Georgia House of Representatives - 1995/1996 Sessions

HB 599 - Special Insurance Fraud Fund; establish

Page Numbers - 1/ 2/ 3

Code Sections - 33-1-17

1. Towery  30th           2. Ehrhart  36th           3. Irvin  45th
4. Evans  28th            5. Sauder  29th


House Comm: Ins        /                Senate Comm:            /                                   
House Vote: Yeas       Nays             Senate Vote: Yeas     Nays                                  
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               House          Action         Senate                                                 
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              2/6/95   Read 1st Time                                                                
              2/7/95   Read 2nd Time                                                                
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Code Sections amended:                                                                              


HB 599                                            LC 15 4072






                        A BILL TO BE ENTITLED
                               AN ACT


  1- 1  To amend Chapter 1 of Title 33 of the Official Code of
  1- 2  Georgia Annotated, relating to general provisions regarding
  1- 3  insurance, so as to provide for legislative findings; to
  1- 4  provide for the establishment of the Special Insurance Fraud
  1- 5  Fund; to provide for the purposes of the fund; to provide
  1- 6  for the submission of an annual budget relative to the cost
  1- 7  of investigating and prosecuting insurance fraud; to provide
  1- 8  for assessments against insurers; to provide a formula for
  1- 9  assessments; to provide for penalties and interest relative
  1-10  to assessments; to authorize rules and regulations; to
  1-11  authorize appropriations for certain purposes relative to
  1-12  insurance fraud; to provide for the sharing of information
  1-13  relative to the investigation of insurance fraud; to provide
  1-14  for immunity for certain insurers and their agents and
  1-15  employees; to provide for the payment of certain expenses;
  1-16  to provide for the disposition of assessments under certain
  1-17  circumstances; to provide for matters relative to the
  1-18  foregoing; to repeal conflicting laws; and for other
  1-19  purposes.

  1-20       BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:

                         SECTION 1.

  1-21  Chapter 1 of Title 33 of the Official Code of Georgia
  1-22  Annotated, relating to general provisions regarding
  1-23  insurance, is amended by adding at the end thereof a new
  1-24  Code Section 33-1-17 to read as follows:

  1-25    "33-1-17. (Index)

  1-26    (a) The General Assembly finds that the proper and
  1-27    expeditious investigation and prosecution of fraudulent
  1-28    insurance acts are beneficial to the public interest.  The
  1-29    General Assembly further finds that proper investigation
  1-30    of fraudulent insurance acts, followed by vigorous
  1-31    prosecution of insurance fraud, will bring about lower
  1-32    insurance rates for the citizens of this state.




                                 -1- (Index)

                                                  LC 15 4072

  2- 1    (b) There is created a Special Insurance Fraud Fund for
  2- 2    the purpose of funding the investigation and prosecution
  2- 3    of insurance fraud.

  2- 4      (c)(1) The Commissioner shall submit to the General
  2- 5      Assembly on an annual basis a separate budget which sets
  2- 6      forth the cost and expense of funding the investigation
  2- 7      and prosecution of insurance fraud.

  2- 8      (2) There is imposed upon each foreign, alien, and
  2- 9      domestic insurance company doing business in the state
  2-10      an annual assessment under a formula to be established
  2-11      by regulation promulgated by the Commissioner.  The
  2-12      formula shall be calculated such that the total proceeds
  2-13      paid or collected from such assessments for any year
  2-14      shall not exceed the budget submitted by the
  2-15      Commissioner which sets forth the applicable annual cost
  2-16      and expense of the investigation and prosecution of
  2-17      insurance fraud in Georgia.  Such assessments may be
  2-18      measured by kind of company, kind of insurance, income,
  2-19      volume of transactions, or such other factors as the
  2-20      Commissioner determines appropriate. Assessments shall
  2-21      be due and payable for each calendar quarter at the
  2-22      times specified in subsection (b) of Code Section
  2-23      33-8-6.  Any insurance company which fails to report and
  2-24      pay any installment of such assessment shall be subject
  2-25      to penalties and interest as provided by subsection (d)
  2-26      of Code Section 33-8-6.  The Commissioner is authorized
  2-27      to provide by regulation for such other terms and
  2-28      conditions for the payment or collection of such
  2-29      assessments as may be necessary to ensure the proper
  2-30      payment and collection thereof.

  2-31      (3) The General Assembly may appropriate to the
  2-32      Insurance Department funds for the investigation of
  2-33      insurance fraud and for the funding of the prosecution
  2-34      of insurance fraud.  The Commissioner is authorized to
  2-35      use such funds for investigation of insurance fraud and
  2-36      to reimburse prosecuting attorneys for some or all of
  2-37      the costs of retaining assistant prosecuting attorneys
  2-38      to prosecute insurance fraud cases.

  2-39    (d) Insurers shall make personnel involved in
  2-40    investigating insurance fraud and any files relating to
  2-41    insurance fraud investigation available to the
  2-42    Commissioner, the Attorney General, local prosecuting
  2-43    officials, special prosecuting attorneys, or other law
  2-44    enforcement agencies as needed in order to further the


                                 -2- (Index)

                                                  LC 15 4072

  3- 1    investigation and prosecution of insurance fraud.
  3- 2    Information supplied by an insurer and contained in such
  3- 3    files shall upon receipt become part of the investigative
  3- 4    file and subject to the provisions of Code Section
  3- 5    50-18-72.  The insurer and its employees and agents shall
  3- 6    be entitled to immunity as provided in Code Section
  3- 7    33-1-16.

  3- 8    (e) Any expenses incurred by insurers as a result of this
  3- 9    Code section shall be defrayed by such insurers from their
  3-10    own funds and shall not be borne by the state or by the
  3-11    Special Insurance Fraud Fund.

  3-12    (f) In the event the General Assembly chooses not to make
  3-13    an appropriation for the Special Insurance Fraud Fund for
  3-14    fiscal year 1996 and only for fiscal year 1996, any moneys
  3-15    collected by the Commissioner pursuant to paragraph (2) of
  3-16    subsection (c) of this Code section shall be deposited in
  3-17    a fiduciary account, which shall also be an
  3-18    interest-bearing account.  The assets of this account
  3-19    shall be only to defray actual expenses of the Special
  3-20    Insurance Fraud Fund, including, but not limited to, the
  3-21    expenses of investigating insurance fraud and prosecuting
  3-22    insurance fraud."

                         SECTION 2.

  3-23  All laws and parts of laws in conflict with this Act are
  3-24  repealed.





















                                 -3- (Index)