Limitation of adverse underwriting decisions

(a) No insurance institution or agent may base an adverse underwriting decision in whole or in part: (1) On the fact of a previous adverse underwriting decision or on the fact that an individual previously obtained insurance coverage through a residual market mechanism; provided, however, an insurance institution or agent may base an adverse underwriting decision on further information obtained from an insurance institution or agent responsible for a previous adverse underwriting decision; (2) On personal information received from an insurance-support organization whose primary source of information is insurance institutions; provided, however, an insurance institution or agent may base an adverse underwriting decision on further personal information obtained as the result of information received from such insurance-support organization. (b) With respect to a personal or family type policy of motor vehicle insurance, no insurance institution or agent may base an adverse underwriting decision solely on the fact that the applicant has never purchased such a policy of motor vehicle insurance or has not owned or been covered by such a policy of motor vehicle insurance during any specified period immediately preceding the date of application. History. — Code 1981, § 33-39-13, enacted by Ga. L. 1982, p. 615, § 1; Ga. L. 1984, p. 22, § 33; Ga. L. 1989, p. 642, § 1. 33-39-14. Disclosure of personal or privileged information received in connection with insurance transactions. An insurance institution, agent, or insurance-support organization shall not disclose any personal or privileged information about an individual collected or received in connection with an insurance transaction unless the disclosure is: (1) With the written authorization of the individual, provided: 823 33-39-14 (A) If such authorization is submitted by another insurance institution, agent, or insurance-support organization, the authorization meets the requirement of Code Section 33-39-7; or (B) If such authorization is submitted by a person other than an insurance institution, agent, or insurance-support organization, the authorization is: (i) Dated; (ii) Signed by the individual; and (iii) Obtained one year or less prior to the date a disclosure is sought pursuant to this subsection; or (2) To a person other than an insurance institution, agent, or insurance-support organization, provided such disclosure is reasonably necessary: (A) To enable such person to perform a business, professional, or insurance function for the disclosing insurance institution, agent, or insurance-support organization and such person agrees not to disclose the information further without the individual’s written authorization unless the further disclosure: (i) Would otherwise be permitted by this Code section if made by an insurance institution, agent, or insurance-support organization; or (ii) Is reasonably necessary for such person to perform its function for the disclosing insurance institution, agent, or insurance-support organization; or (B) To enable such person to provide information to the disclosing insurance institution, agent, or insurance-support organization for the purpose of: (i) Determining an individual’s eligibility for an insurance benefit or payment; or (ii) Detecting or preventing criminal activity, fraud, material misrepresentation, or material nondisclosure in connection with an insurance transaction; or (3) To an insurance institution, agent, insurance-support organization, or self-insurer, provided the information disclosed is limited to that which is reasonably necessary: (A) To detect or prevent criminal activity, fraud, material misrepresentation, or material nondisclosure in connection with insurance transactions; or 824 33-39-14 (B) For either the disclosing or receiving insurance institution, agent, or insurance-support organization to perform its function in connection with an insurance transaction involving the individual; (4) To a medical-care institution or medical professional for the purpose of: (A) Verifying insurance coverage or benefits; (B) Informing an individual of a medical problem of which the individual may not be aware; or (C) Conducting an operations or services audit; provided only such information is disclosed as is reasonably necessary to accomplish the foregoing purposes; (5) To an insurance regulatory authority; (6) To a law enforcement or other governmental authority: (A) To protect the interests of the insurance institution, agent, or insurance-support organization in preventing or prosecuting the perpetration of fraud upon it; or (B) If the insurance institution, agent, or insurance-support organization reasonably believes that illegal activities have been conducted by the individual; (7) Otherwise permitted or required by law; (8) In response to a facially valid administrative or judicial order, including a search warrant or subpoena; (9) Made for the purpose of conducting actuarial or research studies, provided: (A) No individual may be identified in any actuarial or research report; (B) Materials allowing the individual to be identified are returned or destroyed as soon as they are no longer needed; and (C) The actuarial or research organization agrees not to disclose the information unless the disclosure would otherwise be permitted by this Code section if made by an insurance institution, agent, or insurance-support organization; (10) To a party or a representative of a party to a proposed or consummated sale, transfer, merger, or consolidation of all or part of the business of the insurance institution, agent, or insurance-support organization, provided: (A) Prior to the consummation of the sale, transfer, merger, or consolidation only such information is disclosed as is reasonably 825 33-39-14 necessary to enable the recipient to make business decisions about the purchase, transfer, merger, or consolidation; and (B) The recipient agrees not to disclose the information unless the disclosure would otherwise be permitted by this Code section if made by an insurance institution, agent, or insurance-support organization; (11) To a person whose only use of such information will be in connection with the marketing of a product or service, provided: (A) No medical-record information, privileged information, or personal information relating to an individual’s character, personal habits, mode of living, or general reputation is disclosed, and no classification derived from such information is disclosed; (B) The individual has been given an opportunity to indicate that he or she does not want personal information disclosed for marketing purposes and has given no indication that he or she does not want the information disclosed; and (C) The person receiving such information agrees not to use it except in connection with the marketing of a product or service; (12) To an affiliate whose only use of the information will be in connection with an audit of the insurance institution or agent or the marketing of an insurance product or service, provided the affiliate agrees not to disclose the information for any other purpose or to unaffiliated persons; (13) By a consumer reporting agency, provided the disclosure is to a person other than an insurance institution or agent; (14) To a group policyholder for the purpose of reporting claims experience or conducting an audit of the insurance institution’s or agent’s operations or services, provided the information disclosed is reasonably necessary for the group policyholder to conduct the review or audit; (15) To a professional peer review organization for the purpose of reviewing the service or conduct of a medical-care institution or medical professional; (16) To a governmental authority for the purpose of determining the individual’s eligibility for health benefits for which the governmental authority may be liable; (17) To a certificate holder or policyholder for the purpose of providing information regarding the status of an insurance transaction; or 826 33-39-16 (18) To a lienholder, mortgagee, assignee, lessor, or other person shown on the records of an insurance institution or agent as having legal or beneficial interest in a policy of insurance, provided that: (A) No medical-record information is disclosed unless the disclosure would otherwise be permitted by this Code section; and (B) The information disclosed is limited to that which is reasonably necessary to permit such person to protect its interest in such policy. History. — Code 1981, § 33-39-14, enacted by Ga. L. 1982, p. 615, § 1; Ga. L. 1984, p. 22, § 33. 33-39-15. Investigations by Commissioner into affairs of insurance institutions, agents, or insurance-support organizations. (a) The Commissioner shall have power to examine and investigate into the affairs of every insurance institution or agent doing business in this state to determine whether the insurance institution or agent has been or is engaged in any conduct in violation of this chapter. (b) The Commissioner shall have the power to examine and investigate into the affairs of every insurance-support organization acting on behalf of an insurance institution or agent which either transacts business in this state or transacts business outside this state that has an effect on a person residing in this state in order to determine whether such insurance-support organization has been or is engaged in any conduct in violation of this chapter. History. — Code 1981, § 33-39-15, enacted by Ga. L. 1982, p. 615, § 1. 33-39-16. Violations of chapter; service of statement of charges and notice of hearing; conduct of hearing. (a) Whenever the Commissioner has reason to believe that an insurance institution, agent, or insurance-support organization has been or is engaged in conduct in this state which violates this chapter, or if the Commissioner believes that an insurance-support organization has been or is engaged in conduct outside this state which has an effect on a person residing in this state and which violates this chapter, the Commissioner shall issue and serve upon such insurance institution, agent, or insurance-support organization a statement of charges and notice of hearing to be held at a time and place fixed in the notice. The date for such hearing shall be not less than 30 days after the date of service. 827 33-39-17 (b) At the time and place fixed for such hearing the insurance institution, agent, or insurance-support organization charged shall have an opportunity to answer the charges against it and present evidence on its behalf. Upon good cause shown, the Commissioner shall permit any adversely affected person to intervene, appear, and be heard at such hearing by counsel or in person. (c) At any hearing conducted pursuant to this Code section, the Commissioner may administer oaths, examine and cross-examine witnesses, and receive oral and documentary evidence. The Commissioner shall have the power to subpoena witnesses, compel their attendance, and require the production of books, papers, records, correspondence, and other documents which are relevant to the hearing. A stenographic record of the hearing shall be made upon the request of any party or at the discretion of the Commissioner. If no stenographic record is made and if judicial review is sought, the Commissioner shall prepare a statement of the evidence for use on review. Hearings conducted under this Code section shall be governed by the same rules of evidence and procedure as set forth in Chapter 2 of this title. (d) Statements of charges, notices, orders, and other processes of the Commissioner under this chapter may be served by anyone duly authorized to act on behalf of the Commissioner. Service of process may be completed in the manner provided by law for service of process in civil actions or by registered mail or statutory overnight delivery. A copy of the statement of charges, notice, order, or other process shall be provided to the person or persons whose rights under this chapter have been allegedly violated. A verified return setting forth the manner of service, or return postcard receipt in the case of registered mail or statutory overnight delivery shall be sufficient proof of service. History. — Code 1981, § 33-39-16, enacted by Ga. L. 1982, p. 615, § 1; Ga. L. 1984, p. 22, § 33; Ga. L. 2000, p. 1589, § 4. Editor’s notes. — Ga. L. 2000, p. 1589, § 16, not codified by the General Assembly, provides that the amendment to subsection (d) is applicable with respect to notices delivered on or after July 1, 2000. 33-39-17. Commissioner as appointed to accept service on behalf of insurance-support organization transacting business outside state. For the purpose of this chapter, an insurance-support organization transacting business outside this state which has an effect on a person residing in this state shall be deemed to have appointed the Commissioner to accept service of process on its behalf, provided the Commissioner causes a copy of such service to be mailed forthwith by registered mail or statutory overnight delivery to the insurance-support organization at its last known principal place of business. The return postcard 828 33-39-18 receipt for such mailing shall be sufficient proof that the same was properly mailed by the Commissioner. History. — Code 1981, § 33-39-17, enacted by Ga. L. 1982, p. 615, § 1; Ga. L. 2000, p. 1589, § 4. Editor’s notes. — Ga. L. 2000, p. 1589, § 16, not codified by the General Assembly, provides that the amendment to this Code section is applicable with respect to notices delivered on or after July 1, 2000. 33-39-18. Service of findings and cease and desist orders of Commissioner; modification or setting aside of order or report. (a) If, after a hearing pursuant to Code Section 33-39-16, the Commissioner determines that the insurance institution, agent, or insurance-support organization charged has engaged in conduct or practices in violation of this chapter, the Commissioner shall reduce his or her findings to writing and shall issue and cause to be served upon such insurance institution, agent, or insurance-support organization a copy of such findings and an order requiring such insurance institution, agent, or insurance-support organization to cease and desist from the conduct or practices constituting violation of this chapter. (b) If, after a hearing pursuant to Code Section 33-39-16, the Commissioner determines that the insurance institution, agent, or insurance-support organization charged has not engaged in conduct or practices in violation of this chapter, the Commissioner shall prepare a written report which sets forth findings of fact and conclusions of law. Such report shall be served upon the insurance institution, agent, or insurance-support organization charged and upon the person or persons, if any, whose rights under this chapter were allegedly violated. (c) Until the expiration of the time allowed under Code Section 33-39-20 for filing a petition for review or until such petition is actually filed, whichever occurs first, the Commissioner may modify or set aside any order or report issued under this Code section. After the expiration of the time allowed under Code Section 33-39-20 for filing a petition for review, if no such petition has been duly filed, the Commissioner may, after notice and opportunity for hearing, alter, modify, or set aside, in whole or in part, any order or report issued under this Code section whenever conditions of fact or law warrant such action or if the public interest so requires. History. — Code 1981, § 33-39-18, enacted by Ga. L. 1982, p. 615, § 1; Ga. L. 1984, p. 22, § 33. 829 33-39-20 33-39-19. Monetary penalty for knowing violations of chapter; monetary penalty for violation of cease and desist order. (a) In any case where a hearing pursuant to Code Section 33-39-16 results in the finding of a knowing violation of this chapter, the Commissioner may, in addition to the issuance of a cease and desist order as prescribed in Code Section 33-39-18, order payment of a monetary penalty of not more than $500.00 for each violation but not to exceed $10,000.00 in the aggregate for multiple violations. (b) Any person who violates a cease and desist order of the Commissioner under Code Section 33-39-18 may, after notice and hearing and upon order of the Commissioner, be subject to one or more of the following penalties, at the discretion of the Commissioner: (1) A monetary fine of not more than $10,000.00 for each violation; (2) A monetary fine of not more than $50,000.00 if the Commissioner finds that violations have occurred with such frequency as to constitute a general business practice; or (3) Suspension or revocation of an insurance institution’s or agent’s license. History. — Code 1981, § 33-39-19, enacted by Ga. L. 1982, p. 615, § 1; Ga. L. 1984, p. 22, § 33. 33-39-20. Order or report of Commissioner.