2020 Georgia Code
Title 33 - Insurance
Chapter 31 - Credit Life Insurance and Credit Accident and Sickness Insurance
§ 33-31-9. Premiums; Refunds and Credits

1. Any insurer, subject to the power of the Commissioner to disapprove the form as provided in Code Section 33-31-8, may revise its schedules of premium rates from time to time and shall file such revised schedules with the Commissioner. Premiums charged by an insurer shall be deemed to be reasonable and in compliance with this chapter and this title if the rate utilized in the calculation of the premium has been approved by the Commissioner. No insurer shall charge premiums for credit life insurance or credit accident and sickness insurance which exceed the premium rate then on file with the Commissioner, except that for the second and subsequent years of insurance provided for the debtors of a creditor it may charge a premium in excess of such maximum if such increase is approved by the Commissioner because of unfavorable claims experience. Nothing in this chapter shall be deemed to prohibit an insurer from decreasing the premium rate on the insurance provided for the debtors of a creditor for the second and subsequent years of insurance.
2. The amount collected by the creditor from the debtor for any credit life insurance or any credit accident and sickness insurance shall be consistent with the premium rate charged by the insurer.Nothing in this chapter shall be construed to legalize any charge illegal under any statute or rule of law governing credit transactions.
3. Each individual policy, notice of proposed insurance, or group certificate of credit life insurance and credit accident and sickness insurance shall provide that, in the event of termination of the insurance prior to the scheduled maturity date of the indebtedness, any refund of premium due shall be calculated as of the date the indebtedness terminated and be paid or credited promptly to the person entitled to such refund; provided, however, that the Commissioner shall prescribe a minimum refund and no refund which would be less than such minimum need be made. The formula to be used in computing a refund shall be filed with and approved by the Commissioner. It shall be the obligation of the insured to notify the insurer of the early payoff of the indebtedness which is covered by the insurance.
4. If a creditor requires a debtor to make a payment in connection with credit life insurance or credit accident and sickness insurance and an individual policy or group certificate of insurance is not issued, the creditor shall immediately give written notice to the debtor and shall promptly make an appropriate credit to the account.

(c.1)Each individual policy, notice of proposed insurance, or group certificate of credit life insurance and credit accident and sickness insurance issued shall provide a notice on the face of such policy, notice, or certificate in at least 10 point type that it is the obligation of the insured to notify the insurer of any early payoff of the indebtedness which is covered by the insurance.

(Code 1933, § 56-3308, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1996, p. 6, § 33; Ga. L. 1996, p. 912, § 5; Ga. L. 2005, p. 612, § 1/SB 167; Ga. L. 2013, p. 141, § 33/HB 79; Ga. L. 2019, p. 386, § 107/SB 133.)

The 2019 amendment, effective July 1, 2019, deleted "now" following "legalize any charge" in the second sentence of subsection (b); and deleted "after May 2, 2005," following "sickness insurance issued" in subsection (c.1).

- Ga. L. 2005, p. 612, § 2/SB 167, not codified by the General Assembly, provides that: "This Act is declaratory of existing law and is only intended to clarify such law. The passage of this Act shall not create any implication that any change in existing law is effected."

- For survey article on insurance law, see 59 Mercer L. Rev. 195 (2007). For survey article on trial practice and procedure, see 59 Mercer L. Rev. 423 (2007). For survey article on trial practice and procedure, see 60 Mercer L. Rev. 397 (2008).

JUDICIAL DECISIONS

Purpose of section.

- This section recognizes and seeks to protect the interest of an insured debtor in credit life insurance. Betts v. Brown, 218 Ga. 782, 136 S.E.2d 365 (1964).

- When the method of determining the insurance refund is not specified by statute, it would properly be a subject for clarification under the rule-making power of the Industrial Loan Commissioner, which rules, if consistent with law, have the force and effect of law. Brown v. Quality Fin. Co., 112 Ga. App. 369, 145 S.E.2d 99 (1965).

- Insured's suit seeking a refund of unearned credit life insurance and credit disability policy premiums under O.C.G.A. § 33-31-9(c) was not barred by the insured's failure to give the insurer pre-suit notice of the insured's early payoff of the insured's truck loan; because O.C.G.A. § 33-31-9(c) did not specify a particular time for giving notice, the insured's filing of the complaint constituted sufficient notice. Baker v. Am. Heritage Life Ins. Co., F. Supp. 2d (M.D. Ga. Sept. 1, 2006).

Credit life insurer's failure to refund unearned premiums unless an insured provided written notice to the insurer constituted a breach of the legal duty the insurer owed to the insurer's insureds to refund unearned premiums under O.C.G.A. § 33-31-5. The notice requirement in the policy was not a condition precedent or express stipulation of forfeiture, and failure to return unearned premiums was a breach of the insurer's obligation of good faith and fair dealing. Res. Life Ins. Co. v. Buckner, 304 Ga. App. 719, 698 S.E.2d 19 (2010).

- Because an insurer expressly acknowledged that, by filing suit, the insured satisfied any contractual notice requirement obligating the insurer to return any unearned premium, and a 2005 amendment to O.C.G.A. § 33-31-9 did not affect this result, the appeals court rejected the insurer's claim that the insured's claim in contract was barred due to the insured's failure to submit proof of early loan payoff, as required by both the expressed and implied terms of the insurance contract. J.M.I.C. Life Ins. Co. v. Toole, 280 Ga. App. 372, 634 S.E.2d 123 (2006).

- Insureds' failure to provide pre-suit notice of an early loan payoff and an insurer's failure to refund unearned premiums on credit policies because there were no express or implied term in the insurance certificates requiring pre-suit notice and the filing of the lawsuit sufficiently complied with notice required under O.C.G.A. § 33-31-9(c). Bishop's Prop. & Invs., LLC v. Protective Life Ins. Co., F. Supp. 2d (M.D. Ga. Sept. 1, 2006).

- Appellate court rejected an insurer's assertion that the insurer's insured's individual tort claims failed because a tort was the unlawful violation of a private legal right other than a mere breach of contract, express or implied, as the duties the insured alleged that the insurer violated did not arise merely from contract but were also imposed by O.C.G.A. § 33-31-9. J.M.I.C. Life Ins. Co. v. Toole, 280 Ga. App. 372, 634 S.E.2d 123 (2006).

Cited in Smith v. General Fin. Corp., 143 Ga. App. 390, 238 S.E.2d 694 (1977); SunTrust Bank v. Hightower, 291 Ga. App. 62, 660 S.E.2d 745 (2008).

OPINIONS OF THE ATTORNEY GENERAL

Premium charges other than those approved by Commissioner unauthorized.

- Any premium charge made to the debtor other than as filed with and approved by the Insurance Commissioner and consistent with the premium rate charged by the insurer is unauthorized. 1965-66 Op. Att'y Gen. No. 66-184.