TITLE 33 INSURANCE

Section 22. Insurance Premium Finance Companies, 33-22-1 through 33-22-16.

ARTICLE 4 JOINT COMMITTEE TO STUDY PRESCRIPTION COSTS IN STATE FUNDED HEALTH CARE PLANS

33-22-13. Procedure for cancellation of insurance contract upon default.

When a premium finance agreement contains a power of attorney enabling the premium finance company to cancel any insurance contract or contracts listed in the agreement, the insurance contract or contracts shall not be canceled by the premium finance company unless the cancellation is effectuated in accordance with this Code section.
Not less than ten days' written notice shall be delivered to the insured or sent by electronic means or mailed to the insured at his or her address shown in the agreement of the intent of the premium finance company to cancel the insurance contract unless the default is cured within such ten-day period. A copy of said notice shall also be sent to the insurance agent or insurance broker indicated on the premium finance agreement.
1. After expiration of such ten-day period, the premium finance company may thereafter in the name of the insured cancel such insurance contract or contracts by mailing or delivering to the insurer a notice of cancellation; and the insurance contract shall be canceled as if the notice of cancellation had been submitted by the insured, but without requiring the return of the insurance contract or contracts. The premium finance company, when mailing or delivering notice to the insurance company to cancel the policy, shall mail notice to the insured notifying him or her of the action taken. Such notice to the insured shall contain the date and time the policy is to be canceled, which date shall be after the date of mailing of such notice, and shall inform the insured that any payment received after the mailing or delivery of notice to the insurance company to cancel the policy will not reinstate the policy. The notice may contain information to the effect that the premium finance company will make a request to the insurance company to reinstate the policy. Language sufficiently clear and specific so that a person of average intelligence can understand the action being taken by the premium finance company shall be used. The notice to the insured required by this subsection shall be delivered as provided in subsection (d) of Code Section 33-24-14 or mailed to the last address of record of the insured and shall be dispatched by at least first-class mail and receiving the receipt provided by the United States Postal Service or such other evidence of mailing as prescribed or accepted by the United States Postal Service.
2. The receipt of the notice of cancellation provided in paragraph (1) of this subsection by the insurer shall create a conclusive presumption that the premium finance company has fully complied with all the requirements of this Code section, that the insurer is entitled to rely on such presumption, and that the cancellation of the insurance contract or contracts is concurred in and authorized by the insured. No liability of any nature whatsoever shall be imposed upon the insurer as a result of the failure by the insured to receive the notice of the action taken required by paragraph (1) of this subsection or as a result of the failure of the insurance premium finance company to comply with any of the requirements of this Code section.
All statutory, regulatory, and contractual restrictions providing that the insurance contract may not be canceled unless notice is given to a governmental agency, mortgagee, or other third party shall apply where cancellation is effected under this Code section. The insurer shall give the prescribed notice on behalf of itself or the insured to any governmental agency, mortgagee, or other third party on or before the second business day after the day it receives the notice of cancellation from the premium finance company and shall determine the effective date of cancellation taking into consideration the number of days required to complete the cancellation.

(Ga. L. 1969, p. 561, § 12; Ga. L. 1984, p. 1345, § 2; Ga. L. 1985, p. 149, § 33; Ga. L. 1986, p. 496, § 1; Ga. L. 1995, p. 1047, § 4; Ga. L. 2002, p. 1192, § 7; Ga. L. 2014, p. 829, § 2/HB 645.)

The 2014 amendment, effective July 1, 2014, inserted "delivered as provided in subsection (d) of Code Section 33-24-14 or" near the middle of the last sentence of paragraph (c)(1).

JUDICIAL DECISIONS

Language of this section must be strictly construed. Freeman v. Government Employees Ins. Co., 151 Ga. App. 161, 259 S.E.2d 165 (1979); Brooks Brown Ins. Agency, Inc. v. Harden, 236 Ga. App. 781, 513 S.E.2d 755 (1999).

When a premium finance company seeks to cancel an insurance contract pursuant to authorization of a power of attorney contained in an agreement with its insured, it must do so in strict compliance with this section. Clark v. Superior Ins. Co., 209 Ga. App. 290, 433 S.E.2d 394 (1993).

Terms of section must be exactly followed. Garber v. American Mut. Fire Ins. Co., 131 Ga. App. 366, 206 S.E.2d 86 (1974).

Notice requirements.

- The notice required by this section applies to all subsections of the statute; it is necessary first to notify the insured of the intent to cancel and then of the election to cancel the policy. Georgia Mut. Ins. Co. v. Gardner, 205 Ga. App. 458, 422 S.E.2d 324 (1992).

Premium finance company's notice to an insured, pursuant to O.C.G.A. § 33-22-13(b), that the policy would be cancelled for nonpayment of premiums was effective because the check the insured sent to pay the premium had been returned for insufficient funds. Kolencik v. Stratford Ins. Co., F. Supp. 2d (N.D. Ga. Nov. 28, 2005).

Any ambiguities of notice must be resolved in favor of insured. Freeman v. Government Employees Ins. Co., 151 Ga. App. 161, 259 S.E.2d 165 (1979).

Address of insured required on postal receipt.

- A receipt bearing the name and policy number - but not the address - of an insured to whom notice of cancellation is sent does not constitute a form of proof of mailing within the meaning of subsection (c) regardless of whether it is acceptable to the United States Postal Service. Moore v. Scottsdale Ins. Co., 264 Ga. 808, 450 S.E.2d 198 (1994).

The company has the burden of proving strict compliance with this section. Freeman v. Government Employees Ins. Co., 151 Ga. App. 161, 259 S.E.2d 165 (1979); Brooks Brown Ins. Agency, Inc. v. Harden, 236 Ga. App. 781, 513 S.E.2d 755 (1999).

Proof of accuracy of receipt not required.

- There is nothing in subsection (c) requiring proof of the accuracy of the receipt, and defendant complied with that provision by providing the receipt which it obtained in connection with the mailing; in other words, no hearsay was involved in the matter to be proven by defendant, that the bulk mailing document was the receipt received from the post office in connection with the mailing to plaintiff, and the required evidence was provided by the statements in the affidavit of defendant's president which also authenticated the bulk mailing document so as to permit its consideration by the superior court. Oriental Farmers Food Corp. v. Agency Servs., Inc., 237 Ga. App. 75, 514 S.E.2d 80 (1999).

Separate notice to mortgagee.

- This Code section allows a premium finance company to terminate coverage under an insurance policy notwithstanding the existence of a mortgagee. Subsection (d) merely requires that the insurer provide separate notice of cancellation to the mortgagee and set the effective date of cancellation of the mortgagee's coverage. Massachusetts Bay Ins. Co. v. Photographic Assistance Corp., 732 F. Supp. 1572 (N.D. Ga. 1990).

Limited power of attorney given by insured to an insurance premium finance company authorizing the company to cancel policies and perform certain other duties relating thereto did not create a fiduciary relationship between the insured and the company. Gill Plumbing Co. v. Imperial Premium Fin., Inc., 213 Ga. App. 754, 445 S.E.2d 840 (1994).

Cited in Cochran v. Paco, Inc., 409 F. Supp. 219 (N.D. Ga. 1975); Leader Nat'l Ins. Co. v. Gaydon, 185 Ga. App. 322, 363 S.E.2d 859 (1987).

RESEARCH REFERENCES

Am. Jur. 2d.

- 43 Am. Jur. 2d, Insurance, §§ 95, 907.

C.J.S.

- 45 C.J.S., Insurance, § 775 et seq.

ALR.

- Remedies and measure of damages for wrongful cancellation of life, health, and accident insurance, 34 A.L.R.3d 245.

Remedies and measure of damages for wrongful cancellation of liability and property insurance, 34 A.L.R.3d 385.

Cases Citing Georgia Code 33-22-13 From Courtlistener.com
Total Results: 3
Reynolds v. Infinity General Insurance
Court: Supreme Court of Georgia | Date Filed: 2010-03-15
Citation: 694 S.E.2d 337, 287 Ga. 86
Snippet: the provisions of subsection (d) of Code Section 33-22-13 pertaining to notice to a governmental agency
Cresent Hills Apartments v. Admiral Insurance
Court: Supreme Court of Georgia | Date Filed: 2003-11-17
Citation: 277 Ga. 396, 589 S.E.2d 96, 2003 Fulton County D. Rep. 3388, 2003 Ga. LEXIS 1008
Snippet: (1994) (construing similar language in OCGA § 33-22-13 (c)). Id. (insurer showed mailing to last known
Moore v. Scottsdale Insurance
Court: Supreme Court of Georgia | Date Filed: 1994-11-07
Citation: 264 Ga. 808, 450 S.E.2d 198, 1994 Ga. LEXIS 876
Snippet: to cancel, OCGA § 33-22-13 (b), followed by a notice of cancellation. OCGA § 33-22-13 (c). At the time

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