HB 626 - Ins agents, subagents, counselors, & adjusters; licensing serv; costs
Georgia House of Representatives - 1995/1996 Sessions
HB 626 - Ins agents, subagents, counselors, & adjusters; licensing serv; costs
Page Numbers - 1/ 2/ 3/ 4/ 5/ 6/ 7/ 8
1. Heard 89th 2. Hugley 133rd 3. Shipp 38th
4. Bannister 77th 5. Rogers 20th 6. Bargeron 120th
House Comm: Ins / Senate Comm: I&L /
House Vote: Yeas 104 Nays 0 Senate Vote: Yeas Nays
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House Action Senate
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2/6/95 Read 1st Time 2/27/95
2/7/95 Read 2nd Time 3/10/95
2/17/95 Favorably Reported 3/9/95
Sub Committee Amend/Sub Sub
2/22/95 Read 3rd Time 3/15/95
2/22/95 Passed/Adopted
CS Comm/Floor Amend/Sub
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Tabled 3/15/95; Taken from Table 3/6/96; Recommitted 3/6/96
Code Sections amended: 33-23-11
HB 626 LC 15 4163S
A BILL TO BE ENTITLED
AN ACT
1- 1 To amend Title 33 of the Official Code of Georgia Annotated,
1- 2 relating to insurance, so as to repeal certain provisions
1- 3 relating to fees for certificates; to authorize the
1- 4 Commissioner to enter into certain agreements for services
1- 5 and to negotiate charges therefor; to provide for the
1- 6 payment of costs and fees for certain services; to revise
1- 7 the scope of coverage available under the Georgia Life and
1- 8 Health Insurance Guaranty Association; to revise the
1- 9 definition of member insurer with respect to such
1-10 association; to revise what shall be considered as control
1-11 or controlled with regard to producer controlled property
1-12 and casualty insurers; to require insurers domiciled in this
1-13 state to file reports with the Commissioner of Insurance and
1-14 other entities disclosing material acquisitions and
1-15 dispositions of assets or material nonrenewals,
1-16 cancellations, or revisions of ceded reinsurance agreements;
1-17 to provide for the time of filing such reports; to provide
1-18 for the confidential treatment of such reports; to provide
1-19 what acquisitions and dispositions of assets shall be
1-20 considered material; to provide what nonrenewals,
1-21 cancellations, or revisions shall be considered material; to
1-22 provide exemptions; to provide for matters relative to the
1-23 foregoing; to provide effective dates; to repeal conflicting
1-24 laws; and for other purposes.
1-25 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION 1.
1-26 Title 33 of the Official Code of Georgia Annotated, relating
1-27 to insurance, is amended by striking Code Section 33-23-11,
1-28 relating to the issuance and contents of licenses and
1-29 display certificates for agents, subagents, counselors, or
1-30 adjusters, and inserting in lieu thereof a new Code Section
1-31 33-23-11 to read as follows:
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LC 15 4163S
2- 1 "33-23-11. (Index)
2- 2 (a) The Commissioner shall issue licenses applied for to
2- 3 persons qualified for the licenses in accordance with this
2- 4 chapter.
2- 5 (b) The license shall state the name and address of the
2- 6 licensee, the date of issue, the general conditions
2- 7 relative to expiration or termination, the kind or kinds
2- 8 of insurance covered, and the other conditions of
2- 9 licensing.
2-10 (c) Upon the request of a licensee under this chapter, the
2-11 Commissioner shall provide a certificate of licensure
2-12 which shall be suitable for display at the business
2-13 premises of the licensee. The Commissioner shall provide
2-14 by rule or regulation the application procedures for the
2-15 certificate, and the form and content of the certificate,
2-16 and a fee for the certificate which shall approximate the
2-17 administrative costs incurred in the preparation and
2-18 issuance of such certificate; provided, however, that such
2-19 cost shall not exceed $25.00.
2-20 (d) The Commissioner shall have the authority to enter
2-21 into agreements with persons for the purposes of providing
2-22 licensing testing, administrative, record keeping,
2-23 printing, mounting, and other services related to the
2-24 administration of the Commissioner's duties under this
2-25 chapter and to set appropriate charges by rule or
2-26 regulation to cover the costs of such services which shall
2-27 be in addition to the fees otherwise provided for in this
2-28 title and shall be paid directly to the providers of such
2-29 services. The Commissioner may require applicants for
2-30 licenses to pay such charges for licensing testing and for
2-31 the cost of the printing and mounting of a certificate of
2-32 licensure which is suitable for display directly to the
2-33 provider of such services. The Commissioner may require
2-34 insurers to pay such charges for administrative, record
2-35 keeping, and other services provided for in this
2-36 subsection directly to the provider of such services in
2-37 proportion to the number of their authorized agents."
SECTION 2.
2-38 Said title is further amended by striking subsection (a) of
2-39 Code Section 33-38-2, relating to the scope of coverage
2-40 under the Georgia Life and Health Guranty Association, and
2-41 inserting in lieu thereof a new subsection (a) to read as
2-42 follows:
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LC 15 4163S
3- 1 "(a) This chapter shall apply to direct life insurance
3- 2 policies, health insurance policies, contracts
3- 3 supplemental to life and health insurance policies, and
3- 4 annuity contracts issued by persons authorized to transact
3- 5 insurance in this state at any time provide coverage to
3- 6 the persons specified in subsection (b) of this Code
3- 7 section for direct, nongroup life, health, annuity, and
3- 8 supplemental policies or contracts, for certificates under
3- 9 direct group policies and contracts, and for unallocated
3-10 annuity contracts issued by member insurers, except as
3-11 limited by this chapter. Annuity contracts and
3-12 certificates under group annuity contracts include, but
3-13 are not limited to, guaranteed investment contracts,
3-14 deposit administration contracts, unallocated funding
3-15 agreements, allocated funding agreements, structured
3-16 settlement agreements, lottery contracts, and any
3-17 immediate or deferred annuity contracts."
SECTION 3.
3-18 Said title is further amended by striking paragraph (10) of
3-19 Code Section 33-38-4, relating to definitions used in
3-20 Chapter 38, and inserting in lieu thereof a new paragraph
3-21 (10) to read as follows:
3-22 "(10) 'Member insurer' means any person authorized in
3-23 this state to transact any kind of insurance to which
3-24 this chapter applies under Code Section 33-38-2 insurer
3-25 which is licensed or which holds a certificate of
3-26 authority to transact in this state any kind of
3-27 insurance for which coverage is provided under Code
3-28 Section 33-38-2 and includes any insurer whose license
3-29 or certificate of authority in this state may have been
3-30 suspended, revoked, not renewed, or voluntarily
3-31 withdrawn, but does not include:
3-32 (A) A nonprofit hospital or medical service
3-33 corporation;
3-34 (B) A health care corporation;
3-35 (C) A health maintenance organization;
3-36 (D) A fraternal benefit society;
3-37 (E) A mandatory state pooling plan;
3-38 (F) A mutual assessment company or any entity that
3-39 operates on an assessment basis;
3-40 (G) An insurance exchange; or
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LC 15 4163S
4- 1 (H) Any entity similar to those described in
4- 2 subparagraphs (A) through (G) of this paragraph."
SECTION 4.
4- 3 Said title is further amended by striking paragraph (1) of
4- 4 Code Section 33-48-2, relating to definitions used with
4- 5 regard to producer controlled property and casualty
4- 6 insurers, and inserting in lieu thereof a new paragraph (1)
4- 7 to read as follows:
4- 8 "(1) 'Control' or 'controlled' means the possession,
4- 9 direct or indirect, of the power to direct or cause the
4-10 direction of the management and policies of a person,
4-11 whether through the ownership of voting securities, by
4-12 contract other than a contract for goods or
4-13 nonmanagement services, or otherwise. Control shall be
4-14 presumed to exist if any person, directly or indirectly,
4-15 owns, controls, holds with the powers to vote, or holds
4-16 proxies representing a majority of the outstanding
4-17 voting securities of any other person. No person shall
4-18 be deemed to control another person solely by reason of
4-19 being an officer or director of such other person shall
4-20 have the same meaning as provided in paragraph (3) of
3 Code Section 33-13-1, relating to definitions used with
4-22 regard to insurance company holding systems."
SECTION 5.
4-23 Said title is further amended by adding a new chapter, to be
4-24 designated Chapter 54, to read as follows:
"CHAPTER 54
4-25 33-54-1. (Index)
4-26 (a) Every insurer domiciled in this state shall file a
4-27 report with the Commissioner disclosing material
4-28 acquisitions and dispositions of assets or material
4-29 nonrenewals, cancellations, or revisions of ceded
4-30 reinsurance agreements unless such acquisitions and
4-31 dispositions of assets or material nonrenewals,
4-32 cancellations, or revisions of ceded reinsurance
4-33 agreements have been submitted to the Commissioner for
4-34 review, approval, or information purposes pursuant to
4-35 other provisions of this title, regulations, or other
4-36 requirements.
4-37 (b)(1) The report required in subsection (a) of this
4-38 Code section is due within 15 days after the end of the
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LC 15 4163S
5- 1 calendar month in which any of the covered transactions
5- 2 occur.
5- 3 (2) One complete copy of the report, including any
5- 4 exhibits or other attachments filed as part thereof,
5- 5 shall be filed with:
5- 6 (A) The Commissioner of Insurance; and
5- 7 (B) The National Association of Insurance
5- 8 Commissioners.
5- 9 (c) All reports obtained by or disclosed to the
5-10 Commissioner pursuant to this Code section shall be given
5-11 confidential treatment, shall not be subject to subpoena,
5-12 and shall not be made public by the Commissioner, the
5-13 National Association of Insurance Commissioners, or any
5-14 other person, except to insurance departments of other
5-15 states, without the prior written consent of the insurer
5-16 to which it pertains unless the Commissioner, after giving
5-17 the insurer who would be affected thereby notice and an
5-18 opportunity to be heard, determines that the interest of
5-19 policyholders, shareholders, or the public will be served
5-20 by the publication thereof, in which event the
5-21 Commissioner may publish all or any part thereof in such
5-22 manner as he or she may deem appropriate.
5-23 33-54-2. (Index)
5-24 (a) No acquisitions or dispositions of assets need be
5-25 reported pursuant to Code Section 33-54-1 if the
5-26 acquisitions or dispositions are not material. For
5-27 purposes of this chapter, a material acquisition or
5-28 disposition or the aggregate of any series of related
5-29 acquisitions or related dispositions during any 30 day
5-30 period is one that is nonrecurring and not in the ordinary
5-31 course of business and involves more than 5 percent of the
5-32 reporting insurer's total admitted assets as reported in
5-33 its most recent statutory statement filed with the
5-34 insurance department of the insurer's state of domicile.
5-35 (b)(1) Asset acquisitions subject to this chapter
5-36 include every purchase, lease, exchange, merger,
5-37 consolidation, succession, or other acquisition other
5-38 than the construction or development of real property by
5-39 or for the reporting insurer or the acquisition of
5-40 materials for such purpose.
5-41 (2) Asset dispositions subject to this chapter include
5-42 every sale, lease, exchange, merger, consolidation,
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LC 15 4163S
6- 1 mortgage, hypothecation, assignment for the benefit of
6- 2 creditors or otherwise, abandonment, destruction, or
5 de f other disposition.
6- 4 (c)(1) The following information is required to be
6- 5 disclosed in any report of a material acquisition or
6- 6 disposition of assets:
6- 7 (A) Date of the transaction;
6- 8 (B) Manner of acquisition or disposition;
6- 9 (C) Description of the assets involved;
6-10 (D) Nature and amount of the consideration given or
6-11 received;
6-12 (E) Purpose of or reason for the transaction;
6-13 (F) Manner by which the amount of consideration was
6-14 determined;
6-15 (G) Gain or loss recognized or realized as a result of
6-16 the transaction; and
6-17 (H) Name or names of the person or persons from whom
6-18 the assets were acquired or to whom they were
6-19 disposed.
6-20 (2) Insurers are required to report material
6-21 acquisitions and dispositions on a nonconsolidated basis
6-22 unless the insurer is part of a consolidated group of
6-23 insurers which utilizes a pooling arrangement or 100
6-24 percent reinsurance agreement that affects the solvency
6-25 and integrity of the insurer's reserves and such insurer
6-26 ceded substantially all of its direct and assumed
6-27 business to the pool. An insurer is deemed to have
6-28 ceded substantially all of its direct and assumed
6-29 business to a pool if the insurer has less than $1
6-30 million total direct premiums plus assumed written
6-31 premiums during a calendar year that are not subject to
6-32 a pooling arrangement and the net income of the business
6-33 not subject to the pooling arrangement represents less
6-34 than 5 percent of the insurer's capital and surplus.
6-35 33-54-3. (Index)
6-36 (a) Nonrenewals, cancellations, or revisions of ceded
6-37 reinsurance agreements shall not be required to be
6-38 reported pursuant to Code Section 33-54-1 if the
6-39 nonrenewals, cancellations, or revisions are not material.
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LC 15 4163S
7- 1 For purposes of this chapter, a material nonrenewal,
7- 2 cancellation, or revision is one that affects:
7- 3 (1) With respect to property and casualty business,
7- 4 including accident and health business written by a
7- 5 property and casualty insurer:
7- 6 (A) More than 50 percent of the insurer's total ceded
7- 7 written premium; or
7- 8 (B) More than 50 percent of the insurer's total ceded
7- 9 indemnity and loss adjustment reserves;
7-10 (2) With respect to life, annuity, and accident and
7-11 sickness business, more than 50 percent of the total
7-12 reserve credit taken for business ceded on an annualized
7-13 basis, as indicated in the insurer's most recent annual
7-14 statement; or
7-15 (3) With respect to either property and casualty or
7-16 life, annuity, and accident and sickness business,
7-17 either of the following events shall constitute a
7-18 material revision which must be reported:
7-19 (A) An authorized reinsurer representing more than 10
7-20 percent of a total cession is replaced by one or more
7-21 unauthorized reinsurers; or
7-22 (B) Previously established collateral requirements
7-23 have been reduced or waived as respects one or more
7-24 unauthorized reinsurers representing collectively more
7-25 than 10 percent of a total cession.
7-26 (b) Notwithstanding the provisions of subsection (a) of
7-27 this Code section, no filing shall be required if:
7-28 (1) With respect to property and casualty business,
7-29 including accident and sickness business written by a
7-30 property and casualty insurer, the insurer's total
7-31 written premium represents, on an annualized basis, less
7-32 than 10 percent of its total written premium for direct
7-33 and assumed business; or
7-34 (2) With respect to life, annuity, and accident and
7-35 sickness business, the total reserve credit taken for
7-36 business ceded represents, on an annualized basis, less
7-37 than 10 percent of the statutory reserve requirement
7-38 prior to any cession.
7-39 (c)(1) The following information is required to be
7-40 disclosed in any report of a material nonrenewal,
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8- 1 cancellation, or revision of ceded reinsurance
8- 2 agreements:
8- 3 (A) The effective date of the nonrenewal,
8- 4 cancellation, or revision;
8- 5 (B) The description of the transaction with an
8- 6 identification of the initiator thereof;
8- 7 (C) The purpose of or reason for the transaction; and
8- 8 (D) The identity of the replacement reinsurers, if
8- 9 applicable.
8-10 (2) Insurers are required to report all material
8-11 nonrenewals, cancellations, or revisions of ceded
8-12 reinsurance agreements on a nonconsolidated basis unless
8-13 the insurer is part of a consolidated group of insurers
8-14 which utilizes a pooling arrangement or 100 percent
8-15 reinsurance agreement that affects the solvency and
8-16 integrity of the insurer's reserves and the insurer
8-17 ceded substantially all of its direct and assumed
8-18 business to the pool. An insurer is deemed to have
8-19 ceded substantially all of its direct and assumed
8-20 business to a pool if the insurer has less than $1
8-21 million total direct premiums plus assumed written
8-22 premiums during a calendar year that are not subject to
8-23 a pooling arrangement and the net income of the business
8-24 not subject to the pooling arrangement represents less
8-25 than 5 percent of the insurer's capital and surplus."
SECTION 6.
8-26 (a) Except as provided in subsection (b) of this section,
8-27 this Act shall become effective upon its approval by the
8-28 Governor or upon its becoming law without such approval.
8-29 (b) Sections 2, 3, 4, and 5 of this Act shall become
8-30 effective on July 1, 1995.
SECTION 7.
8-31 All laws and parts of laws in conflict with this Act are
8-32 repealed.
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