Georgia bill that would bring larger insurer fines, more fraud enforcement and more wind-mitigation funding now moves to state Senate, where it is expected to pass in the next few weeks.
The Georgia House of Representatives late last month approved, by an overwhelming majority, House Bill 1344, which has been endorsed by an insurance agents’ group, by a national carrier group, and by state regulators. The measure is ostensibly aimed at making property insurance more affordable, and it would affect much of the industry, including carriers, agents and policyholders.
The main sponsor, Rep. Matt Reeves, R-Duluth, called it “the strongest insurance legislation in the country.” Leaders of the Independent Insurance Agents of Georgia and of the American Property Casualty Insurance Association have worked with Reeves and other lawmakers to draft the bill over the last six months.
“We commend Speaker Burns and House Leadership for taking an approach that will protect consumers and tackle loss drivers that impact affordability for Georgia families,” said IIAG CEO John Barbour.
Here’s a look at some of the key provisions:
Auto fraud. The bill, if signed into law, would specifically outlaw “cappers” or “runners” who steer auto accident victims to health care providers, a practice that has become increasingly familiar as auto insurance fraud has burgeoned in Georgia and other states. Likewise, clinics and doctors would be barred from compensating runners.
Violations of the law would be considered felonies, subject to as much as 10 years in prison and $200,000 fines. People involved in making claims for staged accidents would face fines of up to $100,000.
The state insurance commissioner would be authorized to hire prosecutors, appointed by district attorneys. Lawmakers may appropriate funds, but some funding would come from new, $100 to $200 annual fees on captive insurance companies.
“We always welcome any effort to address fraud,” said APCIA’s Ron Jackson.
The bill also would raise fees for motorists who let their insurance lapse.
For carriers. Property insurers would be forbidden from drafting policies that require insureds to file claims lawsuits within two years after the date of the loss. Most insureds now have up to four years to file suit. The restriction would not apply to liability and workers’ compensation coverage.
In rate filings, the Office of the Commissioner of Insurance (OCI) would, for the first time, be able to consider a wider range of information, including complaints against carriers. On the House floor last week, Rep. Jasmine Clark, D-Lilburn, asked about insurers repoprtedly dropping homeowners who have large trees near their homes. Reeves said that under current law, regulators cannot consider complaints, litigation, penalties and investigations into insurer conduct when reviewing rate filings.