What Did the Georgia General Assembly Do This Year?

Many of you may know that the Georgia General Assembly adjourned for the year at midnight last Thursday, March 20, 2014.  While Gould Hagler of the IIAG thought that what the General Assembly did as far as insurance related issues was not “especially exciting”, I thought that one of the bills he mentioned in his Capital Report the next day as having been passed was good news for Georgia insurance agents and another creates a potential E&O exposure for such agents.

The latter bill authorizes the cancellation of any insurance policy that permits an audit if the insured fails to submit to or allow an audit after having been contacted twice by the insurance company about the need for an audit.  While this may be welcomed by some agents, the requirement in the bill that the insured’s agent must be included in the contact efforts may lead to E&O exposure if the agent does not attempt to contact the insured upon receiving such a notice from the insurance company.  This would be especially true if the agent knew that the address being used for the insured by the insurance company was not correct or that the insured was unlikely to receive the notice for other reasons.   This new law will be applicable to all insurance policies that are issued or renewed on or after July 1, 2014, if not vetoed by the Governor.  In order to protect themselves from this potential E&O exposure, Georgia agents should consider including in their paperwork for insureds with policies that permit an audit a statement that they will assume no responsibility for notifying the insured of any attempts by the insurance company to contact the insured about scheduling an audit.

The good news for Georgia agents was the passage of a bill that confirmed the validity of the electronic delivery of insurance policies, if the procedures specified in the Georgia Uniform Electronic Transactions Act were followed.  I wrote an article in 2011 for the IIAG’s Dec Page magazine that came to that conclusion with one potential problem.  This bill removes that potential problem and also permits the electronic posting of insurance policies by the insurance company in lieu of the actual delivery of the policy to the insured, if certain requirements are met. (See Section 4 of the bill for those requirements.)

The bill goes even farther by authorizing the electronic delivery of other documents, including, but not limited to, cancellation or nonrenewal notices, that had been required to be mailed in the past.  The bill imposes several conditions on the electronic delivery of such notices and other documents that do not apply to the electronic delivery of insurance policies. These conditions are also contained in Section 4 of the bill.  The bill states that these conditions are in addition to those imposed by the federal Electronic Signatures in Global and National Commerce Act.  This means that the requirements of that Act regarding the electronic delivery of notices and other documents in consumer transactions must also be followed.  Those requirements are extensive and are explained in my Dec Page magazine article.  This bill will become effective on its signature by the Governor or the Governor’s failure to veto it within 40 days after the end of the General Assembly’s session.