Georgia Licenses Beyond the Agent
Georgia’s licensing chapter, Article 1 of Chapter 23 of Title 33, also licenses agencies, counselors, adjusters and surplus lines brokers.
Agent responsibility (O.C.G.A. §§ 33-23-26, 33-23-19, 33-23-3)
Certificates of authority from insurers
A license alone does not let an agent represent any particular insurer. After the license issues, the agent must obtain a certificate of authority from each insurer the agent will represent (Ga. Comp. R. & Regs. r. 120-2-3-.07(6)), and each insurer must obtain one for each agent who sells for it (§ 33-23-26(a)). It is Georgia’s term for an appointment.
The insurer submits the request within 15 days from the date the agency contract is executed or the first application is submitted, affirming that it has investigated the agent’s character, including a criminal background check (r. 120-2-3-.21(1)-(2)). The certificate is effective as soon as the insurer submits the request, but a new applicant’s first certificate does not take effect until the license is granted (§ 33-23-26(a)).
When an insurer ends its relationship with an agent, it must notify the Commissioner within 30 days after the termination takes effect, whatever the reason, and provide more information if the Commissioner asks (§ 33-23-26(d), (f)).
An agent with no certificate of authority on file from at least one insurer has an inactive license. The agent may not sell, solicit or negotiate insurance while inactive, but must still meet continuing education requirements (§ 33-23-19). Suspension or inactive status does not take away a right, acquired by contract, to commissions on policies written before (§ 33-23-20(a)).
Agencies
A business entity that sells, solicits or negotiates insurance must hold an agency license, which does not replace the individual license of anyone who sells for it (§ 33-23-4(a)(3); r. 120-2-3-.05(8)). Each agency location must have at least one licensed agent whose primary place of business is that location (r. 120-2-3-.05(5)). The agency license is renewed biennially (§ 33-23-3(a)). A person whose license has been refused, revoked or suspended may not own an agency, serve as an officer or director of an incorporated agency, or own 10 percent or more of one (§ 33-23-3(c)).
License maintenance (O.C.G.A. § 33-23-18; Ga. Comp. R. & Regs. r. 120-2-3-.09, .15)
The licensing examination
The passing grade on Georgia’s licensing examinations is 70 percent (r. 120-2-3-.09(2)). An applicant who scores 60 percent and has a licensed agent sponsor may be granted a temporary license on an insurer’s written request (r. 120-2-3-.09(2)(a)). After passing, the applicant must apply within 12 months or take the examination again (r. 120-2-3-.09(4)).
Continuing education
Resident agent, adjuster and counselor licenses, other than temporary and probationary licenses, are issued for two years and expire on the last day of the licensee’s birth month (§ 33-23-18(a)). Each two-year period, the licensee completes continuing education (CE) before the license expires (r. 120-2-3-.15(1)):
| Licensee | CE hours each two-year period | Of which in ethics |
|---|---|---|
| Licensed less than 20 years | 24 | 3 |
| Continually licensed 20 years or longer | 20 | 3 |
| Holder of a listed designation, such as CPCU, CIC, CISR, CRM or AAI | 12 | 3 |
The designation reduction is in r. 120-2-3-.19(4). Also:
- Excess hours carry forward to the next period, up to 50 percent of the two-year requirement (r. 120-2-3-.15(5)). Extra ethics hours carry forward only as general hours, not toward the next period’s ethics requirement (r. 120-2-3-.15(6)).
- An agent licensed for property who will sell National Flood Insurance Program policies must complete a one-time 3-hour flood course, which counts toward the CE total and may count toward ethics (r. 120-2-3-.15(2)(e)).
Nonactive license
An agent licensed for ten consecutive years or more who now only collects renewal or deferred commissions may hold a nonactive license, exempt from CE and from keeping a certificate of authority, but needs the Commissioner’s approval to sell again (§§ 33-23-4(f), 33-23-18(e); r. 120-2-3-.30).
License denial, revocation, suspension and refusal to renew (O.C.G.A. §§ 33-23-21 through 33-23-23, 33-23-43.10)
Grounds
Section 33-23-21 lists the grounds on which the Commissioner may refuse, suspend or revoke a license, and it applies to Chapter 23 licenses generally, not only agents’. Beyond the familiar grounds of fraud, misappropriation and false applications, it includes:
- Holding a license, not in good faith, to secure rebates, commissions or controlled business, or otherwise not carrying on business in good faith (§ 33-23-21(9)-(10))
- Knowingly participating in writing substantial overinsurance of a property risk (§ 33-23-21(12))
- Failing or refusing, on written demand, to pay over money belonging to an insurer, agent, agency, applicant, beneficiary or insured (§ 33-23-21(13))
- A felony or crime involving moral turpitude, where “conviction” includes a guilty plea even if the conviction is appealed, and first offender treatment or a withheld adjudication still counts (§ 33-23-21(15)-(16))
- Discipline by any other licensing authority, in any business or profession, or loss of any license or permit affecting the ability to transact insurance (§ 33-23-21(18), (21))
A probationary license stands outside this process. The Commissioner may issue one to any applicant for 3 to 24 months, and may revoke it immediately for cause at any time without a hearing (§ 33-23-14(a)-(b)).
Procedure
The Commissioner may inquire into a licensee’s conduct on the Commissioner’s own motion, and must do so on a written complaint signed by a Georgia citizen (§ 33-23-36). When the Commissioner acts against a license, notice goes to the licensee and to each insurer or agent the licensee represents, and the hearing and any appeal follow Chapter 2 of Title 33 (§ 33-23-22).
Applying again
A person whose license or application has been refused or revoked may not apply for a license as an agent, agency, limited subagent, surplus lines broker, counselor or adjuster for five years from the effective date of that action, or, if it was taken to court, from the final court order upholding it (§ 33-23-23(a)). Even then, the application may be refused unless the applicant shows good cause (§ 33-23-23(b)). Surrendering a license under a written consent order has the same effect as revocation, five-year bar included (§ 33-23-23(c)). The Commissioner has discretion to let a refused applicant reapply after not less than one year (§ 33-23-23(d)).
Public adjusters
Public adjusters have their own list of grounds, which includes misappropriating or converting money required to be held in a fiduciary capacity and materially misrepresenting, with intent to deceive, one’s status as a public adjuster. The licensee is entitled to notice and a hearing under Chapter 2 (§ 33-23-43.10).
Counselor license (O.C.G.A. § 33-23-5)
A counselor is paid for advice about insurance, not for selling it. A counselor who receives compensation for this service may not receive compensation from any other source on or relating to the same transaction (§ 33-23-1(a)(6)). A “transaction” means coverage or services in the same line or subline. For commercial risks, ancillary services beyond acquiring the coverage, such as risk analysis and insurance audits, are a separate transaction if disclosed in writing and approved in advance by the insured (§ 33-23-1.1).
To be licensed, a counselor must:
- Be at least 18 years old (§ 33-23-5(a)(1))
- Have five years’ experience as an agent, subagent or adjuster or in some other phase of the insurance business, or teaching or educational qualifications the Commissioner finds sufficient (§ 33-23-5(a)(5); r. 120-2-3-.28(3))
- Pass the counselor examination unless exempt; CPCU, AAI and CIC holders are exempt from the property and casualty counselor examination (r. 120-2-3-.28(5))
- File a $5,000 bond (§ 33-23-7; r. 120-2-3-.18(1)(b))
Adjuster license (O.C.G.A. § 33-23-5; Ga. Comp. R. & Regs. r. 120-2-3-.25)
Who must be licensed
An adjuster must be licensed as an independent adjuster or a public adjuster (§ 33-23-4(a)(4)). The definition of adjuster leaves out those who adjust life, marine or annuity claims, and an agent or salaried employee of an agent or insurer adjusting losses under its own policies (§ 33-23-1(a)(1)). An agent may also, from time to time and as authorized by an insurer it represents, investigate and report on that insurer’s claims without an adjuster license (§ 33-23-29(a)).
Georgia issues four adjuster licenses (r. 120-2-3-.06(3)(a)):
| License | Scope | Represents |
|---|---|---|
| Adjuster | Property and casualty | The insurer or an adjusting firm, never the insured |
| Public adjuster | Property and casualty | The insured, never the insurer |
| Workers’ compensation adjuster | Workers’ compensation only | Never the insured |
| Crop hail adjuster | Crop hail and multi-peril crop | Never the insured |
An adjuster licensed as both an independent and a public adjuster may never represent both the insurer and the insured in the same transaction (§ 33-23-43(a)).
Resident adjusters
An adjuster applicant must be at least 18 (§ 33-23-5(a)(1)) and must complete an approved prelicensing course (§ 33-23-5(a)(6)). Under the rules, a new applicant submits fingerprints, completes an approved property and casualty prelicensing course, passes the examination within 12 months of finishing the course, and applies within 12 months of passing; CPCU holders are exempt from the course and the examination (r. 120-2-3-.25(1)). A nonresident licensed as an adjuster in the home state receives a Georgia nonresident license without an examination (§ 33-23-29(c)(1)).
Public adjusters
No one may act or hold out as a public adjuster in Georgia without a public adjuster license. An attorney licensed in Georgia acting for an insured, and a property and casualty agent acting for an insurer on a policy the agent issued, do not need one (§ 33-23-43.1). A public adjuster applicant meets the same course and examination requirements as an adjuster and files a $5,000 bond (§ 33-23-6; r. 120-2-3-.18(1)(a), .25(2)). At the Commissioner’s discretion, a public adjuster may also have to file proof of financial responsibility, such as a surety bond or professional liability policy, covering judgments insureds obtain for the adjuster’s errors, omissions, fraud, negligence or unfair practices. It is a continuing condition of the license and is in addition to the bond (§ 33-23-43.4).
The public adjuster’s relationship with the insured is controlled closely:
- The contract. It must be on a form the Commissioner has approved, titled “Public Adjuster Contract,” state the fee, and display “WE REPRESENT THE INSURED ONLY” in 12-point boldface type (§ 33-23-43.2(a)-(b)). The insured may rescind it by written notice mailed or delivered within three business days after signing, and anything of value the insured gave must be returned within 15 business days after the adjuster receives the rescission. Before contacting the insurer, the adjuster must give it a notification letter signed by the insured (§ 33-23-43.2(d)).
- The fee. The fee may be hourly, flat or a percentage, but may not be unreasonable, and the total may not exceed 33.3 percent of the insurance settlement. If the insurer pays the policy limit, or commits in writing to pay it, within 72 hours after the loss is reported, the adjuster may not take a percentage fee and is limited to reasonable compensation for time and expenses (§ 33-23-43.3(a)-(b)). Separately, knowingly charging more than reasonable time-and-expense compensation when the insurer pays or commits to pay all policy limits within three business days of the report is a misdemeanor (§ 33-23-43(c)(8), (e)).
- Claim checks. Every claim payment must name the insured as a payee and require the insured’s endorsement, unless each insured authorizes the adjuster in writing to endorse it for deposit only into the adjuster’s escrow or trust account (§ 33-23-43.3(c), (e)).
- Conduct. A public adjuster owes loyalty to the client alone (§ 33-23-43.9(a)). Like every adjuster, a public adjuster may not solicit during a natural disaster for which the Governor has proclaimed a state of emergency, and may solicit only between 8 a.m. and 10 p.m. on weekdays and Saturdays and between noon and 10 p.m. on Sundays (§ 33-23-43.8(a)-(b)). The adjuster may not take part in repairing the damaged property or take referral fees (§ 33-23-43.8(g), (l)). Knowingly soliciting an insured during a loss-producing occurrence defined in the policy, falsely telling insureds they must hire an adjuster, or advertising or promising to pay or rebate any part of a deductible as an inducement is a misdemeanor (§ 33-23-43(c)(1), (4), (6), (e)).
- Records. Records of each transaction are kept in Georgia for at least five years after it ends (§ 33-23-43.5(b)).
Workers’ compensation and crop hail adjusters
A workers’ compensation adjuster applicant must hold the Certified Workers’ Compensation Professional (CWCP) or CPCU designation or otherwise qualify under the rules (r. 120-2-3-.25(3)(b)). For CE, the workers’ compensation adjuster may take 20 hours through the State Board of Workers’ Compensation or meet the regular property and casualty requirement, and one licensed only as a workers’ compensation adjuster has no ethics requirement (r. 120-2-3-.15(2)(c)). A crop hail adjuster applicant must complete an approved proficiency testing program unless exempt, as CPCU holders are (r. 120-2-3-.25(4)(b)).
Emergency adjusters
After a catastrophe, unlicensed adjusters may work here temporarily:
- Disasters declared by GEMA. The insurer electronically files a list of its unlicensed salaried staff adjusters and out-of-state licensees who will handle the claims, and receives Disaster Re-entry Permits that it assigns to them for no more than 60 days (r. 120-2-3-.25(5)(a)).
- Other disasters. An adjuster licensed in another state may work in Georgia for no more than 60 days after notifying the department before entering the state. Staying longer requires a Georgia license (r. 120-2-3-.25(5)(c)).
The statute adds two exemptions. A nonresident independent adjuster needs no Georgia license to adjust a single loss, or losses arising from one catastrophe (§ 33-23-29(b)(1)). A nonresident who regularly adjusts in another state, and is licensed there if that state requires it, may do emergency adjustment work for up to 60 days for an employer that is, or regularly employs, a Georgia-licensed adjuster, if the employer notifies the Commissioner in writing at once (§ 33-23-29(b)(2)).
Surplus lines broker (O.C.G.A. § 33-23-37)
The license
A surplus lines broker places risks with nonadmitted insurers (§ 33-5-20.1(8)). A resident agent licensed for property and casualty insurance whom the Commissioner finds competent and trustworthy may be licensed as one, and losing the agent license cancels the broker license (§ 33-23-37(b); r. 120-2-3-.20(2)). The applicant passes the surplus lines examination unless licensed as a surplus lines broker in the home state or holding the CPCU designation (§ 33-23-37(b)(5); r. 120-2-3-.20(4)). The license is issued for two years and expires on the last day of the birth month (§ 33-23-37(b)(3)).
Before the license issues or renews, the broker files a $50,000 bond with a corporate surety, guaranteeing that the broker will place insurance only with eligible insurers, remit the surplus lines tax promptly, account for premiums collected and follow Title 33. The bond may not be terminated without 30 days’ written notice to the Commissioner (§ 33-23-37(b)(4)).
Placing surplus lines business
Surplus lines insurance may be placed only when all of these conditions are met (§ 33-5-21(a)):
- It is placed through a licensed surplus lines broker.
- The insurer is eligible. A U.S. insurer must be authorized to write the coverage in its home state and have capital and surplus of at least the greater of Georgia’s minimum or $15 million; the Commissioner may accept less, but never less than $4.5 million. A U.S. group of individual underwriters qualifies with a trust fund of at least $10 million, and an alien insurer must appear on the NAIC’s Quarterly Listing of Alien Insurers (§ 33-5-25(b)(1)).
- The insured or the insured’s agent has tried and failed to obtain satisfactory coverage from authorized insurers. The search is not required for a large “exempt commercial purchaser” that, after the broker discloses that admitted coverage may be available, asks in writing for the placement (§ 33-5-21(b)).
- The coverage is not personal private passenger auto or residential dwelling property coverage, unless that coverage cannot be obtained from an authorized insurer.
Each policy carries the broker’s name and a legend stating that it is registered and delivered as surplus line coverage under the Surplus Line Insurance Law, Chapter 33-5 (§ 33-5-26(a)). A policy with an annual premium of $5,000 or less must include a standard disclosure form explaining surplus lines insurance (§ 33-5-26(b)). Each quarter, by the fifteenth of April, July, October and January, the broker files an affidavit of the business placed and remits a 4 percent tax on the premiums (§§ 33-5-29(a), 33-5-31(a)).
A retail agent licensed in Georgia for the kind of insurance involved can bring a risk the admitted market declined to a surplus lines broker, who may place it and share compensation with the agent (§ 33-5-24). The agent needs no certificate of authority for that placement and is not acting as a subagent (§§ 33-23-26(h), 33-23-1(a)(16)(B)).
The Commissioner must revoke the license of a broker who fails to file the quarterly affidavit or remit the tax. A revoked broker cannot be relicensed for five years, and not until all penalties and back taxes are paid (§ 33-5-23(a), (d)).
Lesson summary
- An agent needs a certificate of authority from each insurer represented; the insurer files within 15 days and reports a termination within 30 days.
- Resident agent, adjuster and counselor licenses run two years and expire on the last day of the birth month. CE is 24 hours (20 after 20 years, 12 with a listed designation), 3 of them in ethics, with up to 50 percent carried forward.
- Section 33-23-21 governs refusal, suspension and revocation of Chapter 23 licenses generally. A refused or revoked licensee generally waits five years to reapply, and surrender under a consent order counts as revocation.
- A counselor is paid for advice, may not take compensation from another source on the same transaction, and needs five years’ experience or equivalent qualifications and a $5,000 bond.
- Each adjuster license serves one side: adjusters, workers’ compensation adjusters and crop hail adjusters work for insurers, and public adjusters for insureds. Disaster permits and notice allow up to 60 days of unlicensed work.
- Public adjusters need a $5,000 bond and may need proof of financial responsibility. The insured can rescind their contract within three business days, and their fee is capped at 33.3 percent of the settlement.
- A surplus lines broker is a licensed property and casualty agent with a $50,000 bond who places risks with eligible nonadmitted insurers after the admitted market declines them, and files quarterly with a 4 percent tax.