HB 1274: Auto Insurance Excess Profits Act; enact

The Senate Committee on Insurance and Labor offered the following substitute to HB 1274:

A BILL TO BE ENTITLED

AN ACT

To amend Title 33 of the Official Code of Georgia Annotated, relating to insurance, so as to improve insurance policyholder protections by strengthening the regulation of excess profit in private passenger automobile insurance policies, healthcare plan coverage of ground ambulance transportation services, and obligations under life insurance policies; to provide for the collection of certain data annually from insurers writing private passenger automobile insurance policies; to provide for the Commissioner of Insurance to order the refund of any excess profit made by such insurers; to provide for calculations; to provide for notice and opportunity for hearing; to provide for cash refunds or credit refunds; to provide for certification; to prohibit adjustments to commission, premium tax, or other tax payments; to provide for insurance coverage for certain out-of-network ambulance transportation service; to provide for the minimum allowable reimbursement rate for such service; to provide for maximum amounts on copayments, coinsurance, or deductibles for such service; to provide for insurers to conduct policy locator searches on a quarterly basis; to provide for updated records; to provide for disclosure of certain information; to provide for the right to original agents of record; to provide for the right to access policy information; to provide for an authorized recipient; to provide for a standardized form authorizing access to certain information; to provide for the right to an annual policy status report; to provide for the right to beneficiary protection; to provide for annual reporting; to provide for the Department of Insurance to publish on its website a statement on the rights of policyholders and a standardized form for authorizing a recipient to have access to certain policy information; to provide for such statement and form to be sent to certain insurers; to provide for definitions; to provide for rules and regulations; to provide for a short title; to provide for related matters; to provide for effective dates and applicability; to repeal conflicting laws; and for other purposes.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:

SECTION 1.

Title 33 of the Official Code of Georgia Annotated, relating to insurance, is amended in Chapter 9, relating to regulation of rates, underwriting rules, and related organizations, by revising Code Section 33-9-41, which is reserved, as follows:

"33-9-41.

(a) As used in this Code section, the term:

(1) 'Anticipated underwriting profit' means the expected, projected, or modeled net profit that an insurer anticipates making from providing insurance coverage, exclusive of income from investments. Such term shall be calculated as the sum of the dollar amounts obtained by multiplying, for each rate filing of the insurer group in effect during a five-year period, the earned premiums applicable to such rate filings by the percentage factor included in such rate filing for profit and contingencies, such percentage factor having been determined with due recognition to investment income from funds generated by business in this state; provided, however, that separate calculations shall not be necessary for consecutive filings containing the same percentage factor for profits and contingencies.

(2) 'Cash refund' means a refund issued to a policyholder or former policyholder by an insurer in a single payment of coins, currency, checks, drafts, or money orders.

(3) 'Credit refund' means a refund issued to a policyholder by an insurer through application to a policy renewal premium for such policyholder.

(4) 'Excess profit' means an underwriting gain for the five most recent calendar accident years combined which is greater than the anticipated underwriting profit plus 6 percent of earned premiums for such calendar accident years.

(5) 'Final compilation year' means the final year in which data is reported in a five-year reporting period.

(6) 'Private passenger automobile insurance' means insurance that covers the personal use of a private passenger automobile and its operating equipment; covers liability, collision, comprehensive, personal injury protection or medical payments, or uninsured or underinsured motorist protection; or provides the mandatory minimum limits required under Chapter 34 of this title for the personal use of a private passenger automobile. Such insurance may be written on a family automobile policy, standard automobile policy, personal automobile policy, or similar private passenger automobile policy. Such term shall not include commercial automobile insurance or similar policies for commercial automobiles or commercial motor vehicles.

(b) No later than January 1, 2028, and annually thereafter, any domestic, foreign, or alien insurer that is authorized to write private passenger automobile insurance policies in this state shall file with the department on forms prescribed by the Commissioner data for private passenger automobile insurance in this state. Such data shall include both voluntary and joint underwriting association business and shall include the following:

(1) Calendar year total limits earned premium;

(2) Accident year incurred losses and loss adjustment expenses;

(3) Administrative and selling expenses incurred in this state or allocated to this state for the calendar year;

(4) Policyholder dividends incurred during the applicable calendar year;

(5) A schedule of private passenger automobile loss and loss adjustment experience for each of the five most recent accident years. The incurred losses and loss adjustment expenses shall be valued as of March 31 of the year following the close of the accident year, developed to an ultimate basis, and at four 12 month intervals thereafter, each developed to an ultimate basis, so that a total of five evaluations will be provided for each accident year; and

(6) Any supplemental data the department needs for the determination of compliance with the provisions of this Code section.

(c) The department shall review the data collected pursuant to subsection (b) of this Code section to determine if excess profit has been realized based on a comparison of the insurer's underwriting gain and anticipated underwriting profit. Each insurer's underwriting gain or loss for each calendar accident year shall be calculated as the sum of the accident year incurred losses and loss adjustment expenses as of March 31 of the following year, developed to an ultimate basis, plus the administrative and selling expenses incurred in the calendar year, plus policyholder dividends applicable to the calendar year, subtracted from the calendar year earned premium. Such underwriting gain or loss shall be compared to the anticipated underwriting profit for the five most recent calendar accident years to determine if excess profit has been realized.

(d) Whenever the Commissioner has determined that an excess profit has been realized, the Commissioner shall issue an order for the insurer to return excess profit and otherwise comply with the provisions of this Code section. The order shall contain or shall be accompanied by a notice of opportunity for hearing which clearly explains that the opportunity must be requested within ten days of receipt of the order and notice. The order and notice shall be served in person by the Commissioner or his or her agent or by registered or certified mail or statutory overnight delivery, return receipt requested. The hearing shall be conducted in accordance with the provisions of Chapter 2 of this title. (e)(1) Excess profit shall be refunded unless an insurer demonstrates to the department that the refund of excess profit will render the insurer financially impaired or insolvent.

(2) The insurer shall submit to the Commissioner a fair, practicable, and nondiscriminatory plan to refund or credit to policyholders the realized excess profit as determined by the Commissioner within 30 days after receipt of the written notice provided for in subsection (d) of this Code section, or, if an insurer requests a hearing, within 30 days after the conclusion of such hearing. If the refund or credit plan is not approved, the Commissioner shall issue a written notice to the insurer containing the reasons why it was not approved and specifications for corrections to the plan. Upon approval of the insurer's refund or credit plan, the Commissioner shall issue an order requiring the insurer to distribute the excess profit according to the approved plan in the form of:

(A) A cash refund within 60 days of a final order on the refund of excess profit; or

(B) A credit refund, which shall be applied to policy renewal premium notices that are forwarded to policyholders no more than 60 days after a final order on the refund of excess profit; provided, however, that, if a policyholder cancels the policy or allows the policy to terminate, the insurer shall make a cash refund no more than 60 days after termination of coverage.

(f) An insurer shall immediately certify to the department when all cash refunds or credit refunds have been made. Any cash refund or credit refund made pursuant to this Code section shall be treated as a policyholder dividend applicable to the year in which it is incurred for purposes of reporting under this Code section for subsequent years.

(g) The data in the required reports to the department obtained pursuant to this Code section and cash refunds or credit refunds to policyholders issued pursuant to this Code section may be rounded to the nearest dollar, provided that such rounding shall be applied consistently.

(h) No insurer that makes any refund pursuant to this Code section shall be allowed to adjust any payments of commissions, premium tax, or other tax due to such refund.

(i) The Commissioner shall be authorized to promulgate rules and regulations necessary for the implementation and enforcement of this Code section. Reserved."

SECTION 2.

Said title is further amended in Chapter 20E, the "Surprise Billing Consumer Protection Act," by revising Code Section 33-20E-23, relating to financial responsibilities for ground ambulance transportation, as follows:

"33-20E-23.

Nothing in this chapter shall reduce a covered person's financial responsibilities with regard to ground ambulance transportation.

(a) As used in this Code section, the term:

(1) 'Ambulance provider' means an agency, including an agency of any political subdivision of this state, or a company which is operating under a valid license from the Emergency Health Section of the Department of Public Health and which provides emergency transport service; provided, however, that such term shall not include an air ambulance service as such term is defined in Code Section 31-11-2.

(2) 'Clean claim' means a claim for reimbursement of service rendered by an ambulance provider that has no defect or impropriety, including any lack of required substantiating documentation, which would reasonably prevent timely payment for a claim.

(3) 'Covered service' means emergency transport service which a covered person is entitled to receive under the terms of a healthcare plan.

(4) 'Emergency transport service' means the provision of emergency transportation on the public streets and highways of this state by an ambulance provider for a wounded, injured, sick, invalid, or incapacitated human being to or from a place where medical or hospital care is furnished.

(5) 'First responder' means any firefighter of a municipal, county, or volunteer fire department; paramedic as defined in Code Section 31-11-2; emergency medical technician as defined in Code Section 31-11-2; peace officer as defined in Code Section 35-8-2; or communications officer as defined in Code Section 37-12-1.

(b) A healthcare plan shall consider emergency transport service as a covered service when such emergency transport service is requested by a first responder. (c)(1) The minimum allowable reimbursement rate under any healthcare plan other than a state healthcare plan for covered service to an out-of-network ambulance provider shall be the rate agreed to by contract with or through passage of an ordinance, resolution, rule, or regulation by a county, municipality, special district, or authority for such service within the respective jurisdiction.

(2) When no agreement on a minimum reimbursement rate exists as set forth in paragraph (1) of this subsection, the minimum allowable reimbursement amount shall be the lesser of:

(A) Three hundred and twenty-five percent of the reimbursement rate under the Medicare program, Part A or B of Title XVIII of the federal Social Security Act, 42 U.S.C. Section 1395, et seq., as amended, for ambulance services; or

(B) The charges billed by the ambulance provider.

(d) Any payment made to an ambulance provider pursuant to this Code section shall release a covered person from any further payment responsibility other than any copayment, coinsurance, or deductible owed by the covered person.

(e) Any copayment, coinsurance, or deductible paid for covered service provided by an out-of-network ambulance provider shall not exceed the amount of a copayment, coinsurance, or deductible amount owed for similar service provided by an ambulance provider that belongs to the provider network in a healthcare plan.

(f) No later than 30 days after the receipt of a clean claim for covered service, an insurer shall remit payment for such service directly to the ambulance provider and shall not remit any payment to a covered person. When an insurer receives a claim that is not a clean claim, such insurer shall, within 30 days after receipt of such claim, send written notice to the ambulance provider making such claim that acknowledges the receipt of such claim and informs the ambulance provider that:

(1) The insurer has declined to pay all or part of the claim, including the reasons for such denial; or

(2) Additional information is necessary to make a determination regarding payment of all or part of the claim submitted, including the specific information required."

SECTION 3.

Said title is further amended in Chapter 25, relating to life insurance, by adding a new subsection to Code Section 33-25-14, relating to unclaimed life insurance benefits, purpose, definitions, and insurer conduct, to read as follows:

"(d.1) An insurer shall conduct a search of the National Association of Insurance Commissioners' policy locator system on at least a quarterly basis to identify potential matches to policies, persons, and designated beneficiaries. If an insurer finds a match, then the insurer shall within 30 days confirm the accuracy of the match, contact the person, the designated beneficiary, or an authorized representative, and update the insurer's records. To the extent permitted by law, an insurer may disclose minimum necessary personal information about a person or a designated beneficiary to a person who the insurer reasonably believes may be able to assist the insurer in locating the designated beneficiary or a person otherwise entitled to payment of the claims proceeds."

SECTION 4.

Said title is further amended in said chapter by adding a new Code section to read as follows:

"33-25-16.

(a) This Code section shall be known and may be cited as the 'Georgia Policyholder Bill of Rights.'

(b) As used in this Code section, the term:

(1) 'Insurer' means an insurance company that issued or currently insures a policy.

(2) 'Policy' means a life insurance policy owned by an individual who is a resident of this state regardless of whether the policy was issued, delivered, or renewed in this state. Such term includes a contract of life insurance, a life benefit certificate issued by a fraternal benefit society, a life annuity, or an annuity contract.

(3) 'Policyholder' means the owner of a policy.

(c) A policyholder has the right to retain his or her original agent of record for a policy. If an insurer sells or transfers the policy to another insurer, such insurer shall continue to provide annual reports to the original agent of record.

(d) A policyholder has the right to receive important insurance policy documents. Such documents include, but are not limited to, company illustrations outlining projected values; status reports detailing payments, benefits, and conditions; and reprojections providing updated future value estimates. A policyholder may authorize a recipient to have access to such documents by submitting a standardized form developed by the department. Such form shall include the following:

(1) The policyholder's full legal name, date of birth, and the last four digits of the policyholder's social security number;

(2) The authorized recipient's name and contact information;

(3) The information authorized to be shared;

(4) The express limitation that the authorization does not grant the authorized recipient the authority to make policy changes, change beneficiaries, or assign, surrender, borrow, or transfer any policy;

(5) The effective date and the duration of effectiveness, not to exceed 12 months; and

(6) The notarized signature of the policyholder.

(e) A policyholder has the right to receive an annual report detailing the status of his or her policy. An insurer shall provide such annual report, even if the policy is fully paid.

(f) A policyholder has the right to beneficiary protection. No later than January 1, 2027, and annually thereafter, every insurer shall report to the Commissioner the results of searches conducted under Code Section 33-25-14.

(g) The Commissioner shall, as soon as practicable, but no later than January 1, 2027, prepare a statement that sets forth in simple and nontechnical terms the rights of policyholders as set forth in this Code section and the authorization form provided for in subsection (d) of this Code section. Such statement and form shall be published on the department website and shall be sent to all insurers authorized to transact life insurance in this state.

(h) The Commissioner shall promulgate rules and regulations necessary to implement the provisions of this Code section."

SECTION 5.

(a) Except as provided in subsection (b) of this section, this Act shall become effective on July 1, 2026, and shall apply to all policies issued, delivered, issued for delivery, or renewed in this state on or after such date.

(b) Section 2 of this Act shall become effective on January 1, 2027, and shall apply to all contracts entered into or renewed and all policies issued, delivered, issued for delivery, or renewed in this state on or after such date.

SECTION 6.

All laws and parts of laws in conflict with this Act are repealed.