HB 375 - Ins premium finance agreement; renewed or extended policy
Georgia House of Representatives - 1995/1996 Sessions
HB 375 - Ins premium finance agreement; renewed or extended policy
Page Numbers - 1/ 2/ 3/ 4/ 5
1. Williams 114th 2. Culbreth 132nd
House Comm: Ins / Senate Comm: I&L /
House Vote: Yeas 170 Nays 1 Senate Vote: Yeas 49 Nays 0
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House Action Senate
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1/25/95 Read 1st Time 2/3/95
1/26/95 Read 2nd Time 2/15/95
2/1/95 Favorably Reported 2/14/95
2/2/95 Read 3rd Time 3/8/95
2/2/95 Passed/Adopted 3/8/95
FA Comm/Floor Amend/Sub FA
3/13/95 Amend/Sub Disagreed To
3/14/95 Insists 3/14/95
3/14/95 Conf Comm Appointed 3/14/95
3/17* Conf Comm Rep Adopted 3/17*
3/31/95 Sent to Governor
4/20/95 Signed by Governor
460 Act/Veto Number
7/1/95 Effective Date
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Senate Rejects Conference Committee Report #1 and Appoints Conference Committee
#2 3/17/95
House Appoints Conference Committee #2 3/17/95
House and Senate Adopt Conference Committee Report #2 3/17/95
Code Sections amended: 33-22-8, 33-22-10, 33-22-12.1, 33-22-13
HB 375 HB 375/AP
H. B. No. 375 (AS PASSED HOUSE AND SENATE)
By: Representatives Williams of the 114th and Culbreth of
the 132nd
A BILL TO BE ENTITLED
AN ACT
1- 1 To amend Chapter 22 of Title 33 of the Official Code of
1- 2 Georgia Annotated, relating to insurance premium finance
1- 3 companies, so as to allow an additional premium to a policy
1- 4 or a renewed or extended policy to be financed with the same
1- 5 insurance premium finance company without the execution of a
1- 6 new premium finance agreement; to provide for an addendum to
1- 7 a premium finance agreement to be mailed or delivered to the
1- 8 insured; to allow the imposition of a returned check fee for
1- 9 each installment payment check returned by a financial
1-10 institution as a result of insufficient funds; to provide
1-11 the amount of such fee; to revise provisions relative to the
1-12 notification of the insured by the premium finance company
1-13 of cancellation of the policy; to require premium finance
1-14 companies to provide written disclosure to insureds of the
1-15 existence within a premium finance agreement of any power of
1-16 attorney enabling such premium finance company to cancel any
1-17 insurance contract listed in the agreement; to provide for
1-18 the form of such notice; to provide for a conclusive
1-19 presumption of compliance by the premium finance company
1-20 with certain statutory requirements; to relieve the insurer
1-21 from liability under certain circumstances; to provide for
1-22 editorial revision; to repeal conflicting laws; and for
1-23 other purposes.
1-24 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION 1.
1-25 Chapter 22 of Title 33 of the Official Code of Georgia
1-26 Annotated, relating to insurance premium finance companies,
1-27 is amended by striking Code Section 33-22-8, relating to the
1-28 form, contents, execution, and delivery of premium finance
1-29 agreements, and inserting in lieu thereof a new Code Section
1-30 33-22-8 to read as follows:
1-31 "33-22-8. (Index)
1-32 (a) A premium finance agreement shall:
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HB 375/AP
2- 1 (1) Be dated and signed by or on behalf of the insured,
2- 2 and the printed portion of the agreements agreement
2- 3 shall be in at least eight-point type;
2- 4 (2) Contain the name and place of business of the
2- 5 insurance agent or insurance broker negotiating the
2- 6 related insurance contract, the name and residence of
2- 7 place of business of the insured as specified by him or
2- 8 her, the name and place of business of the premium
2- 9 finance company to which payments are to be made, a
2-10 description of the insurance contracts involved, and the
2-11 amount of the premium for the contracts; and
2-12 (3) Set forth the following items, where applicable:
2-13 (A) The total amount of the premiums;
2-14 (B) The amount of the down payment;
2-15 (C) The principal balance (the difference between
2-16 subparagraphs (A) and (B) of this paragraph);
2-17 (D) The amount of the service charge, including the
2-18 additional charge as provided in Code Section 33-22-9;
2-19 (E) The balance payable by the insured (the sum of
2-20 subparagraphs (C) and (D) of this paragraph); and
2-21 (F) The number of payments required, the amount of
2-22 each payment expressed in dollars, and the due date or
2-23 period of payment.
2-24 (b) The items set out in paragraph (3) of subsection (a)
2-25 of this Code section need not be stated in the sequence or
2-26 order in which they appear in such clause, and additional
2-27 items may be included to explain the computations made in
2-28 determining the amount to be paid by the insured.
2-29 (c) The licensee or the insurance agent or insurance
2-30 broker shall deliver to the insured or mail to him the
2-31 insured at his or her address shown in the agreement a
2-32 complete copy of the agreement.
2-33 (d) Whenever an insurance policy has been financed
2-34 pursuant to this chapter, an additional premium to such
2-35 policy or a renewal or extension of such policy may be
2-36 financed with the same premium finance company without the
2-37 execution of a new premium finance agreement. The premium
2-38 finance company shall mail or deliver to the insured an
2-39 addendum to the existing premium finance agreement in the
2-40 same manner as provided in subsection (c) of this Code
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HB 375/AP
3- 1 section, and such addendum shall contain the information
3- 2 required under subsection (a) of this Code section."
SECTION 2.
3- 3 Said chapter is further amended by striking Code Section
3- 4 33-22-10, relating to delinquency charges, and inserting in
3- 5 lieu thereof a new Code Section 33-22-10 to read as follows:
3- 6 "33-22-10. (Index)
3- 7 (a) A premium finance agreement may provide for the
3- 8 payment by the insured of a delinquency charge ranging in
3- 9 amount from $1.50 to a maximum of 5 percent of the
3-10 delinquent payment on any payment which is in default for
3-11 a period of five days or more. If the default results in
2 otic the cancellation of any insurance contract listed in the
3-13 agreement, the agreement may provide for the payment by
3-14 the insured of a cancellation charge of $15.00 in the case
3-15 of a commercial insurance premium finance agreement or
3-16 $5.00 in the case of a consumer insurance premium finance
3-17 agreement.
3-18 (b) A premium finance agreement may provide for a returned
3-19 check fee of $20.00 for each installment payment check
3-20 returned by the financial institution as the result of
3-21 insufficient funds."
SECTION 3.
3-22 Said chapter is further amended by adding immediately
3-23 following Code Section 33-22-12 a new Code Section
3-24 33-22-12.1 to read as follows:
3-25 "33-22-12.1. (Index)
3-26 Whenever a premium finance company executes a premium
3-27 finance agreement relative to a personal or family-type
3-28 policy of insurance, it shall mail or deliver to the
3-29 insured a copy of the agreement as provided in subsection
3-30 (c) of Code Section 33-22-8 and a written notice which
3-31 clearly discloses to the insured the existence of the
3-32 power of attorney contained in such agreement. The written
3-33 notice shall substantially comply with the following form:
'NOTICE
3-34 Your insurance policy premiums have been financed and
3-35 are payable on a monthly payment basis. If you do not
3-36 pay each payment on or before the date due or within 15
3-37 days of the date due, we have the right to CANCEL your
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HB 375/AP
4- 1 insurance policy or policies which are financed under
4- 2 the premium finance agreement. To avoid cancellation of
4- 3 your policy or policies, MAKE YOUR PAYMENTS ON TIME.'"
SECTION 4.
4- 4 Said chapter is further amended by striking subsection (c)
4- 5 of Code Section 33-22-13, relating to the procedure for
4- 6 cancellation of the insurance contract upon default, and
4- 7 inserting in lieu thereof a new subsection (c) to read as
4- 8 follows:
4- 9 "(c)(1) After expiration of such ten-day period, the
4-10 premium finance company may thereafter in the name of
4-11 the insured cancel such insurance contract or contracts
4-12 by mailing or delivering to the insurer a notice of
4-13 cancellation; and the insurance contract shall be
4-14 canceled as if the notice of cancellation had been
4-15 submitted by the insured, himself, but without requiring
4-16 the return of the insurance contract or contracts. The
4-17 premium finance company, when mailing or delivering
4-18 notice to the insurance company to cancel the policy,
4-19 shall simultaneously mail notice to the insured
4-20 notifying him or her of the action taken. Such notice
4-21 to the insured shall contain the date and time the
4-22 policy is to be canceled, which date shall not be prior
4-23 to be after the date of mailing of such notice, and
4-24 shall inform the insured that any payment received after
4-25 the mailing or delivery of notice to the insurance
4-26 company to cancel the policy will not reinstate the
4-27 policy. The notice may contain information to the
4-28 effect that the premium finance company will make a
4-29 request to the insurance company to reinstate the
4-30 policy. Language sufficiently clear and specific so
4-31 that a person of average intelligence can understand the
4-32 action being taken by the premium finance company shall
4-33 be used. The notice to the insured required by this
4-34 Code section subsection shall be mailed to the last
4-35 address of record of the insured and shall be dispatched
4-36 by at least first-class mail and receiving the receipt
4-37 provided by the United States Postal Service or such
4-38 other evidence of mailing as prescribed or accepted by
4-39 the United States Postal Service.
4-40 (2) The receipt of the notice of cancellation provided
4-41 in paragraph (1) of this subsection by the insurer shall
4-42 create a conclusive presumption that the premium finance
4-43 company has fully complied with all the requirements of
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HB 375/AP
5- 1 this Code section, that the insurer is entitled to rely
5- 2 on such presumption, and that the cancellation of the
5- 3 insurance contract or contracts is concurred in and
5- 4 authorized by the insured. No liability of any nature
5- 5 whatsoever shall be imposed upon the insurer as a result
5- 6 of the failure by the insured to receive the notice of
5- 7 the action taken required by paragraph (1) of this
5- 8 subsection or as a result of the failure of the
5- 9 insurance premium finance company to comply with any of
5-10 the requirements of this Code section."
SECTION 5.
5-11 All laws and parts of laws in conflict with this Act are
5-12 repealed.
H. B. No. 375
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Office of the Clerk of the House
Robert E. Rivers, Jr., Clerk of the House
Last Updated on 01/02/97