (cash, securities, bond, etc.) and is made particularly clear by the provision allowing the trial court to dispense with cash deposit and bond upon a showing by the insurer of sufficient available liquid assets to satisfy such judgment as may be rendered against it. Retail Union Health & Welfare Fund v. Seabrum, 240 Ga. 695 , 242 S.E.2d 18 (1978).

Conditions precedent apply to unauthorized foreign or alien insurers when sued. - The conditions precedent to filing defenses set forth by this section apply to unauthorized foreign or alien insurers when they have been sued. Underwriters at Lloyd's, London v. Strickland, 99 Ga. App. 89 , 107 S.E.2d 860 (1959).

Procuring certificate of authority is alternative act but not required. - It is not the purpose of this section to require an unauthorized insurer to procure a certificate of authority to transact business in this state, as that is merely one of the acts an unauthorized insurer is permitted to take so as to be entitled to defend a suit instituted against it. Retail Union Health & Welfare Fund v. Seabrum, 240 Ga. 695 , 242 S.E.2d 18 (1978).

Section assumes deposit or bond will be filed when defensive pleadings filed. - Former Code 1933, § 56-610(1) (see subsection (a) of this Code section) assumed that an unauthorized insurer will file the required cash, securities, or bond at the time of filing defensive pleadings. Retail Union Health & Welfare Fund v. Seabrum, 240 Ga. 695 , 242 S.E.2d 18 (1978).

Compliance with subsection (a) within reasonable time suffices. - When an unauthorized insurer timely files defensive pleadings and then fully complies with the requirements of former Code 1933, § 56-610(1) (see subsection (a) of O.C.G.A. § 33-5-7) within a reasonable time following notice that this section is applicable, then this section does not command a forfeiture of the right to litigate the merits of the dispute. Retail Union Health & Welfare Fund v. Seabrum, 240 Ga. 695 , 242 S.E.2d 18 (1978).

33-5-58. Recovery of penalty and attorney's fees by plaintiff; effect of failure of insurer to defend action.

In any action against an unauthorized foreign or alien insurer upon a contract of insurance issued or delivered in this state or to a resident of this state or to a corporation authorized to do business in this state, if the insurer has failed for 30 days after demand prior to the commencement of the action to make payment in accordance with the terms of the contract, and it appears that such refusal was vexatious and without reasonable cause, the said insurer shall be subject to a penalty of not more than 25 percent of the liability of the insurer for the loss and an allowance for reasonable attorney's fees. The attorney's fees shall be determined by the trial court and shall be included in any judgment which is rendered in the action. Failure of an insurer to defend the action shall be deemed prima-facie evidence that its failure to make payment was vexatious and without reasonable cause. The limitations contained in this Code section in reference to the amount of attorney's fees are not controlling as to the fees which may be agreed upon by the plaintiff and his attorney for the services of the attorney in the action against the unauthorized insurer.

(Code 1933, § 56-611, enacted by Ga. L. 1960, p. 289, § 1.)

Cross references. - Liability of authorized insurer refusing in bad faith to pay claim, § 33-4-6 .

Law reviews. - For article discussing Georgia provisions concerning damages for insurer's failure to pay first-party claims, see 14 Ga. L. Rev. 497 (1980).

JUDICIAL DECISIONS

If the question of liability is a close one, the insurer cannot be guilty of bad faith. Allen v. National Liberty Life Ins. Co., 153 Ga. App. 579 , 266 S.E.2d 269 (1980).

Evidence admissible on question of reasonable cause though unknown when claim denied. - Although it does not appear that a doctor's opinion was known by the insurer at the time it decided to deny the decedent's claim for benefits, such testimony is nonetheless admissible for the purpose of disproving appellant's allegation that the denial of benefits was "vexatious and without reasonable cause." Allen v. National Liberty Life Ins. Co., 153 Ga. App. 579 , 266 S.E.2d 269 (1980).

Ordinarily, the question of good or bad faith of the insurer is for the jury. Allen v. National Liberty Life Ins. Co., 153 Ga. App. 579 , 266 S.E.2d 269 (1980).

Summary judgment for insurer is proper if evidence shows substantial defense. - Where under the evidence submitted on the insurer's motion, it is clear that genuine issues of material fact exist on the question of what caused the decedent's loss, but it is also clear that the insurer has evidence on which a substantial defense to liability under the policy can be based, since the denial of benefits was based upon "reasonable cause" and was not "vexatious," the trial court did not err in granting the insurer motion for partial summary judgment on the insured's claim under this section. Allen v. National Liberty Life Ins. Co., 153 Ga. App. 579 , 266 S.E.2d 269 (1980).

Cited in Cotton States Mut. Ins. Co. v. McFather, 251 Ga. 739 , 309 S.E.2d 799 (1983).

RESEARCH REFERENCES

Am. Jur. 2d. - 44 Am. Jur. 2d, Insurance, § 46 et seq.

C.J.S. - 44 C.J.S., Insurance, §§ 70, 143.

ALR. - Validity of statutory provision for attorneys' fees, 90 A.L.R. 530 .

What persons or corporations, contracts or policies, are within statutory provisions allowing recovery of attorney's fee penalty against insurance companies or against companies dealing in specified kinds of insurance, 126 A.L.R. 1439 .

Consequences of liability insurer's refusal to assume defense of action against insured upon ground that claim upon which action is based is not within coverage of policy, 49 A.L.R.2d 694.

What constitutes "trial," "final trial," or "final hearing" under statute authorizing allowance of attorneys' fees as costs on such proceeding, 100 A.L.R.2d 397.

Validity of statute allowing attorney's fee to successful claimant but not to defendant, or vice-versa, 73 A.L.R.3d 515.

Recoverability of punitive damages in action by insured against liability insurer for failure to settle claim against insurer, 85 A.L.R.3d 1211.

Liability insurer's postloss conduct as waiver of, or estoppel to assert, "no-action" clause, 68 A.L.R.4th 389.

33-5-59. Applicability of article.

This article shall not apply to any action or proceeding against any unauthorized insurer arising out of any contract of:

  1. Reinsurance effectuated in accordance with the laws of Georgia;
  2. Surplus line insurance authorized by this chapter;
  3. Insurance on property or operations of carriers engaged in interstate commerce;
  4. Insurance against legal liability arising out of the ownership, operation, or maintenance of any property having a permanent situs outside of this state; or
  5. Insurance against loss of or damage to any property having a permanent situs outside of this state where the contract contains a provision designating the Commissioner or a bona fide resident of the State of Georgia to be its true and lawful attorney upon whom may be served all lawful process in any action or proceeding instituted by or on behalf of an insured or beneficiary arising out of the contract or where the insurer enters a general appearance in any such action or proceeding.

    (Code 1933, § 56-612, enacted by Ga. L. 1960, p. 289, § 1.)

JUDICIAL DECISIONS

Cited in Cheshire Bridge Enters., Inc. v. Lexington Ins. Co., 183 Ga. App. 672 , 359 S.E.2d 702 (1987).

CHAPTER 6 UNFAIR TRADE PRACTICES

Article 1

General Provisions.

Article 2

Unfair Claims Settlement Practices.

Cross references. - Deceptive trade practices generally, § 10-1-370 et seq.

Administrative Rules and Regulations. - Unfair trade and claims settlement practices, Official Compilation of the Rules and Regulations of the State of Georgia, Rules of Comptroller General, Commissioner of Insurance, Chapter 120-2-20.

JUDICIAL DECISIONS

Cited in Hubbard v. Stewart, 651 F. Supp. 294 (M.D. Ga. 1987).

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, § 19 et seq.

C.J.S. - 44 C.J.S., Insurance, § 65 et seq.

ALR. - Right to enjoin business competitor from unlicensed or otherwise illegal acts or practices, 90 A.L.R.2d 7.

Provisions of insurance company's contract with independent insurance agent restricting competitive placements by agent as illegal restraint of trade under state law, 42 A.L.R.4th 1072.

Constitutional right to jury trial in cause of action under state unfair or deceptive trade practices law, 54 A.L.R.5th 631.

ARTICLE 1 GENERAL PROVISIONS

Editor's notes. - Ga. L. 1992, p. 3048, § 9, effective July 1, 1992, designated Code Sections 33-6-1 through 33-6-14 as Article 1.

33-6-1. Purpose of article.

The purpose of this article is to regulate trade practices in the business of insurance in accordance with the intent of Congress as expressed in the act of Congress of March 9, 1945 (Public Law 15, 79th Congress), by defining or providing for the determination of all practices in this state which constitute unfair methods of competition or unfair or deceptive acts or practices and by prohibiting the trade practices so defined or determined.

(Code 1933, § 56-701, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1982, p. 3, § 33; Ga. L. 1992, p. 3048, § 1.)

U.S. Code. - The Act of Congress of March 9, 1945 (Public Law 15, 79th Congress), referred to in this Code section, is codified as 15 U.S.C. § 1011.

JUDICIAL DECISIONS

Unfair insurance practices not subject to Georgia's Uniform Deceptive Trade Practices Act. - Pursuant to O.C.G.A. § 10-1-374(a)(1), insurance transactions are exempt from Georgia's Uniform Deceptive Trade Practices Act (UDTPA), O.C.G.A. § 10-1-370 et seq. Claims of unfair trade practices in insurance transactions are instead governed by the Georgia Insurance Code. Northeast Ga. Cancer Care, LLC v. Blue Cross & Blue Shield of Ga., Inc., 297 Ga. App. 28 , 676 S.E.2d 428 (2009), cert. denied, No. S09C1241, 2009 Ga. LEXIS 805 (Ga. 2009).

Cited in Fairfax MK, Inc. v. City of Clarkston, 274 Ga. 520 , 555 S.E.2d 722 (2001).

33-6-2. "Person" defined.

As used in this article, the term "person" means an individual, corporation, association, partnership, reciprocal exchange, interinsurer, Lloyd's insurer, fraternal benefit society, and any other legal entity engaged in the business of insurance, including but not limited to agents, brokers, counselors, and adjusters.

(Code 1933, § 56-702, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1992, p. 3048, § 2.)

OPINIONS OF THE ATTORNEY GENERAL

This section includes as "person" any legal entity engaged in the business of insurance. 1963-65 Op. Att'y Gen. 435.

33-6-3. Unfair methods of competition or unfair and deceptive acts or practices prohibited.

No person shall engage in this state in any trade practice which is defined in this article as or determined pursuant to this article to be an unfair method of competition or an unfair or deceptive act or practice in the business of insurance.

(Code 1933, § 56-703, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1992, p. 3048, § 3.)

JUDICIAL DECISIONS

Violation found. - A claims adjuster, even absent a fiduciary relationship, may not induce a claimant by trick, artifice or misrepresentation to sign a general release while the claimant is under a disability which deprives the claimant of the capacity to read, reason or investigate personally. Cravey v. Johnson, 229 Ga. App. 130 , 493 S.E.2d 536 (1997).

33-6-4. Enumeration of unfair methods of competition and unfair or deceptive acts or practices; penalty.

  1. As used in this Code section, the term:
    1. "Gift certificate" shall have the same meaning as provided in Code Section 10-1-393.
    2. "Policy" means any insuring bond issued by an insurer.
    3. "Store gift card" shall have the same meaning as provided in Code Section 10-1-393.
  2. The following acts or practices are deemed unfair methods of competition and unfair and deceptive acts or practices in the business of insurance:
    1. Making, publishing, disseminating, circulating, or placing before the public or causing directly or indirectly to be made, published, disseminated, circulated, or placed before the public in a newspaper, magazine, or other publication or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio station or in any other way an advertisement, announcement, or statement containing any assertion, representation, or statement with respect to the business of insurance or with respect to any person in the conduct of his insurance business, which statement, assertion, or representation is untrue, deceptive, or misleading;
    2. Making, issuing, circulating, or causing to be made, issued, or circulated any estimate, illustration, circular, or statement misrepresenting the terms of any policy issued or to be issued, the benefits or advantages promised thereby, or the dividends or share of the surplus to be received thereon; making any false or misleading statement as to the dividends or share of surplus previously paid on similar policies; making any misleading representation or any misrepresentation as to the financial condition of any insurer, as to the legal reserve system upon which any life insurer operates; using any name or title of any policy or class of policies misrepresenting the true nature thereof; or making any misrepresentation to any policyholder insured in any company for the purpose of inducing or tending to induce the policyholder to lapse, forfeit, or surrender his insurance. A dividend estimate prepared on company forms and clearly indicating, in type equal in size to that used in figures showing amounts of estimated dividends, that the dividends are based on estimates made by the company based upon past experience of the company shall not be considered misrepresentation and false advertising within the meaning of this paragraph;
    3. Making, publishing, disseminating, or circulating directly or indirectly or aiding, abetting, or encouraging the making, publishing, disseminating, or circulating of any oral or written statement or any pamphlet, circular, article, or literature which is false or maliciously critical of or substantially misrepresents the financial condition of an insurer and which is calculated to injure any person engaged in the business of insurance;
    4. Entering into any agreement to commit or by any concerted action committing any act of boycott, coercion, or intimidation resulting in or tending to result in unreasonable restraint of or monopoly in the business of insurance;
    5. Filing with any supervisory or other public official or making, publishing, disseminating, circulating, delivering to any person, or placing before the public or causing directly or indirectly to be made, published, disseminated, circulated, delivered to any person, or placed before the public any false statement of financial condition of an insurer with the intent to deceive;
    6. Making any false entry in any book, report, or statement of any insurer with intent to deceive any agent or examiner lawfully appointed to examine into its condition or into any of its affairs or any public official to whom such insurer is required by law to report or who has authority by law to examine into its condition or into any of its affairs or, with like intent, willfully omitting to make a true entry of any material fact pertaining to the business of such insurer in any book, report, or statement of the insurer;
    7. Issuing or delivering or permitting agents, officers, or employees to issue or deliver agency or company stock or other capital stock, benefit certificates or shares in any common-law corporation, securities, or any special or advisory board contracts of any kind promising returns and profits as an inducement to insurance;
        1. Making or permitting any unfair discrimination between individuals of the same class, same policy amount, and equal expectation of life in the rates charged for any contract of life insurance or of life annuity, in the dividends or other benefits payable thereon, or in any other of the terms and conditions of the contract.
        2. Making or permitting any unfair discrimination between individuals of the same class and of essentially the same hazard in the amount of premium, policy fees, or rates charged for any policy or contract of accident or sickness insurance, in the benefits payable thereunder, in any of the terms or conditions of the contract, or in any other manner whatever.
        3. Making or permitting any unfair discrimination in the issuance, renewal, or cancellation of any policy or contract of insurance against direct loss to residential property and the contents thereof, in the amount of premium, policy fees, or rates charged for the policies or contracts when the discrimination is based solely upon the age or geographical location of the property within a rated fire district without regard to objective loss experience relating thereto.
        4. (I) Unfair discrimination prohibited by the provisions of this subparagraph includes discrimination based on race, color, and national or ethnic origin. In addition, in connection with any kind of insurance, it shall be an unfair and deceptive act or practice to refuse to insure or to refuse to continue to insure an individual; to limit the amount, extent, or kind of coverage available to an individual; or to charge an individual a different rate for the same coverage because of the race, color, or national or ethnic origin of that individual. The prohibitions of this division are in addition to and supplement any and all other provisions of Georgia law prohibiting such discrimination which were previously enacted and currently exist, or which may be enacted subsequently, and shall not be a limitation on such other provisions of law.

          (II) A violation of this division shall give rise to a civil cause of action for damages resulting from such violation including, but not limited to, all damages recoverable for breach of insuring agreements under Georgia law including damages for bad faith and attorney's fees and costs of litigation. A violation of this division shall also give rise to the awarding of punitive or exemplary damages in an amount as may be determined by the trier of fact if such violation is found to be intentional. The remedies provided in this division are in addition to and cumulative of all other remedies that may now or hereafter be provided by law.

      2. Knowingly permitting or offering to make or making any contract of insurance or agreement as to the contract other than as plainly expressed in the contract issued thereon; paying, allowing, giving, or offering to pay, allow, or give directly or indirectly, as inducement to any contract of insurance, any rebate of premiums payable on the contract, any special favor or advantage in the dividends or other benefits thereon, or any valuable consideration or inducement whatever not specified in the contract, except in accordance with an applicable rate filing, rating plan, or rating system filed with and approved by the Commissioner; giving, selling, purchasing, or offering to give, sell, or purchase as inducement to such insurance or in connection therewith any stocks, bonds, or other securities of any company, any dividends or profits accrued thereon, or anything of value whatsoever not specified in the contract; or receiving or accepting as inducement to contracts of insurance any rebate of premium payable on the contract, any special favor or advantage in the dividends or other benefit to accrue thereon, or any valuable consideration or inducement not specified in the contract.
      3. Nothing in subparagraphs (A) and (B) of this paragraph shall be construed as including within the definition of discrimination or rebates any of the following practices:
        1. In the case of any contract of life insurance or life annuity, paying bonuses to policyholders or otherwise abating their premiums in whole or in part out of surplus accumulated from nonparticipating insurance, provided that any bonuses or abatement of premiums shall be fair and equitable to policyholders and for the best interest of the company and its policyholders;
        2. In the case of life or accident and sickness insurance policies issued on the industrial debit or weekly premium plan, making allowance in an amount which fairly represents the saving in collection expense to policyholders who have continuously for a specified period made premium payments directly to an office of the insurer;
        3. Making a readjustment of the rate of premium for a policy based on the loss or expense experienced at the end of the first or any subsequent policy year of insurance thereunder, which adjustment may be made retroactive only for the policy year;
        4. Issuing life or accident and sickness insurance policies covering bona fide employees of the insurer at a rate less than the rate charged other persons in the same class;
        5. Issuing life or accident and sickness policies on a salary-saving, payroll deduction, preauthorized, postdated, automatic check, or draft plan at a reduced rate commensurate with the savings made by the use of such plan;
        6. Paying commissions or other compensation to duly licensed agents or brokers or allowing or returning dividends, savings, or unabsorbed premium deposits to participating policyholders, members, or subscribers;
        7. Paying by an insurance agent of part or all of the commissions on public insurance to a nonprofit association of insurance agents which is affiliated with a recognized state or national insurance agents' association, which commissions are to be used in whole or in part for one or more civic enterprises;
        8. Paying for food or refreshments by an insurer or an agent, broker, or employee of an insurer for current or prospective clients during group sales presentations and group seminars, provided that no insurance or annuity applications or contracts are offered or accepted at such presentations or seminars;
        9. Paying for business meals and entertainment by an insurer or an agent, broker, or employee of an insurer, agent, or broker for current or prospective clients; or
        10. Advertising or conducting promotional programs by insurers or insurance producers whereby prizes, goods, wares, store gift cards, gift certificates, sporting event tickets, or merchandise, not exceeding $100.00 in value per customer in the aggregate in any one calendar year, are given to current or prospective customers; provided, however, that the giving of any item or items of value under this subsection shall not be contingent on the sale or renewal of a policy;
    9. Failing to instruct and require properly that agents shall, in the solicitation of insurance and the filling out of applications of insurance on behalf of policyholders, incorporate therein all material facts relevant to the risk being written, which facts are known to the agent or could have been known by proper diligence;
    10. Encouraging agents to accept applications which contain material misrepresentations or conceal material information which, if stated in the application, would prevent issuance of the policy or which would void a policy from its inception according to its terms even though premiums had been paid on the policy;
    11. Any insurer or agent of same becoming a party to requiring or imposing as a condition to the sale of real or personal property or to the financing of real or personal property, as a condition to the granting of or an extension of a loan which is to be secured by the title to or a lien of any kind on real or personal property, or as a condition to the performance of any other act in connection with the sale, financing, or lending, whether the person thus acts for himself or for anyone else, that the insurance or any renewal thereof to be issued on said property as collateral to said sale or loan shall be written through any particular insurance company or agent, provided that this paragraph shall not apply to a policy purchased by the seller, financier, or lender from his or its own funds and not charged to the purchaser or borrower in the sale price of the property or the amount of the loan or required to be paid for out of his personal funds; provided, further, that such seller, financier, or lender may disapprove for reasons affecting solvency or other sensible and sufficient reasons, the insurance company selected by the buyer or borrower. This paragraph shall not apply to title insurance;
      1. Representing that any insurer or agent is employed by or otherwise associated with any medicare program as defined in Code Section 33-43-1 or the United States Social Security Administration or that any insurance policy sold or offered for sale has been endorsed or sponsored by the federal or state government.
      2. Knowingly selling or offering to sell medicare supplement insurance coverage as defined in Code Section 33-43-1 which is not in compliance with the provisions of Chapter 43 of this title, relating to medicare supplement insurance, or the rules and regulations promulgated by the Commissioner pursuant to Chapter 43 of this title.
      3. Representing that any individual policy is a group policy or that the insurer, agent, or policy is endorsed, sponsored by, or associated with any group, association, or other organization unless such is, in fact, the case.
      4. Knowingly selling to Medicaid recipients substantially unnecessary coverage which duplicates benefits provided under the Medicaid program without disclosing to the prospective buyer that it may not be to the buyer's benefit or that it might actually be to the buyer's detriment to purchase the additional coverage;
      1. Making direct response advertising by an insurer, including radio or television advertisement, of any individual or group life insurance policy in which computation of the death benefit is of such a technical nature that such death benefit cannot reasonably be properly presented in the advertisement and understood by a member of the insuring public. Policies, other than variable life or other interest sensitive policies, which provide for multiple changes in death benefits, combinations of increasing and nonuniformly decreasing term insurance, or increasing life insurance benefits equal to or slightly greater than the premiums paid during the early years of the coverage combined with accidental death benefits are types of contracts within the purview of this subparagraph. Additionally, any life insurance policy which cannot be truthfully, completely, clearly, and accurately disclosed in an advertisement falls within this subparagraph.
      2. Making direct response advertising by an insurer, including radio or television advertisement, of any individual or group accident and sickness or life insurance policy which is misleading in fact or by implication that the coverage is "guaranteed issue" when there are conditions to be met by those persons to be insured, such as limited medical questions or other underwriting guidelines of the insurer.
      3. Making direct response advertising by an insurer, including radio or television advertisement, of any individual or group accident and sickness or life insurance policy where such advertisement has not been approved for use in this state by the Commissioner;
    14. Failing to disclose in printed advertising material that medical benefits are calculated on the basis of usual, customary, and reasonable charges;

      (14.1) Engaging in dishonest, unfair, or deceptive insurance practices in marketing or sales of insurance to service members of the armed forces of the United States and, notwithstanding any other provision of this title, the Commissioner may promulgate such rules and regulations as necessary to define dishonest, unfair, or deceptive military marketing and sales practices; or

      1. As used in this paragraph, the term:
        1. "Confidential abuse information" means information about acts of family violence or sexual assault, the status of a victim of family violence or sexual assault, an individual's medical condition that the insurer knows or has reason to know is related to family violence or sexual assault, or the home and work addresses and telephone numbers of a subject of family violence or sexual assault.
        2. "Family violence" means family violence as defined in Code Sections 19-13-1 and 19-13-20 and as limited by Code Section 19-13-1.
        3. "Sexual assault" means rape, sodomy, aggravated sodomy, sexual battery, and aggravated sexual battery as those terms are defined in Chapter 6 of Title 16.
      2. No person shall deny or refuse to accept an application; refuse to insure; refuse to renew; refuse to reissue; cancel, restrict, or otherwise terminate; charge a different rate for the same coverage; add a premium differential; or exclude or limit coverage for losses or deny a claim incurred by an insured on the basis that the applicant or insured is or has been a victim of family violence or sexual assault or that such person knows or has reason to know the applicant or insured may be a victim of family violence or sexual assault; nor shall any person take or fail to take any of the aforesaid actions on the basis that an applicant or insured provides shelter, counseling, or protection to victims of family violence or sexual assault.
      3. No person shall request, directly or indirectly, any information the person knows or reasonably should know relates to acts of family violence or sexual assault or an applicant's or insured's status as a victim of family violence or sexual assault or make use of such information however obtained, except for the limited purpose of complying with legal obligations, verifying an individual's claim to be a subject of family violence or sexual assault, cooperating with a victim of family violence or sexual assault in seeking protection from family violence or sexual assault, or facilitating the treatment of a family violence or sexual assault related medical condition. When a person has information in their possession that clearly indicates that the insured or applicant is a subject of family violence or sexual assault, the disclosure or transfer of the information by a person to any person, entity, or individual is a violation of this Code section, except:
        1. To the subject of family violence or sexual assault or an individual specifically designated in writing by the subject of family violence or sexual assault;
        2. To a health care provider for the direct provision of health care services;
        3. To a licensed physician identified and designated by the subject of family violence or sexual assault;
        4. When ordered by the Commissioner or a court of competent jurisdiction or otherwise required by law;
        5. When necessary for a valid business purpose to transfer information that includes confidential abuse information that cannot reasonably be segregated without undue hardship. Confidential abuse information may be disclosed pursuant to this division only to the following persons or entities, all of whom shall be bound by this subparagraph:
          1. A reinsurer that seeks to indemnify or indemnifies all or any part of a policy covering a subject of family violence or sexual assault and that cannot underwrite or satisfy its obligations under the reinsurance agreement without that disclosure;
          2. A party to a proposed or consummated sale, transfer, merger, or consolidation of all or part of the business of the person;
          3. Medical or claims personnel contracting with the person, only where necessary to process an application or perform the person's duties under the policy or to protect the safety or privacy of a subject of family violence or sexual assault; or
          4. With respect to address and telephone number, to entities with whom the person transacts business when the business cannot be transacted without the address and telephone number;
        6. To an attorney who needs the information to represent the person effectively, provided the person notifies the attorney of its obligations under this paragraph and requests that the attorney exercise due diligence to protect the confidential abuse information consistent with the attorney's obligation to represent the person;
        7. To the policy owner or assignee, in the course of delivery of the policy, if the policy contains information about family violence or sexual assault status; or
        8. To any other entities deemed appropriate by the Commissioner.
      4. It is unfairly discriminatory to terminate group coverage for a subject of family violence because coverage was originally issued in the name of the perpetrator of the family violence and the perpetrator has divorced, separated from, or lost custody of the subject of family violence, or the perpetrator's coverage has terminated voluntarily or involuntarily. If termination results from an act or omission of the perpetrator, the subject of family violence shall be deemed a qualifying eligible individual under Code Section 33-24-21.1 and may obtain continuation and conversion of such coverages notwithstanding the act or omission of the perpetrator. A person may request and receive confidential abuse information to implement the continuation and conversion of coverages under this subparagraph.
      5. Subparagraph (C) of this paragraph shall not preclude a subject of family violence or sexual assault from obtaining his or her insurance records. Subparagraph (C) of this paragraph shall not prohibit a person from asking about a medical condition or a claims history or from using medical information or a claims history to underwrite or to carry out its duties under the policy to the extent otherwise permitted under this paragraph and other applicable law.
      6. No person shall take action that adversely affects an applicant or insured on the basis of a medical condition, claim, or other underwriting information that the person knows or has reason to know is family violence or sexual assault related and which:
        1. Has the purpose or effect of treating family violence or sexual assault status as a medical condition or underwriting criterion;
        2. Is based upon correlation between a medical condition and family violence or sexual assault;
        3. Is not otherwise permissible by law and does not apply in the same manner and to the same extent to all applicants and insureds similarly situated without regard to whether the condition or claim is family violence or sexual assault related; or
        4. Except for claim actions, is not based on a determination, made in conformance with sound actuarial and underwriting principles and guidelines generally applied in the insurance industry and supported by reasonable statistical evidence, that there is a correlation between the applicant's or insured's circumstances and a material increase in insurance risk.
          1. Any person issuing, delivering, or renewing a policy of insurance in this state at any time shall include with such policy or renewal certificate a notice attached thereto containing the following language:
      7. No person shall fail to pay losses arising out of family violence or sexual assault against an innocent first-party claimant to the extent of such claimant's legal interest in the covered property, if the loss is caused by the intentional act of an insured against whom a family violence or sexual assault complaint is brought for the act causing this loss.
      8. No person shall use other exclusions or limitations on coverage which the Commissioner has determined through the policy filing and approval process to unreasonably restrict the ability of victims of family violence or sexual assault to be indemnified for such losses.
  3. Any person violating this Code section by making unlawful, false representations as to the policy sold shall be guilty of a misdemeanor.

    (Code 1933, §§ 56-704, 56-9906, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1978, p. 2016, § 1; Ga. L. 1980, p. 1266, § 2; Ga. L. 1989, p. 888, § 1; Ga. L. 1989, p. 1276, § 1; Ga. L. 1992, p. 6, § 33; Ga. L. 1992, p. 996, §§ 1-3; Ga. L. 2000, p. 236, § 1; Ga. L. 2001, p. 4, § 33; Ga. L. 2002, p. 441, § 2; Ga. L. 2005, p. 563, § 2/HB 407; Ga. L. 2006, p. 72, § 33/SB 465; Ga. L. 2006, p. 433, § 1/HB 425; Ga. L. 2007, p. 500, § 1/SB 84; Ga. L. 2016, p. 381, § 1/HB 784; Ga. L. 2019, p. 337, § 1-34/SB 132; Ga. L. 2019, p. 866, § 1/HB 227.)

"NOTICE

The laws of the State of Georgia prohibit insurers from unfairly discriminating against any person based upon his or her status as a victim of family violence."

The 2019 amendments. The first 2019 amendment, effective July 1, 2019, deleted "of Insurance" following "Commissioner" at the end of subparagraph (b)(13)(C) and deleted "within a period of 24 months after July 1, 2000," following "at any time" in subparagraph (b)(15)(I). The second 2019 amendment, effective July 1, 2019, substituted "family violence or sexual assault" for "family violence" throughout paragraph (b)(15); added ", the term" at the end of the introductory language of subparagraph (b)(15)(A); substituted "Confidential abuse information" for "Confidential family violence information" near the beginning of division (b)(15)(A)(i); added division (b)(15)(A)(iii); substituted "family violence or sexual assault" for "abuse" throughout subparagraph (b)(15)(C); substituted "confidential abuse information" for "family violence information" in the first sentence of division (b)(15)(C)(v) and in the last sentence of subparagraph (b)(15)(D); and substituted "Confidential abuse" for "Family violence" at the beginning of the second sentence in division (b)(15)(C)(v).

Cross references. - False advertising generally, § 10-1-420 et seq.

Provision that contracts in general restraint of trade contravene public policy, § 13-8-2 .

Punishment for misdemeanors generally, § 17-10-3 .

Code Commission notes. - Pursuant to Code Section 28-9-5, in 2002, in subdivision (b)(8)(A)(iv)(II), "this division" was substituted for "this Code section" in the second sentence and "in this division" was substituted for "herein" in the last sentence.

Editor's notes. - Ga. L. 2002, p. 441, § 1, not codified by the General Assembly, provides that: "This Act shall be known and may be cited as the 'Consumers' Health Insurance Protection Act.'"

Ga. L. 2002, p. 441, § 11, not codified by the General Assembly, provides that: "This Act shall apply only to health benefit plan contracts issued, delivered, issued for delivery, or renewed in this state on or after October 1, 2002; provided, however, that Section 8 of this Act shall apply to all claims relating to health care services provided on or after July 1, 2002. Any carrier, plan, network, panel, or agent thereof conducting a post-payment audit or imposing a retroactive denial on any claim initially submitted prior to July 1, 2002, shall, no later than June 30, 2003, provide written notice to the claimant of the intent to conduct such an audit or impose such a retroactive denial of any such claim or part thereof, including the specific reason for the audit or denial and shall complete the audit or retroactive denial and provide notice to the claimant of any payment or refund due prior to January 1, 2004." The reference to Section 8 of the Act apparently should be to Section 9 of the Act, which enacted Article 3 of Chapter 20A of this title.

Law reviews. - For note on 1989 amendment to this Code section, see 6 Ga. St. U.L. Rev. 261 (1989). For note on 2000 amendment of this Code section, see 17 Ga. St. U.L. Rev. 220 (2000). For note on the 2002 amendment of this Code section, see 19 Ga. St. U.L. Rev. 220 (2002).

JUDICIAL DECISIONS

Editor's notes. - In light of the similarity of the statutory provisions, decisions under former Ga. L. 1912, p. 119, § 20, are included in the annotations for this Code section.

Contract held prohibited as discriminatory. - Where a mutual life insurance company prepared a form of contract for sale by its agent to certain persons taking insurance which named the insured as "local inspector," stated that he agreed, upon written request, to furnish information on certain subjects which he might be able to obtain without expense to himself, and recited that, in consideration thereof, the company agreed to create a fund based on insurance in force, to be divided into 1,000 equal shares, and that each "local inspector" who should pay to the company the annual premium on $5,000 of insurance and perform the other duties required by the contract would be entitled to one share therein, this was a special discriminatory contract, prohibited by Ga. L. 1912, p. 119, § 20. Leonard v. American Life & Annuity Co., 139 Ga. 274 , 77 S.E. 41 (1913) (decided under former Ga. L. 1912, p. 119, § 20).

Note for premium held void because of agreement for rebate. - Where an agent by parol contract agreed to insure a person's life and agreed to rebate a part of the first premium, and took a note for the amount of the premium less the amount of the rebate, the agreement to rebate was an integral part of the contract, and the agreement to rebate being void, the note given in furtherance of the contract was itself illegal and void. Jones v. Crawford, 21 Ga. App. 29 , 93 S.E. 515 (1917) (decided under former Ga. L. 1912, p. 119, § 20).

Cited in Nat'l Viatical, Inc. v. State, 258 Ga. App. 408 , 574 S.E.2d 337 (2002); Fortis Ins. Co. v. Kahn, 299 Ga. App. 319 , 683 S.E.2d 4 (2009).

OPINIONS OF THE ATTORNEY GENERAL

Soliciting mortgage customers for insurance business not unfair competition. - A corporation engaged in the mortgage servicing and insurance business cannot be said to be guilty of unfair competition by merely soliciting the mortgagors, whose mortgages they service, to obtain their insurance business. 1965-66 Op. Att'y Gen. No. 66-213.

Unfair discrimination in premiums for life insurance, accident insurance, or sickness insurance is prohibited. 1974 Op. Att'y Gen. No. 74-81.

Rates for different group policies may be different. - For there to be unfair discrimination in premiums the insurance companies must not be offering the same amount of insurance for the same amount of premium to policyholders with the same risk rating; also, the number of employees under the group plan could legitimately affect the rates; consequently, for different group policies the rates charged by the insurance company may be different and at the same time may also be legal. 1974 Op. Att'y Gen. No. 74-81.

Validity of sales promotions. - An insurer who offers a gift to a prospective insured in exchange for the opportunity to compare the insured's current policy violates subparagraph (b)(8)(B) of this section and § 33-9-36(b) , but an insurer who makes a charitable contribution based on a portion of the total sales of a particular policy for a specified period of time violates neither code provision. 1984 Op. Att'y Gen. No. 84-78.

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, §§ 21, 41, 44.

C.J.S. - 44 C.J.S., Insurance, §§ 65, 66.

ALR. - Extension of time for payment of premium or assessment as within statute prohibiting discrimination by insurance companies, 53 A.L.R. 1537 .

Wrongful termination of policy by insurer, or false information to insured in that regard, as excusing further tender and payment of premiums or assessments, 122 A.L.R. 385 ; 160 A.L.R. 629 .

Insurance: illustrations concerning accumulations, dividends, surplus, etc., 127 A.L.R. 1464 .

Grounds for cancelation or rescission of annuity agreement, or for recovery back of property conveyed, or money paid, thereunder, 131 A.L.R. 424 .

Duty of life insurer, or its agents, to inform or explain to insured his rights under policy before accepting his surrender of the same, 131 A.L.R. 1299 .

Insurance agent's misrepresentations to applicant, insured, or beneficiary, as basis of action by them, other than on policy itself, or as defense to action against them, 136 A.L.R. 5 .

Insurer's demand for additional or corrected proof of loss as waiver or estoppel as to right to assert contractual limitation provision, or as suspending running thereof, 15 A.L.R.2d 955.

Construction and effect of state statute forbidding unfair trade practice or competition by discriminatory allowances of rebates, commissions, discounts, or the like, 54 A.L.R.2d 1187.

Liability of insurance broker or agent to insured for failure to procure insurance, 64 A.L.R.3d 398.

Wrongful cancellation of medical malpractice insurance, 99 A.L.R.3d 469.

Propriety of automobile insurer's policy of refusing insurance, or requiring advanced rates, because of age, sex, residence, or handicap, 33 A.L.R.4th 523.

Validity, construction, and application of state statute forbidding unfair trade practice or competition by discriminatory allowance of rebates, commissions, discounts, or the like, 41 A.L.R.4th 675.

State regulation of insurer's right to classify insureds for premium or other underwriting purposes by occupation, 57 A.L.R.4th 625.

Liability of insurance agent or broker on ground of inadequacy of liability insurance coverage procured, 60 A.L.R.5th 165.

33-6-5. Other unfair methods of competition and unfair and deceptive acts or practices.

In addition to Code Section 33-6-4, violations of the following provisions also are defined as unfair methods of competition and unfair and deceptive acts or practices in the business of insurance:

  1. No insurance company shall issue or cause to be issued any policy of insurance of any type or description upon life or property, real or personal, whenever such policy of insurance is to be furnished or delivered to the purchaser or bailee of any property, real or personal, as an inducement to purchase or bail such property, real or personal; and no other person shall advertise, offer, or give free insurance or insurance without cost or for less than the approved or customary rate in connection with the sale or bailment of real or personal property, except as provided in Chapter 27 of this title;
  2. No person who is not an insurer shall assume or use any name which deceptively implies or suggests that he or she is an insurer;
  3. Where the premium or charge for insurance of or involving real or personal property or merchandise is included in the overall purchase price or financing of the purchase of merchandise or property, the vendor or lender shall separately state and identify the amount charged and to be paid for the insurance and the classifications, if any, upon which based; and the inclusion or exclusion of the cost of insurance in such purchase price or financing shall not increase, reduce, or otherwise affect any other factor involved in the cost of the merchandise or property or financing as to the purchaser or borrower. A vendor or lender shall not be prohibited from charging the purchaser or borrower a finance charge otherwise permitted by law on any premium or charge for insurance included in the cost of the merchandise or property or financing. This paragraph shall not apply to credit life or credit accident and sickness insurance which is in compliance with Code Section 33-31-7;
    1. No insurer shall make, offer to make, or permit any preference or distinction in property, marine, casualty, or surety insurance as to form of policy, certificate, premium, rate, or conditions of insurance based upon membership, nonmembership, or employment of any person or persons by or in any particular group, association, corporation, or organization, making the foregoing preference or distinction available in any event based upon any fictitious grouping of persons.
    2. As used in this paragraph, the term "fictitious grouping" means any grouping by way of membership, nonmembership, license, franchise, employment contract, agreement, or any other method or means resulting in unfair discrimination.
    3. The restrictions and limitations of this paragraph shall not extend to life or accident and sickness insurance; nor shall they apply to any bona fide association group which is composed of members engaged in a common trade, business, or profession and which has had group insurance of the same type continuously in existence for at least five years;
  5. No insurer or agent thereof shall hypothecate, sell, or dispose of a promissory note received in payment of any part of a premium on a policy of insurance applied for prior to acceptance of the risk by the insurer;
    1. No person shall knowingly collect any sum as premium or charge for insurance, which insurance is not then provided or not in due course to be provided subject to acceptance of the risk by the insurer by an insurance policy issued by an insurer as permitted by this title.
    2. No person shall knowingly collect as premium or charge for insurance any sum in excess of or less than the premium or charge applicable to such insurance, which sum is specified in the policy in accordance with the applicable classifications and rates as filed with and approved by the Commissioner. In cases where classifications, premiums, or rates are not required by this title to be filed and approved:
      1. The premiums and charges for insurance, except insurance written in accordance with Chapter 5 of this title, shall not be in excess of or less than those specified in the policy and as fixed by the insurer; and
      2. The premiums and charges for insurance written in accordance with Chapter 5 of this title shall not be in excess of or less than those specified in the policy.

        This subparagraph shall not be deemed to prohibit surplus lines brokers licensed under Chapter 5 of this title from charging and collecting the amount of applicable state and federal taxes in addition to the premium required by the insurer; nor shall it be deemed to prohibit a life or accident and sickness insurer from charging and collecting amounts actually to be expended for medical examination of an applicant for life or accident and sickness insurance or for reinstatement of a life or accident and sickness insurance policy.

    3. Notwithstanding this paragraph or any other law limiting or regulating interest rates or other charges, any insurance agent or agency, as defined in Code Section 33-23-1, shall be authorized but not required to charge, receive, and collect on any unpaid premium account with a balance owing for 30 days or more a service charge which shall not exceed 15› per $10.00 per month computed on all amounts unpaid on the premium from month to month which need not be a calendar month or other regular period; provided, however, that, if the amount of service charge so computed shall be less than $1.00 for the month, a service charge of $1.00 for the month may be charged, received, and collected. Nothing contained in this subparagraph shall be construed to prevent an agent, agency, or broker from canceling a policy in accordance with the laws of this state;
    1. Any insurer may retain, invest in, or acquire the whole or any part of the capital stock of any other insurer or insurers or have a common management with any other insurer or insurers, unless such retention, investment, acquisition, or common management is inconsistent with any other provision of this title or unless, by reason thereof, the business of such insurers with the public is conducted in a manner which substantially lessens competition generally in the insurance business or tends to create a monopoly therein.
    2. Any person otherwise qualified may be a director of two or more insurers which are competitors, unless the effect thereof is to lessen substantially competition between insurers generally or tends materially to create a monopoly;
  8. No insurance company shall cancel, modify coverage, refuse to issue, or refuse to renew any property or casualty insurance policy solely because the applicant or insured or any employee of either is mentally or physically impaired, provided that this paragraph shall not apply to accident and sickness insurance policies sold by a casualty insurer; provided, further, that this paragraph shall not be interpreted to modify any other provision of this title relating to the cancellation, modification, issuance, or renewal of any insurance policy or contract;
  9. No insurance company, when selling salvage motor vehicles, major component parts, or parts, shall sell directly to a used motor vehicle parts dealer, motor vehicle dismantler, motor vehicle rebuilder, salvage pool dealer, or salvage dealer who is not licensed under Chapter 47 of Title 43; provided, however, this paragraph shall not prevent an insurance company from selling salvage motor vehicles, major component parts, or parts to any person, firm, or corporation when the sale is made through a used motor vehicle parts dealer, motor vehicle dismantler, motor vehicle rebuilder, salvage pool dealer, or salvage dealer who is licensed under Chapter 47 of Title 43;
  10. No insurer shall refuse to insure an individual, refuse to continue to insure an individual, limit the amount, extent, or kind of coverage available to an individual, or charge an individual a different rate for coverage solely because the individual is blind or partially blind;
  11. Each insurer which acquires a salvage motor vehicle, as defined in Code Section 40-3-2, shall, within 30 days of acquisition, apply for a salvage certificate of title, and no insurer shall sell, convey, or transfer any such salvage motor vehicle without first applying for and obtaining a salvage certificate of title;
    1. No insurer shall cancel, nonrenew, or otherwise terminate all or substantially all of an entire line or class of business for the purpose of withdrawing from the market in this state unless:
      1. The insurer has notified the Commissioner in writing of the action, including the reasons for such action, at least one year before the completion of the withdrawal, provided that this paragraph shall not be construed to prevent such insurer from canceling, nonrenewing, or terminating policies where the insurer, by contract, statute, or otherwise, has the right to do so; or
      2. The insurer has filed a plan of action for the orderly cessation of the insurer's business within a period of time shorter than one year and such plan of action has been approved by the Commissioner.
    2. At a minimum, in order to provide for orderly cessation and withdrawal, an insurer shall provide a general notice to each insured at least 90 days prior to the termination of any policy followed by a subsequent notice which meets the applicable statutory notice requirements for canceling, nonrenewing, or terminating insurance under this title.
    3. An insurer's rates, rules, and forms filed pursuant to Code Sections 33-9-21 and 33-24-9 shall be considered no longer on file for use with any new business in the market affected by the insurer's withdrawal plan on and after the withdrawal plan goes into effect;

    (12.1) No insurer or managed care entity subject to licensing by the Commissioner shall violate any provision of Chapter 20A of this title;

    1. As used in this paragraph, the term:
      1. "Aftermarket crash part" means a replacement for any of the nonmechanical sheet metal or plastic parts which generally constitute the exterior of a motor vehicle, including inner and outer panels.
      2. "Insurer" includes an insurance company and any person authorized to represent the insurer with respect to a claim and who is acting within the scope of the person's authority.
      3. "Nonoriginal equipment manufacturer aftermarket crash part" means an aftermarket crash part made by any manufacturer other than the original vehicle manufacturer or his or her supplier.
      4. "Repair facility" means a motor vehicle dealer, garage, body shop, or other commercial entity which undertakes the repair or replacement of those parts that generally constitute the exterior of a motor vehicle.
    2. Any aftermarket crash part manufactured or supplied for use in this state on or after January 1, 1990, shall have affixed thereto or inscribed thereon the logo, identification number, or name of its manufacturer. Such manufacturer's logo, identification number, or name shall be visible after installation whenever practicable.
    3. In all instances where nonoriginal equipment manufacturer aftermarket crash parts are used in preparing an estimate for repairs the written estimate prepared by the insurance adjuster and repair facility shall clearly identify each such part. A disclosure document attached to the estimate shall contain the following information in no smaller than ten-point type:

      "THIS ESTIMATE HAS BEEN PREPARED BASED ON THE USE OF AFTERMARKET CRASH PARTS SUPPLIED BY A SOURCE OTHER THAN THE MANUFACTURER OF YOUR MOTOR VEHICLE. THE AFTERMARKET CRASH PARTS USED IN THE PREPARATION OF THIS ESTIMATE ARE WARRANTED BY THE MANUFACTURER OR DISTRIBUTOR OF SUCH PARTS RATHER THAN THE MANUFACTURER OF YOUR VEHICLE."; and

  14. On and after July 1, 1992, no insurer, as defined in Code Section 33-1-2, shall issue, cause to be issued, renew, or provide coverage under any major medical insurance policy or plan containing a calendar year deductible or similar plan benefit period deductible which does not provide for a carry-over of the application of such deductible as provided in this paragraph. If all or any portion of an insured's or member's cash deductible for a calendar year or similar plan benefit period is applied against covered expenses incurred by the insured or member during the last three months of the deductible accumulation period, the insured's or member's cash deductible for the next ensuing calendar year or similar benefit plan period shall be reduced by the amount so applied. The provisions of this paragraph shall apply to major medical insurance policies or plans which have a benefit plan period of less than 24 months, except policies or plans designed and issued to be compatible with a health savings account as set out in 26 U.S.C. Section 223 or a spending account as defined in Chapter 30B of this title.

    (Code 1933, § 56-713, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1971, p. 887, § 1; Code 1933, § 56-712, as redesignated by Ga. L. 1972, p. 1261, § 7; Ga. L. 1980, p. 1011, § 1; Ga. L. 1982, p. 3, § 33; Ga. L. 1983, p. 699, § 1; Ga. L. 1984, p. 22, § 33; Ga. L. 1985, p. 464, § 1; Ga. L. 1985, p. 1227, § 3; Ga. L. 1986, p. 695, § 3; Ga. L. 1989, p. 1396, § 1; Ga. L. 1992, p. 996, § 4; Ga. L. 1995, p. 1165, § 6; Ga. L. 1996, p. 6, § 33; Ga. L. 2000, p. 136, § 33; Ga. L. 2002, p. 441, § 3; Ga. L. 2002, p. 786, § 1; Ga. L. 2005, p. 481, § 1/HB 291; Ga. L. 2019, p. 337, § 1-35/SB 132.)

The 2019 amendment, effective July 1, 2019, deleted "immediately preceding March 8, 1960" following "five years" at the end of subparagraph (4)(C); and deleted "paragraph (4) of" preceding "Code Section 33-1-2" near the beginning of the first sentence of paragraph (14).

Cross references. - Provision that contracts in general restraint of trade contravene public policy, § 13-8-2 .

Code Commission notes. - Pursuant to Code Section 28-9-5, in 1985, the paragraph (10) added by Ga. L. 1985, p. 1227, § 3 was redesignated as paragraph (11).

Pursuant to Code Section 28-9-5, in 2002, in paragraph (12), "canceling" was substituted for "cancelling" in division (A)(i) and subparagraph (B) and "Chapter 20A of this title" was substituted for "Chapter 20A of Title 33" in paragraph (12.1).

Editor's notes. - Ga. L. 2002, p. 441, § 1, not codified by the General Assembly, provides that: "This Act shall be known and may be cited as the 'Consumers' Health Insurance Protection Act.'"

Ga. L. 2002, p. 441, § 11, not codified by the General Assembly, provides that: "This Act shall apply only to health benefit plan contracts issued, delivered, issued for delivery, or renewed in this state on or after October 1, 2002; provided, however, that Section 8 of this Act shall apply to all claims relating to health care services provided on or after July 1, 2002. Any carrier, plan, network, panel, or agent thereof conducting a post-payment audit or imposing a retroactive denial on any claim initially submitted prior to July 1, 2002, shall, no later than June 30, 2003, provide written notice to the claimant of the intent to conduct such an audit or impose such a retroactive denial of any such claim or part thereof, including the specific reason for the audit or denial and shall complete the audit or retroactive denial and provide notice to the claimant of any payment or refund due prior to January 1, 2004." The reference to Section 8 of the Act apparently should be to Section 9 of the Act, which enacted Article 3 of Chapter 20A of this title.

Law reviews. - For note on the 2002 amendment of this Code section, see 19 Ga. St. U.L. Rev. 220 (2002).

JUDICIAL DECISIONS

Legislative intent. - Legislature's decision to restrict only mass cancellations and not mass renewals was not absurd or unjust, if the legislature had intended to restrict both, then it would have said so, as it did elsewhere in the unfair trade practices chapter. Ins. Dep't of Ga. v. St. Paul Fire & Cas. Ins. Co., 253 Ga. App. 551 , 559 S.E.2d 754 (2002).

Under O.C.G.A. § 33-6-5(12) , "cancel" did not mean "nonrenew"; interpreting cancel in that manner would be contrary to the strict letter of the statute. By its plain terms, the statute limits the power of an insurer to cancel an entire line or class of business, thereby effectuating an immediate, widespread interruption of insurance coverage. Ins. Dep't of Ga. v. St. Paul Fire & Cas. Ins. Co., 253 Ga. App. 551 , 559 S.E.2d 754 (2002).

Cited in Nat'l Viatical, Inc. v. State, 258 Ga. App. 408 , 574 S.E.2d 337 (2002).

OPINIONS OF THE ATTORNEY GENERAL

Section prohibits requiring minimum purchases to maintain insurance. - A credit card insurance plan which requires that a cardholder must purchase during each billing period at least $10.00 worth of the goods and services merchandised by the credit card company and its affiliates in order to acquire and maintain the insurance coverage falls squarely within the prohibition of paragraph (1) of this section. 1972 Op. Att'y Gen. No. 72-66.

Efforts to stimulate business by free insurance. - The use of the words "in connection with" in paragraph (1) of this section extends to and prohibits every commercial effort to stimulate business by gifts of free insurance. 1963-65 Op. Att'y Gen. p. 435.

Offer of group rate valid when offered under statutory standards. - A filing which purports to offer insurance rates on a group basis does not violate paragraph (4) of O.C.G.A. § 33-6-5 when the rates are derived on the basis of rate-making considerations and standards set forth in O.C.G.A. § 33-9-4 . 1984 Op. Att'y Gen. No. 84-88.

Fact that title insurance is sold at different prices to different purchasers would not constitute a violation of subparagraph (6)(B) of O.C.G.A. § 33-6-5 . 1983 Op. Att'y Gen. No. 83-31.

Practice of title insurance companies bidding below their published rates in an attempt to obtain orders on large commercial accounts while charging their residential customers the published amount without bidding against each other would not violate subparagraph (6)(B) of O.C.G.A. § 33-6-5 unless they are charging either the large commercial or residential customers amounts either above or below the rates fixed by the insurance company and specified in the policies issued to such persons. 1983 Op. Att'y Gen. No. 83-31.

Paragraph (9) of O.C.G.A. § 33-6-5 does not limit the class of purchasers to those mentioned; however, if an insurance company chooses to sell salvage parts and vehicles to anyone in the class of purchasers enumerated, the purchaser must be licensed. 1984 Op. Att'y Gen. No. 84-28.

RESEARCH REFERENCES

ALR. - Legality of combinations or agreements between insurance companies or insurance agents, 21 A.L.R. 543 .

When payment of insurance premiums or assessments deemed involuntary so as to permit their recovery back, 86 A.L.R. 388 .

Wrongful cancellation of medical malpractice insurance, 99 A.L.R.3d 469.

33-6-6. Power of Commissioner as to investigation of unfair or deceptive acts or practices generally.

  1. The Commissioner shall have the power to examine and investigate into the affairs of every person engaged in the business of insurance in this state in order to determine whether the person has been or is engaged in any unfair method of competition or in any unfair or deceptive act or practice prohibited by this chapter.
  2. In addition to any other authority granted to the Commissioner by this title and in addition to those reports required by Code Section 33-3-21, the Commissioner may require persons engaged in the business of insurance in this state to file reports by postal ZIP Code, where appropriate, or in any other format to enable the Commissioner to determine readily if such person has been or is engaged in any unfair method of competition or in any unfair or deceptive act or practice prohibited by this article.

    (Code 1933, § 56-705, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1978, p. 2016, § 2; Ga. L. 1992, p. 3048, § 4.)

RESEARCH REFERENCES

Am. Jur. 2d. - 43 Am. Jur. 2d, Insurance, § 20 et seq.

C.J.S. - 44 C.J.S., Insurance, §§ 53, 54.

33-6-7. Conduct of hearings by Commissioner; rights of person being investigated; powers of Commissioner; service of process.

  1. Whenever the Commissioner shall have reason to believe that any person has been engaged or is engaging in this state in any unfair method of competition or any unfair or deceptive act or practice, whether or not defined in Code Sections 33-6-4 and 33-6-5, and have reason to believe that a proceeding by the Commissioner in respect to such unfair method of competition or such unfair or deceptive act or practice would be in the public interest, he shall issue and serve upon the person a statement of the charges in that respect and a notice of a hearing on the charges to be held at a time and place fixed in the notice, which time shall not be less than 15 days after the date of the service of the notice.
  2. At the time and place fixed for the hearing, the person shall have an opportunity to be heard and to show cause why an order requiring the person to cease and to desist from the acts, methods, or practices so complained of should not be made by the Commissioner. Upon good cause shown, the Commissioner shall permit any person to intervene, appear, and be heard at the hearing by counsel or in person.
  3. Nothing contained in this article shall require the observance at the hearing of formal rules of pleading or evidence.
  4. The Commissioner at the hearing may administer oaths, examine and cross-examine witnesses, receive oral and documentary evidence, subpoena and compel the attendance of witnesses, and require the production of books, papers, records, correspondence, or other documents which he deems relevant to the inquiry. The Commissioner at the hearing may and, upon request of any party, shall cause to be made a record of all the evidence and all the proceedings had at the hearing. In case of a refusal of any person to comply with any subpoena issued under this Code section or to testify with respect to any matter concerning which he may be lawfully interrogated, the Superior Court of Fulton County or the superior court of the county where the party resides, on application of the Commissioner, may issue an order requiring the person to comply with the subpoena and to testify; and any failure to obey any order of the court may be punished by the court as a contempt thereof.
  5. Statements of charges, notices, orders, and other processes of the Commissioner under this article may be served by anyone duly authorized by the Commissioner either in the manner provided by law for service of process in civil actions or by registering or certifying and mailing a copy of the statement, notice, order, or other process to the person affected by it at the person's residence or principal office or place of business. The verified return by the person so serving the statement, notice, order, or other process, which return sets forth the manner of the service, shall be proof of the same; and the return post card receipt for the statement, notice, order, or other process, which receipt is registered or certified and mailed as provided in this Code section, shall be proof of the service of the same.

    (Code 1933, § 56-706, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1972, p. 1261, § 1; Ga. L. 1992, p. 3048, § 5.)

Cross references. - Conduct of hearings by Commissioner generally, § 33-2-16 et seq.

Administrative procedure generally, T. 50, C. 13.

Law reviews. - For comment on Bankers Life & Cas. Co. v. Cravey, 208 Ga. 682 , 69 S.E.2d 87 (1952) see 14 Ga. B.J. 468 (1952).

JUDICIAL DECISIONS

Editor's notes. - In light of the similarity of the statutory provisions, a decision under former Ga. L. 1950, p. 326, is included in the annotations for this Code section.

Section blueprints procedure to be followed. - The investigative powers of the Commissioner as set forth in this section constitute a legislative "blueprint" of the procedure that he must employ. Bankers Life & Cas. Co. v. Cravey, 208 Ga. 682 , 69 S.E.2d 87 (1952), commented on in 14 Ga. B.J. 468 (1952).

Insurance company has no duty to copy records for Commissioner. - There is nothing in the law placing upon the insurance company a duty to copy its records and mail them to the Commissioner, and when the Commissioner has fully performed the duties and employed the powers given the Commissioner by law, the Commissioner will have all the information that the Commissioner could obtain by requiring copies of the company's records to be mailed to the Commissioner. Bankers Life & Cas. Co. v. Cravey,