HB24.html

To amend Code Section 33_7_11.1 of the Official Code of Georgia Annotated, relating to commencement of liability of insurer to pay benefits to third party on behalf of insured, so as to include towing and storage costs in the losses for which an insurer must pay to a third party on behalf of an insured under a motor vehicle or automobile liability insurance policy; to amend Chapter 22 of Title 33 of the Official Code of Georgia Annotated, relating to insurance premium finance companies, so as to change certain provisions relating to requirements for license for transaction of business, fees, change of address, and examination of applicants; to change certain provisions relating to maintenance of records of transactions by licensees and examination of records by the Commissioner of Insurance; to change certain provisions relating to form, contents, execution, and delivery of premium finance agreements; to change certain provisions relating to service charges; to change certain provisions relating to notice to insured by premium finance company, copy of premium finance agreement, and notice of existence of power of attorney; to change certain provisions relating to procedure for cancellation of insurance contract upon default; to change certain provisions relating to disposition of unearned premiums upon cancellation of insurance policies; to provide for use of electronic records and signatures subject to certain provisions of law; to change certain provisions relating to applicability of said chapter; to provide for related matters; to repeal conflicting laws; and for other purposes.

Code Section 33_7_11.1 of the Official Code of Georgia Annotated, relating to commencement of liability of insurer to pay benefits to third party on behalf of insured, is amended by striking the Code section in its entirety and inserting in lieu thereof a new Code Section 33_7_11.1 to read as follows:
"33_7_11.1.
(a) As used in this Code section, 'liability insurance policy' means an automobile liability or motor vehicle liability insurance policy issued or delivered in this state to the owner of such vehicle or issued or delivered by any insurer licensed in this state upon any such motor vehicle then principally garaged or principally used in this state.
(b) ~~Whenever any insurer undertakes~~ Any insurer, upon acceptance of liability, pursuant to any automobile liability or motor vehicle liability insurance policy, to shall pay reasonable benefits for losses, including total losses, to a third party on behalf of an insured for loss of use and towing and storage costs of such a motor vehicle, and the liability of the insurer for payment of ~~the~~ benefits for losses, including total losses, to the third party shall commence as of the time of the incident or occurrence which results in ~~the loss of use of the motor vehicle~~ such losses; provided, however, in no event shall this Code section be construed so as to relieve the claimant of his or her obligation to mitigate his or her losses or to require the payment of loss of use and towing and storage costs benefits in an amount which is greater than the actual ~~loss of use~~ losses suffered.
(c) The provisions of this Code section shall be applicable to all automobile liability or motor vehicle liability insurance policies ~~pursuant to which an insurer undertakes to~~ that pay benefits to a third party on behalf of an insured for the loss of use and towing and storage costs of such motor vehicle issued, delivered, or renewed in this state on or after ~~November 1, 1982~~ July 1, 2002."

Chapter 22 of Title 33 of the Official Code of Georgia Annotated, relating to insurance premium finance companies, is amended by striking subsection (c) of Code Section 33_22_3, relating to requirements for license for transaction of business, fees, change of address, and examination of applicants, and inserting in lieu thereof the following:
"(c) Before any licensee changes his or her address, he or she shall ~~return his license to the Commissioner who shall endorse the license indicating the change~~ inform the Commissioner of the change in writing."

Said chapter is further amended by striking subsection (b) of Code Section 33_22_7, relating to maintenance of records of transactions by licensees and examination of records by the Commissioner of Insurance, and inserting in lieu thereof the following:
"(b) Every licensee shall preserve its records of its premium finance transactions, including cards used in a card system, for at least three years after making the final entry in respect to any premium finance agreement. The preservation of records in photographic or electronic form shall constitute compliance with this requirement."

Said chapter is further amended by striking Code Section 33_22_8, relating to form, contents, execution, and delivery of premium finance agreements, and inserting in lieu thereof the following:
"33_22_8.
(a) A premium finance agreement shall:
(1) Be dated and signed by or on behalf of the insured, and the printed portion of the agreement shall be in ~~at least~~ approximately eight_point type and shall be readable by an individual with average eyesight;
(2) Contain the name and place of business of the insurance agent or insurance broker negotiating the related insurance contract, the name and residence of or place of business of the insured as specified by him or her, the name and place of business of the premium finance company to which payments are to be made, a description of the insurance contracts involved, and the amount of the premium for the contracts; and
(3) Set forth the following items, where applicable:
(A) The total amount of the premiums;
(B) The amount of the down payment;
(C) The principal balance (the difference between subparagraphs (A) and (B) of this paragraph);
(D) The amount of the service charge, including the additional charge as provided in Code Section 33_22_9;
(E) The balance payable by the insured (the sum of subparagraphs (C) and (D) of this paragraph); and
(F) The number of payments required, the amount of each payment expressed in dollars, and the due date or period of payment.
(b) The items set out in paragraph (3) of subsection (a) of this Code section need not be stated in the sequence or order in which they appear in such clause, and additional items may be included to explain the computations made in determining the amount to be paid by the insured.
(c) The licensee or the insurance agent or insurance broker shall deliver to the insured or send by electronic means or mail to the insured at his or her address shown in the agreement a complete copy of the agreement.
(d) Whenever an insurance policy has been financed pursuant to this chapter, an additional premium to such policy or a renewal or extension of such policy may be financed with the same premium finance company without the execution of a new premium finance agreement. The premium finance company or the insurance agent or insurance broker shall ~~mail or deliver to the insured~~ deliver to the insured or send by electronic means or mail to the insured at his or her address shown in the agreement an addendum to the existing premium finance agreement ~~in the same manner as provided in subsection (c) of this Code section~~, and such addendum shall contain the information required under subsection (a) of this Code section."

Said chapter is further amended by striking Code Section 33_22_9, relating to service charges, and inserting in lieu thereof the following:
"33_22_9.
(a) As used in this Code section, the term:
(1) 'Commercial insurance premium finance agreement' means any insurance premium finance agreement other than a consumer premium finance agreement.
(2) 'Consumer insurance premium finance agreement' means an insurance premium finance agreement, as defined in Code Section 33_22_2, wherein the insurance contracts which are the subject of the premium finance agreement are for personal, family, or household purposes ~~or where the premiums for those agreements are $3,000.00 or less~~ rather than business or professional purposes.
(b) A premium finance company shall not charge, contract for, receive, or collect a service charge other than as permitted by this chapter.
(c) The service charge shall be computed on the balance of the premiums due, after subtracting the down payment made by the insured in accordance with the premium finance agreement, from the effective date of the insurance coverage for which the premiums are being advanced, to and including the date when the final payment of the premium finance agreement is payable; provided, however, that service charges as specified in the premium finance agreement may continue to be charged until such agreement is paid in full.
(d) The service charge per consumer insurance premium finance agreement shall be a maximum of $12.00 per $100.00 per annum plus an additional charge which shall not exceed $20.00 per premium finance agreement, which additional charge need not be refunded upon prepayment. Any insured may prepay his premium finance agreement in full at any time before the due date of the final payment and in such event the unearned service charge shall be refunded in accordance with the Rule of 78 and shall represent at least as great a proportion of the service charge, if any, as the sum of the periodic balances after the month in which prepayment is made bears to the sum of all periodic balances under the schedule of payments in the agreement.
(e) The service charge for a commercial insurance premium finance agreement shall be properly agreed upon by the parties to the contract. The claim or defense of usury by such insureds who enter into such a commercial insurance premium finance agreement or their successors or anyone in their behalf shall not be valid if such agreement is a valid contract in all other respects."

Said chapter is further amended by striking Code Section 33_22_12.1, relating to notice to insured by premium finance company, copy of premium finance agreement, and notice of existence of power of attorney, and inserting in lieu thereof the following:
"33_22_12.1.
Whenever a premium finance company executes a premium finance agreement relative to a personal or family_type policy of insurance, it shall ~~mail or deliver to the insured~~ deliver to the insured or send by electronic means or mail to the insured at his or her address shown in the agreement a copy of the agreement ~~as provided in subsection (c) of Code Section 33_22_8~~ and a written notice which clearly discloses to the insured the existence of the power of attorney contained in such agreement. The written notice shall substantially comply with the following form:

Said chapter is further amended by striking subsection (b) of Code Section 33_22_13, relating to procedure for cancellation of insurance contract upon default, and inserting in lieu thereof the following:
"(b) Not less than ten days´ written notice shall be ~~mailed to the insured~~ delivered to the insured or sent by electronic means or mailed to the insured at his or her address shown in the agreement of the intent of the premium finance company to cancel the insurance contract unless the default is cured within such ten_day period. A copy of said notice shall also be sent to the insurance agent or insurance broker indicated on the premium finance agreement."

Said chapter is further amended by striking paragraph (1) of subsection (b) of Code Section 33_22_14, relating to disposition of unearned premiums upon cancellation of insurance policies, and inserting in lieu thereof the following:
"(b)(1) In the event that the crediting of return premiums to the account of the insured results in a surplus over the amount due from the insured, the premium finance company shall refund the excess within ten working days of receipt of the return premium or tender of return premium to the insured via the agent, agency, or broker placing the insurance and shall furnish such agent, agency, or broker, upon a written request, a report setting forth an itemization of the unearned finance charge and other charges under the premium finance agreement; provided, however, there shall be no refund required when the excess due the insured is less than ~~$2.00~~ $5.00."