Definitions

As used in this article, the term: 187 33-5-20.1 INSURANCE 33-5-20.1 (1) ‘‘Domestic surplus lines insurer’’ means a nonadmitted insurer that is domiciled in this state with which a surplus lines broker may place surplus lines insurance; (1.1) ‘‘Exempt commercial purchaser’’ means any person purchasing commercial insurance that, at the time of placement, meets the following requirements: (A) The person employs or retains a qualified risk manager to negotiate insurance coverage; (B) The person has paid aggregate nation-wide commercial property and casualty insurance premiums in excess of $100,000.00 in the immediately preceding 12 months; and (C)(i) The person meets at least one of the following criteria: (I) The person possesses a net worth in excess of $20 million as such amount is adjusted pursuant to division (ii) of this subparagraph; (II) The person generates annual revenues in excess of $50 million as such amount is adjusted pursuant to division (ii) of this subparagraph; (III) The person employs more than 500 full-time or full-time equivalent employees per individual insured or is a member of an affiliated group employing more than 1,000 employees in the aggregate; (IV) The person is a not for profit organization or public entity generating annual budgeted expenditures of at least $30 million as such amount is adjusted pursuant to division (ii) of this subparagraph; or (V) The person is a municipality with a population in excess of 50,000. (ii) Effective on January 1, 2016, and every five years on January 1 thereafter, the amounts in subdivisions (I), (II), and (IV) of division (i) of this subparagraph shall be adjusted to reflect the percentage change for such five-year period in the Consumer Price Index for All Urban Consumers as reported by the Bureau of Labor Statistics of the United States Department of Labor. (2) ‘‘Home state’’ means: (A) The state in which an insured maintains its principal place of business or, in the case of an individual, the individual’s principal residence; or 188 33-5-20.1 REG. OF UNAUTHORIZED INSURERS 33-5-20.1 (B) If 100 percent of the insured risk is located outside the state referred to in subparagraph (A) of this paragraph, the state to which the greatest percentage of the insured’s taxable premium for that insurance contract is allocated. If more than one insured from an affiliated group are named insureds on a single nonadmitted insurance contract, the term ‘‘home state’’ means the home state, as determined according to subparagraph (A) of this paragraph, of the member of the affiliated group that has the largest percentage of premium attributed to it under such insurance contract. (3) ‘‘Nonadmitted insurance’’ means any property and casualty insurance permitted in a state to be placed directly or through a surplus line broker with a nonadmitted insurer eligible to accept such insurance. (4) ‘‘Principal place of business’’ means the state where the insured maintains its headquarters and where the insured’s high-level officers direct, control, and coordinate the business’s activities. (5) ‘‘Principal residence’’ means the state where the individual resides for the greatest number of days during a calendar year. (6) ‘‘Qualified risk manager’’ means, with respect to a policyholder of commercial insurance, a person who meets all of the following requirements: (A) The person is an employee of, or third-party consultant retained by, the commercial policyholder; (B) The person provides skilled services in purchase of insurance and in loss prevention, loss reduction, or risk and insurance coverage analysis; (C) The person has a bachelor’s degree or higher from an accredited college or university in risk management, business administration, finance, economics, or any other field determined by a state insurance commissioner or other state regulatory official or entity to demonstrate minimum competence in risk management and: (i) Has three years of experience in risk financing, claims administration, loss prevention, risk and insurance analysis, or purchasing commercial lines of insurance; (ii) Has a designation as a chartered property and casualty underwriter issued by the American Institute for CPCU/Insurance Institute of America; (iii) Has a designation as an associate in risk management issued by the American Institute for CPCU/Insurance Institute of America; 189 33-5-20.1 INSURANCE 33-5-20.1 (iv) Has a designation as certified risk manager issued by the National Alliance for Insurance Education & Research; (v) Has a designation as a RIMS Fellow issued by the Global Risk Management Institute; or (vi) Has any other designation, certification, or license determined by the Commissioner to demonstrate minimum competency in risk management; and (D) The person has: (i) At least seven years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of insurance; (ii) Any one of the designations specified in subparagraph (C) of this paragraph; or (iii) A graduate degree from an accredited college or university in risk management, business administration, finance, economics, or any other field determined by a state insurance commissioner or other state regulatory official or entity to demonstrate minimum competence in risk management. (7) ‘‘Surplus line insurance’’ means any property and casualty insurance permitted in a state to be placed through a surplus line broker with a nonadmitted insurer eligible to accept such insurance. (8) ‘‘Surplus line broker’’ or ‘‘broker’’ means an individual who is licensed in this state to sell, solicit, or negotiate insurance on properties, risks, or exposures located or to be performed in this state with nonadmitted insurers. History. — Code 1981, § 33-5-20.1, enacted by Ga. L. 2011, p. 449, § 1/HB 413; Ga. L. 2018, p. 744, § 1/SB 381; Ga. L. 2019, p. 337, § 1-25/SB 132; Ga. L. 2019, p. 1056, § 33/SB 52. The 2018 amendment, effective July 1, 2018, added paragraph (1); and redesignated former paragraph (1) as present paragraph (1.1) The 2019 amendments. — The first 2019 amendment, effective July 1, 2019, added ‘‘or’’ at the end of division (6)(D)(ii); deleted former division (6)(D)(iii), which read: ‘‘At least ten years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of insurance; or’’; and redesignated former division (6)(D)(iv) as present division (6)(D)(iii). The second 2019 amendment, effective May 12, 2019, part of an Act to revise, modernize, and correct the Code, deleted ‘‘or’’ following ‘‘subparagraph;’’ at the end of subdivisions (1.1)(C)(i)(I) and (1.1)(C)(i)(II). 190 33-5-20.2 REG. OF UNAUTHORIZED INSURERS 33-5-20.2 33-5-20.2. Criteria for domestic surplus lines insurer; construction with federal provisions; eligibility to write insurance; taxes; protection; financial and solvency requirements; exemption from statutory requirements. (a) A nonadmitted insurer that is domiciled in this state shall be deemed a domestic surplus lines insurer if all of the following criteria are satisfied: (1) The insurer shall possess a policyholder surplus of at least $15 million; (2) The insurer is an eligible surplus lines insurer in at least one jurisdiction other than this state; (3) The board of directors of the insurer has passed a resolution seeking to be a domestic surplus lines insurer in this state; and (4) The Commissioner has issued a certificate of authority or otherwise provided written approval for the insurer to be a domestic surplus lines insurer. (b) For the purposes of the federal Nonadmitted and Reinsurance Reform Act of 2010, 15 U.S.C Section 8201, et seq, a domestic surplus lines insurer shall be considered a nonadmitted insurer with respect to risks insured in this state. (c) A domestic surplus lines insurer shall be deemed an eligible surplus lines insurer and authorized to write any kind of insurance that a nonadmitted insurer not domiciled in this state is eligible to write. (d) Notwithstanding any other statute, the policies issued in this state by a domestic surplus lines insurer shall be subject to taxes assessed upon surplus lines policies issued by nonadmitted insurers, including the surplus lines premium tax, but will not be subject to other taxes levied upon admitted insurers, whether domestic or foreign. (e) Policies issued by a domestic surplus lines insurer are not subject to the protections or other provisions of the Georgia Insurers Insolvency Pool created by Chapter 36 of this title or the Georgia Life and Health Insurance Guaranty Association created by Chapter 38 of this title. (f ) All financial and solvency requirements imposed by this state’s laws upon domestic admitted insurers shall apply to domestic surplus lines insurers unless domestic surplus lines insurers are otherwise specifically exempted. (g) Policies issued by a domestic surplus lines insurer shall be exempt from all statutory requirements relating to insurance rating plans, policy forms, premiums charged to insureds, and other statutory 191 33-5-20.2 INSURANCE 33-5-21 requirements in the same manner and to the same extent as a nonadmitted insurer domiciled in another state. History. — Code 1981, § 33-5-20.2, enacted by Ga. L. 2018, p. 744, § 2/SB 381. Effective date. — This Code section became effective July 1, 2018. 33-5-21. Authorization of procurement of surplus line insurance; conditions; procuring or placing nonadmitted insurance for exempt commercial purchaser. (a) Surplus line insurance may be procured from unauthorized insurers subject to the following conditions: (1) The insurance must be procured through a licensed surplus line broker; (2) The insurance may only be procured from insurers which meet the financial condition requirements of Code Section 33-5-25; (3) The insured or the insured’s agent has made an effort to procure the desired insurance coverage or benefits from authorized insurers, but such effort has been unsuccessful in obtaining insurance coverage or benefits which are satisfactory to the insured except as provided under subsection (b) of this Code section; and (4) The insurance shall not be procured under this chapter for personal private passenger motor vehicle coverage or residential dwelling property coverage unless such insurance cannot be obtained from an authorized insurer. (b) The broker shall not be required to make a due diligence search to determine whether the full amount or type of insurance can be obtained from authorized insurers when the surplus line broker is seeking to procure or place nonadmitted insurance for an exempt commercial purchaser, provided: (1) The broker procuring or placing the surplus line insurance has disclosed to the exempt commercial purchaser that such insurance may be available from the admitted market that may provide greater protection with more regulatory oversight; and (2) The exempt commercial purchaser has subsequently requested in writing for the broker to procure or place such insurance from a nonadmitted insurer. History. — Code 1933, § 56-614, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1992, p. 6, § 33; Ga. L. 1995, p. 1165, § 1; Ga. L. 2011, p. 449, § 2/HB 413; Ga. L. 2019, p. 337, § 1-26/SB 132. The 2019 amendment, effective July 1, 2019, inserted ‘‘private’’ in paragraph (a)(4). 192 33-5-21 REG. OF UNAUTHORIZED INSURERS 33-5-23