2020 Georgia Code
Title 33 - Insurance
Chapter 36 - Georgia Insurers Insolvency Pool
§ 33-36-14. Exhaustion of Rights by Claimants Against Insolvent Insurers Prior to Recovery; Recovery of Payment to Claimants in Excess of Amounts Authorized; Reduction of Liability of Insured; Recovery of Amounts Paid on Behalf of Certain Persons

1. Except as provided for in Code Section 33-36-20, any person having a claim against a policy or an insured under a policy issued by an insolvent insurer, which claim is a covered claim and is also a claim within the coverage of any policy issued by a solvent insurer, shall be required to exhaust first his or her rights under such policy issued by the solvent insurer. The policy of the solvent insurer shall be treated as primary coverage and the policy of the insolvent insurer shall be treated as secondary coverage and his or her rights to recover such claim under this chapter shall be reduced by any amounts received from the solvent insurers.
2. Any amount paid a claimant in excess of the amount authorized by this chapter may be recovered by an action brought by or on behalf of the pool.
3. To the extent that the pool's obligation is reduced by the application of this Code section, the liability of the person insured by the insolvent insurer's policy for the claim shall be reduced in the same amount.
4. Except as provided for in Code Section 33-36-20, the pool shall have the right to recover from the following persons all amounts paid by the pool on behalf of such person, whether for indemnity or defense or otherwise:
   1. Any insured whose net worth on December 31 of the year immediately preceding the date the insurer becomes an insolvent insurer exceeds $25 million, provided that an insured's net worth on such date shall be deemed to include the aggregate net worth of the insured and all of its subsidiaries and affiliates as calculated on a consolidated basis; and
   2. Any person who is an affiliate of the insolvent insurer.

(Ga. L. 1970, p. 700, § 11; Ga. L. 1982, p. 3, § 33; Ga. L. 1989, p. 74, § 8; Ga. L. 2005, p. 563, § 20/HB 407; Ga. L. 2010, p. 1085, § 2/HB 1364; Ga. L. 2012, p. 1350, § 9/HB 1067.)

- Ga. L. 2005, p. 563, § 24/HB 407, not codified by the General Assembly, provides that the amendment to this Code section shall apply to insolvencies which occur on or after July 1, 2005.

Ga. L. 2006, p. 887, § 1/HB 1444, not codified by the General Assembly, amended Ga. L. 2005, p. 563, § 24/HB 407, to read: "The provisions of Section 12 of this Act shall apply to insolvencies that occur on or after the effective date of this Act. All other provisions shall apply as of the effective date of this Act." Ga. L. 2005, p. 563, became effective July 1, 2005.

- For annual survey of law on workers' compensation, see 62 Mercer L. Rev. 383 (2010). For annual survey on worker's compensation, see 71 Mercer L. Rev. 345 (2019).

JUDICIAL DECISIONS

Construction of exhaustion provision.

- Georgia Court of Appeals held that the plain language of O.C.G.A. § 33-36-14(a) did not require that the amount of offset must be for the same claim or for amounts paid by a solvent carrier that were also at issue under an insolvent carrier's policy underlying a claim against Georgia's Insurers Insolvency Pool. Georgia Insurers Insolvency Pool v. Dubose, 349 Ga. App. 238, 825 S.E.2d 606 (2019).

Trial court erred by limiting offset rights of the Georgia's Insurers Insolvency Pool (Pool) under O.C.G.A. § 33-36-14(a) to amounts received by the insured specific to lost wages and medical expenses because the language of O.C.G.A. § 33-36-14(a) did not require that a policy issued by an insolvent carrier under which a claim against the Pool arises had to be for the same type of coverage as provided by the solvent insurer's policy. Georgia Insurers Insolvency Pool v. Dubose, 349 Ga. App. 238, 825 S.E.2d 606 (2019).

- When the defendants' liability carrier becomes insolvent, a plaintiff's apparently good faith settlement with the plaintiff's own uninsured motorist carrier for less than the policy limits does not provide the defendants with a personal defense so as to bar the plaintiff's pursuit of a tort action against them. Plaintiff's compliance or noncompliance with subsection (a) of O.C.G.A. § 33-36-14 is only a relevant inquiry if and when the plaintiff obtains a judgment against the defendants. Lee v. Fulton Concrete Co., 195 Ga. App. 348, 393 S.E.2d 449 (1990) (applying statutory language prior to 1989 amendment).

In an action against defendants whose liability carrier became insolvent, matters of the existence or nonexistence of uninsured motorist coverage and compliance or noncompliance with O.C.G.A. § 33-36-14 did not constitute defenses available to the defendants, and any decision as to who might be ultimately liable for any decision against the defendants was not ripe for adjudication. Reid v. United States Fid. & Guar. Co., 223 Ga. App. 204, 477 S.E.2d 369 (1996), aff'd, 268 Ga. 432, 491 S.E.2d 50 (1997).

When the defendant's liability insurance carrier was declared insolvent after suit was filed, the issue whether the plaintiffs' failure to serve their uninsured motorist insurer evinced a failure to "exhaust" their rights under their own policy was not ripe since judgment had not yet been rendered against the tortfeasor. Grigsby v. White, 228 Ga. App. 682, 492 S.E.2d 603 (1997).

Failure to obtain uninsured motorist benefits prior to the date the tortfeasor's liability insurer became insolvent did not bar the insured's claim to Georgia Insurer's Insolvency funds since, because the two-year personal injury statute of limitations had expired when the tortfeasor's insurer became insolvent, the insured had no benefit rights to exhaust under the insured's uninsured motorist coverage. G & MSS Trucking, Inc. v. Rich, 224 Ga. App. 130, 479 S.E.2d 761 (1996).

- Passenger's uninsured motorist (UM) insurer was not required to provide the $15,000 bodily injury coverage afforded by the insolvent insurer for a permissive driver under O.C.G.A. § 33-36-14(a) because the UM insurer's benefits were not available to the passenger as the owner's UM coverage was not available to stack with the UM insurer's coverage as the owner's insurer was the liability insurer with respect to the single car accident; therefore, the passenger's claim was not a claim within the coverage of a policy issued by the UM insurer as required by § 33-36-14. Jefferson Ins. Co. v. Thomas, 278 Ga. App. 89, 628 S.E.2d 171 (2006).

Medical expenses paid by an insured's own carrier reduced the liability of the Georgia Insurers Insolvency Pool; the fact such carrier might have a subrogation claim against the tortfeasor did not give the insured the right to collect the amount from the pool. G & MSS Trucking, Inc. v. Rich, 224 Ga. App. 130, 479 S.E.2d 761 (1996).

- Because: (1) resolution of the issues raised in a petition filed by the Georgia Insurers Insolvency Pool were dependent upon a determination by the State Board of Workers' Compensation of the amount, if any, an injured employee was entitled to recover in the pending, unresolved claim for workers' compensation; and (2) after a notice to controvert was filed, the Board never held a hearing or issued any findings with regard to liability for the claim, the trial court lacked subject matter jurisdiction to determine the applicability of earlier provisions of O.C.G.A. § 33-36-14(a) to the Pool's claim against an insurer, after another carrier became insolvent, and hence, grant the Pool summary judgment in its declaratory judgment action. Royal Indem. Co. v. Ga. Insurers Insolvency Pool, 284 Ga. App. 787, 644 S.E.2d 279 (2007), cert. denied, No. S07C1207, 2007 Ga. LEXIS 639 (Ga. 2007).