HB 401: Insurance; prohibit insurers from considering advertising costs when making or using insurance rates

Under current Georgia law, insurers have leeway in choosing what factors go into their rating plans, the formulas that determine how much customers pay for coverage. This bill changes that by adding a new rule to Georgia's insurance rate regulation law (O.C.G.A. Title 33, Chapter 9). The bill first defines 'advertising costs' as any money an insurer spends to promote its products, services, or brand through any media channel. It then adds a new standard saying no insurer may base its rating plan, in whole or in part, directly or indirectly, on those advertising costs. The bill does not set an enforcement mechanism or penalty beyond the existing rate regulation framework, and it repeals any conflicting laws.

• Adds a new definition of 'advertising costs' to Georgia's insurance code, covering any spending to promote an insurer's products, services, or brand through any media channel.
• Adds a new rule to the standards for insurance rate-making (O.C.G.A. § 33-9-4) barring insurers from basing their rating plans on advertising costs, directly or indirectly.
• Repeals any existing Georgia laws that conflict with this new restriction.

Insurance companies licensed to sell coverage in Georgia, since they would lose the ability to fold advertising and marketing spending into their rate calculations. Georgia policyholders are also affected, since the rule could change how their premiums are determined.

If enacted, insurers would have to set rates without factoring in what they spend on advertising and brand promotion, which could affect how premiums are calculated for Georgia consumers. The practical effect on actual premium prices depends on how much advertising cost currently influences insurers' rate filings.

• Section 1 amends the definitions section (O.C.G.A. § 33-9-2) to add 'advertising costs,' defined as any expenditures to promote products, services, or brand through any media channel.
• Section 2 amends the rate-making standards (O.C.G.A. § 33-9-4) by adding paragraph (11), which forbids insurers from basing any standard or rating plan, in whole or in part, directly or indirectly, on advertising costs.
• Section 3 repeals any conflicting laws, a standard closing provision with no substantive effect beyond the new rule itself.

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 rates
• insurance regulation
• insurance advertising
• consumer protection