2021 Georgia Code
Title 33 - Insurance
Chapter 23 - Licensing
Article 1 - Agents, Agencies, Subagents, Counselors, and Adjusters
§ 33-23-1. Definitions

1. As used in this article, the term:
   1. "Adjuster" means any individual who for a fee, commission, salary, or other compensation investigates, settles, or adjusts and reports to his or her employer or principal with respect to claims arising under insurance contracts on behalf of the insurer or the insured or a person who directly supervises or manages such individual. The term "adjuster" does not include:
      1. Individuals who adjust claims arising under contracts of life or marine insurance or annuities; or
      2. An agent or a salaried employee of an agent or a salaried employee of an insurer who adjusts or assists in adjusting losses under policies issued by such agent or insurer.
   2. "Agency" means a business entity which represents one or more insurers and is engaged in the business of selling, soliciting, or negotiating insurance. Agency also means a business entity insurance producer.
   3. "Agent" means an individual appointed or employed by an insurer who sells, solicits, or negotiates insurance. Agent also means an individual insurance producer.

      (3.1) "Automated claims adjudication system" means a preprogrammed computer system designed for the collection, data entry, calculation, and final resolution of property insurance claims used only for portable electronics as defined in paragraph (1) of subsection (d) of Code Section 33-23-12 which:

      1. May only be utilized by a licensed independent adjuster, licensed agent, or supervised individuals operating pursuant to this paragraph;
      2. Shall comply with all claims payment requirements of the Georgia Insurance Code; and
      3. Shall be certified as compliant with this Code section by a licensed independent adjuster that is an officer of a business entity licensed under this chapter.
   4. "Business entity" means a corporation, association, partnership, sole proprietorship, limited liability company, limited liability partnership, or other legal entity.
   5. "Controlled business of a person" means property or casualty insurance for a person or a person's spouse; for any relative by blood or marriage within the second degree of kinship as defined by paragraph (5) of Code Section 53-4-2; for a person's employer or the firm of which a person is a member; for any officer, director, stockholder, or member of a person's employer or of any firm of which a person is a partner; for any spouse of the officer, director, employer, stockholder, or member of a person's firm; for a person's ward or employee; or for any person or in regard to any property under a person's control or supervision in any fiduciary capacity.
   6. "Counselor" means any individual who engages or advertises or holds himself or herself out as engaging in the business of counseling, advising, or rendering opinions as to the benefits promised under any contract of insurance issued or offered by any insurer or as to the terms, value, effect, advantages, or disadvantages under the contract of insurance, other than an actuary or consultant advising insurers. When receiving a fee, commission, or other compensation for this service, such individual shall not receive any compensation from any other source on or relating to the same transaction.
   7. "Home state" means Canada, the District of Columbia, and any state or territory of the United States in which an insurance producer or adjuster maintains his or her principal place of residence or principal place of business and is licensed to act as an insurance producer or adjuster.
   8. "Independent adjuster" means an adjuster representing the interest of the insurer who is not an employee of such insurer.
   9. "Insurance," except where the type of insurance is specifically stated, means all kinds of insurance other than bail bonding by individual sureties.
   10. "Insurance producer" means a person required to be licensed under the laws of this state to sell, solicit, or negotiate insurance.

       (10.1) "Limited subagent" means an individual licensed on behalf of a licensed agent pursuant to Code Section 33-23-12.

   11. "Negotiate" means the act of conferring directly with or offering advice directly to a purchaser or prospective purchaser of a particular contract of insurance concerning any of the substantive benefits, terms, or conditions of the contract, provided that the person engaged in that act either sells insurance or obtains insurance from insurers for purchasers.
   12. "Person" means an individual or business entity.
   13. "Public adjuster" means any person who solicits, advertises for, or otherwise agrees to represent only a person who is insured under a policy covering fire, windstorm, water damage, and other physical damage to real and personal property other than vehicles licensed for the road, and any such representation shall be limited to the settlement of a claim or claims under the policy for damages to real and personal property, including related loss of income and living expense losses but excluding claims arising out of any motor vehicle accident, and who, for compensation on behalf of an insured:
       1. Acts or aids, solely in relation to first-party claims arising under insurance contracts that insure the real or personal property of the insured, in negotiating for, or effecting the settlement of, a claim for loss or damage covered by an insurance contract;
       2. Advertises for employment as a public adjuster of insurance claims or solicits business or represents himself or herself to the public as a public adjuster of first-party claims for losses or damages arising out of policies of insurance that insure real or personal property; or
       3. Directly or indirectly solicits business, investigates or adjusts losses, or advises an insured about first-party claims for losses or damages arising out of policies of insurance that insure real or personal property for another person engaged in the business of adjusting losses or damages covered by an insurance policy.
   14. "Sell" means to exchange a contract of insurance by any means, for money or its equivalent, on behalf of an insurance company.
   15. "Solicit" means attempting to sell insurance or asking or urging a person to apply for a particular kind of insurance from a particular company.
   16. "Subagent" means any licensed agent, except as provided in Code Section 33-23-12, who acts for or on behalf of another licensed agent in the selling of, solicitation of, or negotiation for an insurance contract or annuity contract and who has on file with the Commissioner a certificate of authority from each agent with whom the subagent places insurance. Subagent also means subproducer. The term "subagent" shall not include:
       1. An agent who places insurance with or through another agent involving 12 or fewer policies or certificates of insurance in any one calendar year; or
       2. An agent who places surplus lines insurance with or through a surplus lines broker only with respect to such surplus lines insurance.
   17. "Surplus lines broker" means an individual licensed pursuant to Code Section 33-23-37.
2. The definitions of agent, subagent, and counselor in subsection (a) of this Code section shall not be deemed to include:
   1. An attorney at law admitted to practice in this state, when handling the collections of premiums or advising clients as to insurance as a function incidental to the practice of law or who adjusts losses which are incidental to the practice of his or her profession;
   2. Any representative of ocean marine insurers;
   3. Any representative of farmers' mutual fire insurance companies as defined in Chapter 16 of this title;
   4. A salaried employee of a credit or character reporting firm or agency not engaged in the insurance business who may, however, report to an insurer;
   5. A person acting for or as a collection agency;
   6. A person who makes the salary deductions of premiums for employees or, under a group insurance plan, a person who serves the master policyholder of group insurance in administering the details of such insurance for the employees or debtors of the master policyholder or of a firm or corporation by which the person is employed and who does not receive insurance commissions for such service; provided, further, that an administration fee not exceeding 5 percent of the premiums collected paid by the insurer to the administration office shall not be construed to be an insurance commission;
   7. Persons exempted from licensure as provided in subsection (h) of Code Section 33-23-4; or
   8. An individual who collects claim information from, or furnishes claim information to, insureds or claimants, who conducts data entry, and who enters data into an automated claims adjudication system, provided that the individual is an employee of a licensed independent adjuster or its affiliate where no more than 25 such persons are under the supervision of one licensed independent adjustor or licensed agent.
3. In addition to paragraphs (2) through (8) of subsection (b) of this Code section, the definitions of public adjuster, independent adjuster, and adjuster in subsection (a) of this Code section shall not be deemed to include an attorney admitted to practice law in this state.

(Code 1981, §33-23-1, enacted by Ga. L. 1992, p. 2830, § 1; Ga. L. 1995, p. 1011, §§ 1, 2; Ga. L. 1999, p. 878, § 2; Ga. L. 2001, p. 925, § 1; Ga. L. 2008, p. 1076, § 1/SB 113; Ga. L. 2012, p. 1350, §§ 3, 4, 5/HB 1067; Ga. L. 2012, p. 1040, §§ 4, 5, 6/SB 203; Ga. L. 2014, p. 181, §§ 1, 2/HB 610.)

- For annual survey of real property law, see 68 Mercer L. Rev. 231 (2016).

JUDICIAL DECISIONS

Editor's notes.

- In light of the similarity of the statutory provisions, decisions under former Civil Code 1910, § 2443 and former Code 1933 §§ 56-501, 56-502, and 56-508 are included in the annotations for this Code section.

- Part of former Civil Code 1910, § 2443, defining who is an agent, was not unconstitutional because it impaired the obligation of contracts. Globe & Rutgers Fire Ins. Co. v. Walker, 150 Ga. 163, 103 S.E. 407 (1920) (decided under former Civil Code 1910, § 2443).

- Person who had no authority to make, alter, vary, or discharge any policy contract, but was a soliciting or special agent with authority to solicit applications for insurance and to offer all such applications to the company, was an agent of the insurance company. Travelers Ins. Co. v. Harrington, 75 Ga. App. 759, 44 S.E.2d 457 (1947) (decided under former Code 1933, § 56-502).

- There is no decision which has construed the word "individual" as used in defining agent to include a corporation. Robinson v. Franwylie, Inc., 145 Ga. App. 507, 244 S.E.2d 73 (1978) (decided under former Code 1933, § 56-801).

Bankruptcy debtors who administered employment benefit plans were fiduciaries for purposes of nondischargeability of debts to the plans under 11 U.S.C. § 523(a)(4) as licensed insurance agents since O.C.G.A. § 33-23-35(b) created an express statutory trust, and the debtors' administration of the plans through a corporation did not abrogate the debtors' fiduciary status as individuals under O.C.G.A. § 33-23-1. Nat'l Air Traffic Controllers Assoc. v. Davenport (In re Davenport), Bankr. (Bankr. N.D. Ga. Sept. 6, 2007).

- Employer who obtains a group policy of insurance covering an employee is, for the purpose of doing every act necessary to effectuate the purpose of the policy, the agent of the insurance company issuing the policy. Cason v. Aetna Life Ins. Co., 91 Ga. App. 323, 85 S.E.2d 568 (1954).

- Former Code 1933, § 56-2301 (see O.C.G.A. § 33-24-34), when construed with the statute existing at the time of its enactment, former Code 1933, § 56-501 (see O.C.G.A. § 33-23-1), indicated that cities were empowered to enter into agreements with insurance companies to furnish such insurance in the same manner and in the same capacity as would a nongovernmental employer, i.e., as an agent of the insurance company. Cason v. Aetna Life Ins. Co., 91 Ga. App. 323, 85 S.E.2d 568 (1954).

- When an insurance company, through the agency of the deceased's employer, had knowledge that the deceased was ineligible for insurance under the policy increase certificate issued to the deceased and, in these circumstances, had accepted the premiums necessary to keep the certificate, the insurance company was estopped to interpose the defense that the deceased was not entitled to protection under the certificate. Cason v. Aetna Life Ins. Co., 91 Ga. App. 323, 85 S.E.2d 568 (1954) (decided under former Code 1933, § 56-501).

- When an insurance company had issued a master policy of group life insurance to an incorporated association, when a representative of the association wrote a letter notifying a partner that none of the members of the partnership were entitled to a $10,000.00 policy under the master policy, the author of the letter was not acting as the agent of the insured rather than the insurance company when the author wrote the letter, since in this state the association was the agent of the insurance company and not of the insured; the action of the association's representative did not cancel out the $10,000.00 policy. Washington Nat'l Ins. Co. v. Burch, 293 F.2d 365 (5th Cir. 1961) (decided under former Code 1933, § 56-501).

- Effect of former paragraph (b)(2) was that a person who served the master policyholder in administering the details of group insurance was exempted from the licensing requirements of these statutes. Piedmont S. Life Ins. Co. v. Gunter, 108 Ga. App. 236, 132 S.E.2d 527 (1963) (decided under former Code 1933, § 56-801).

- Provisions defining who are agents of an insurance company as a part of an act designed to make insurance companies and the companies' agents qualify and obtain certificates before the Insurance Commissioner and pay certain fees, but not attempting to define the authority of any agent, does not affect the provisions of the application and policy touching the authority of agents. Saul v. New York Life Ins. Co., 92 F.2d 665 (5th Cir. 1937) (decided under former Code 1910, § 2443).

- This section which, in effect, makes a soliciting agent of an insurance company its agent for all purposes does not go to the extent of making a soliciting agent an officer of the company authorized to create a new contract, which would be necessary to validate reinstatement of a lapsed policy on false evidence of insurability, contrary to the provisions of the policy. New York Life Ins. Co. v. Odom, 93 F.2d 641 (5th Cir. 1937), cert. denied, 304 U.S. 566, 58 S. Ct. 948, 82 L. Ed. 1532 (1938) (decided under former Code 1933, § 56-501).

- Even if the acts of a party were such as to bring the party within the statutory definition of an agent under the provisions of former paragraph (a)(3) of former Code 1933, § 56-801 (see O.C.G.A. § 33-23-1), this would not automatically clothe the party with power to issue a valid oral binder as recognized under Ga. L. 1960, p. 289, § 1 (see O.C.G.A § 33-24-33(a)). Southeastern Fid. Fire Ins. Co. v. State Farm Mut. Auto. Ins. Co., 118 Ga. App. 861, 165 S.E.2d 887 (1968) (decided under former Code 1933, § 56-801).

- It cannot be said that every person who procures insurance to cover the property of another is the agent of the company from whom the insurance is purchased and not the person for whom the insurance is sought. Georgia Ins. Serv., Inc. v. Wise, 97 Ga. App. 461, 103 S.E.2d 445 (1958) (decided under former Code 1933, § 56-501).

- It seems to be necessary under former paragraph (a)(4) that an independent broker be the agent of the insured rather than the insurer. Canal Ins. Co. v. Lawson, 123 Ga. App. 376, 181 S.E.2d 91 (1971) (decided under former Code 1933, § 56-801).

Cited in Kennesaw Life & Accident Ins. Co. v. Hendricks, 108 Ga. App. 148, 132 S.E.2d 152 (1963); Kelley v. Montgomery, 108 Ga. App. 271, 132 S.E.2d 857 (1963); Chicago Title Ins. Co. v. Nash, 228 Ga. 719, 187 S.E.2d 662 (1972); Stewart v. Georgia Mut. Ins. Co., 159 Ga. App. 91, 282 S.E.2d 728 (1981); Seals v. Hygrade Distrib. & Delivery Sys., Inc., 249 Ga. App. 574, 549 S.E.2d 412 (2001).

OPINIONS OF THE ATTORNEY GENERAL

Editor's notes.

- In light of the similarities of the statutory provisions, decisions under former Code 1933, §§ 56-501 and 56-801 are included in the annotations for this Code section.

- When folders are being distributed by the county superintendent of schools to all of the superintendent's teachers, who in turn distribute the folders to the school children who return the application and the premium to the teachers, who are required to complete the applications and keep a record of the applications, this is not doing an insurance business through unlicensed agents. 1957 Op. Att'y Gen. p. 165 (decided under former Code 1933, § 56-501).

- All types of court bonds were included in the definition given in former paragraph (a)(9) of this section, and the individual selected in a law firm as an attorney-in-fact would be a "limited agent." 1963-65 Op. Att'y Gen. p. 133 (decided under former Code 1933, § 56-801).

- Administrative personnel in the office of an insurance agent who perform clerical duties of opening envelopes containing premium checks need not be licensed as insurance agents. 1994 Op. Att'y Gen. No. U94-15.

RESEARCH REFERENCES

Am. Jur. 2d.

- 43 Am. Jur. 2d, Insurance, § 109 et seq.

- 44 C.J.S., Insurance, §§ 65, 259 et seq., 305.

- Whom does agent represent in soliciting or taking application for reinstatement of insurance policy, 23 A.L.R. 1201.

Right of insurer to challenge agent's classification of risk, 29 A.L.R. 99.

Meaning of term "solicit" in statute relating to insurance agents, 48 A.L.R. 1173.

Statutory declaration that one who does certain prescribed acts for a surety company or an insurance company shall be deemed as acting as its agent as affected by other party's knowledge of, or opportunity to know, limitations of his actual authority, 88 A.L.R. 291.

Right of insurance company, in view of its public interest, to reject applications for insurance, 107 A.L.R. 1421; 123 A.L.R. 139.

Insured's responsibility for false answers inserted by insurer's agent in application following correct answers by insured, or incorrect answers suggested by agent, 26 A.L.R.3d 6.

Excess carrier's right to maintain action against primary liability insurer for wrongful failure to settle claim against insured, 10 A.L.R.4th 879.