HB1554: HB1554 Collateral Protection Insurance Act; enact

When a homeowner with a mortgage stops carrying required property insurance, lenders and loan servicers can buy their own coverage to protect their financial interest in the home and pass the cost on to the borrower. This is called collateral protection insurance. Georgia currently has no dedicated law spelling out how this works, and this bill would add one, as a new article to Georgia's insurance code (O.C.G.A. Title 33, Chapter 24). The bill sets rules for when this coverage can start and must end, how much lenders and insurers can charge, and how the coverage amount must be calculated, generally based on the home's last known insurance amount or its replacement cost. It requires any insurance money beyond the unpaid loan balance to go to the homeowner, bans insurers from paying kickbacks or commissions to lenders or servicers for this business, and sets disclosure, rate filing, and annual reporting requirements with the Department of Insurance. It would take effect January 1, 2028, applying to policies issued or renewed on or after that date.

• Creates a new legal framework in Georgia law (O.C.G.A. Title 33, Chapter 24, Article 5) specifically governing collateral protection insurance on mortgaged homes.
• Requires that this insurance start no earlier than the date a homeowner's own coverage lapses, and sets several conditions under which it must end.
• Requires any insurance payout for a covered loss that exceeds the unpaid mortgage balance to be paid to the homeowner, not kept by the lender.
• Bans insurers and agents from paying commissions, sharing premiums, or making other payments to lenders, investors, or servicers to secure this insurance business.
• Requires insurers to send homeowners a policy or certificate disclosing the property covered, coverage amount, premium, effective dates, and claims contact information.
• Requires insurers writing at least $100,000 in this coverage annually to file detailed loss and premium data with the Department of Insurance each year and refile rates at least every four years.

The bill affects homeowners whose mortgage lenders or loan servicers buy insurance on their behalf after a lapse in their own coverage, as well as mortgage lenders, loan servicers, investors holding mortgage loans, and insurance companies and agents that write or sell collateral protection insurance in Georgia.

Homeowners who fall behind on their own property insurance could see clearer limits on what lenders can charge them, guaranteed refunds of excess insurance payouts, and required disclosures about their coverage. Insurers and lenders would face new restrictions on kickbacks and new state reporting obligations.

• Section 33-24-130 states the legislature's intent to regulate collateral protection insurance, separate lenders/servicers from insurers, and prevent unfair competitive practices.
• Section 33-24-131 defines key terms including 'collateral protection insurance,' 'lapse,' 'mortgagor,' 'replacement cost value,' and 'loss ratio.'
• Section 33-24-132(c) bars insurers from charging a mortgagor for coverage before it takes effect or for a term longer than the policy's actual term.
• Section 33-24-132(d) sets the method for calculating coverage amount and premiums, based on last known coverage, replacement cost, or unpaid loan balance, and requires excess payouts above the loan balance go to the homeowner.
• Section 33-24-132(e) prohibits insurers and agents from self-dealing, paying commissions, sharing premiums or risk, or making payments to secure this insurance business.
• Section 33-24-132(f) requires delivery of a policy or certificate to the homeowner listing the covered property, coverage amount, term, premium, and claims contact information.
• Section 33-24-133 requires rate filings at least every four years and annual reports to the Department of Insurance for insurers writing at least $100,000 in this coverage, including a required rate filing if loss ratios stay below 35 percent for two straight years.
• Section 3 sets the effective date as January 1, 2028, applying to policies issued, delivered, or renewed on or after that date.

1. 2026-03-19House Second Readers (House)
2. 2026-03-18House First Readers (House)
3. 2026-03-16House Hopper (House)

• Jutt Howard (R, HD-071)Primary sponsor
• Kimberly New (R, HD-040)
• David Huddleston (R, HD-072)
• Tyler Smith (R, HD-018)

• insurance regulation
• mortgage lending
• homeowners insurance
• consumer protection
• Department of Insurance