Georgia House of Representatives - 1995/1996 Sessions

HB 1439 - Motor vehicle insurance; cancellation or nonrenewal

Page Numbers - 1/ 2/ 3

1. Heard  89th            2. Hugley  133rd           3. Culbreth  132nd


House Comm: Ins        /                Senate Comm: I&L        /                                   
House Vote: Yeas 106   Nays 1           Senate Vote: Yeas 43  Nays 0                                
              ----------------------------------------                                              
               House          Action         Senate                                                 
              ----------------------------------------                                              
              1/25/96  Read 1st Time         2/15/96                                                
              1/26/96  Read 2nd Time         2/28/96                                                
              2/6/96   Favorably Reported    2/27/96                                                
              Sub      Committee Amend/Sub                                                          
              2/14/96  Read 3rd Time         3/14/96                                                
              2/14/96  Passed/Adopted        3/14/96                                                
              CS       Comm/Floor Amend/Sub                                                         
              3/22/96  Sent to Governor                                                             
              4/9/96   Signed by Governor                                                           
              842      Act/Veto Number                                                              
              7/1/96   Effective Date                                                               
              ----------------------------------------                                              
                                                                                                    
Code Sections amended: 33-24-45, 33-24-46                                                           


HB 1439                                     LC 10 1623S
               The House Committee on Insurance offers the
      following substitute to HB 1439:



                        A BILL TO BE ENTITLED
                               AN ACT


  1- 1  To amend Article 1 of Chapter 24 of Title 33 of the Official
  1- 2  Code of Georgia Annotated, relating to general provisions
  1- 3  applicable to insurance generally, so as to change certain
  1- 4  provisions relating to the cancellation or nonrenewal of
  1- 5  automobile or motorcycle policies and the cancellation or
  1- 6  nonrenewal of certain property insurance policies; to change
  1- 7  certain provisions relating to termination of an agency
  1- 8  relationship as a valid reason for failure to renew a
  1- 9  policy; to provide that certain provisions shall not abridge
  1-10  or supersede contractual rights of the terminated agency or
  1-11  the insurer, provided that these contractual rights do not
  1-12  adversely affect the privilege of the named insured to apply
  1-13  for renewal through another agent of the insurer; to change
  1-14  the form of the notice of nonrenewal based upon the
  1-15  termination of an agency relationship; to repeal conflicting
  1-16  laws; and for other purposes.

  1-17       BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:

                         SECTION 1.

  1-18  Article 1 of Chapter 24 of Title 33 of the Official Code of
  1-19  Georgia Annotated, relating to general provisions applicable
  1-20  to insurance generally, is amended by striking in its
  1-21  entirety paragraph (6) of subsection (e) of Code Section
  1-22  33-24-45, relating to the cancellation or nonrenewal of
  1-23  automobile or motorcycle policies, and inserting in lieu
  1-24  thereof a new paragraph (6) to read as follows:

  1-25        "(6)(A) Notwithstanding paragraph (3) of this
  1-26        subsection, the termination of an agency relationship
  1-27        shall be valid as a reason for a failure to renew a
  1-28        policy.  In such case, if the named insured wishes to
  1-29        retain the policy with the particular insurer, the
  1-30        insured may shall locate another agent of the insurer
  1-31        and apply for the policy with another agent of the
  1-32        insurer before the time at which the nonrenewal
  1-33        becomes effective.  Upon receipt of the application,
  1-34        the insurer shall treat the application as a renewal
  1-35        and not as an original writing. Nothing in this


                                 -1- (Index)

                                                 LC 10 1623S

  2- 1        subparagraph shall abridge or supersede contractual
  2- 2        rights of the terminated agency or the insurer,
  2- 3        provided that these contractual rights do not
  2- 4        adversely affect the privilege of the named insured to
  2- 5        apply for renewal through another agent of the
  2- 6        insurer.

  2- 7        (B) A notice of nonrenewal based upon the termination
  2- 8        of an agency relationship shall contain the provisions
  2- 9        of subparagraph (A) of this paragraph, in
  2-10        substantially the form which follows:

                          'NOTICE

  2-11          Your policy has not been renewed because your
  2-12          present agent no longer represents this insurer.
  2-13          You have the option of procuring coverage through
  2-14          your present agent or retaining this policy by
  2-15          applying through another agent of this insurer.
  2-16          Code Section 33-24-45 of the Official Code of
  2-17          Georgia Annotated provides that if you will locate
  2-18          another agent of this insurer and apply for this
  2-19          policy before the time at which the nonrenewal
  2-20          becomes effective, this insurer will treat the
  2-21          application as a renewal and not as an application
  2-22          for a new policy.'"

                         SECTION 2.

  2-23  Said article is further amended by striking in its entirety
  2-24  subsection (m) of Code Section 33-24-46, relating to the
  2-25  cancellation or nonrenewal of certain property insurance
  2-26  policies, and inserting in lieu thereof a new subsection (m)
  2-27  to read as follows:

  2-28      "(m)(1) Notwithstanding subsection (j) of this Code
  2-29      section, the termination of an agency relationship shall
  2-30      be valid as a reason for a failure to renew a policy.
  2-31      In such case, if the named insured wishes to retain the
  2-32      policy with the particular insurer, the insured may
  2-33      shall locate another agent of the insurer and apply for
  2-34      the policy with another agent of the insurer before the
  2-35      time at which the nonrenewal becomes effective.  Upon
  2-36      receipt of the application, the insurer shall treat the
  2-37      application as a renewal and not as an original writing.
  2-38      Nothing in this paragraph shall abridge or supersede
  2-39      contractual rights of the terminated agency or the
  2-40      insurer, provided that these contractual rights do not



                                 -2- (Index)

                                                 LC 10 1623S

  3- 1      adversely affect the privilege of the named insured to
  3- 2      apply for renewal through another agent of the insurer.

  3- 3      (2) A notice of nonrenewal based upon the termination of
  3- 4      an agency relationship shall contain the provisions of
  3- 5      paragraph (1) of this subsection, in substantially the
  3- 6      form which follows:

                          'NOTICE

  3- 7        Your policy has not been renewed because your present
  3- 8        agent no longer represents this insurer.  You have the
  3- 9        option of procuring coverage through your present
  3-10        agent or retaining this policy by applying through
  3-11        another agent of this insurer.  Code Section 33-24-46
  3-12        of the Official Code of Georgia Annotated provides
  3-13        that if you will locate another agent of the insurer
  3-14        and apply for this policy before the time at which the
  3-15        nonrenewal becomes effective, this insurer will treat
  3-16        the application as a renewal and not as an application
  3-17        for a new policy.'"

                         SECTION 3.

  3-18  All laws and parts of laws in conflict with this Act are
  3-19  repealed.

























                                 -3- (Index)