Georgia House of Representatives - 1995/1996 Sessions

HB 46 - Insurance; redefine premium; penalty for cert cancellation

Page Numbers - 1/ 2/ 3

1. Williams  114th        2. Towery  30th            3. Harbin  113th


House Comm: Ins        /                Senate Comm:            /                                   
House Vote: Yeas       Nays             Senate Vote: Yeas     Nays                                  
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               House          Action         Senate                                                 
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              1/9/95   Read 1st Time                                                                
              1/10/95  Read 2nd Time                                                                
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Rules Suspended to Introduce                                                                        
                                                                                                    
Code Sections amended: 33-24-1, 33-24-46                                                            


HB 46                                             LC 15 3992






                        A BILL TO BE ENTITLED
                               AN ACT


  1- 1  To amend Chapter 24 of Title 33 of the Official Code of
  1- 2  Georgia Annotated, relating to insurance generally, so as to
  1- 3  revise the definition of premium; to authorize the charging
  1- 4  of a penalty with regard to the cancellation of policies
  1- 5  under certain conditions; to clarify what shall be
  1- 6  considered a nonrenewal with regard to certain property
  1- 7  insurance policies; to provide for matters relative to the
  1- 8  foregoing; to repeal conflicting laws; and for other
  1- 9  purposes.

  1-10       BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:

                         SECTION 1.

  1-11  Chapter 24 of Title 33 of the Official Code of Georgia
  1-12  Annotated, relating to insurance generally, is amended by
  1-13  striking paragraph (2) of Code Section 33-24-1, relating to
  1-14  definitions, and inserting in lieu thereof the following:

  1-15      "(2) 'Premium' means the consideration for insurance, by
  1-16      whatever name called. Any assessment, or any membership,
  1-17      policy, survey, inspection, service, or similar fee or
  1-18      charge in consideration for an insurance contract is
  1-19      deemed part of the premium.  The term 'premium' shall
  1-20      not include any amount deposited and held for the
  1-21      account of the insured which is returnable upon
  1-22      cancellation of the insurance contract and upon which no
  1-23      commission has been paid."

                         SECTION 2.

  1-24  Said chapter is further amended by striking paragraph (1) of
  1-25  subsection (c) of Code Section 33-24-44, relating to the
  1-26  cancellation of insurance policies generally, and inserting
  1-27  in lieu thereof a new paragraph (1) to read as follows:

  1-28      "(1) Any unearned premium which has been paid by the
  1-29      insured shall be refunded to the insured on a pro rata
  1-30      basis as provided in this Code section; provided,
  1-31      however, an insurer may impose a penalty charge as filed



                                 -1- (Index)

                                                  LC 15 3992

  2- 1      with and approved by the Commissioner when the
  2- 2      cancellation results from the failure of the insured to
  2- 3      discharge when due any of the obligations in connection
  2- 4      with the payment of premiums and when such insurer holds
  2- 5      a power of attorney signed by the insured assigning the
  2- 6      rights of cancellation to the insurer or a premium
              1/10/95  Read 2nd Time                                                                e
  2- 8      return does not accompany notice of cancellation, then
  2- 9      such return shall be made on or before the cancellation
  2-10      date either directly to the named insured or to the
  2-11      insured's agent of record. In the event the insurer
  2-12      elects to return such unearned premium to the insured
  2-13      via the insured's agent of record, such agent shall
  2-14      return the unearned premium to the insured either in
  2-15      person or by depositing such return in the mail within
  2-16      ten working days of receipt of the unearned premium, or
  2-17      within ten working days of notification from the insurer
  2-18      of the amount of return of unearned premium due, or on
  2-19      the effective date of cancellation, whichever is later.
  2-20      If the insured has an open account with the agent, such
  2-21      return of unearned premium may be applied to any
  2-22      outstanding balance and any remaining unearned premium
  2-23      shall be returned to the insured either in person or by
  2-24      depositing such return in the mail within ten working
  2-25      days of receipt of the unearned premium, or within ten
  2-26      working days of notification from the insurer of the
  2-27      amount of return of unearned premium due, or on the
  2-28      effective date of cancellation, whichever is later."

                         SECTION 3.

  2-29  Said chapter is further amended by striking paragraph (1) of
  2-30  subsection (b) of Code Section 33-24-46, relating to the
  2-31  cancellation or nonrenewal of certain property insurance
  2-32  policies, and inserting in lieu thereof a new paragraph (1)
  2-33  to read as follows:

  2-34      "(1) 'Nonrenewal' or 'nonrenewed' means a refusal by an
  2-35      insurer or an affiliate of an insurer to renew.  The
  2-36      failure of an insured to take timely action to
  2-37      effectuate the renewal of a policy after the insurer has
  2-38      manifested, prior to the expiration date of the policy,
  2-39      to the insured or the insured's agent its willingness to
  2-40      renew the policy shall not be considered a nonrenewal."






                                 -2- (Index)

                                                  LC 15 3992

                         SECTION 4.

  3- 1  All laws and parts of laws in conflict with this Act are
  3- 2  repealed.













































                                 -3- (Index)