Georgia State Regulations & NAIC Insurance Law

Licensing

To apply for a Georgia resident producer’s license, an individual must:

• Be at least 18 years old.
• Be a resident of Georgia before submitting the application, or have a principal place of business in Georgia (O.C.G.A. § 33-23-5(a)(1)).

Pre-licensing course and exam

Georgia requires a resident applicant to complete an approved prelicensing course of at least 8 hours of instruction for each major line of authority (life, accident and sickness, property, casualty and personal lines), unless an exemption applies (Ga. Comp. R. & Regs. r. 120-2-3-.07).

A candidate who fails the Georgia producer examination must wait 14 days before retaking it, and 60 days after failing it three times (Ga. Comp. R. & Regs. r. 120-2-3-.09).

Fingerprints/background check

Georgia requires new applicants to submit electronic fingerprints, through a vendor the Commissioner selects and at their own cost, for a criminal background check; active licensees and those reinstating within 6 months of expiration are excepted (Ga. Comp. R. & Regs. r. 120-2-3-.07(2)).

Controlled business

Controlled business is insurance written on the producer’s own life, property or interests, or on those of the producer’s family, employer or a business the producer controls. A producer may insure themselves and their family, but a license exists to sell insurance to the public, so states generally restrict obtaining or using a license principally to write controlled business. In Georgia, controlled business is property or casualty insurance for the producer, family members, an employer or a business the producer is connected with, and a property or casualty applicant may not, in any calendar year, write controlled business amounting to as much as 25 percent of the producer’s volume (O.C.G.A. §§ 33-23-1(5), 33-23-5(a)(2)).

Non-resident license

A producer licensed in another state can obtain a Georgia nonresident license without taking Georgia’s examination. Under the NAIC’s Producer Licensing Model Act, which most states have adopted in some form, a nonresident receives the license if the person:

• Is currently licensed as a resident, and in good standing, in the home state
• Has applied (the home-state application or the Uniform Application) and paid the fees
• Lives in a home state that grants nonresident licenses to residents of this state on the same basis (reciprocity)

Under the same model, a producer who moves to another state files a change of address, with certification from the new home state, within 30 days. A licensed producer who moves into a state applies for a resident license there within 90 days and does not repeat prelicensing education or the examination for lines already held.

Temporary license

Most states allow the insurance regulator to issue a temporary license, without an examination, when one is needed to keep an insurance business serviced. Typical cases are:

• The surviving spouse or personal representative of a producer who dies or becomes disabled, to allow time to sell the business or train new people
• A member or employee of a business entity producer, on the death or disability of its designated producer
• The designee of a producer entering active military service

The regulator may limit what a temporary licensee may do and may require a licensed sponsor who takes responsibility for the temporary licensee’s acts.

A Georgia temporary license requires sponsorship by a licensed insurer (except a temporary hardship license). It is valid for 6 months from its original issue date and renewable for 3-month periods, but may not be held beyond 15 months from the original issue date, and an applicant is eligible for only one such license in the same lines of authority (Ga. Comp. R. & Regs. r. 120-2-3-.40).

Military service

A Georgia producer who cannot comply with license renewal procedures because of military service may request a waiver of those procedures, and of any examination requirement, fine or sanction for failing to comply with them (Ga. Comp. R. & Regs. r. 120-2-3-.16(4)).

Renewal and reinstatement

A producer license stays in effect only while the producer renews it on schedule: paying the renewal fee and completing continuing education by the due date.

Georgia license renewals and fees are due on the last day of the licensee’s birth month, and a late renewal may be filed, with a late fee, within 15 days after that (Ga. Comp. R. & Regs. r. 120-2-3-.16(1)).

A producer who misses the deadline and lets the license lapse may be able to reinstate it without retaking the examination.

A Georgia producer who misses renewal may apply for late renewal reinstatement, paying a $150 reinstatement penalty on top of the renewal and late fees, and submitting fingerprints again if 6 or more months have passed since expiration. A person who has not applied within one year of expiration must reapply for the license and satisfy all prelicensing requirements (Ga. Comp. R. & Regs. r. 120-2-3-.16).

Continuing Education

All states, including Georgia, have continuing education requirements that must be met to renew any major lines (life, health, property, liability) insurance license.

In Georgia:

• Individuals licensed in the state of Georgia must complete continuing education prior to renewing their license. The number of hours required is set by state law.

Notice of change of name or address

A Georgia licensee must notify the Commissioner of any change in the information in its filings or applications, such as an address, within 30 days of the change (Ga. Comp. R. & Regs. r. 120-2-3-.37).

The model also requires a producer to report to the regulator within 30 days any administrative action taken against the producer in another state or by another government agency, counted from the final disposition, and any criminal prosecution in any jurisdiction, counted from the initial pretrial hearing date. Georgia requires the report of a criminal prosecution with the application or within 30 days of the date of arrest (O.C.G.A. § 33-23-21(17)). A producer who does business under any name other than their legal name must notify the regulator before using it. Georgia allows 60 days to report a criminal conviction or an action taken against a license elsewhere (O.C.G.A. § 33-23-21(19), (22)).

Company Regulations

An insurance company must be authorized by the Office of the Commissioner of Insurance and Safety Fire to conduct business in Georgia.

To receive a certificate of authority, the company applies to the Commissioner and files its charter or articles of incorporation, financial statements showing that it meets the state’s capital and surplus requirements, and the other documents and fees the state requires.

Capital and Surplus Requirement

A company that has been authorized to conduct insurance business in Georgia must maintain minimum standards as a corporation.

• The certificate of authority allows the insurer to conduct business in the state only if it maintains the minimum capital or permanent surplus required. In Georgia, the Commissioner must suspend or revoke the certificate of authority of an insurer that no longer meets the requirements for the authority it was granted, on account of a deficiency in assets or otherwise (O.C.G.A. § 33-3-19).

Duties of the Insurance and Safety Fire Commissioner

The Georgia Insurance and Safety Fire Commissioner is a state executive position in the Georgia state government. The Commissioner heads the Georgia Office of Insurance and Safety Fire Commissioner, which is responsible for regulating the state’s insurance industry and ensuring fire safety in the state.

The Commissioner is elected to four-year terms in federal midterm election years. The commissioner is elected at the same time and holds office for the same term as the Governor. There are no term limits for the office of Insurance and Safety Fire Commissioner.

The Commissioner is responsible for establishing and enforcing regulations in the Georgia insurance market in a manner that protects consumers and encourages economic development.

Those duties include:

• Investigate all claims and complaints of legal violations relating to insurance.

• If the Commissioner finds that laws have been violated, the findings and supporting documents may be referred for criminal prosecution.

• Monitor transactions of all companies including domestic, foreign, and alien insurance companies.

• The Commissioner must examine each domestic insurer at least once every five years (O.C.G.A. § 33-2-11(a)).

• Audit the books and records of any resident producer as frequently as necessary.

• Collect all fees associated with producers and insurers.

• Determine and administer fines associated with violations for insurers and producers.

• Issue reports pertaining to the suspension and revocation of licenses of producers and certificates of authority for insurers.

• Approve documentation used by insurance companies such as forms and rates.

Sidenote

Know this...

The Commissioner does not have the authority to arrest, issue injunctions or sentence jail time. They can get the process started, but It takes a law officer to arrest and a judge or court of law to issue injunctions or sentence jail time.

In Georgia, personnel the Commissioner employs to investigate insurance fraud may make arrests for criminal violations their investigations establish (O.C.G.A. § 33-1-16(h)).

Suspend, Revoke or Non-renew

The Commissioner has the authority to suspend, revoke, or refuse to renew a license for:

• Providing false information on the application for an insurance license.

• Omitting any relevant information on an application that would have disqualified the individual from being eligible to receive a license.

• Being found guilty of a violation or the noncompliance of insurance regulations and laws…

• Committing fraud while attempting to obtain an insurance license.

• Improperly withholding, misappropriating or converting any money or property received in the course of doing insurance business.

• Providing false information in reference to the terms and conditions of an insurance contract.

• Having been convicted of a felony or of any crime involving moral turpitude (O.C.G.A. § 33-23-21(15)).

• Having admitted or been found to have committed any insurance unfair trade practice or fraud.

• Having engaged in activities of a fraudulent nature which allowed the person to involve themselves in dishonest, coercive, untrustworthy, and financially irresponsible practices.

• Having had a prior insurance license revoked or suspended in a state other than Georgia.

• Using another person’s identity and forging their name on an insurance application.

• Being found guilty of using unethical practices or cheating on an examination for an insurance license.

Cease and Desist

If the Commissioner finds that a producer has violated the state’s insurance laws, the Commissioner may order the producer to cease and desist. In Georgia, the Commissioner may also act against a person who is about to engage in a prohibited act, and may issue a proposed order that takes effect without a hearing unless one is requested within 10 days of receiving it (O.C.G.A. § 33-2-24).

A cease and desist order:

• Does not mean the recipient’s registration has been suspended or revoked.
• Requires the recipient to stop or limit the activity addressed in the order.

Hearing and penalties

A cease and desist order must be complied with once it takes effect, but the action is not “final and binding”: a person facing action by the Commissioner is entitled to notice and an opportunity for a hearing, within time limits set by Georgia law, and may ask a court to review the final order.

A violation of the insurance laws can bring a civil penalty in addition to action against a license. State law sets the maximum, usually per violation and often with a cap on the total, and a higher tier commonly applies to a violation that was knowing or flagrant. Some violations are also crimes.

Unfair Claims Settlement Practices

Under the NAIC’s model act, these practices are violations when committed flagrantly and in conscious disregard of the law, or often enough to indicate a general business practice.

• The intentional obstruction and delay of claims payment or the delay of a claims investigation is a violation of regulation.

• Neglecting to provide a prompt response and written explanation of insurance policy terms, conditions, and laws related to the contract are examples of unfair claims settlement practices.

• Failure to provide claims without launching a thorough investigation is a violation of regulation.

• Denying a claim without conducting a thorough investigation.

• Attempting to settle a claim for less than fair market value.

Policy forms

Insurers file their policy forms with the Commissioner.

A Georgia policy, annuity contract, application, rider or endorsement form may not be delivered or issued for delivery in the state unless it has been filed with and approved by the Commissioner (O.C.G.A. § 33-24-9).

If a policy provision conflicts with Georgia law, the policy is read as amended to conform to the law.

Record maintenance

A producer keeps records of each transaction (the policies placed, the insureds, the premiums received and any changes) and makes them available for the Commissioner’s inspection.

Georgia law sets how long the records must be kept. The records of each transaction are kept for five years after the transaction is completed or the term of the contract ends, whichever is greater (O.C.G.A. § 33-23-34(b)).

Fraudulent Producer Representation

An insurance producer who represents to the public that he/she is licensed to conduct insurance business in Georgia, but has not passed the appropriate licensing examination is in violation of regulation.

This includes any means of public communication, such as:

• Advertisements
• Letterheads
• Circulars
• Business cards
• Other methods of representation

A producer found guilty of conducting business in Georgia in any line of insurance for which they are not properly licensed may have any other insurance license suspended or revoked.

Misrepresentation

• Misrepresentation involving the creation or distribution of policies, quotes, and illustrations designed to provide inaccurate information about the terms and conditions of a policy is prohibited.

• Providing inaccurate or incomplete information or comparisons regarding the benefits of a policy is an example of misrepresentation.

• Providing inaccurate or incomplete information for the purpose of inducing, or tending to induce, the lapse, exchange, conversion, forfeiture, or surrender of a policy is a violation as well (twisting). Georgia’s statute names a misrepresentation made to induce a policyholder to lapse, forfeit or surrender a policy (O.C.G.A. § 33-6-4(b)(2)).

False advertising

Making, publishing or circulating an advertisement, announcement or statement about the business of insurance that is untrue, deceptive or misleading is an unfair trade practice under state law, based on the NAIC’s model act. The medium does not matter: the rule reaches newspapers, magazines, radio and television, and also notices, circulars, pamphlets, letters, posters and any other way of placing the statement before the public. The model act’s test is whether the statement is untrue, deceptive or misleading, not whether the person meant to deceive.

Defamation

Defamation of an insurer is an unfair trade practice under state law, based on the NAIC’s model act: making, publishing or circulating an oral or written statement that is false, or maliciously critical of or derogatory to the financial condition of an insurer, and that is calculated to injure that insurer or any other person engaged in the business of insurance. Spreading an untrue rumor that a competing insurer is about to fail is the classic example.

Boycott, Coercion and Intimidation

Entering into an agreement to commit, or by concerted action committing, any act of boycott, coercion or intimidation that results or tends to result in unreasonable restraint of, or monopoly in, the business of insurance is prohibited.

False Financial Statements

Making or circulating any false statement of an insurer’s financial condition with the intent to deceive is an unfair trade practice in Georgia (O.C.G.A. § 33-6-4(b)(5)). A producer who knowingly puts materially false information in an insurance application commits a fraudulent insurance act (O.C.G.A. § 33-1-16(a)(1)), and fraudulent or dishonest practices are a ground for license discipline (O.C.G.A. § 33-23-21(5)).

Illegal inducements

Offering anything of value not specified in the policy (money, a service, a favor or a gift) as an inducement to buy insurance is prohibited unless state law expressly allows it, and any agreement made as part of the sale must be written into the policy.

Georgia prohibits rebating: no insurer or its employee, and no broker or agent, may pay, allow or give, or offer to pay, allow or give, directly or indirectly, any rebate, discount, abatement, credit or reduction of premium, or any special favor, advantage, valuable consideration or inducement not provided for in the policy (O.C.G.A. § 33-9-36©).

Georgia’s unfair trade practices law permits store gift cards, gift certificates, sporting event tickets or merchandise worth no more than $100 per customer in the aggregate in a calendar year to be given to current or prospective customers, on conditions the statute sets (O.C.G.A. § 33-6-4).

Unfair discrimination

Unfair discrimination is treating people or risks that present the same hazard differently. The NAIC’s model act, on which state unfair trade practices laws are based, prohibits:

• Unfair discrimination between individuals of the same class and equal expectation of life in life insurance and annuity rates, dividends, benefits or terms
• Unfair discrimination between individuals of the same class and essentially the same hazard in health insurance premiums, benefits or terms
• Refusing, limiting or canceling coverage because of a person’s sex, marital status, race, religion or national origin
• In property and casualty insurance, refusing or limiting coverage solely because of a risk’s geographic location, unless sound underwriting and actuarial principles justify it, or solely because the applicant or insured is physically or mentally impaired

Many states also expressly forbid refusing or limiting coverage solely because a person is blind or partially blind. Georgia does (O.C.G.A. § 33-6-5(10)), and its own unfair discrimination provision names race, color, and national or ethnic origin (O.C.G.A. § 33-6-4(b)(8)(A)(iv)).

Errors & Omissions

Errors & Omissions (E&O) insurance is a type of professional liability insurance that protects insurance agents if they are sued for negligent performance of their duties.

• E&O only covers honest mistakes resulting in (financial) damage to customers/prospects.
• There is no coverage for violation of insurance regulation.

Rebating

Georgia licensed producers are prohibited from directly or indirectly giving any refund, discount, favor, or credit to reduce premiums to induce the purchase of insurance.

Sidenote

Know this...

To “solicit” or “negotiate” insurance implies that the person is licensed.

Sharing Commission

The splitting or sharing of commissions with a licensed producer is allowed. Both parties must be licensed in the line of business in which the proposed commission is to be split. Under the NAIC’s model act, a commission may also be paid to an insurance agency, or to a person who does not sell, solicit or negotiate insurance. Georgia is narrower: an agent may share a commission only with an agent licensed in Georgia, an agency with such an agent as its proprietor, partner, officer or employee, or an agent or agency licensed in another state (O.C.G.A. § 33-23-38(a)).

Twisting

Providing false information or expressing derogatory ideas about the financial conditions of a competitor company with the intent to lapse or surrender an existing policy is a violation of the law.

Under the NAIC’s model act, twisting is a misrepresentation made to induce a policyholder to lapse, forfeit, surrender, exchange or convert a policy. A false or maliciously critical statement about a competing insurer’s finances, made to injure it, is defamation.

Any written or oral statements used to induce the lapse, termination, exchange, or surrender of an insurance contract based on inaccurate information is prohibited.

Unfair Marketing Practices

The Office of the Commissioner of Insurance and Safety Fire is responsible for establishing minimum standards for the full and fair disclosure of policy content. They also require the standardization and simplification of the terms used to describe insurance coverage.

Advertising may not involve the following:

• Any statement or implication that policies are approved, or that the financial condition of a company is endorsed, by any government agency or by any independent group, individual, organization or society, unless that is the fact.

• Any statements regarding advertising that are false or untrue in reference to the time frame in which claims are paid.

Gramm-Leach Bliley Act (GLBA)

This law repealed the Glass-Steagall Act of 1933, allowing consolidation of commercial banks, investment institutions and insurance companies.

GLBA established a framework of responsibilities of federal and state regulators for these financial industries. It permits financial services companies to merge and engage in a variety of new business activities, including insurance, while attempting to address the regulatory issues raised by such combinations.

McCarran-Ferguson Act

Federal law signed in 1945 in which Congress declared that the insurance industry would be regulated at the state level. Grants insurers a limited exemption from federal antitrust legislation. Since 2021 the exemption does not cover the business of health insurance, apart from narrow activities such as sharing historical loss data (15 U.S.C. § 1013©).

National Association of Insurance Commissioners (NAIC)

The U.S. standard-setting and regulatory support organization is created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories.

Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally. NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S.

Fair Credit Reporting Act

The Fair Credit Reporting Act (FCRA, 15 U.S.C. 1681) regulates consumer reporting agencies and the use of consumer reports, such as credit reports, MIB records and investigative reports, including in insurance underwriting.

• When an insurer requests an investigative consumer report, it must disclose that to the consumer within 3 days of the request
• When an insurer takes adverse action based on a consumer report, it must notify the consumer and identify the reporting agency. The consumer then has 60 days to request a free copy of the report and may dispute inaccurate information

Privacy Act of 1974

The federal Privacy Act of 1974 governs how federal agencies handle personal information. It does not apply to private insurers. An insurer’s use of an applicant’s personal information is governed by the FCRA, the Gramm-Leach-Bliley Act and state insurance privacy law.

In states that adopted the NAIC’s Insurance Information and Privacy Protection Model Act, an authorization to collect personal information signed with an application is valid for no more than 30 months for life, health or disability insurance and one year for property or casualty insurance.

Telemarketing

The National Do Not Call Registry is a list of telephone numbers whose owners do not want to receive telemarketing calls. Telemarketers may not call registered numbers without the person’s permission or an established business relationship, and unsolicited sales calls:

• May be made only between 8 a.m. and 9 p.m. in the recipient’s local time
• Must disclose the caller’s identity, the company the caller represents and that the purpose is a sale

CAN-SPAM

A commercial email must:

• Be identified clearly as an advertisement
• Carry accurate header information and a subject line that is not deceptive
• Include the sender’s valid physical postal address
• Offer a way to opt out, and the sender must honor an opt-out within 10 business days

Insurance guaranty association

Every state has a property and casualty insurance guaranty association that pays covered claims when a member insurer becomes insolvent. Insurers licensed to write the covered lines in the state must belong to it, and it is funded by assessments on its members.

The Georgia Insurers Insolvency Pool pays a covered first-party claim, or a third-party claim other than workers’ compensation, up to the policy limit or $300,000, whichever is less (O.C.G.A. § 33-36-3).

Auto insurance state minimum

A state’s financial responsibility law sets the minimum liability an auto policy must carry, written as a split limit: the first number is bodily injury liability per person, the second bodily injury liability per accident, and the third property damage liability per accident, each in thousands of dollars.

Georgia’s minimum auto liability limits are $25,000 bodily injury per person, $50,000 bodily injury per accident and $25,000 property damage, or 25/50/25 (Ga. Office of Insurance and Safety Fire Commissioner).