HB1274: HB1274 Auto Insurance Excess Profits Act; enact

26 LC 46 1673S 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 to1 improve insurance policyholder protections by strengthening the regulation of excess profit2 in private passenger automobile insurance policies, healthcare plan coverage of ground3 ambulance transportation services, and obligations under life insurance policies; to provide4 for the collection of certain data annually from insurers writing private passenger automobile5 insurance policies; to provide for the Commissioner of Insurance to order the refund of any6 excess profit made by such insurers; to provide for calculation s; to provide for notice and7 opportunity for hearing; to provide for cash refunds or credit refunds; to provide for8 certification; to prohibit adjustments to commission, premium tax, or other tax payments; to9 provide for insurance coverage for certain out-of-network ambulance transportation service;10 to provide for the minimum allowable reimbursement rate for suc h service; to provide for11 maximum amounts on copayments, coinsurance, or deductibles for such service; to provide12 for insurers to conduct policy locator searches on a quarterly basis; to provide for updated13 records; to provide for disclosure of certain information; to provide for the right to original14 agents of record; to provide for the right to access policy inf ormation; to provide for an15 authorized recipient; to provide for a standardized form author izing access to certain16 information; to provide for the right to an annual policy status report; to provide for the right17 to beneficiary protection; to provide for annual reporting; to provide for the Department of18 - 1 - 26 LC 46 1673S Insurance to publish on its website a statement on the rights o f policyholders and a19 standardized form for authorizing a recipient to have access to certain policy information;20 to provide for such statement and form to be sent to certain in surers; to provide for21 definitions; to provide for rules and regulations; to provide f or a short title; to provide for22 related matters; to provide for effective dates and applicabili ty; to repeal conflicting laws;23 and for other purposes.24 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:25 SECTION 1.26 Title 33 of the Official Code of Georgia Annotated, relating to insurance, is amended in27 Chapter 9, relating to regulation of rates, underwriting rules, and related organizations, by28 revising Code Section 33-9-41, which is reserved, as follows:29 "33-9-41.30 (a) As used in this Code section, the term:31 (1) 'Anticipated underwriting profit' means the expected, projected, or modeled net profit32 that an insurer anticipates making from providing insurance cov erage, exclusive of33 income from investments. Such term shall be calculated as the sum of the dollar amounts34 obtained by multiplying, for each rate filing of the insurer gr oup in effect during a35 five-year period, the earned premiums applicable to such rate filings by the percentage36 factor included in such rate filing for profit and contingencie s, such percentage factor37 having been determined with due recognition to investment income from funds generated38 by business in this state; provided, however, that separate cal culations shall not be39 necessary for consecutive filings containing the same percentag e factor for profits and40 contingencies.41 (2) 'Cash refund' means a refund issued to a policyholder or former policyholder by an42 insurer in a single payment of coins, currency, checks, drafts, or money orders.43 - 2 - 26 LC 46 1673S (3) 'Credit refund' means a refund issued to a policyholder by an insurer through44 application to a policy renewal premium for such policyholder.45 (4) 'Excess profit' means an underwriting gain for the five most recent calendar accident46 years combined which is greater than the anticipated underwriting profit plus 6 percent47 of earned premiums for such calendar accident years.48 (5) 'Final compilation year' means the final year in which data is reported in a five-year49 reporting period.50 (6) 'Private passenger automobile insurance' means insurance t hat covers the personal51 use of a private passenger automobile and its operating equipme nt; covers liability,52 collision, comprehensive, personal injury protection or medical payments, or uninsured53 or underinsured motorist protection; or provides the mandatory minimum limits required54 under Chapter 34 of this title for the personal use of a privat e passenger automobile. 55 Such insurance may be written on a family automobile policy, st andard automobile56 policy, personal automobile policy, or similar private passenger automobile policy. Such57 term shall not include commercial automobile insurance or simil ar policies for58 commercial automobiles or commercial motor vehicles.59 (b) No later than January 1, 2028, and annually thereafter, any domestic, foreign, or alien60 insurer that is authorized to write private passenger automobile insurance policies in this61 state shall file with the department on forms prescribed by the Commissioner data for62 private passenger automobile insurance in this state. Such data shall include both voluntary63 and joint underwriting association business and shall include the following:64 (1) Calendar year total limits earned premium;65 (2) Accident year incurred losses and loss adjustment expenses;66 (3) Administrative and selling expenses incurred in this state or allocated to this state for67 the calendar year;68 (4) Policyholder dividends incurred during the applicable calendar year;69 - 3 - 26 LC 46 1673S (5) A schedule of private passenger automobile loss and loss adjustment experience for70 each of the five most recent accident years. The incurred loss es and loss adjustment71 expenses shall be valued as of March 31 of the year following the close of the accident72 year, developed to an ultimate basis, and at four 12 month inte rvals thereafter, each73 developed to an ultimate basis, so that a total of five evaluations will be provided for each74 accident year; and75 (6) Any supplemental data the department needs for the determi nation of compliance76 with the provisions of this Code section.77 (c) The department shall review the data collected pursuant to subsection (b) of this Code78 section to determine if excess profit has been realized based o n a comparison of the79 insurer's underwriting gain and anticipated underwriting profit. Each insurer's underwriting80 gain or loss for each calendar accident year shall be calculated as the sum of the accident81 year incurred losses and loss adjustment expenses as of March 3 1 of the following year,82 developed to an ultimate basis, plus the administrative and selling expenses incurred in the83 calendar year, plus policyholder dividends applicable to the calendar year, subtracted from84 the calendar year earned premium. Such underwriting gain or lo ss shall be compared to85 the anticipated underwriting profit for the five most recent ca lendar accident years to86 determine if excess profit has been realized.87 (d) Whenever the Commissioner has determined that an excess profit has been realized,88 the Commissioner shall issue an order for the insurer to return excess profit and otherwise89 c o m p l y w i t h t h e p r o v i s i o n s o f t h i s C o de sectio n . T h e o r d e r s h all contain or shall be90 accompanied by a notice of opportunity for hearing which clearl y explains that the91 opportunity must be requested within ten days of receipt of the order and notice. The order92 and notice shall be served in person by the Commissioner or his or her agent or by93 registered or certified mail or statutory overnight delivery, return receipt requested. The94 hearing shall be conducted in accordance with the provisions of Chapter 2 of this title.95 - 4 - 26 LC 46 1673S (e)(1) Excess profit shall be refunded unless an insurer demonstrates to the department96 that the refund of excess profit will render the insurer financially impaired or insolvent.97 (2) The insurer shall submit to the Commissioner a fair, pract icable, and98 nondiscriminatory plan to refund or credit to policyholders the realized excess profit as99 determined by the Commissioner within 30 days after receipt of the written notice100 provided for in subsection (d) of this Code section, or, if an insurer requests a hearing,101 within 30 days after the conclusion of such hearing. If the re fund or credit plan is not102 approved, the Commissioner shall issue a written notice to the insurer containing the103 reasons why it was not approved and specifications for correcti ons to the plan. Upon104 approval of the insurer's refund or credit plan, the Commission er shall issue an order105 requiring the insurer to distribute the excess profit according to the approved plan in the106 form of:107 (A) A cash refund within 60 days of a final order on the refund of excess profit; or108 (B) A credit refund, which shall be applied to policy renewal premium notices that are109 forwarded to policyholders no more than 60 days after a final o rder on the refund of110 excess profit; provided, however, that, if a policyholder cancels the policy or allows the111 policy to terminate, the insurer shall make a cash refund no mo re than 60 days after112 termination of coverage.113 (f) An insurer shall immediately certify to the department when all cash refunds or credit114 refunds have been made. Any cash refund or credit refund made pursuant to this Code115 section shall be treated as a policyholder dividend applicable to the year in which it is116 incurred for purposes of reporting under this Code section for subsequent years.117 (g) The data in the required reports to the department obtaine d pursuant to this Code118 section and cash refunds or credit refunds to policyholders iss ued pursuant to this Code119 section may be rounded to the nearest dollar, provided that such rounding shall be applied120 consistently.121 - 5 - 26 LC 46 1673S (h) No insurer that makes any refund pursuant to this Code sec tion shall be allowed to122 adjust any payments of commissions, premium tax, or other tax due to such refund.123 (i) The Commissioner shall be authorized to promulgate rules and regulations necessary124 for the implementation and enforcement of this Code section. Reserved."125 SECTION 2.126 Said title is further amended in Chapter 20E, the "Surprise Billing Consumer Protection Act,"127 by revising Code Section 33-20E-23, relating to financial respo nsibilities for ground128 ambulance transportation, as follows:129 "33-20E-23.130 Nothing in this chapter shall reduce a covered person's financial responsibilities with regard131 to ground ambulance transportation.132 (a) As used in this Code section, the term:133 (1) 'Ambulance provider' means an agency, including an agency of any political134 subdivision of this state, or a company which is operating under a valid license from the135 Emergency Health Section of the Department of Public Health and which provides136 emergency transport service; provided, however, that such term shall not include an air137 ambulance service as such term is defined in Code Section 31-11-2.138 (2) 'Clean claim' means a claim for reimbursement of service rendered by an ambulance139 provider that has no defect or impropriety, including any lack of required substantiating140 documentation, which would reasonably prevent timely payment for a claim.141 (3) 'Covered service' means emergency transport service which a covered person is142 entitled to receive under the terms of a healthcare plan.143 (4) 'Emergency transport service' means the provision of emerg ency transportation on144 the public streets and highways of this state by an ambulance p rovider for a wounded,145 injured, sick, invalid, or incapacitated human being to or from a place where medical or146 hospital care is furnished.147 - 6 - 26 LC 46 1673S (5) 'First responder' means any firefighter of a municipal, co unty, or volunteer fire148 department; paramedic as defined in Code Section 31-11-2; emerg ency medical149 technician as defined in Code Section 31-11-2; peace officer as defined in Code Section150 35-8-2; or communications officer as defined in Code Section 37-12-1.151 (b) A healthcare plan shall consider emergency transport service as a covered service when152 such emergency transport service is requested by a first responder.153 (c)(1) The minimum allowable reimbursement rate under any healthcare plan other than154 a state healthcare plan for covered service to an out-of-network ambulance provider shall155 be the rate agreed to by contract with or through passage of an ordinance, resolution, rule,156 or regulation by a county, municipality, special district, or a uthority for such service157 within the respective jurisdiction.158 (2) When no agreement on a minimum reimbursement rate exists a s set forth in159 paragraph (1) of this subsection, the minimum allowable reimbursement amount shall be160 the lesser of:161 (A) Three hundred and twenty-five percent of the reimbursement rate under the162 Medicare program, Part A or B of Title XVIII of the federal Soc ial Security Act, 42163 U.S.C. Section 1395, et seq., as amended, for ambulance services; or164 (B) The charges billed by the ambulance provider.165 (d) Any payment made to an ambulance provider pursuant to this Code section shall166 release a covered person from any further payment responsibilit y other than any167 copayment, coinsurance, or deductible owed by the covered person.168 (e) Any copayment, coinsurance, or deductible paid for covered service provided by an169 out-of-network ambulance provider shall not exceed the amount o f a copayment,170 coinsurance, or deductible amount owed for similar service prov ided by an ambulance171 provider that belongs to the provider network in a healthcare plan.172 (f) No later than 30 days after the receipt of a clean claim for covered service, an insurer173 shall remit payment for such service directly to the ambulance provider and shall not remit174 - 7 - 26 LC 46 1673S any payment to a covered person. When an insurer receives a cl aim that is not a clean175 claim, such insurer shall, within 30 days after receipt of such claim, send written notice to176 the ambulance provider making such claim that acknowledges the receipt of such claim and177 informs the ambulance provider that:178 (1) The insurer has declined to pay all or part of the claim, including the reasons for such179 denial; or180 (2) Additional information is necessary to make a determination regarding payment of181 all or part of the claim submitted, including the specific information required."182 SECTION 3.183 Said title is further amended in Chapter 25, relating to life i nsurance, by adding a new184 subsection to Code Section 33-25-14, relating to unclaimed life insurance benefits, purpose,185 definitions, and insurer conduct, to read as follows:186 "(d.1) An insurer shall conduct a search of the National Associ ation of Insurance187 Commissioners' policy locator system on at least a quarterly ba sis to identify potential188 matches to policies, persons, and designated beneficiaries. If an insurer finds a match, then189 the insurer shall within 30 days confirm the accuracy of the match, contact the person, the190 designated beneficiary, or an authorized representative, and update the insurer's records.191 To the extent permitted by law, an insurer may disclose minimum necessary personal192 information about a person or a designated beneficiary to a per son who the insurer193 reasonably believes may be able to assist the insurer in locating the designated beneficiary194 or a person otherwise entitled to payment of the claims proceeds."195 SECTION 4.196 Said title is further amended in said chapter by adding a new Code section to read as follows:197 - 8 - 26 LC 46 1673S "33-25-16.198 (a) This Code section shall be known and may be cited as the 'Georgia Policyholder Bill199 of Rights.'200 (b) As used in this Code section, the term:201 (1) 'Insurer' means an insurance company that issued or currently insures a policy.202 (2) 'Policy' means a life insurance policy owned by an individual who is a resident of this203 state regardless of whether the policy was issued, delivered, o r renewed in this state. 204 Such term includes a contract of life insurance, a life benefit certificate issued by a205 fraternal benefit society, a life annuity, or an annuity contract.206 (3) 'Policyholder' means the owner of a policy.207 (c) A policyholder has the right to retain his or her original agent of record for a policy. 208 If an insurer sells or transfers the policy to another insurer, such insurer shall continue to209 provide annual reports to the original agent of record.210 (d) A policyholder has the right to receive important insuranc e policy documents. Such211 documents include, but are not limited to, company illustrations outlining projected values;212 status reports detailing payment s, benefits, and conditions; an d reprojections providing213 updated future value estimates. A policyholder may authorize a recipient to have access214 to such documents by submitting a standardized form developed by the department. Such215 form shall include the following:216 (1) The policyholder's full legal name, date of birth, and the last four digits of the217 policyholder's social security number;218 (2) The authorized recipient's name and contact information;219 (3) The information authorized to be shared;220 (4) The express limitation that the authorization does not grant the authorized recipient221 the authority to make policy changes, change beneficiaries, or assign, surrender, borrow,222 or transfer any policy;223 (5) The effective date and the duration of effectiveness, not to exceed 12 months; and224 - 9 - 26 LC 46 1673S (6) The notarized signature of the policyholder.225 (e) A policyholder has the right to receive an annual report detailing the status of his or her226 policy. An insurer shall provide such annual report, even if the policy is fully paid.227 (f) A policyholder has the right to beneficiary protection. No later than January 1, 2027,228 and annually thereafter, every insurer shall report to the Comm issioner the results of229 searches conducted under Code Section 33-25-14.230 (g) The Commissioner shall, as soon as practicable, but no lat er than January 1, 2027,231 prepare a statement that sets forth in simple and nontechnical terms the rights of232 policyholders as set forth in this Code section and the authorization form provided for in233 subsection (d) of this Code section. Such statement and form s hall be published on the234 department website and shall be sent to all insurers authorized to transact life insurance in235 this state.236 (h) The Commissioner shall promulgate rules and regulations necessary to implement the237 provisions of this Code section."238 SECTION 5.239 (a) Except as provided in subsection (b) of this section, this Act shall become effective on240 July 1, 2026, and shall apply to all policies issued, delivered, issued for delivery, or renewed241 in this state on or after such date.242 (b) Section 2 of this Act shall become effective on January 1, 2027, and shall apply to all243 contracts entered into or renewed and all policies issued, deli vered, issued for delivery, or244 renewed in this state on or after such date.245 SECTION 6.246 All laws and parts of laws in conflict with this Act are repealed.247 - 10 -