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Georgia Senate Bill 276 has become law.
The following is a synopsis of these new Georgia law provisions that will require insurers to revise policy forms, renewal notices and their rate filing process:
(1) Uninsured Motorist Coverage policy provisions for policies issued on or after 1/1/2009.
(2) Notice/offer of policy renewal after 11/16/2008.
(3) Rate filing process on or after 10/1/2008.
The key provisions of this new law are:
Changes the definition of "uninsured motor vehicle" to allow uninsured motorist coverage to be “excess” to the tortfeasor’s Liability Coverage limits unless the insured elects “gap” coverage applicable to the difference between the tortfeasor’s Liability Coverage limits and the insured’s UM limits.
File & use auto rating law for coverage above the minimum mandatory limits. This removes the Insurance Commissioner’s authority to approve rates for auto insurance policies in excess of minimum mandatory limits.
Limits uninsured motorist coverage to automobile and motor vehicle liability policies, and excludes umbrella and excess liability policies.
I. UNINSURED MOTORIST COVERAGE
UM changes from a “gap” coverage to an “excess” coverage; with “gap” Option (eff. 1/1/09)
Every auto liability policy must continue to be issued with UM coverage of not less than 25/50/25, or with limits equal to the Liability Coverage limits under that policy unless the insured provides a written rejection of coverage or elects lower limits.
CGCA Section 33-7-11 previously defined uninsured motorists coverage as a “gap” coverage for the difference between the uninsured motorist coverage limit and lower tortfeasor liability coverage. The new definition defines a motorist as uninsured if their liability coverage limit is inadequate to fully cover the insured’s bodily injury and property damage losses. Therefore, uninsured motorists coverage is now an “excess” coverage [and policy language will have to be amended accordingly], except the insured has the OPTION to “reject” the applicability of the “excess” provisions and “select” uninsured motorist coverage that only applies for the amount of the difference between the tortfeasor’s available liability coverages and the limits of the uninsured motorist coverages provided under the insured’s policies (gap coverage) [for which appropriate policy language must be incorporated].
Notice Upon First Renewal after 11/16/2008 on policies issued before 1/1/2009 (eff. 1/1/09)
For private passenger motor vehicle insurance policies in effect on January 1, 2009, insurers shall send to their insureds who have not previously rejected uninsured motorist coverage a notice at least 45 days before the first renewal of such policies advising of the new coverage options.
Limits of Liability offsets (eff. 1/1/09)
In addition to any offsets or reductions permitted by the prior statute, the revised statute now specifically provides that policies may contain provisions which exclude any liability of the uninsured motorist insurer for personal or bodily injury or death for which the insured has been compensated pursuant to “medical payments coverage” or workers´ compensation laws. [This may warrant a policy revision or endorsement.]
Umbrella & Excess Policies exempt (eff. 1/1/09)
Umbrella and excess liability policies are not required to provide uninsured motorists coverage but may provide such coverage if set forth in a policy or policy endorsement.
II. RATEMAKING (file & use for rates above minimum limits)(eff. 10/1/2008)
With respect to private passenger motor vehicle insurance, CGCA Section 33-9-21 subsections (b) and (c) are amended and the authority of the Commissioner, and the requirement for prior approval by the Commissioner, of rates, rating plans, rating systems, or underwriting rules, are restricted to 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.
For private passenger motor vehicle insurance with limits above the mandatory minimum required by Code Section 33-34-4 and subsection (a) of Code Section 40-9-37, rates, rating plans, rating systems, and underwriting rules shall be effective upon filing and shall be implemented without approval of the Commissioner. This subsection shall apply to the entire private passenger motor vehicle insurance policy with limits above the mandatory minimum and shall apply to the entire private passenger motor vehicle policy with minimum limits if such policy has any additional non-mandatory coverage or coverages.
© 2008 The Nash Group, LLC
This information does not constitute legal advice. Persons using this website are strongly advised not to act on the information contained in it without seeking legal counsel or engaging The Nash Group, LLC.
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