SB 603: "Georgia Insurance Consumer and Policyholder Advocacy Act"; enact

Senate Bill 603

By: Senators Parkes of the 7th, Mangham of the 55th, James of the 28th, Kemp of the 38th and Harrell of the 40th

A BILL TO BE ENTITLED

AN ACT

To amend Title 33 of the Official Code of Georgia Annotated, relating to insurance, so as to increase transparency and accountability in the insurance industry and at the office of the Commissioner of Insurance; to provide for an insurance consumer and policyholder advocate within the office of the Commissioner of Insurance; to provide for definitions; to provide for the duties of such advocate; to provide for such advocate to represent insurance consumers and policyholders at certain proceedings; to provide for rules and regulations; to prohibit rates from being unjustifiably increased; to revise standards for the making and use of rates of insurance; to eliminate the file-and-use system for private passenger automobile insurance; to revise the time the department has to review rate filings; to require insurers to submit additional documentation when a proposed rate filing will increase rates; to provide for additional review and procedures for a rate filing that increases a rate by more than ten percent within any 12 month period; to provide for open records; to provide for the approval of rate increases under certain conditions; to authorize such advocate to review and investigate complaints; to provide for such advocate to request a hearing; to provide for related matters; to provide for a short title; to provide for legislative purpose; to provide for an effective date and applicability; to repeal conflicting laws; and for other purposes.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:

SECTION 1.

This Act shall be known and may be cited as the "Georgia Insurance Consumer and Policyholder Advocacy Act."

SECTION 2.

The purpose of this Act is to protect insurance consumers and policyholders by ensuring fairness and transparency in insurance practices, addressing unjustified rate increases, enhancing industry oversight, and providing education and advocacy for insurance consumers and policyholders.

SECTION 3.

Title 33 of the Official Code of Georgia Annotated, relating to insurance, is amended in Chapter 2, relating to department and Commissioner, by revising Code Section 33-2-4, which is reserved, as follows:

"33-2-4.

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

(1) 'Insurance consumer' means any individual or person in this state that entered into a contract for a product or service from an insurer or licensee under the jurisdiction of the Commissioner.

(2) 'Insurance consumer and policyholder advocate' or 'advocate' means an individual employed in the department to represent the interests of insurance consumers and policyholders in insurance matters.

(3) 'Policyholder' means a person in this state who is or was an owner, insured, covered person, beneficiary, or person designated as responsible for payment under an insurance policy, certificate of insurance, or annuity contract provided by an insurer.

(b) There is established within the office of the Commissioner the position of insurance consumer and policyholder advocate. The advocate shall:

(1) Review insurer practices related to policy cancellations and nonrenewals for fairness to insurance consumers and policyholders and investigate any policy cancellations or nonrenewals at the request of an insurance consumer or policyholder;

(2) Participate in rate approval processes and advocate on behalf of insurance consumers and policyholders in such processes and any subsequent hearings;

(3) Implement state-wide campaigns, conduct stakeholder meetings, publish materials, and provide online tools to educate insurance consumers and policyholders on the risks and benefits of different types of insurance, including but not limited to health, life, automobile, property, and flood, to ensure insurance consumers and policyholders can make informed decisions; and

(4) Perform such other functions necessary to advocate for insurance consumers and policyholders.

(c) The advocate shall be entitled to appear, as a party or otherwise, on behalf of insurance consumers and policyholders in any proceedings before the Commissioner, in administrative proceedings related to violations of provisions in this title, and in judicial proceedings appealing an act by the Commissioner.

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

SECTION 4.

Said title is further amended in said chapter by adding a new subsection to Code Section 33-2-17, relating to conduct of hearings by Commissioner generally and demands for hearing, to read as follows:

"(e) The insurance consumer and policyholder advocate is authorized to request a hearing and to participate in any hearing held pursuant to this Code section."

SECTION 5.

Said title is further amended in said chapter by revising Code Section 33-2-26, relating to persons entitled to appeal and procedure generally, as follows:

"33-2-26.

An appeal from the Commissioner shall be taken only from an order on hearing or with respect to a matter as to which the Commissioner has refused or failed to grant or hold a hearing after demand therefor under Code Section 33-2-17 or as to a matter as to which the Commissioner has refused or failed to make his order on hearing as required by Code Section 33-2-23. Any The insurance consumer and policyholder advocate and any person who was a party to the hearing or whose pecuniary interests are directly and immediately affected by the refusal or failure to grant a hearing and who is aggrieved by the order, refusal, or failure may appeal from the order on hearing or as to any such matter within 30 days after:

(1) The order on hearing has been mailed or delivered to the persons entitled to receive the same;

(2) The Commissioner's order denying rehearing or reargument has been so mailed or delivered;

(3) The Commissioner has refused or failed to make his order on hearing as required under Code Section 33-2-23; or

(4) The Commissioner has refused or failed to grant or hold a hearing as required under Code Section 33-2-17."

SECTION 6.

Said title is further amended in Chapter 9, relating to regulation of rates, underwriting rules, and related organizations, by revising subsection (a) of Code Section 33-9-1, relating to purpose and construction of chapter, as follows:

"(a) The purpose of this chapter is to promote the public welfare by regulating insurance rates as provided in this chapter to the end that they shall not be excessive, inadequate, or unfairly discriminatory to insurance consumers or policyholders, shall not be unjustifiably increased, and shall be subject to an open and transparent review process; to authorize the existence and operation of qualified rating organizations and advisory organizations and require that specified rating services of such rating organizations be generally available to all admitted insurers; and to authorize cooperation between insurers in rate making and other related matters."

SECTION 7.

Said title is further amended in said chapter by revising Code Section 33-9-2, relating to definitions, as follows:

"33-9-2.

As used in this chapter, the term:

(1) 'Advisory organization' means every person other than an admitted insurer, whether located within or outside this state, who prepares policy forms or makes underwriting rules incident to but not including the making of rates, rating plans, or rating systems, or who collects and furnishes to admitted insurers or rating organizations loss or expense statistics or other statistical information and data and acts in an advisory, as distinguished from a rate-making, capacity. No duly authorized attorney at law acting in the usual course of his profession shall be deemed to be an advisory organization.

(2) 'Insurance consumer' shall have the same meaning as set forth in Code Section 33-2-4.

(3) 'Insurance consumer and policyholder advocate' or 'advocate' shall have the same meaning as set forth in Code Section 33-2-4.

(2)(4) 'Member' means an insurer who participates in or is entitled to participate in the management of a rating, advisory, or other organization.

(5) 'Policyholder' shall have the same meaning as set forth in Code Section 33-2-4. (3)(6) 'Rating organization' means every person other than an admitted insurer, whether located within or outside this state, who has as his object or purpose the making of rates, rating plans, or rating systems. Two or more admitted insurers who act in concert for the purpose of making rates, rating plans, or rating systems and who do not operate within the specific authorizations contained in Code Sections 33-9-6, 33-9-7, 33-9-11, 33-9-20, and 33-9-22 shall be deemed to be a rating organization. No single insurer shall be deemed to be a rating organization.

(4)(7) 'Subscriber' means an insurer which is furnished at its request with rates and rating manuals by a rating organization of which it is not a member, or with advisory services by an advisory organization of which it is not a member."

SECTION 8.

Said title is further amended in said chapter by revising Code Section 33-9-4, relating to standards applicable to making and use of rates, as follows:

"33-9-4.

The following standards shall apply to the making and use of rates pertaining to all classes of insurance to which this chapter is applicable:

(1) Rates shall not be excessive, or inadequate, as defined in this Code section, nor shall they be or unfairly discriminatory to insurance consumers or policyholders;

(2) No rate shall be held to be excessive unless such rate is unreasonably high for the insurance provided and a reasonable degree of competition does not exist in the area with respect to the classification to which such rate is applicable; provided, however, with respect to rate filings involving an increase in rates, no rate for personal private passenger motor vehicle insurance shall be held to be excessive unless such rate is unreasonably high for the insurance provided and a reasonable degree of competition does not exist;

(3) No rate shall be held inadequate unless it is unreasonably low for the insurance provided and continued use of it would endanger solvency of the insurer, or unless the use of such rate by the insurer using such rate has, or will, if continued, tend to destroy competition or create a monopoly;

(3.1) No rate shall be unjustifiably increased, and any rate filing that results in an overall rate increase of 10 percent or more within a 12 month period shall be subject to an examination and an open and transparent review process as set forth in this chapter;

(4) Consideration shall be given to the extent applicable to past and prospective loss experience within and outside this state, to conflagration and catastrophe hazards, to a reasonable margin for underwriting profit and contingencies, to past and prospective expenses both country wide and those specially applicable to this state, to the insurer's average yield from investment income, and to all other factors, including judgment factors, deemed relevant within and outside this state; and, in the case of fire insurance rates, consideration may be given to the experience of the fire insurance business during the most recent five-year period;

(5) Consideration may also be given, in the making and use of rates, to dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers;

(6) The systems of expense provisions included in the rates for use by any insurer or group of insurers may differ from those of other insurers or groups of insurers to reflect the operating methods of any such insurer or group with respect to any kind of insurance or with respect to any subdivision or combination thereof;

(7) Risks may be grouped by classifications for the establishment of rates and minimum premiums. Classification rates may be modified to produce rates for individual risks in accordance with rating plans which establish standards for measuring variations in hazards or expense provisions, or both. Such standards may measure any difference among risks that have a probable effect upon losses or expenses. Classifications or modifications of classifications of risks may be established based upon size, expense, management, individual experience, location or dispersion of hazard, or any other reasonable considerations. Such classifications and modifications shall apply to all risks under the same or substantially the same circumstances or conditions; provided, however, the Commissioner shall establish the maximum amount of any such modification;

(8) Nothing contained in this Code section or elsewhere in this chapter shall be construed to repeal or modify Chapter 6 of this title, relating to unfair trade practices, and any rate, rating classification, rating plan or schedule, or variation thereof established in violation of Chapter 6 of this title shall, in addition to the consequences stated in Chapter 6 of this title or elsewhere, be deemed violative of to violate his Code section;

(9) No insurer shall base any standard or rating plan on vehicle insurance, in whole or in part, directly or indirectly, upon race, creed, or ethnic extraction; and

(10) No insurer shall base any standard or rating plan on vehicle insurance, in whole or in part, directly or indirectly, upon any physical disability of an insured unless the disability directly impairs the ability of the insured to drive a motor vehicle."

SECTION 9.

Said title is further amended in said chapter by revising Code Section 33-9-21, relating to maintenance and filing rates, rating plans, rating systems, or underwriting rules and examination of claim reserve practices by the Commissioner, as follows:

"33-9-21.

(a) Every insurer shall maintain with the Commissioner copies of the rates, rating plans, rating systems, underwriting rules, and policy or bond forms used by it. The maintenance of rates, rating plans, rating systems, underwriting rules, and policy or bond forms with the Commissioner by a licensed rating organization of which an insurer is a member or subscriber will be sufficient compliance with this Code section for any insurer maintaining membership or subscriberships in such organization, to the extent that the insurer uses the rates, rating plans, rating systems, underwriting rules, and policy or bond forms of such organization; provided, however, that the Commissioner, when he or she deems it necessary, without compliance with the rule-making procedures of this title or Chapter 13 of Title 50, the 'Georgia Administrative Procedure Act':

(1) May require any domestic, foreign, and alien insurer to file the required rates, rating plans, rating systems, underwriting rules, and policy or bond forms used independent of any filing made on its behalf or as a member of a licensed rating organization, as the Commissioner shall deem to be necessary to ensure compliance with the standards of this chapter and Code Section 34-9-130 and for the best interests of the citizens of this state;

(2) Shall require each domestic, foreign, and alien insurer, writing or authorized to write workers' compensation insurance in this state, to file such insurer's own individual rate filing for rates to be charged for workers' compensation insurance coverage written in this state. Such rates shall be developed and established after consultation with the State Board of Workers' Compensation based upon each individual insurer's experience in the State of Georgia to the extent actuarially credible. The experience filed shall include the loss ratios, reserves, reserve development information, expenses, including commissions paid and dividends paid, investment income, pure premium data adjusted for loss development and loss trending, profits, and all other data and information used by that insurer in formulating its workers' compensation rates which are used in this state and any other information or data required by the Commissioner. In establishing and maintaining loss reserves, no workers' compensation insurer shall be allowed to maintain any excess loss reserve for any claim or potential claim for more than 90 days after the amount of liability for such claim or potential claim has been established, whether by final judgment, by settlement agreement, or otherwise. This limitation on the maintenance of loss reserves shall be enforced through this Code section, as well as through Code Section 33-9-23, relating to examination of admitted insurers, and any other appropriate enforcement procedures. The Commissioner is authorized to accept such rate classifications as are reasonable and necessary for compliance with this chapter. A rate filing required by this paragraph shall be updated by the insurer at least once every two years; and

(3) As used in paragraph (2) of this subsection, the term 'excess loss reserve' means any reserve amount in excess of the reserve required by law.

(b) Any domestic, foreign, or alien insurer that is authorized to write insurance in this state must shall file with the Commissioner any rate, rating plan, rating system, or underwriting rule for all personal private passenger motor vehicle insurance:

(1) For private passenger motor vehicle insurance providing only the mandatory minimum limits required by Code Section 33-34-4 and subsection (a) of Code Section 40-9-37, and no such rate, rating plan, rating system, or underwriting rule shall become effective, nor may any premium be collected by any insurer thereunder, unless the filing has been received by the Commissioner in his or her office and such filing has been approved by the Commissioner or a period of 45 60 days has elapsed from the date such filing was received by the Commissioner during which time such filing has not been disapproved by the Commissioner. The Commissioner shall be authorized to extend such 45 60 day period by no more than 55 40 days at his or her discretion. If a filing is disapproved, notice of such disapproval order shall be given within 100 days of receipt of filing by the Commissioner, specifying in what respects such filing fails to meet the requirements of this chapter. The filer shall be given a hearing upon written request made within 30 days after the issuance of the disapproval order, and such hearing shall commence within 30 days after such request unless postponed by mutual consent. Such hearing, once commenced, may be postponed or recessed by the Commissioner only for weekends, holidays, or after normal working hours or at any time by mutual consent of all parties to the hearing. The Commissioner may also, at his or her discretion, recess any hearing for not more than two recess periods of up to 15 consecutive days each. In connection with any hearing or judicial review with respect to the approval or disapproval of such rates, the burden of persuasion shall fall upon the affected insurer or insurers to establish that the challenged rates are adequate, not excessive, and not unfairly discriminatory, and not unjustifiably increased. After such a hearing, the Commissioner must shall affirm, modify, or reverse his or her previous action within the time period provided in subsection (a) of Code Section 33-2-23 relative to orders of the Commissioner. The requirement of approval or disapproval of a rate filing by the Commissioner under this subsection shall not prohibit actions by the Commissioner regarding compliance of such rate filing with the requirements of Code Section 33-9-4 brought after such approval or disapproval.

(2) For personal private passenger motor vehicle insurance other than that described in paragraph (1) of this subsection, such rate, rating plan, rating system, or underwriting rule for all such personal private passenger motor vehicle insurance shall be effective 60 days after such filing and shall be implemented without approval of the Commissioner, unless an earlier effective date is authorized by the Commissioner or a later effective date is specified by the insurer. This paragraph shall apply to the entire personal private passenger motor vehicle insurance policy with limits above the mandatory minimum required by Code Section 33-34-4 and subsection (a) of Code Section 40-9-37 and shall apply to the entire personal private passenger motor vehicle policy with minimum limits if such policy has any additional nonmandatory coverage or coverages.

(3) Notwithstanding the provisions of paragraphs (1) and (2) of this subsection, an insurer may, but shall not be required to, file its rate, rating plan, rating system, or underwriting rule for all such personal private passenger motor vehicle insurance provided for in paragraphs (1) and (2) of this subsection under the filing process of paragraph (1) of this subsection.

(c) When a rate filing of an insurer required under paragraph (1) of subsection (b) of this Code section is not accompanied by the information upon which the insurer supports the filing and the Commissioner does not have sufficient information to determine whether the filing meets the requirements of this chapter, then the Commissioner shall request in writing, within 20 days of the date he or she receives the filing, the specifics of such additional information as he or she requires, and the insurer shall be required to furnish such information, and in such event the 45 60 day period provided for in paragraph (1) of subsection (b) of this Code section shall commence as of the date such information is furnished.

(d) Any domestic, foreign, or alien insurer that is authorized to write insurance in this state must shall file with the Commissioner any rate, rating plan, rating system, or underwriting rule at least 45 60 days prior to any indicated effective date for all insurance other than personal private passenger motor vehicle insurance. No rate, rating plan, rating system, or underwriting rule required to be filed under this subsection will become effective, nor may any premium be collected by any insurer thereunder, unless the filing has been received by the Commissioner in his office not less than 45 60 days prior to its effective date.

(e) When a rate filing of an insurer required under subsection (d) of this Code section results in any increase that impacts insurance consumers or policyholders, such insurer shall submit to the Commissioner a detailed actuarial report demonstrating the necessity of the proposed rate increase based on claims trends, risk factors, and financial solvency; a breakdown of administrative expenses, claim costs, and anticipated profit margins; a statement on how the proposed rate increase shall affect policyholders, including families, small businesses, and commercial enterprises in this state; historical past rate changes and corresponding justifications for the preceding five years; and any other documents deemed necessary by the advocate or the Commissioner. When a rate filing of an insurer required under subsection (d) of this Code section results in any overall rate increase of 10 percent or more within any 12 month period, the Commissioner shall order an examination of that insurer to determine the accuracy of the claim reserves, the applicability of the claim reserve practices for the loss data used in support of such filing, and any other component of the rate filing; provided, however, that in the event the overall increase is less than 25 percent within any 12 month period and the Commissioner affirmatively determines that he or she has sufficient information to evaluate such rate increase and that the cost thereof would not be justified, he or she may waive all or part of such examination. In all other rate filings required under subsection (d) of this Code section, the Commissioner may order an examination of that insurer as provided in this subsection. Such examination shall be conducted in accordance with the provisions of Chapter 2 of this title. Upon notification by the Commissioner of his or her intent to conduct such examination, the insurer shall be prohibited from placing the rates so filed in effect until such examination has been reviewed and certified by the Commissioner as being complete. Such examination, if conducted by the Commissioner, shall be reviewed and certified within 90 days of the date such rate, rating plan, rating system, or underwriting rule is filed; provided, however, that if the Commissioner makes an affirmative finding that the examination may not be completed within the 90 day period, he or she may extend such time for one additional 60 day period completed and reviewed by the advocate and the Commissioner has approved or disapproved the rate filing. Any examination required under this Code section shall be conducted in accordance with Chapter 2 of this title.

(f) Notwithstanding the provisions of subsection (d) of this Code section, in the event the filing of any rate, rating plan, rating system, or underwriting rule under subsection (d) of this Code section is not necessary, in the judgment of the Commissioner, to accomplish the purposes of this chapter as set forth in Code Section 33-9-1, then the Commissioner may exempt all domestic, foreign, and alien insurers from being required to file such rate, rating plan, rating system, or underwriting rule.

(g) Filings required pursuant to this Code section shall be accompanied by a fee or fees as provided in Code Section 33-8-1.

(h) All filings related to rate increases shall be made available on the office's public website within ten days of submission, as provided under Article 4 of Chapter 18 of Title 50."

SECTION 10.

Said title is further amended in said chapter by revising Code Section 33-9-21.2, relating to petition for hearing by aggrieved insurer, as follows:

"33-9-21.2.

(a) The Commissioner shall only approve a proposed rate, rating plan, rating system, or underwriting rule that results in an increase if such increase is:

(1) Supported by clear and compelling data;

(2) Necessary to ensure the insurer's financial stability; and

(3) Not excessive, inadequate, or unfairly discriminatory to insurance consumers or policyholders.

(b) The Commissioner shall disapprove any proposed rate, rating plan, rating system, or underwriting rule that results in an increase that fails to comply with the requirements of this chapter.

(c) Any insurer aggrieved by the Commissioner's disapproval of any rate filing may petition the Commissioner for a hearing within ten days of the notification of such disapproval, unless otherwise specifically provided by law. A hearing conducted pursuant to this Code section shall be conducted in accordance with the provisions of Chapter 2 of this title. The insurance consumer and policyholder advocate is authorized to participate in such hearing and in any appeal therefrom."

SECTION 11.

Said title is further amended in said chapter by revising Code Section 33-9-26, relating to review of rate, rating plan, rating system, or underwriting rule by insurer or rating organization, as follows:

"33-9-26.

(a) Any person aggrieved by any rate charged, rating plan, rating system, or underwriting rule followed or adopted by an insurer or rating organization may request the insurer or rating organization to review the manner in which the rate, plan, system, or rule has been applied with respect to insurance afforded him. The request may be made by his authorized representative and shall be written. If the request is not granted within 30 days after it is made, the requestor may treat it as rejected.

(b) Any person aggrieved by any rate charged, rating plan, rating system, or underwriting rule followed or adopted by an insurer or rating organization or the action of an insurer or rating organization in refusing the review requested or in failing or refusing to grant all or part of the relief requested may file a written complaint and request for hearing with the Commissioner, specifying the grounds relied upon.

(c) The insurance consumer and policyholder advocate shall review and investigate any written complaint as provided for in subsection (b) of this Code section and, on his or her own initiative, may review and investigate any rate, rating plan, rating system, or underwriting rule proposed, followed, or adopted by an insurer or rating organization. If the Commissioner has information concerning a similar complaint, he may deny the hearing. If he believes that probable cause for the complaint does not exist or that the complaint is not made in good faith, he shall deny the hearing. Otherwise, and if he

(d) If the advocate finds that the complaint charges a violation of this chapter and that the complainant would be aggrieved if the violation is proven, he or if the advocate finds a violation of this chapter based on his or her investigation, the advocate shall request a hearing before the Commissioner and such complaint shall proceed as provided in Code Section 33-9-27."

SECTION 12.

Said title is further amended in said chapter by revising Code Section 33-9-28, relating to conduct of hearing by Commissioner upon failure to correct noncompliance, notice of hearing, and matters considered at hearing, as follows:

"33-9-28.

If the Commissioner has good cause to believe the noncompliance to be willful, or, if within the period prescribed by the Commissioner in the notice required by Code Section 33-9-27, the insurer, organization, group, or association does not make the changes necessary to correct the noncompliance specified by the Commissioner or establish to the satisfaction of the Commissioner that the specified noncompliance does not exist, then the Commissioner may hold a public hearing in connection with the noncompliance, provided that within a reasonable period of time, which shall be not less than ten days before the date of the hearing, he shall mail written notice specifying the matters to be considered at the hearing to the insurer, organization, group, or association. If no notice has been given as provided in Code Section 33-9-27, the notice provided for in this Code section shall state to the extent practicable in what manner such noncompliance is alleged to exist. The hearing shall not include any additional subjects not specified in the notices required by Code Section 33-9-27 or this Code section. The insurance consumer and policyholder advocate shall represent the interests of insurance consumers and policyholders before the Commissioner."

SECTION 13.

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.

SECTION 14.

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