HB401: HB401 Insurance; prohibit insurers from considering advertising costs when making or using insurance rates

Georgia law (O.C.G.A. Chapter 9 of Title 33) already sets standards for how insurance companies calculate and use their rates. This bill would add a new rule saying insurers cannot base their rates, even partly or indirectly, on how much they spend on advertising. The bill adds a definition of 'advertising costs' to the code, describing it as any money an insurer spends promoting its products, services, or brand through any media channel. It then amends the section governing rate-making standards to add this new prohibition to the existing list of rules insurers must follow. The bill does not set a specific effective date beyond the standard process of becoming law, and it repeals any conflicting laws.

• Adds a new legal definition of 'advertising costs' to Georgia's insurance code, covering any spending to promote an insurer's products, services, or brand through any media.
• Prohibits insurers from using advertising costs, directly or indirectly, as any part of the basis for a rating plan or standard.
• Inserts this new rule as an additional paragraph among the existing standards insurers must follow when making and using insurance rates.
• Repeals any existing state laws that conflict with this new prohibition.

Insurance companies operating in Georgia that set rates for consumers, since they would be barred from passing along advertising expenses through their rate calculations; and Georgia policyholders, whose premiums could no longer be shaped by an insurer's ad spending.

If an insurer currently factors marketing or branding expenses into how it prices policies, this bill would stop that practice, potentially changing how some premiums are calculated. The practical effect depends on how much insurers currently rely on advertising costs in their rate models.

• Section 1 amends O.C.G.A. § 33-9-2 to add a definition of 'advertising costs' as any expenditure to promote an insurer's products, services, or brand through any media channel.
• Section 2 amends O.C.G.A. § 33-9-4 by adding paragraph (11), stating no insurer shall base any standard or rating plan in whole or in part, directly or indirectly, on advertising costs.
• Section 2 also makes technical changes to the punctuation of paragraphs (9) and (10) to accommodate the new paragraph (11).
• Section 3 repeals any conflicting laws, a standard clause with no substantive effect beyond the bill's own changes.

1. 2025-02-13House Second Readers (House)
2. 2025-02-12House First Readers (House)
3. 2025-02-11House Hopper (House)

• Spencer Frye (D, HD-122)Primary sponsor
• Martin Momtahan (R, HD-017)
• Jordan Ridley (R, HD-022)
• Eric Bell (D, HD-075)
• Shea Roberts (D, HD-052)
• Stacey Evans (D, HD-057)

• insurance regulation
• insurance rates
• consumer protection
• advertising costs