Commissioner King Publicizes that some Insurance Companies are Violating the Georgia Unfair Trade Practices Act

By Carol A. Gasser Moore

GEORGIA – John F. King, Georgia’s Commissioner of Insurance and Safety Fire (CISF) has issued a statement reminding insurers and brokers that it is unlawful to charge customers added fees in conjunction with the sale of a surplus line insurance policy. This statement is in response to Commissioner’s learning that some surplus line insurers and brokers are collecting fees in violation of the Georgia Unfair Trade Practices Act.

A surplus line insurer or broker may not collect any sum in excess of the premiums and charges for insurance specified by the insurer in the insurance policy.

Specifically, the instances in which reasonable fees may be charged are:

• The surplus lines producer includes the fee as a line item on the policy’s declaration page;
• The fee is reported as premium for the purposes of taxation; and
• The fee is included in the calculation of surplus lines premium tax.

King is making it known to all that pursuant to O.C.G.A. § 33-6-5(6)(B)(ii), the collection of fees outside of the prescribed methodology as described herein would be considered an unfair method of competition and unfair and deceptive act or practice in the business of insurance. If you have any questions, please contact the Premium Tax Division at (404) 656-7553 or via email at [email protected].

The CISF bulletin addresses the same issue which is referenced in Directive 22-EX-4, and therefore this bulletin is meant to supersede and replace that of Directive 22-EX-4