(.; ( CiA.O ,~f #-2 14 FOREWORD This volume contains the laws of the State of Georgia enacted up to and including the year 1953, relating to insurance, insurance companies, insurance agents, fraternal benefit societies, non-profit hospital service associations and non-profit medical service associations as they appear in the combined edition of Title 56 of the Code of Georgia Annotated published by Harrison Publishing Company. This volume also contains an appendix in which is published selected sections relating to insurance companies, their agents and adjusters, and to insurance generally, not published in Title 56 but taken from other parts of Harrison's Annotated Code. Recognition and appreciation is extended to Harrison Publishing Company for the privilege of printing herein its editorial notes to the yarious sections. As a supplement to the foregoing this work also contains the general acts relating to insurance enacted at the January-February (1955) session of the legislature of Georgia. TITLE 56. INSURANCE. Chap. 56- 1. Insurance Department _ Sec. _.._ _ 56-101 56- 2. Incorporation, powers, duties, etc., of insurance companies in general _ _ 56-201 56- 3. Deposits by companies doing business in State 56-301 56- 4. License to do business 56-401 56- 4A. Unfair trade practices 56- 5. Agents and solicitors 56- 5A. Excess fire or casualty insurance agents 56-401a _ _ _ 56-501 __ _ _ 56-501a 56- 5B. Licensing of life, health, and accident insUl'ance agents _ _._ 56-501b 56- 6. Actions against insUl'ance companies _ _ _ 56-601 56- 6A. Unauthorized Insurers Process Act. _ _ _ __._._ 56-601a 56- 7. Amount of recovery and damages _ _._..__ _ _ _ _ _ 56-701 56- 8. Fire insurance _ _ _ _ _._ _ _._ _ _.._ _._ _ 56-801 56- 9. Life insurance _ _.._ _ _ _ _._.._ _ _ _ _ __._ _56-901 56-10. Accident liability and casualty insurance_._ _ _.. _ 56-1001 56-11. Fidelity insurance _ _ 56-1101 56-12. Marine insurance _.._ _ 56-1201 56-13. Industrial life, accident, and health insurance _ 56-1301 56-14. Mutual or cooperative insurance. Burglary and robbery insurance 56-1401 56-15. Assessment insurance companies 56-1501 56-16. Fraternal benefit societies 56-1601 56-16A. Conversion of fraternal benefit societies into stock of mutual companies 56-1601a 56-17. Fraternal beneficiary orders _ _ (Repealed) 56-18. Cooperative insurance exchanges _ __ 56-1801 56-19. Title insurance _ _ _ __ __. ..56-1901 56-20. Regulation of rate making for casualty, fidelity, and motor vehicle insurance _ __.._.._ _ __ _ 56-2001 56-21. Regulation of rate making for fire, marine, and inland marine insurance __ _ __ _ _ __.._ 56-2101 56-22. Uniform Insurers Liquidation AcL _ __ _ _..__.._ _.._.56-2201 56-23. Group insurance of public employees _ _ _ _ 56-2301 56-99. Crimes _ _.._ _ _ _ _ _._ 56-9901 APPENDIX Page Constitutional Provisions Pertaining to Insurance Companies __.__ _ _.._.. 184 Securities Eligible for Deposit With State Treasurer and Investment by Insurance Companies _ _ _ _.__.._.__._.__._ 185 School Bus Insurance _ _ _ _._._._ _ _.._._. .._ 187 Service Upon Non-Resident Motor Common Carrier _ __.__.._ _ 188 Taxation of Insurance Companies, Agents and Adjusters __ __.__..__ 189 Extracts from Motor Vehicle Safety Responsibility Law. .__ . 191 Hospital Service Non-Profit Corporations .__._.__ __ 192 on-Profit Medical Service Corporations _ _ _ _ _ _ . 196 Extracts from Workmen's Compensation Law _ _._._ __.,,_._ 204 CROSS-REFERENCES. Burning goods to defraud insurer: See Title 26, Crimes and Punishment, 26-2210. Constitutional provisions: See Title 2, Constitution of the State of Georgia, 2-2901 through 2-2905. Incorporation of companies in general: See Title 22, Corporations. Securities, sale of, etc:.: See Title 97, Securities. State-owned buildings, insurance of: See Title 91, Public Property, 91-403, 91-404. . Workmen's compensation: See Title 114, Workmen's Compensation, Chapter 114-6. Sec. 56-101. CHAPTER 56-1. INSURANCE DEPARTMENT. Sec. Officers of Department. Comp- 56-102. Compensation of deputy. troller General as Insurance 56-103. Collection and disposition of Commissioner; deputy; seal; fees and taxes. records; reports. 56101 INSURA CE DEPARTMENT 2 Sec. 56-104. 56-105. 56-106. 56-107. 56-108. Examination of insurance companies doing business as assessment, fraternal, industrial, or charitable companies; appointment of and reports by examiners; hearings; expenses. Investigation of affairs of companies by Commissioner; expenses. Duty of Insurance Commissioner in case of insolvency, fraud, or insufficiency of as- sets. Orders, how enforced; testing validity of. Blank forms for reports by companies. Sec. 56-109. 56-110. 56-111. 56-112. 56-113. 56-114. 56-115. 56-116. Additional rules and regulations, authority to prescribe. Supervision of companies before organization. State fire inspector and assistant; appointment, etc. Investigations by State fire inspector or assistant; reports. Authority of State fire inspector to go upon premises. Compensation of State fire inspector for making investigations; liability of insur- ance companies for expenses. Commissioner and inspectors may administer oaths. Appointment of investigators. Cross-reference.-For provisions of Act of 1949 substituted for 56-111 to 56-113, see Chapter 92A-7. 56-101. Officers of Department. Comptroller General as Insurance Commissioner; deputy; seal; records; reports.-There is hereby established in the office of the Comph'oller General a department which shall be called the Insurance Department of the State of Georgia, and which shall be charged with the enforcement of the laws relating to insurance. Its chief officer shall be the Comptroller General, who shall be styled "Insurance Commissioner." The Insurance Commissioner shall exercise the powers and perform the duties confelTed and imposed upon him by law. He may appoint a deputy insurance commissioner to assist him in the discharge and performance of his duties, and in the event of a vacancy in the office of Insurance Commissioner, or in his absence or disability for any reason, the deputy shall perform all the duties required of the Insurance Commissioner. The said deputy shall execute a bond with proper security in the sum of $5,000, said bond to be approved by the Insurance Commissioner and conditioned upon the faithful performance of his duties. The said deputy shall be removable at the pleasure of the Commissioner. The Commissioner shall have an official seal of such device as he shall, with the approval of the Governor, select. Every certificate and other document or paper executed by such Insurance Commissioner in pursuance of any authority conferred upon him by law, and sealed with the seal of his office, and all copies of papers certified by him and authenticated by said seal, shall in all cases be evidenced equally and in like manner as the original thereof and shall have the same force and effect as the original would have in any suit or proceeding in any court in this State. The office of the Insurance Commissioner shall be deemed a public office and the records, books and papers thereof, on file therein, shall be deemed public records of the State, except as may be provided otherwise herein. The Commissioner shall publish and report annually to the legislature his official transactions, and shall include in such report abstracts of the annual statements of the several insul"ance companies and bonding and fidelity companies, and an exhibit of the financial condition and business transactions of the said companies as disclosed by official examinations of the same, or their annual statements. He shall include therein a statement of receipts and expenditures of the Department for the preceding year, and such other information and recommendations relative to insurance and the insurance laws of the State as he shall deem proper. (Acts 1912, p. 119.) 3 INSURANCE DEPARTMENT 56104 Cross-reference.-Reports to State Librarian, see 101-217. Editorial .ote.-The provision of the above section as it appears in the original Act which authorized the Insurance Commissioner to appoint a clerk, has been cut out' as superseded by Const., Art. V, Sec. II, Par. II ( 2-3102) authorizing the General Assembly to provide help and expenses necessary for the operation of the Comptroller General's department, and by Acts 1931, Extra. Sess., pp. 94, 96, creating the Budget Bureau, under which law appropriations are made in lump sums to the several departments. See 40-403. The effect of these laws was to abolish such special clerkships and to authorize the heads of the several departments to employ assistants at such salaries as they think proper, within the limits of their respective appropriations. 56-102. Compensation of Deputy.-The salary of the Deputy Insurance Commissioner of the State of Georgia shall be in an amount fixed by the Insurance Commissioner of the State of Georgia, payable monthly, and he shall not receive any other fees or compensation whatsoever by virtue of his office as Deputy Insurance Commissioner: Provided, however, that the amount so fixed shall not exceed the sum of $5499 per year. (Acts 1949, p. 999.) Cross-reference.-Salary of Comptroller General, see 40-1404. Editorial Note.-See editorial note under preceding section. 56-103. Collection and disposition of fees and taxes.-The Insurance Commissioner shall collect the charges, fees, dues and taxes imposed on insurance companies as provided by law and give proper receipts therefor, and at the end of every calendar month, or oftener, in the discretion of the Commissioner, shall pay into the State treasury, all amounts collected by him. (Acts 1912, pp. 119, 121, 128.) Cross-reference.-Occupation taxes on insurance companies, agents, and adjustment bureaus, see Title 92, Public Revenue, Chapter 92-25. 56104. Examination of insurance companies doing busines as assessment, fraternal, industrial, or charitable companies; appointment of and reports by examiners; hearings; expenses.-The Insurance Commissioner may at any time examine into the affairs of any insurance company doing business in this State as an assessment, fraternal, industrial or charitable company or otherwise, and into the affairs of any company organized under the laws of any other State, having an office in this State, which company is engaged in or is claiming or advertising that it is engaged in organizing or receiving subscriptions for or disposing of stock of, or in any manner aiding or taking part in the formation or business of, an insurance company or companies, or which is holding capital stock of one or more insurance companies for the purpose of controlling the management thereof or as voting trustee or otherwise. For such purpose the Commissioner may appoint as examiners one or more competent persons, not officers of, or connected with or interested in any insurance company, other than as policyholders, and upon such examination, he, his deputy or any examiner authorized by him, may examine under oath the officers and agents of such company and all persons deemed to have material information regarding the company's property or business. Every such company, its officers and agents, shall produce at the office of the company where the same are kept, its books and all papers in its possession relating to its business, and any other person may be required to produce any book or paper in his custody relevant to the examination, for the inspection of the Commissioner, his deputies or 56-105 INSURANCE DEPARTMENT 4 examiners whenever required; and the officers and agents of such company shall facilitate such examination and aid the examiners in making the same so far as it is in their power to do so. Every such examiner shall make a full and true report of every examination made by him, verified by his oath, which shall comprise only facts appearing upon the books, papers, records or documents of such company or ascertained from the sworn testimony of its officers or agents or other persons examined under oath concerning its affairs, and said report so verified shall be presumptive evidence in any action or proceeding against the company, its officers or agents, as to the facts therein stated. The Insurance Commissioner shall grant a hearing to the company examined before filing any such report and may withhold any such report from public inspection for such time, not to exceed 60 days, as he may deem proper, and may after so filing, if he deems it for the interest of the public to do so, publish any such report or the result of any such examination in one or more newspapers. It shall be the duty of the Insurance Commissioner to examine every domestic insurance company at least once in five years. The expense of all examinations of insurance companies shall be paid by the companies so examined. (Acts 1912, pp. 119, 121; 1945, p. 443.) Cross-references.-Investigation by Commissioner, see 56-105. Powers of Insurance Commissioner or deputy, see 56-1312. Examination of domestic fraternal benefit societies, see 56-1636. Examination of foreign fraternal benefit societies, see 56-1638. Examinations by Commissioner of rate making organizations, etc., under Chapter 56-20, subject to provisions of this section, see 56-2012. Penalty on agents of unauthorized companies, see 56-9905. Neglect of summons or obstructing examination, penalty, see 56-9901. 56-105. (2433) Investigation of affairs of companies by Commissioner; expenses.-It shall be the duty of the Insurance Commissioner, whenever he shall deem it expedient so to do, and he is hereby empowered, either in person or by an expert examiner by him appointed, to investigate the affairs of any insurance company doing business in this State; to require free access to all books and papers of any company or of the agents thereof; to summon and examine under oath any person in this State relative to the affairs and conditions of said company; for probable cause, to visit at its principal office, wherever it may be, any insurance company not of the State, in which the substantial requirements of this law, as to valuations of policies of life and accident insurance companies, and calculations for the reinsurance reserve of fire, marine, and inland insurance companies, are not in force, for the purpose of investigating its affairs and condition; and to revoke its authority to do business, if said company shall refuse to permit the examination. All expense incurred in the investigation of said companies shall be paid by the companies so examined. (Acts 1887, p. 118.) Cross-references.-Examination of assessment, industrial, etc., companies, see 56-104. Domestic fraternal benefit societies, see 56-1636. Foreign fraternal benefit societies, see 56-1638. Editorial ote.-Acts 1952, p. 492, requested the Insurance Commissioner to conduct an investigation as to rates being charged in the individual counties of this State for crop and hail insurance and determine whether such rates are excessive, unfair or discriminatory. 56-106. (2442) Duty of Insurance Commissioner in case of insolvency, fraud, or insufficiency of assets.-Whenever the Insurance 5 INSURANCE DEPARTMENT 56-113 Commissioner shall have reason to believe that any insurance company is insolvent or fraudulently conducted, or that its assets are not sufficient for conducting the business of the company, or during any noncompliance with the provisions of this law, he shall proceed as prescribed in section 56-832. (Acts 1887, p. 121.) 56-107. Orders, how enforced; testing validity of.-The insurance Commissioner may invoke the aid of any court of competent jurisdiction through injunction or other proceedings, mandatory or otherwise, to enforce any order made or action taken in pursuance of the law, and nothing contained in the insurance laws of this State shall be so construed as to prevent any company or person affected by any order or action of the Insurance Commissioner from testing the validity of same in any court of competent jurisdiction. (Acts 1912, pp. 119, 126.) 56-108. Blank forms for reports by companies.-The Insurance Commissioner shall annually in the month of December furnish to each of the insurance companies authorized to do business in this State and required to make annual statements to the Department, two or more blanks in form approved by him and adopted for such statements. (Acts 1912, pp: 119, 125.) 56-109. Additional rules and regulations, authority to prescribe.- The Insurance-Commissioner shall have full power and authority to prescribe such additional reasonable rules and regulations as he may deem proper for the control and government of all insurance companies mentioned in this law. It shall be the duty of such companies to comply fully with such rules and regulations before they shall procure any business in this State, either directly or indirectly, or continue to do business in this State. (Acts 1912, pp. 119, 126.) 56-110. Supervision of companies before organization.-Immediately upon the granting of the charter to any insurance company, and before it shall offer for sale any of its capital stock, such company so receiving a charter in this State or being chartered in any other State and offering its stock for sale in this State, before it has been organized and has procured a license to do business in this State, shall come under the supervision of the Insurance Commissioner, and shall collect, hold and disburse its funds under such rules and regulations as the Insurance Commissioner may prescribe. The Insurance Commissioner shall give directions as to all use of funds so collected until same shall be invested as the law directs and the company fully organized and licensed to do business in this State, thereby becoming subject to the rules and regulations herein provided. (Acts 1912, pp, 19, 136.) 56-111. State fire inspector and assistant; appointment, etc.-(Repealed by Acts 1949, pp. 1057, 1068.) Cross-reference. For provisions of Act of 1949 substituted for 56-111 through 56-113, see Chapter 92A-7. 56-112. Investigators by State fire inspector or assistant; reports.(Repealed by Acts 1949, pp. 1057, 1068.) 56-113. Authority of State fire inspector to go upon premises.(Repealed by Acts 1949, pp. 1057, 1068.) 56-114 I CORPORATION, POWERS, ETC. 6 56-114. Compensation of State fire inspector for making investigations; liability of insurance companies for expenses.-;-(Repealed by Acts 1951, pp. 157, 174.) 56-115. (2464) Commissioner and inspectors may administer oaths. -The Insurance Commissioner and such person or persons as may be appointed by him to make inspections are hereby authorized to administer any and all oaths to parties and witnesses, as required under the provisions of this law. (Acts 1887, p. 127.) 56-116. Appointment of investigators.-The Insurance Commissioner is authorized to appoint such investigators as in his discretion he may determine to be necessary to effectively investigate the activities and business of all insurance companies of every kind doing business within the State of Georgia. Such investigators shall be continued in office for such term and at such compensation as the exigencies of the Department may, in the discretion of the Commissioner, warrant and require. (Acts 1937, p. 702.) CHAPTER 56-2. INCORPORATION, POWERS, DUTIES, ETC., OF INSURANCE COMPANIES IN GENERAL. Sec. 56-201. 56-202. 56-203. 56-204. 56-205. 56-206. 56-207. 56-208. 56-209. 56-210. 56-211. 56-212. 56-213. 56-214. 56-215. 56-216. 56-217. Charters to insurance companies; authority of Secretary of State and Comptroller General. Formation of company; petition; affidavit; filing; record. Form of certificate to be issued to company. Corporate existence and name; powers and privileges. Fee required to be paid. Certificate prima facie evi- dence of corporation's existence. Capital stock; subscription to, before commencing business; investment in bonds. Organization; meeting; notice; board of directors. Amount of capital required before beginning business. Subscriptions to stock; payments in installments; foro. feitures for nonpayment. Stock deemed personalty. Termination of powers, etc., on failure to organize and commence business within two years. Contracts of insurance to be evidenced by policy; signatures to policy. Dividends, declaration of. Stock dividends in lieu of money dividends. Participation by policyholders in net profits. Powers of live-stock insurance companies. Sec. 56-218. Rebates and discriminatory policies or contracts prohib- ited. 56-219. Arrangements by companies or agents preventing or lessen- ing competition; revocation of licen e to do business. 56-220. Same; complaints by citizens; citation. 56-221. Same; practice as to testi- mony, etc., on hearing of complaints. 56-222. Same; place of hearing of complaints; costs and fees; execution. 56-223. Method of putting companies in hands of receivers. 56-224. Authorized investments by in- surance companies. 56-225. Approval of Insurance Com- missioner, when required for investment. 56-226. Investment in more than 10 per cent. of securities of a single company or individual not allowed. 56-227. Required investments. 56-228. Authority to sell and buy prop- erty or securities in which money has been invested. 56-228.1. Investments in real estate; au- thority to make; terms and conditions. . 56-228.2. Same; time when to be treated as investment; effect if les- see a corporation whose secu- rities are legal investments. 7 INCORPORATION, POWERS, ETC. 56-203 ~~ 56-228.3. Same; treatment as admitted assets. 56-228.4. Same; limitation of amount. 56-229. Reinsurance and reserve. 56-230. Extent of liability of stock- holderii. 56-231. Law applicable to individual3. 56-232. Annual report of business; forms; verification; publica- tion. S~ 56-233. 56-234. 56-235. Fees to be paid; annual report; tax on gross receipts. Failure to make such report or pay tax. Exemption of fraternal, secret, and industrial societies from operation of law. 56-201. (2388) Charters to insurance companies; authority of Secretary of State and Comptroller General.-Al1 corporate powers and privileges to insurance companies shall be issued and granted by the Secretary of State, upon the terms, liabilities, restrictions, and subject to all the provisions of this Chapter and the laws and Constitution of this State. If from any cause the Secretary of State should be disqualified from issuing and granting said powers, the duties required by this Chapter to be performed by the Secretary of State shall be performed by the Comptroller General. (Acts 1893, p. 73.) Cross-references.-Tax on premiums of insurance companies, see 92-2509. Corporate powers, how granted, see Const., Art. III, Sec. VII, Par. XVII ( 2-1917). Fee of State Treasurer, see 56-205. Organization of fraternal benefit societies, see 56-1614 et seq. Penalty on agents of unauthorized companies, see 56-9905. To what extent provisions of this Chapter applicable to mutual insurance companies, see 56-1402. Editorial Note.-The Act of 1893 was passed to carry into effect Art. III, Sec. VII, Par. XVII of the Constitution ( 2-1917), in so far as the same relates to issuing and granting corporate powers and privileges to insurance companies. 56-202. (2389) Formation of company; petition; affidavit; filing; record.-Any number of persons not less than five may form a company, but, before receiving a certificate of incorporation under this Chapter, shall first file a petition, addressed to the Secretary of State, in which shall be stated: the name and residence of each of the persons desiring to form said corporation; the name of the company; the kind or kinds of insurance they propose to carryon; the amount of the proposed capital stock; the number of shares each of the petitioners agrees to take; that petitioners in good faith intend to go forward without delay to raise the capital stock and organize said company; a request to be incorporated under the laws of this State; that they have given 30 days' notice of their intention to apply for said charter by the publication of said petition in the newspaper publishing the legal advertisements of the county where the principal office of said company is to be located, once a week for four weeks before the filing of said petition. There shall be annexed to said petition an affidavit made by at least two of the persons forming said company, that the names subscribed are the genuine signatures of the persons named therein and that the facts stated in the petition are true. Said petition thus sworn to shall be filed in the office of the Secretary of State, who shall indorse thereon the date of the filing and record the same in a book to be kept by him for that purpose. (Acts 1893, p. 73.) Cross-reference.-Incorporation of Masonic and other secret societies, see 22-412. 56-203. (2390) Form of certificate to be issued to company.-When said petition shall have been filed in the office of the Secretary of State, he shall issue to said company under the great seal of the State the following form of certificate, to wit: 56204 INCORPORATION, POWERS, ETC. 8 To all to whom these presents may come-Greeting: Whereas, in pursuance of an Act of the General Assembly of the State of Georgia, approved December 18, 1893, and (naming the persons who signed the petition) having filed in the office of Secretary of State a certain petition seeking the formation of a c'lrporation to be known as (insert name), with a capital stock of $ , for the pur- pose of organizing and running a (kind or kinds) insurance company, and having complied with the statutes in such cases made and provid- ed; therefore, the State of Georgia hereby grants unto the above- named persons, their successors and assigns, full authority, by and under the said name of (insert name), to exercise the powers and privileges of a corporation for the purposes above stated, subject to the provisions of the Constitution of this State, and all the laws, rules, and regulations governing insurance companies of force at the date of this certificate, or that may hereafter become of force either by con- stitutional or statute law, or by any rules or regulations of the In- surance Commissioner of this State or otherwise, which govern insur- ance companies in this State. In witness whereof, these presents have been signed by the Secre- tary of State (or when he is disqualified, by the Comptroller Genera!), and to which is annexed the great seal of the State, at Atlanta, Geor- gia, this--day of , 19-. (Acts 1893, p. 74.) 56-204. (2391) Corporate existence and name; powers and privileges. -Thereafter the persons who signed said petition, and all persons who shall become stockholders in said company, shall be a corporation by the name specified in said certificate, and shall possess the powers and privileges and be subject to the provisions contained in this Chapter. (Acts 1893, p. 74.) 56-205. (2392) Fee required to be paid.-Before the Secretary of State shall issue said certificate, the petitioners shall pay to the State Treasurer a fee of $100. (Acts 1893, p. 74.) Cross-referenees.-Corporate powers, how granted, see Const., Art. III, Sec. VII, Par. XVII ( 2-1917). Charters to insurance companies, see 56-201. 56-206. (2393) Certificate prima facie evidence of corporation's existence.-Any certificate or a duplicate thereof, issued under this Chapter, shall be prima facie evidence of the existence of such corporation. (Acts 1893, p. 74. ) 56-207. (2394) Capital stock; subscription to, before commencing business; investment in bonds.-When such certificate shall have been issued, the persons named therein, in case they have not taken the whole capital stock, may open books of subscription to obtain the full capital stock of the company, and, after giving such notice as they may deem expedient, may from time to time receive subscriptions until the whole capital stock shall be subscribed. The capital stock of said company shall be divided into shares of $10 each, and shall not be less than $100,000 for each class of insurance to be engaged in, and no insurance company chartered under this Chapter shall commence the insurance business until at least this amount for each class of insurance to be 9 INCORPORATION, POWERS, ETC. 56-209 engaged in shall have been paid in cash, or invested in bonds of the United states, of this State, or of the cities or counties of this State, estimated at their cash market value, or in mortgages on real estate worth twice the amount for which the same is mortgaged, which investment shall be approved by the Secretary of State, or, when he is disqualified, by the Comptroller General. When the investment shall be in bonds of the cities or counties of this State, the Secretary of State, or Comptroller General, as the case may be, shall require an opinion from the Attorney General that the bonds are good, legal, and valid bonds, before approving the investment. (Acts 1893, pp. 74, 75; 1937, p. 459.) Cross-reference.~Insurance companies may invest in bonds of drainage districts, see 23-2567. Editorial Note.-The Act of 1937 amended this section by changing the par value of shares of stock from $100 to $10. 56-208. (2395) Organization; meeting; notice; board of directors.When the amount of the capital stock shall have been subscribed, the person named in said certificate may call a meeting of the stockholders for the purpose of organization, of which meeting every subscribing stockholder shall have 10 days' notice personally, or by notice deposited in the post office, postage paid, directed to him at the post office nearest his usual place of residence. At said meeting there shall be elected a board of directors of not less than five, and as many additional as may be provided by the bylaws of such companies, to manage the affairs of said company, said directors to be chosen by a majority vote of the stockholders, each share of stock being entitled to one vote; said election to be governed by such bylaws as said company may adopt; the persons elected as directors to continue in office until others shall be elected to fill their places. No person shall be elected a director unless he shall be a stockholder, owning stock in his own name, or as trustee, or personal representative and qualified to vote at the election at which he is chosen. If for any reason the election shall not be held at the time appointed, the same may be held at any time thereafter on 10 days' notice to all stockholders; but at any meeting of the stockholders or their legal representatives, the notice may be waived, and an election held at once. The directors, shall elect a president, vice president or vice presidents, secretary and treasurer, and such other officers and agents as they may deem necessary. The regular elections for directors shall be held annually, at such time and place as may be prescribed in the bylaws of said company. All meetings of directors of said company shall be held in this State. A majority of said directors shall be bona fide residents of Georgia. (Acts 1893, p. 75; 1945, pp. 459, 461; 1947, p. 1498.) Cross-reference.-Number of directors of life insurance companies, see 56-907. 56-209. (2396, 2418) Amount of capital required. before beginning business.-No insurance company of whatever class, except Masonic, O~d Fellows, religious and mutual aid societies, and cooperative or assessment life insurance companies, shall be allowed to transact any business of insurance in this State, unless possessed of at least $100,000 of actual cash capital paid up, or assets and invested bonds or stocks, estimated at their actual market value at the date of the statement required by section 56-402, or in mortgages on real estate worth double the amount for which the same is mortgaged. (Acts 1887, p. 113; 1893, p. 80.) 56-210 I CORPORATION, POWERS, ETC. 10 Editorial ote.-The Act of 1950, pp. 10, 11, repealed former 56-1307, and raised the amount of paid-in capital stock necessary for the formation of stock companies for the purpose of doing an industrial life, health, or accident insurance business from $25,000 to $100,000. The Act further provided that such a company incorporated under the old law could continue to operate until January 1, 1954, \vithout increasing its capital stock, but after that date the capital stock would have to be increased to $100,000 paid in, or the company must cease to operate. It was provided in the same Act that when such a company had increased its paid-in capital stock to $100,000, and had complied with all applicable laws, it might then write ordinary life insurance policies and other policies ordinarily written by regular life insurance companies. 56-210. (2396) Subscriptions to stock; payments in installments; forfeitures for nonpayment.-The directors may require the subscriber to pay the amounts subscribed in such installments as they may deem proper, which sums they may lend until the company shall be ready to engage regularly in business. If any subscriber shall neglect to pay any installment required by resolution of the directors, the said board shall declare his stock and all previous payments thereon forfeited to the use of the company; but they shall not declare it forfeited until they shall have served a notice in writing on him personally, or by depositing said notice in the post office, postage paid, directed to him at the post office nearest his usual place of residence, stating he is required to make such payment at the time and place expressed in such notice, and if he shall fail to make the same, his stock and all previous payments thereon will be forfeited for the use of the company; which notice must be served at least 60 days previous to the day on which such payment shall be required to be made. (Acts 1893, p. 75.) 56-211. (2398) Stock deemed personalty.-The stock in an insurance company shall be deemed personalty and shall be transferable in the manner prescribed by the bylaws of the company; and no share shall be transferable until all previous calls thereon shall have been fully paid in. (Acts 1893, p. "76.) Cross-references.-What is personalty, see 85-1701. Transfer of shares, when complete, see 22-706. 56-212 (2399) Termination of powers, etc., on failure to organize and commence business within two years.-All the powers and privileges and the certificates of incorporation of insurance companies shall cease and terminate at the expiration of two years from the date of said certificate, if, at the expiration of said two years, said companies shall not have organized and commenced business. (Acts 1893, p. 76; 1902, p. 52.) / 56-213. (2404) Contracts of insurance to be evidenced by policy; signatures to policy.-Contracts of insurance to be entered into by any company organized under this Chapter shall not be binding unless evidenced by a policy of insurance in writing or print or both, and the liability of said company in case of loss sustained by any policyholder shall be governed by the terms, stipulations, and conditions appearing upon the face of the policy. No policy or other contract of said corporation shall be binding unless it shall be signed by the president or vice president and secretary or assistant secretary of the company. (Acts 1893, p. 77.) Cross-references.-Contract of fire insurance, see 56-801. Standard form of policy, see 56-810. 11 INCORPORATION, POWERS, ETC. 56-219 56-214. (2405) Dividends, declaration of.-The board of directors of any company organiz~d under t~is Chapt~r may d~cl.are dividends out of the earnings of saId corporatIOn: ProvIded, no dIvIdend shall be declared until the earnings shall be sufficient to pay the same, after deducting all expenses and losses, and after providing for such reserve as may be required by law. (Acts 1893, p. 77.) 56-215. (2406) Stock dividends in lieu of money dividends.Corporations formed under this Chapter may issue stock dividends in lieu of cash dividends if the board of directors shall so decide, and thereby add to the capital stock, not to exceed the highest limit of the capital stock fixed by their charters. (Acts 1893, p. 77.) 56-216. (2407) Participation by policyholders in net profits.-The board of directors, after providing for such reserve as may be required by law, by a majority vote, may give the holders of policies of any company organized under this Chapter on any particular line or class of insurance the right to participate in the net profits of such company to such an extent, in such manner, and upon such terms as the board of directors may agree, the same to be plainly stated on the face of the policy; and unless it be stated on the face of the policy that the policyholder has the right to participate, such policyholder shall not participate in any of the profits of such company. This pri~iple shall apply to all participating policies issued by any companY' organized under this Chapter, whether such company is a mutual or stock company. (Acts 1893, p. 77; 1949, p. 959; 1950, pp. 121, 122.) Editorial ote.-The Act of 1949 struck the original section in its entirety and substituted the above. The Act of 1950 also struck the original section as it appears in the original and substituted the above, the language being identical with that of the Act of 1949. 56-217. (2403) Powers of live-stock insurance companies.-Livestock insurance companies organized under this law may insure against loss arising from the death of or injury to domestic animals, and shall have all powers incident to the live-stock insurance business which are not in conflict with the laws and Constitution of this State or of the United States. (Acts 1893, p. 77.) 56-218. Rebates and discriminatory policies or contracts prohibited.-No insurance company or insurance agent doing business in this State shall enter into any contract to rebate any insurance premium or any part thereof of any insured or other person. No person shall sell or offer for sale in this State, and no insurance company shall do business in this State which sells or offers for sale to the public, any "special contract," "board contract," or any other form of policy or contract whereby any discrimination in any form or character is allowed to any particular person or persons. Any insurance company violating the provisions of this section may have its license revoked as provided in section 56-407. (Acts 1912, pp. 119, 129.) ~ross-~eferenc:es.-Punishment for violation, see 56-9903. Inapplicability of thIS sectIon to kmds of insurance to which Chapter 56-20 applies, see 56-2016. 56-219. (2466) Arrangements by companies or agents preventing or lessening competition; revocation of license to do business.-No insurance company authorized to do business in this State, or the 56-220 12 agent thereof, shall make, maintain, or enter into any contract, agreement, pool, or other arrangement with any other insurance company or companies, licensed to do business in this State, or the agent or agents thereof, for the purpose of, or that may have the tendency or effect of, preventing or lessening competition in the business of insurance transacted in this State. When it shall be made to appear to the Commissioner of Insurance that any company or agent has entered into any such contract, agreement, pool, or other arrangement, said Commissioner shall revoke the license issued to such company and the same shall not be reissued until the president or chief officer of such company shall file an affidavit with said Commissioner, stating that such contracts, agreements, pools, or other arrangements have been annulled and made void: Provided, that nothing in this Chapter shall be so construed as to prevent any insurance company, legally authorized to transact business in this State, from separately surveying, inspecting, or examining the premises to be insured, by and with the consent of the owner, for the purpose of bringing about improvements in fire protection, so as to lessen the cost of insurance by reducing rates. (Acts 1890-1, p. 206.) Cross-references.-Definition of insurance agent, see 56-501. Inapplicability of this section to workmen's compensation insurance and the kinds of insurance to which Chapter 56-20 applies, see 56-2019. Provisions of Constitution as to restricting competition, see 2-2701. 56-220. (2467) Same; complaints by citizens; citation.-Any citizen of this State whose rates of insurance have been increased, or who has been refused insurance at reasonable rates, may file a written complaint under oath, to the best of his knowledge and belief, with the Insurance Commissioner, charging any company or companies authorized to do business in this State with a violation of the preceding section, and there upon it shall be the duty of said Insurance Commissioner to issue a citation, addressed to the company or companies against whom said complaint shall be made, requiring it or them to be and appear before said Insurance Commissioner at a time and place to be fixed by said Insurance Commissioner, not less than 20 nor more than 40 days from the date of the filing of the complaint, and show cause why their licenses should not be revoked as provided by the preceding section. Said citation shall be served npt less than 10 days from the date of filing said complaint by the sheriffs or constables of the State in the same manner as provided by law for the service of process upon insurance companies. (Acts 1890-1, p. 206.) Cross-references.-Investigation of complaint, see 56-807, 56-1003. Service on nonresident companies, see 56-603. Suits against insurance companies, see 56-601. Service on nonresident, assessment, etc., insurance companies, see 56-602 through 56-604. Inapplicability of this section to workmen's compensation insurance and the kinds of insurance to which Chapter 56-20 applies, see 56-2019. 56-221. (2468) Same; practice as to testimony, etc., on hearing of complaints.-For the purposes of the provisions of this Chapter, the Insurance Commissioner may administer oaths, issue subpoenas for witnesses, hear testimony, and issue commissions for taking testimony by interrogatories; and the party or parties complaining, and the company or companies defending, may serve notice for the production of books and papers, under the rules provided by law for civil actions in the superior courts. (Acts 1890-1, p. 206.) Cross-reference.-Inapplicability of this section to workmen's compensation in- 13 INCORPORATION, POWERS, ETC. 56-224 surance and the kinds of insurance to which Chapter 56-20 applies, see 56-2019. 56-222. (2469) Same; place of hearing of complaints; costs and fees execution.-The Insurance Commissioner shall fix the place of hear'ing or trial. The costs and fees for the sheriff or constable, witnesses and the commissioners taking interrogatories shall be the same ~ now provided by law for similar service in the superior courts, the same to be taxed against and paid by the party or parties cast in said suit, and against whom said Insurance Commissioner shall find; for which costs said Insurance Commissioner is hereby authorized to issue execution to be levied and collected as executions from the courts. (Acts 1890-1, p. 206.) Cross-~ference.-Inapplicability of this section to workmen's compensation insurance and the kinds of insurance to which Chapter 56-20 applies, see 56-2019. 56-223. Method of putting companies in hands of receivers.- Before any insurance company chartered under the laws of this State or doing business in this State shall hereafter be put in the hands of a receiver by any court of equity, upon any claim or demand not in judgment, it must first appear that the cause of complaint and the matters and grounds upon which the receivership is sought have been submitted by the complainant to the Insurance Commissioner, and that such complaint and the matters charged against such insurance company have been passed upon by the Insurance Commissioner sit- ting in connection with the Governor and the Attorney General in the manner hereinafter provided, to wit: The Insurance Commissioner, the Governor, and the Attorney General, sitting as a board as provided in section 56-407, shall, upon such matters and complaint as referred to previously in this section being filed with the Insurance Commis- sioner, proceed to hear the same after giving both the complainant and the insurance company in question opportunity to be heard, ample and legal time, however, being given for the production of such evidence as either party may deem necessary. During the pendency of such proceedings, the Insurance Commissioner shall order the com- pany and its officers to maintain the assets in statu quo. Upon hearing same, said commissioner, or a majority of them, shall render a decision and judgment recommending or declining to recommend that the Commissioner make application, in accordance with section 56-921 et seq., for an order directing the company to show cause why the Commissioner should not take possession of its property and conduct its business. No receiver for an insurance company shall be appointed on the petition of any person other than the Insurance Commissioner, unless it be made to appear to the court to which application for such appointment is made, that the Insurance Commissioner has failed or refused to comply and proceed with the findings of said board. (A~ts 1914, p. 135.) . Cross-references.-Examination of domestic fraternal benefit societies, see 56-1636. Application for receiver for fraternal benefit society, see 56-1636. 56-224. (2408) Authorized investments by insurance companies. -Every insurance company organized and doing business by virtue of the laws of this State shall have authority to invest its money and assets in the following securities, to wit: (a) Any and all bonds or securities issued by the United States of America, the District of Columbia, or any State of the United States, 56-224 I CORPORATION, POWERS, ETC. 14 or any county or city therein; bonds of any township or school district therein; bonds issued by the Federal Land Banks under provisions of the Act of Congress of July 17, 1916, its amendments and supple- ments. . (b) Loans secured by any of the classes of securities specified in (a) hereof. (c) Loans secured by first liens on improved real estate in any of the States, not exceeding 66% per cent. of the value of said property. (d) Loans on policies issued by the insurance company, not exceeding the reserve on such policies. (e) A building for horne office purposes and buildings for office purposes, and uses: Provided, that no company shall hereafter invest in such horne office building or buildings for office purposes and uses, unless its assets shall exceed $100,000, and that said company shall not invest more than 25 per cent. of its assets in such buildings: Provided, further, that any such investment in a building for home office use shall first be approved by the Insurance Commissioner. (Acts 1949, p. 1127.) (f) Evidences of indebtedness which may be purchased or discounted by Federal Reserve Banks. (g) Investment securities, that is, marketable bonds, notes, and/or debentures, evidencing indebtedness of solvent persons or corporations, which, under the regulations of the Comptroller of the Currency of the United States, national banks may buy and in which they may deal. (h) Bonds and debentures of any solvent railroad, street railway, or other public utility corporation, or industrial corporation, on which no default of interest has occuned, when and if secured by a mortgage or deed of trust covering physical assets or securities of ample value to exceed the indebtedness secured. (i) Preferred stocks of solvent corporations, where at the time of acquisition the equity of all preferred stock outstanding in the assets of the issuing corporation, including the issue in which the investment is made, is more than twice the amount of such preferred stock, and the earnings applicable to dividends on such preferred stock have, for two consecutive years prior to the date of acquisition, exceeded twice the dividend requirements. (j) Common stocks of solvent railroads, street railways, and other utility corporations and industrial corporations which are listed on an established stock exchange, where, prior to the date of acquisition of the stock, the company" issuing such stock has maintained and paid dividends thereon for three consecutive years, and the current earnings of such company issuing such stock have been sufficient in each of such three consecutive years to fully pay the dividends. (k) Promissory notes amply secured by pledges of securities in which the company is authorized to invest its funds. (1) Securities insured by the Federal Housing Administrator, or debentures issued by such Administrator. (m) All insurance companies now or hereafter authorized to do 15 INCORPORATION, POWERS, ETC. 56-226 business within the State of Georgia under the supervision of the Insurance Department of the State of Georgia, as set out in Chapter 56-1 of the Code of Georgia of 1933 are hereby authorized to invest trust funds held by them in fiduciary capacity in any bonds which have been or may be issued by school districts for the purposes of building and/or equipping schoolhouses under Chapter 32-14, and which have been validated and confirmed as required under Chapter 87-3, providing for the validation and confirmation of county, municipaloI' other political division bonds, upon the same terms and conditions as they are now authorized to invest trust funds in State, county and municipal bonds and securities. (n) Deposits of funds at interest in any chartered State or national bank or trust company, located in this State, and which is insured by the Federal Deposit Insurance Corporation, shall be deemed investments, and such deposits are authorized as legal investments, to the extent that said deposits are insured by the said Federal Deposit Insurance Corporation, without any order or authority from ~ny court. (Acts 1912, pp. 119, 137; 1918, pp. 119, 122; 1925, p. 92; 1929, p. 274; 1937, pp. 462, 463; 1939, p. 366; 1945, p. 211; 1949, p. 1127; 1953, pp. 108, 109.) Cross-references.-Penalty for violation, see 56-9904. Insurance companies may invest in drainage district bonds, see 23-2567. State Park Authority revenue refunding bonds as legal investments, see 43-629. Editorial 'ote.-Subsection (1) was added by Acts 1937, p. 462. The Act of 1939 added paragraph (m). Acts 1939, p. 399, declared Western & Atlantic Railroad warrants to be legal investments and eligible to secure deposits in banks. The Act of 1945 changed the loan limit in subsection (c) from 50 per cent. to 66% per cent. Acts 1949, p. 1127, substituted a new subsection (e), and (n) was added by the Act of 1953, pp. 108, 109. 56-225. Approval of Insurance Commissioner, when required for investment.-Investments in the classes of securities defined in the preceding section, except as to a building for home office purposes, may be made by insurance companies without the approval of the Insurance Commissioner, and all other investments of funds by insurance companies in classes of securities other than those specified in the preceding section shall be made only when the approval of the Insurance Commissioner shall have been obtained. (Acts 1929, p. 275.) 56-226. Investment in more than 10 per cent. of securities in a single company or individual not allowed.-No insurance company organized and doing business by virtue of the laws of this State shall acquire or hold more than 10 per cent. of the securities of any single corporation; nor shall more than 10 per cent. of the assets of any insurance company be invested in the securities of any single company or in securities issued by any single individual: Provided, however, nothing in this section shall prevent the acquisition and ownership by any such insurance company of more than 10 per cent. of the securities of any insurance company incorporated or licensed under the laws of the State of Georgia, upon approval by the Insurance Commissioner. (Acts 1929, p. 276; 1951, p. 278; 1952, pp. 287, 288.) Cross-reference.-Insurance companies may invp.st in drainage district bonds, Bee 23-2567. 56227 INCORPORATION, POWERS, ETC. 16 Editorial Note.-The proviso was added by Acts 1951, p. 278. The Act of 1952 inserted the words "or licensed" in the proviso. 56-227. Required investments.-Every insurance company organized and doing business by virtue of the laws of this State shall, to the extent of the paid-in outstanding capital stock of such insurance company, if it shall be a stock corporation, keep its funds and assets invested in the classes of securities defined and described in subparagraphs (a), (b), (c), (d), (e), (f), and (h) of section 56-224. (Acts 1929, p. 276.) 56-228. Authority to sell and buy property or securities in which money has been invested.-Insurance companies organized and doing business by virtue of the laws of this State may sell, assign, transfer, and convey, either with or without warranty, or either with or without recourse upon it, as it may prefer, any real estate, personal property, bond, note, mortgage, deed of trust, deed to secure debt, or other form of property or securities in which it may have invested its money or its assets or on which it may have made loans as allowed by law, and may also buy and sell any realty that may be necessary for the protection of any loan such insurance company may lawfully make. (Acts 1929, p. 276.) 56-228.1. Investments in real estate; authority to make; terms and conditions.-Every insurance company organized and doing business by virtue of the laws of this State shall have authority, in addition to all other investments authorized by law, to invest assets in real estate acquired for the purpose of leasing the same to any person for a period of not less than 20 years, or in real estate already leased for an unexpired period of not less than 15 years of an original period of not less than 20 years, under the following terms and conditions: (1) that the lessee shall at his own cost erect, or that there has already been erected, thereon free of liens a building or other improvements costing an amount at least equal to the value of the said real estate exclusive of improvements; but if the lease be entered into simultaneously with the purchase of the real estate, the lessor may agree to erect such improvements on such real estate; (2) that the said improvements shall remain on the said property during the period of the lease, with provision when such improvements are put upon the said property at the cost of the lessee that at the termination of the lease the ownership of such improvements free of liens shall vest in the owner of the real estate; (3) that the lessee shall during the term of the lease, or the unexpired period of the lease if the property be bought subject to the lease, pay to the owner of the real estate rent in such amount as will enable the owner to amortize the said investment according to a standard amortization table then in use at or before the end of 40 years should the lease, or the unexpired period of the lease, be for a longer period than 40 years; and (4) that during the term of the lease the tenant shall pay all taxes and assessments levied on or against the said real estate, including improvements, shall keep and maintain the said improvements in good repair and shall provide and maintain for the benefit of the lessor fire insurance on such improvements at least equal to the insurable value of the improvements, or at least equal to the amount invested by the lessor in such real estate, whichever is less. (Acts 1947, p. 1496.) 17 INCORPORATION, POWERS, ETC. 56-232 56-228.2. Same; time when to be treated as investment; effect if lessee a corporation whose securities are legal investments.-Real estate acquired pursuant to the provisions of this law [ 56-228.1 to 56-228.4] shall not be treated as an investment hereunder unless and until the improvements herein required shall have been constructed and the lease agreement entered into in accordance with the terms of this law [ 56-228.1 to 56-22'8.4] ; but if the lessee be a corporation the bonds, debentures, notes or preferred stock of which are eligible as investments under the law of Georgia, the requirements of this law [ 56-228.1 to 56-228.4] as to the erection of improvements by the lessee, the cost of such improvements and the vesting of ownership of such improvements in the owner of the real estate shall not be applicable. (Acts 1947, pp. 1496, 1497.) 56-228.3. Same; treatment as admitted asset.-Real estate acquired under authority of this law [ 56-228.1 to 56-228.4] shall not be treated as an admitted asset in an amount in excess of the actual investment reduced each year by decrements out of the income from said property sufficient to write off completely, based on standard amortization tables in general use, the investment at the normal termination of the lease or at the end of 40 years should the term of the lease, or the unexpired period of the lease, be for 'a longer period than 40 years. (Acts 1947, pp. 1496, 1498.) 56-228.4. Same; limitation of amount.-The total investment of any company under this law [ 56-228.1 to 56-228.4] shall not exceed five per centum of its assets. No investment shall be made by any company pursuant to this law [ 56-228.1 to 56-228.4] which will cause such company's investment in all real property owned by it to exceed 25 per centum of its assets or when all real property owned by such company equals or exceeds 25 per centum of its assets, (Acts 1947, pp. 1496. 1498.) 56-229. (2410) Reinsurance and reserve.-Any company organized under this Chapter may reinsure ~ny or all its risks; and every company incorporated under this Chapter shall provide for such reserve as may be required by law. (Acts 1893, p. 78.) Cross-reference.-Cooperative insurance exchanges, see 56-1811. 56-230. (2411) Extent of liability of stockholders.-Stockholders in corporations organized under this Chapter shall be individually liable to creditors of the corporation to the extent of their unpaid subscription to the capital stock and for no greater amount. (Acts 1893, p. 78.) 56-231. (2465) Law applicable to individuals.-Alllaws regulating. th~ ~usiness of insurance in this State by companies shall apply to mdividuals, associations, and corporations in like business. (Acts 1893, p. 81.) 56-232. (2458) Annual report of business; forms; verification; publication.-Every corporation or association shall, on or before the first day of March in each year after it shall have commenced to do business, make and file with the Insurance Commissioner a report of 56-233 DEPOSITS BY COMPA IES 18 its affairs and operations during the year ending the 31st day of December next preceding. Such annual reports shall be made upon blank forms to be provided and furnished by the Insurance Commissioner, and shall be verified under the oath of the president or secretary or other like officers, and shall be published, or the substance thereof, in the annual report of said Insurance Commissioner. (Acts 1887, p. 126.) Cross-references.-Retum.s of corporations, see 22-1703. Annual report of fraternal benefit societies, see 56-1631, 56-1632. 56-233. (2459) Fees to be paid; annual report; tax on gross receipts.-(Repealed by Acts 1950, pp. 12, 13.) 56-234. (2460) Failure to make such report or pay tax.-If such corporation or association shall at any time fail or refuse to make the annual report or to pay the tax on the gross amount received, as hereinbefore provided, the Insurance Commissioner shall forthwith suspend or revoke all authority to such corporation or association and all its agents to do business, and shall publish such revocation in some newspaper published in this State, and may proceed to collect whatever sum of money may be due or owing on account of such tax by suit or action, in the name of the State, against such corporation or association. (Acts 1887, p. 126.) 56-235. (2461) Exemption of fraternal, secret, and industrial societies from operation of law.-Nothing in the insurance law shall be constl"ued to require any fraternal, secret, or industrial societies or other associations exempt by law, now organized or to be organized in this State, to pay any license fee or tax, or to make or file reports with the Insurance Commissioner, or to prevent the same from doing business, when the money, benefit, charity, or relief is payable by the grand or supreme body of the same, and is derived from assessments on subordinate lodges, councils, or other bodies or therr members. (Acts 1887, p. 126.) Cross-references.-Annual report of fraternal benefit societies, see 56-1631. Exemptions of fraternal benefit societies, see 56-1604. Exemption of certain societies, see 56-1641. CHAPTER 56-3 DEPOSITS BY COMPANIES DOING BUSINESS IN STATE. Sec. 56-301. 56-302. 56-303. 56-304. 56-305. Fire, marine, life, casualty, indemnity, and inland insurance companies of other States or Countries. When notice of loss given, bonds to be retained; appointment of receiver. Bond to be given by receiver. Delivery of bonds to receiver; sale of bonds; disposition of proceeds and residue. Conflicting claims to bonds; affidavit; interpleader. Additional deposit when amount reduced below amount required; revocation of license on failure to make. Sec. 56-306. 56-307. 56-308. 56-309. 56-310. 56-311. Life insurance companies doing business on legal reserve plan; measure of required deposit; renewal of deposit annually. Same; certificate to be issued to companies; expiration of certificate. Same; failure to make deposit; notice; revocation of license. Same; changes of securities deposited. Same; approval of securities offered for deposit and of substitution of secul'ities. Fidelity insurance companies. 19 DEPOSITS BY COMPANIES 56-301 Sec. 56-312. 56-313. 56-314. 56-315. 56-316. 56-317. 56-318. 56-319. 56-320. 56-321. 56-322. Mutual, cooperative or assessment fire insurance companies; what companies ex- cepted. Same; amount of assets re- quired; emergency clause in policies; deposit for exemp- tion. Same; receipt of deposits by State Treasurer authorized. Deposits by foreign companies or agents when amount required of companies of this State by foreign State greater than imposed by this State. Foreign life and accident in- surance companies. Domestic life and accident in- surance companies. Mutual or stock-plan life in- surance companies; amount of deposit; nonresident companies. Same; annual increases until deposit aggregates required amount. Life, accident, or casualty insurance companies; what securities may be deposited; valuation. Industrial life, accident or health insurance companies. Life indemnity or insurance Sec. 56-323. 56-324. 56-325. 56-326. 56-327. 56-328. 56-329. 56-330. 56-331. 56-332. 56-333. 56-334. 56-335. companies doing business upon assessment plan. Withdrawal by company from State, return of bonds deposited. Policies required to be satisfied before withdrawal. Withdrawal of fire insurance companies or associations; reinsurance of policies. Voluntary deposit of bonds in addition to those required or permitted. Same; registration; assignment; levy by judgment creditor or other claimant. Same; exchange for other bonds. Same; income from bonds. Same; retention of bonds in case of loss by insured; appointment of receiver to take charge. Same; procedure by receiver; sale of bonds. Same; conflicting claims; bill of interpleader. Same; issuance of certificates by Insurance Commissioner and State Treasurer. Same; withdrawal of deposit by insurance company. Same; effect as to other laws regulating deposits. 56-301. (2419) Fire, marine, life, casualty, indemnity, and inland insurance companies of other States or Countries.-All fire, marine, and life, casualty, indemnity and inland insurance companies, chartered by other States or foreign Governments, shall deposit with the State Treasurer bonds of the United States, or bonds of this State which according to the Acts and resolutions of the General Assembly are valid, or bonds of any county or municipality in this State which have been validated under the laws of this State, of the first value of $10,000: Provided, that fire, marine, and life, casualty, indemnity, and inland insurance companies chartered by other States or foreign Governments, which have a paid up or issued capital stock in excess of $500,000 shall deposit said bonds in an amount equal to two per centum of the gross annual premiums derived from business written on Georgia property, but in no case shall such amount be less than $10,000 nor more than $25,000; which bonds shall be receipted for by the Treasurer and specially deposited in the treasury; and whenever such company shall cease to do business in this State, and shall have settled all claims against it, said bonds shall be delivered to the proper party on presentation of the Treasurer's receipt. While said bonds are so deposited the owner shall, subj ect to the notices hereinafter provided for or given, be entitled to collect the interest thereon. For the bonds so deposited the faith of the State is pledged that they shall be returned or disposed of as hereinafter provided. All bonds deposited by insurance companies under this or any other section of this Title shall be registered bonds: Provided, that in all cases where a domestic or nonresident life insurance company is being liquidated under re- 56-302 DEPOSITS BY COMPANIES 20 ceivership, or otherwise, that policy holding claimants shall have preference over any common or unsecured claim, or claims in the disbursements of the assets through liquidation: Provided, that no casualty company, now or hereafter doing business in this State, who as a condition precedent to, or in connection with the writing or offering to write other forms or kinds of insurance, other than casualty, has deposited with the State Treasurer, bonds in amount equal to the requirements of this Chapter, shall be required to make no further or additional deposit hereunder: and Provided, further, that such deposits heretofore or hereafter made shall be subject to any judgment rendered against such company or companies. (Acts 1887, p. 116; 1899, p. 45; 1900, p. 77; 1905, p. 75; 1935, p. 149; 1937, pp. 705,706.) Cross-references.-Provisions of Constitution as to requirements of nonresident companies, see 2-2901. State Treasurer ex-officio Bond Commissioner, see 40-1201. Bonds of counties or municipalities, how validated, see 87-301. When amount deposited reduced below amount required, see 56-305. Annual report of business, see 56-232. Deposits by domestic mutual fire insurance companies, see 56-312. Editorial Note.-The title of the Act of 1937 purports to amend the Act of 1935 by inserting "life, casualty and indemnity" companies so as to make the Act apply to these companies as well as to fire, marine, and inland insurance companies, as provided in the original Act. The title also states the purpose to be "to provide that in all cases where a domestic or nonresident life insurance company is being liquidated under receivership, or otherwise, the policyholding claimants shall have preference over any common or unsecured claims." These changes are indicated in the recitation of the section as it shall read, as amended. In reciting how the section as amended shall read, "face value" in the eighth line is written "first value" and in the twelfth line after the words "two per centum," there is omitted "of said capital stock, but not more than $25,000 in amount, and Provided, further, that other fire, marine, and life, casualty, indemnity and inland insurance companies chartered by other States or foreign Governments shall deposit said bonds in an amount equal to 15 per centum." The Act as it appears in the published Georgia Laws for 1937 has been compared with the enrolled Act in the office of the Secretary of State and is found to be accurate, the errors occurring in the enrolled Act. These are evidently clerical errors, as there is nothing either in the title or the enacting clause to indicate an intention of making such changes. The enrollpq Act follows the original bill as introduced. There is also an additional section marked I-A from which the last two provisos in the above section are taken, relating to casualty insurance. These changes do not seem to be covered by the title unless they can be included in the ph~ase "and for other purposes," nor is there anything in the enacting clause of section 1 to indicate that there is an intention to add these provisions. Section I-A has no introduction; it begins with the first of these provisos. It was offered as an amendment to the original bill but through oversight the title of the Act was not amended so as to include a reference to this new provision. The section, before the amendment of 1935, required a deposit of bonds of the face value of $25,000 regardless of the amount of capital or the business done in this State. 56-302. (2420) When notice of loss given, bonds to be retained; appointment of receiver.-Whenever any loss insured against shall occur th~ insured, in order to secure his recovery, may give notice to the State Treasurer of the occurrence of said loss and of the amount claimed, after which notice the State Treasurer shall be bound to retain, subject to the order of the court trying any suit that may be brought for the recovery of such loss, a sufficient amount to pay the judgment in said case in the event of recovery; and if the amount for which said company is liable shall not be paid within 10 days, said plaintiff may file an application with the judge of the superior court 21 DEPOSITS BY COMPANIES 56305 of the county where the case was tried, for a receiver to take charge of as many bonds as shall be necessary to satisfy the aforesaid judgment. (Acts 1887, p. 116.) Cross-reference.-Proceedings when loss occurs, see 56-1109. 56-303. (2421) Bond to be given by receiver. Delivery of bonds to receiver; sale of bonds; disposition of proceeds and residue.-When said receiver shall be appointed by the judge, he shall always require bond and security of him for the faithful performance of his duty. The State Treasurer, on application by the receiver, shall deliver to him bonds of sufficient market value, if in his custody, to satisfy said judgment. The receiver's receipt shall be a complete discharge to said Treasurer and the State. The receiver shall apply to the judge of the superior court for an order of sale, and, in pursuance of said order, shall sell said bonds. Mter deducting such expenses and commissions as shall be allowed by the judge, he shall pay over to the plaintiff or his attorney a sufficient amount to satisfy the judgment; and if there shall remain any residue in the hands of such receiver, he shall pay over the same to the agent of the company, taking his receipt for the same, which shall be filed and recorded with the other papers in the case. (Acts 1887, p. 116.) Cross-references.-Receiver not subject to garnishment, see 55-311. Proceedings when loss occurs; receiver, see 56-1109. 56304. (2422) Conflicting claims to bonds; affidavit; interpleader.-If there shall be conflicting claims, the State Treasurer shall deliver over to the receivers, in the order of their application, the aforesaid bonds; and if there shall be any contest between creditors, which cannot be settled in this mode, the party not receiving sufficient bonds through the receiver appointed in his behalf may become a party to the other case, and make known his claim to the other receiver by making affidavit of the claim and filing the same with him, and the receiver shall report such claim to the judge of the superior court appointing him, who shall, by order, provide for a bill of interpleader, as in cases in equity. (Acts 1887, p. 117.) Cross-references.-Proceedings when loss occurs; receiver, see 56-1109. Interpleader, see 37-1503. 56-305. (2424) Additional deposit when amount reduced below amount required; revocation of license on failure to make.-Whenever, by means of the provisions of this law, the amount of bonds so deposited shall be reduced, the Treasurer of this State shall at once notify the Insurance Commissioner in writing, who shall give notice to the company depositing, and require more bonds to be deposited, so as always to maintain the original amount; and if the company so notified by the Insurance Commissioner shall fail to comply within 30 days, the license to do business in this State shall be revoked, and said Insurance Commissioner shall at the same time give notice, by publication in a newspaper published at the State capital, of the fact of such failure and revocation of license; the cost of which publication shall be paid by the company failing to comply with the provisions of this law. (Acts 1887, p. 117.) Cross-references.-Deposit by companies of other States, see' 56-301. When excess of bonds of fidelity companies shall be returned, see 56-1110. Amount of bonds of fidelity companies must be maintained, see 56-1115. 56-306 DEPOSITS BY CO IPANIES 22 56-306. (2428, 2429) Life insurance companies doing business on legal reserve plan; measure of required deposit; renewal of deposit annuaUy.-The Insurance Commissioner shall, as soon as practicable after the filing of the annual statement of any life insurance company organized and doing business on the legal reserve plan under the laws of this State, proceed to ascertain the net reserve value of each policy in force on the 31st day of December immediately preceding, upon the basis of calculation fixed by existing laws; and should any such company issue policies based upon a higher standard, such policy shall be valued according to such higher standard. For the purpose of making such valuation the Insurance Commissioner may employ a competent actuary, who shall be paid by the company for which the services shall be rendered; but nothing in this section shall prevent any company from making said valuation, which may be received by the Insurance Commissioner upon such proof as he may determine. The expense of procuring such proof shall be paid by the company. Upon ascertaining, in the manner above provided, the net reserve value of all policies in force issued by any such life insurance company desiring to operate under the provisions of this section, the Insurance Commissioner shall notify such company of the amount thereof, and within 60 days after the date of such notification the officers of such company shall have the right to deposit with the Treasurer of this State, for the security and benefit of all its policyholders, securities to an amount which, together with the sum already deposited with said Treasurer, and such sums as may be deposited by said company with other States and Governments, by requirements of the laws of such other States or Governments in which said company is doing business, shall not be less than the amount of such ascertained valuation of all policies in force. In case the deposits made with other States and Governments shall be by the laws of such States and Governments held as security first for the policyholders of such States and Governments, said policyholders in such other States shall not participate in the securities held in this State until due allowance or credit shall have been given for the securities held by their own States of Governments, so that all policyholders of the company shall stand on equal terms. The securities shall be such as are described in section 56-224, or certificates of deposit in any solvent bank or trust company, or satisfactory evidences of ownership or unincumbered improved real estate as may be acquired by such company under the provisions of law, at such value as may be determined upon by two disinterested appraisers residing in the county in which the real estate shall be situated, such appraisers to be appointed by the Insurance Commissioner. Such real estate shall not be sold or incumbered unless securities of equal value as herein required shall be deposited with the Treasurer of this State in lieu thereof. The deposit herein provided for shall be renewed annually. (Acts 1906, p. 107.) Cross-reference.-Calculation of net value of life policies, see 56-912. 56-307. (2429) Same; certificate to be issued to companies; expiration of certificate.-Upon the deposit being made by any company as provided in the foregoing section, the Insurance Commissioner shall issue a certificate setting forth the corporate name of the company, its principal office, that it has fully complied with the provisions of this law, stating the amount deposited and the net reserve value of outstanding policies, and the table upon which the same is computed, and that it is authorized to transact the business of life insurance in this 23 DEPOSITS BY COMPANIES 56-310 State: Provided, that any such certificate shall expire on the 30th day of May in the year following its issue. If requested by such company, the Insurance Commissioner shall furnish such company with a certificate over his signature, to be attached to or printed on policies issued by such company, in substance as follows: State of Georgia, Insurance Department, State Capital, Atlanta, Ga. ,19-. The net reserve value of policies issued by life insurance company of , Georgia, is secured by a deposit of acceptable securities in accordance with the compulsory reserve deposit laws of this State, enacted in the year 1906. , Insurance Commissioner. (Acts 1906, pp. 107, 109.) 56-308. (2430) Same; failure to make deposit; notice; revocation of license.-Upon the failul'e of any company having once exercised the privilege of coming under the provisions of this law to make the deposit in the time provided in section 56-306, the Insurance Commissioner shall notify such company to issue no new policies in this State until there shall have been compliance with said requirements. The Insurance Commissioner shall revoke the license of any company issuing policies after such notice and before compliance with said requirements. (Acts 1906, pp. 107, 109.) Cross-reference.-Licenses are revocable, see 20-117. 56-309. (2431) Same; changes of securities deposited.-All companies coming within the provisions of this law may at any time change their securities on deposit by substituting for those withdrawn a like amount in other securities of the character provided for, and whenever the net reserve value of policies outstanding and in force against any company shall be less than the amount of securities then on deposit with the Treasurer of this State, said company may withdraw such excess; but at least $100,000 shall remain on deposit. Companies having on deposit stocks or bonds as security may collect the dividends and interest accruing on such deposits; but upon default by such company to deposit additional security as called for by the Insurance Commissioner, the State Treasurer shall collect the interest on such stocks or bonds as it becomes due, and add the same to the securities in his hands belonging to such company: Provided, however, that any credit loan and insurance company engaged exclusively in insuring loans or other evidences of indebtedness may deposit or reduce their deposits to a sum of not less than $50,000. (Acts 1906, p. 107,110; 1937, pp. 461, 462.) Cross-reference.-Provisions of Constitution as to requirements of resident companies, see 2-2903. Editorial ote.-Acts 1937 added the proviso to this section. 56310. (2432) Same; approval of securities offered for deposit and of substitution of securities.-Securities offered for deposit under the preceding section shall be passed upon by the Insurance Commis- sioner and approved by him before being deposited with the State Treasurer, and before the withdrawal of any securities from the Treasurer by the company the Insurance Commissioner shall first approve such withdrawal and the substitution of securities therefor. (Acts 1906, pp. 107, 110.) 56311 DEPOSITS BY COMPA rES 24 56-311. Fidelity insurance companies.-Before any surety or bonding company shall write any bonds in this State, it shall be required to deposit the sum of $25,000 with the State Treasurer, conditioned as is provided by law for the deposits required of such companies in writing bonds of public officials of this State: Provided, that whenever any such company shall have already deposited $25,000 as provided by law for writing bonds of public officials it shall not be required to deposit an additional sum. (Acts 1912, pp. 119, 133.) 56-312. Mutual, cooperative, or assessment fire insurance companies; what companies excepted.-All insurance companies chartered under the laws of this State to do a fire insurance business upon the mutual, cooperative or assessment plan, shall, before receiving a license from the Insurance Commissioner, deposit with the State Treasurer registered bonds of the United States or this State, or county or municipal bonds of this State, registered and validated, in the sum of $10,000. Said deposit shall be made under the same conditions that deposits of nonresident fire insurance companies are made with the State Treasurer: Provided, that this section shall not apply to such companies as operate in not more than four counties in a division of this State, or to farmers' cooperative companies doing fire insurance business in this State on the assessment plan where their policies stipulate that all the property, real and personal, of the policyholders is pledged for the payment of the policy. (Acts 1912, pp. 119, 142.) Cross-references.-Bonds of county or municipality, how validated, see 87-301 et seq. Deposits by companies of other States, see 56-301. 56-313. Same; amount of assets required; emergency clause in policies; deposit for exemption.-Companies chartered under the laws of this State to do a fire insurance business upon the mutual, cooperative or assessment plan shall always have in good assets an amount equal to the unearned premium liability of the company, required of all classes of fire insurance companies by the laws of this State. All policies issued by such companies shall embrace what is termed an emergency clause, whereby the company reserves the right to call for extra assessments from its policyholders whenever the contingency shall arise. Samples of all policy contracts to be used by such companies shall, before issuance, be submitted to the Insurance Commissioner for his approval: Pl'ovided, that nothing in this law shall require any mutual fire insurance company chartered under the laws of this State to embrace in its policies said emergency clause when such company shall have deposited with the Treasurer of the State registered securities in the amount of $100,000, consisting of bonds of the United States, bonds of the State, bonds of municipalities or counties of the State, which have been duly validated, or such other securities as the Insurance Commissioner shall deem adequate, nor shall the policyholders of any such company that shall make said deposit be liable for any assessments, except for unpaid premiums, to meet any losses or liabilities that may be incurred by any such company; which deposit shall be in lieu of any other deposit required by this law, and the amount of said deposit shall always be maintained as a surplus in excess of the reinsurance reserve required under the law. (Acts 1912, pp. 119, 143; 1922, p. 122.) 25 DEPOSITS BY COMPANIES 56-318 56-314. Same; receipt of deposits by State Treasurer authorized.The Treasurer of this State is hereby authorized and directed to receive deposits of bonds or other securities as provided in sections 56-312 and 56-313 when the deposit of the same is approved by the Insurance Commissioner, and hold the same subject to the provisions of the laws of this State relating to deposits by fire insurance com- panies. (Acts 1922, pp. 122, 124.) 56-315. (2449) Deposits by foreign companies or agents when amount required of companies of this State by foreign State greater than imposed by this State.-(Repealed by Acts 1945, pp. 419, 42'1.) Editorial Note.-The repealer of this section is part of an Act which revises the law relating to the tax on insurance premiums and which is codified in 92-2509 and 92-2509.1 to 92-2509.3. 56-316. (2426) Foreign life and accident insurance companies.All life and accident insurance companies chartered by other States or foreign Governments shall show, by a certificate from the officer having supervision of the insurance department in the State in which they are chartered or elect to make their deposit, that they have deposited not less than $100,000 in such securities as may be deemed by such officer as equivalent to cash, subject to his order, as a guaranty fund for the security of policy holders of said companies. (Acts 1887, p. 118.) Cross-reference.-Provisions of Constitution as to requirements of nonresident companies, see 2-2901. 56-317. (2427) Domestic life and accident insurance companies. -All such companies chartered by this State shall, before doing business, deposit with the Treasurer of this State $100,000, in such securities as may be deemed by the Insurance Commissioner equivalent to cash, to be subject to his order, as a guaranty fund for the security of the policy holders of the company making such deposit. All interest and dividends arising from such securities shall be paid when due to the company so depositing them. Any such securities as may be needed by the company may be taken from the Treasurer at any time by replacing them with other securities equally acceptable to the Insurance Commissioner. The Treasurer's certificate for the same shall be furnished to the company. (Acts 1887, p. 118; 1905, p. 76.) 56-318. Mutual or stock-plan life insurance companies; amount of deposit; nonresident companies.-No life insurance company, including industrial life insurance companies, chartered, or which may hereafter be chartered, by this State, whether organized on the mutual or the stock plan, and which is not now authorized to transact business in this State, shall be so authorized or licensed until such company shall have deposited with the Treasurer of this State securities, deemed by the Insurance Commissioner to be the equivalent of cash, in an amount of not less than $100,000, as a guaranty fund for its policyholders; and no such company organized, or which may hereafter be organized, under the laws of any State of the Union or foreign State, and not now authorized to do business in this State, shall be authorized or licensed to transact the business of insurance in this State until it.sh.all have produced evidence satisfactory to the Insurance CommISSIoner, that it has on deposit in the State in which it is chartered 56319 DEPOSITS BY COMPANIES 26 or organized, with the proper officer thereof, $100,000 in such securities as may be deemed by such officer equivalent to cash, subject to his order, as a guaranty fund for the security of policyholders: Provided, however, that such nonresident insurance company may make deposit with the Treasurer of this State instead of in the State of its organization, should it elect to do so. (Acts 1920, pp. 212, 213.) Cross-references.-Insurance companies may invest in and deposit as securities, drainage district bonds, see 23-2567. 56-319. Same; annual increases until deposit aggregates required amount.-(Repealed by Acts 1950, pp. 12, 13.) 56-320. Life, accident, or casualty insurance companies; what securities may be deposited; valuation.-All deposits of bonds, collateral, or assets required under the law of any life, accident, or casualty insurance company incorporated under the laws of this State as a condition to its being authorized to do business, may be made in bonds of the United States, bonds of this State which according to the Acts and resolutions of the General Assembly are valid, or bonds of any county or municipality in this State which have been validated under the laws of this State. The said bonds shall be accepted by the appropriate officer for such deposit to the extent of the face value thereof, but in no event in excess of such face value; however, if the actual market value of said bonds shall be less than their face value, they shall be so accepted at only their said market value at the time they shall be so offered. (Acts 1924, p. 121.) Cross-reference.-Validation of county and municipal bonds, see 87-301 et seq. 56-321. Industrial life, accident, or health insurance companies.(Repealed by Acts 1950, pp. 12, 13.) 56-322. (2450) Life indemnity or insurance companies doing business upon assessment plan.-All life indemnity or insurance corporations or associations, organized under the laws of this or any other State or Country, to do business upon the assessment plan, shall deposit with the Treasurer of this State stock or bonds approved by that officer in an amount equal to $20,000 par value, and of not less than $20,000 market value: Provided, however, that industrial associations or assessment life insurance companies doing business on the industrial or weekly payment plan, and issuing no policjes for an amount greater than '$500, shall be required to deposit a sum equal to $1,000 for each $1,000,000 in force, and thereafter such industrial associations or assessment life insurance companies doing business upon the industrial or weekly payment plan, and issuing a policy for no greater amount than $500, shall be required to deposit a sum not less than $1,000 in each $1,000,000 of insurance in force on the last day of the last calendar year, as shown by its annual statement, until the sum so deposited shall be equal to $100,000. The security so deposited shall be held in trust for the benefit and protection of, and as security for, the policyholders of such corporation or association, their legal representatives, and beneficiaries. A corporation or association organized under the laws of other States or Countries shall not be required to make such deposit, if the corporation or association shall make it appear to the satisfaction of said Insurance Commissioner that it has on deposit with the proper State official in the State or Country of 27 DEPOSITS BY COMPANIES 56-325 its incorporation a like amount of securities as is required under the terms of this section, and which are held by said authority in trust for the benefit and protection of, and as security for, the policyholders of such corporations or associations, their legal representatives, or beneficiaries. Said securities shall so remain on deposit until it has made to appear to the satisfaction of said Insurance Commissioner of this State that all the debts and obligations of said company or association due the citizens of this State have been discharged, or, in case of nonresident companies, that, after making deposit, or after similar deposit has been made with the proper State officials in the State or Country of its incorporation, said securities shall be subject to the debts due policyholders and beneficiaries under the same rules and regulations as govern the deposits required to be made by fire insurance companies under the laws of this State, in so far as the same may be applicable. (Acts 1887, p. 124; 1900, pp. 47, 74; 1901, p. 33; 1905, p. 77.) 56-323. (2423) Withdrawal by company from State, return of bonds deposited.-When any company shall desire to withdraw from the State, and will satisfy the Insurance Commissioner that all suits pending against such company, and of which no notice has been given, have been fully satisfied, or whenever no notice of claim shall have been given, and when rights under existing policies shall have been satisfied and released as the provisions of this law require, the Treasurer shall return to said company the bonds so deposited, upon order from the Commissioner. (Acts 1887, p. 117.) Cross-references.-Withdrawal of fidelity company, see 56-1111. Satisfaction of policies before withdrawal, see 56-324. 56-324. (2425) Policies required to be satisfied before withdrawaI.-When any company, having made the deposit required by this law, has existing policies on property of citizens of this State on which no losses have accrued, and the company wishes to withdraw its deposits, before being allowed so to do said company shall take up and satisfy said policies, and give notice of its intention to withdraw from the State, and of the fact that it has satisfied all losses and the claims of policyholders above designated, which notice shall be published once a week for two months in a newspaper to be designated by the Insurance Commissioner of the State, and at the expense of said company. Any claims of the citizens of this State for losses, or on existing policies where no losses have occurred, must be fully settled before said deposits shall be withdrawn. (Acts 1887, p. 117.) Cross-references.-Withdrawal by company from the State, see 56-323. Withdrawal of fidelity company, see 56-1111. 56-325. Withdrawal of fire insurance companies or associations; reinsurance of policies.-Any foreign fire insurance company or association doing business in this State and desiring to retire from this State before the maturity or expiration of its policies or contracts, upon filing with the Insurance Commissioner a written notice of such intention to withdraw, together with a sworn statement of its outstanding liabilities or obligations under all such policies or contracts, and of any and all securities on deposit with the State official designated by law for the protection of the beneficiaries of such policies or contracts, may so retire or withdraw: Provided, that such company or 56-326 DEPOSITS BY COMPANIES 28 companies, as a condition precedent to such withdrawal, shall reins~re all such policies or contracts in some other company or compames authorized to do business in this State and shall file with said Insurance Commissioner a list showing the name or names of such company or companies in which such outstanding policies, contracts or obliga- tions have been so reinsured: and Provided further, that the securities on deposit as aforesaid shall not be so withdrawn from the custody, control and possession of said State official until after such proof as may be required by said Commissioner shall have been furnished him that there are, at the time of such withdrawal, no unsettled claims or losses outstanding against said company so desiring to withdraw: and Provided further, that said reinsurance shall be approved by the In- surance Commissioner. (Acts 1913, p. 86.) 56-326. Voluntary deposit of bonds in addition to those required or permitted.-All fire, marine and life, casualty, indemnity and inland insurance companies chartered by the State of Georgia or other States or foreign Governments and doing business in the State of Georgia, in addition to all deposits of bonds now permitted by, or required of, such companies under the provisions of section 56-301, may deposit with the State Treasurer of Georgia, for the purpose of enabling any such company to qualify to do business in any other State or States, bonds, for the benefit and security of all policy obligations of such depositing company in the United States, according to the terms of this law. Such bonds so deposited shall be bonds of the United States, or bonds of this State which according to the Acts and Resolutions of the General Assembly are valid, or bonds of any county or municipality of this State which have been validated under the laws of this State, and, upon the request of the company desiring to make a deposit of bonds under the provisions of this law, and State Treasurer shall receive, subject to the conditions of this law, said bonds from the company and shall issue a receipt therefor and shall specially deposit said bonds in the State treasUl.y, and, whenever such company shall desire to withdraw such deposit and the Insurance Commissioner of Georgia shall certify to the State Treasurer, as is hereinafter provided, that such deposit is no longer required, in whole or in part, in order to comply with the laws of this or any other State, said deposited bonds, or so many thereof as are not so required, shall be delivered to the depositing company on presentation of the State Treasurer's receipt therefor. While said bonds are so deposited, the owner shall, subject to the notices and conditions hereinafter provided for or given, be entitled to collect the interest thereon. For the bonds so deposited the faith of the State is pledged that they shall be returned or disposed of as thereinafter provided. All bonds deposited by insurance companies under this or any other section of this Title shall be registered bonds. (Acts 1941, p. 456.) 56-327. Same; registration; assignment; levy by judgment creditor or other ciaimant.-All such bonds shall be transferred to and registered under the official title of the State Treasurer of Georgia, in trust for the benefit and security of all policy obligations of such depositing company in the United States, without preference or priority for or on account of any cause or causes whatever, except as otherwise provided for in this law. The term "policy obligations of such depositing company in the United States" shall be deemed to include any and all persons having a legal or equitable right against the de- 29 DEPOSITS BY COMPANIES 56331 positing company arising in the United States out of a contract of insurance. No depositing company shall assign or otherwise transfer all or any part of its interest in any such deposit without the approval in writing of the State Treasurer of Georgia and of the Insurance Commissioner of Georgia. No judgment creditor or other claimant, whether or not a person included in the classes of beneficiaries of such deposit, may levy upon or seize or otherwise obtain any deposit or any part thereof or income therefrom in whole or partial satisfaction of such claim. Beneficiary claimants against such deposit may only subject said deposit to their claims in the procedure provided for in this law. (Acts 1941, p. 457.) 56-328. Same; exchange for other bonds.-The depositing company may from time to time exchange for the deposited bonds, or any of them, other bonds eligible for deposit under the provisions of this law. (Acts 1941, p. 458.) 56-329. Same; income from bonds.-8o long as the depositing company shall continue solvent and shall comply with the laws of this State applicable to such depositing company, provided there is no claim pending against said deposited bonds of which notice has been given to the State Treasurer, as is provided in this law, said depositing com- pany shall be permitted by the State Treasurer to collect and dispose of the income from the deposited bonds. (Acts 1941, p. 458.) 56-330. Same; retention of bonds in case of loss by insured; appointment of receiver to take charge.-Whenever any loss insured against shall occur, the insured, in order to secure his recovery, may give notice to the State Treasurer of the occurrence of said loss and of the amount claimed, after which notice the State Treasurer shall be bound to retain, subject to the order of the Georgia court of competent jurisdiction trying any suit that may be brought for the recovery of such loss, or any suit which may be brought upon any judgment ob- tained in the courts of another State, including the courts of the United States, on account of such loss, a sufficient amount to pay the judgment in said case in event of recovery; and, if the amount for which said depositing company is liable shall not be paid within 10 days, said plaintiff may file an application with the judge of the superior court of the county where the case was tried for a receiver to take charge of as many bonds as shall be necessary to satisfy the aforesaid judgment. (Acts 1941, p. 458.) 56-331. Same; procedure by receiver; sale of bonds.-When said receiver shall be appointed by the judge, he shall always require bond and security of him for the faithful performance of his duty. The State Treasurer, on application by the receiver, shall deliver to him bonds of sufficient market value, if in his custody, to satisfy said judgment. The receiver's receipt shall be a complete discharge to said Treasurer and the State. The receiver shall apply to the judge of the superior court for an order of sale, and, in pursuance of said order, shall sell said bonds. After deducting such expenses and commissions as shall be allowed by the judge, he shall pay over to the plaintiff or his attorney a sufficient amount to satisfy the judgment; and, if there shall remain any residue in the hands of such receiver, he shall pay over the same to the agent of the depositing company taking his re- 56332 DEPOSITS BY COMPANIES 30 ceipt for the same, which shall be filed and recorded with the other papers in the case. (Acts 1941, p. 459.) 56-332. Same; conflicting claims; bill of interpleader.-If there shall be conflicting claims, the State Treasurer shall deliver over to the receivers, in the order of their application, the aforesaid bonds; and, if there shall be any contest between creditors which cannot be settled in this mode, the party not receiving sufficient bonds through the receiver appointed in his behalf may become a party to the other case and make known his claim to the other receiver by making affidavit of the claim and filing the same with him, and the receiver shall report such claim to the judge of the superior court appointing him, who shall, by order, provide for a bill of interpleader as in cases of equity. (Acts 1941, p. 459.) 56-333. Same; issuance of certificates by Insurance Commissioner and State Treasurer.-Upon the deposit being made by any depositing company, as provided in the foregoing sections, the Insurance Commissioner shall issue a certificate setting forth the corporate name of the depositing company, its principal office, that it has fully complied with the provisions of this law, and stating the amount deposited: Provided, however, whenever so desired the depositing company may request of, and shall receive from, the State Treasurer a certificate setting forth the corporate name of the depositing company, its principal office, that it has fully complied with the provisions of this law, and stating the amount deposited. (Acts 1941, p. 460.) 56-334. Same; withdrawal of deposit by insurance company.When any depositing company shall desire to withdraw any deposit made with the State Treasurer hereunder, and the Insurance Commissioner of Georgia shall find that such deposit is no longer required, in whole or in part, in order to comply with the laws of this or any other State, he may to such extent release such deposit, and his certificate to that effect shall authorize the State Treasurer to return the bonds so released to the depositing company. A certificate from the Insurance Commissioner (or other official authorized to administer the insurance laws) of any other State or States, that the depositing company has fully satisfied or made provision for the full payment and satisfaction of all policy obligations therein, or that such policy obligations therein have been otherwise adequately provided for, shall be sufficient evidence that the deposit is no longer required by the laws of such other State or States: Provided, however, that any notice of loss theretofore given in conformity with this law shall remain effective, and the State Treasurer shall nevertheless retain bonds in an amount sufficient to meet the requirements of sections 56-330 and 56-331 and as provided by such sections. (Acts 1941, p. 460.) 56-335. Same; effect as to other laws regulating deposits.-This law shall not be interpreted as amending, changing or modifying in any respect any provision of the laws of Georgia now or hereafter in force or effect regarding deposits required to be made by any fire, marine, life, casualty, indemnity or inland insurance companies, chartered by the State of Georgia or other States or foreign Governments and doing business in the State of Georgia. (Acts 1941, p. 461.) 31 LICE SE TO Do BUSINESS 56402 CHAPTER 56-4. LICENSE TO DO BUSINESS. Sec. 56-401. Companies required to be li- censed. 56-401.1. License fees. 56-402. How license obtained; state- ment required to be filed. 56-403. Issuance of license; renewal; further statements required. 56-404. Fidelity insurance companies. 56-405. Same; applicability of require- ments relating to life insurance companies. 56-406. Issuance of license. 56-407. Revocation of license. 56-408. Revocation of license of com- pany removing cause to Federal court. 56-409. Renewal of license forfeited under preceding section. 56-410. Failure to pay judgment as ground for revoking license. 56-411. Hearing in proceeding to revoke license for failure to pay judgment; order of revocation. 56-412. Renewal of license revoked for failure to pay judgment. 56-413. Revocation of licenses when companies are insolvent or fraudulently conducted; reinstatement of companies. Sec. 56-414. 56-415. 56-416. 56-417. 56-418. 56-419. 56-420. 56-421. 56-422. 56-423. 56-424. 56-425. Insurance companies, domestk and foreign, and fraternal benefit societies required to secure license. Expiration date of licenses. Application for license; con- tents; financial statement. Additional information in dis- cretion of Commissioner. Consideration of application; issuance of license. Application for renewal of li- cense. Consideration of renewal ap- plication; renewal of license. Continuation of business pend- ing consideration of renewal application; hearings. Hearings on intended denial of renewal application; notice of final action. License fee. Renewal applications to which law applicable; additional information in discretion of Commissioner; court review. Existing law as to application for licenses superseded. 56-401. (2414) Companies required to be licensed.-No insurance company chartered by this State, or by another State or a foreign Government, shall transact any business of insurance in this State without first procuring a license from the Insurance Commissioner. (Acts 1887, p. 114.) Cro s-references.-Domestic and foreign companies and fraternal benefit societies included, see 56-414. Issuing license, see 56-406. Penalty on agents of unauthorized companies, see 56-9905. 56401.1 License fees.-Each and every insurance company, domestic or foreign, carrying on an insurance business in Georgia shall pay to the Insurance Commissioner, annually in advance, on or before July 1st, a license fee in the sum of $300, which payments shall be in lieu of all other license fees of said companies and of their agents collectible by the Insurance Commissioner. Foreign companies entering the State and domestic companies beginning business at any time during the license year as herein fixed, shall pay said license fee in full for the remaining portion of that license year: Provided, that local fire insurance companies known as farmers county mutuals, doing business on the assessment plan and operating in independent divisions of not more than four counties to a division, shall pay an annual fee of $25. (Acts 1950, pp. 122, 123; 1951, pp. 664, 666.) 56402. (2415) How license obtained; statement required to be filed.-Before the Insurance Commissioner shall issue a license to an insurance company, the company shall fully comply with all of the provisions of this Title, and shall file with said Insurance Commissioner a statement under oath of its president and secretary, specifying- 56402 LICENSE TO Do BUSINESS 32 First. The name and locality of the company. Second. The condition of such company on the thirty-first day of December then next preceding, if such company was engaged in business on said date; and if not so engaged on said date, then on the date when said company began to dO'business, exhibiting the following facts and items in the following form, namely: 1. The amount of the capital stock of the company, and what part of the same has been paid in cash, and what part is in notes of the stockholders, and how such notes are secured. 2. The property or assets held by the company, specifying(1) The value, as near as may be, of the real estate held by such company; if incumbered, to what amount. (2) The amount of cash on hand and deposited in banks to the credit of the company. (3) The amount of cash in the hands of agents and in the course of transmission. (4) The amount of loans secured by bonds and mortgages on real estate. (5) The amount of other loans, and how secured. (6) The amount of bonds of this State, of other States in the United States, and of any stocks owned by the company, specifying the amount, number of shares, and par and market value of each kind of stock. (7) The amount of interest actually due and unpaid. (8) The amount of premium notes on hand upon which policies have been issued. (9) The amount of all other assets, real and personal, not included hereinbefore. Third. The liabilities of the company, specifying- 1. The amount of losses due and yet unpaid. 2. The amount of claims for losses resisted by the company. 3. The amount of losses not yet due, including those reported to the company on which no action has yet been taken. 4. The amount of dividends declared and due and remaining unpaid. 5. The amount of dividends declared but not yet due. 6. The amount of money borrowed. 7. The amount of all other claims against the company. 8. The amount of reserve for reinsurance. Fourth. The income of the company during the preceding year, specifying- 1. The amount of the cash premiums received. 2. The amount of notes received for premiums. 3. The amount of interest money received. 4. The amount of income received from other sources. Fifth. The expenditures during the preceding year, specifying- 1. The amount of losses paid during the year. 2. The amount of dividends paid during the year. 3. The amount of expense paid during the year, including fees and commissions to agents and officers of the company. 33 LICE SE TO Do BUSINESS 56404 4. The amount paid in taxes. 5. The amount of all other payments and expenditures. Sixth. The greatest amount insured in anyone risk, and the total amount of insurance outstanding. Seventh. The charter or act of incorporation, unless the company applying for a license is unincorporated. (Acts 1887, p. 114; 1929, pp. 162,163.) Cross-references.-Applications, see 56-416. The Insurance Commission may require additional information, see 56-417. Punishment for false statements, see 56-9902. 56-403. Issuance of license; renewal; further statement required.Upon filing such annual statement the Insurance Commissioner, when satisfied it is conect, that the company has fully complied with the laws regulating the business of insurance, and is of the opinion that the company's financial condition and affairs are sound and such that its transaction of business will not be hazardous to its policyholders, creditors, and public, shall issue a license to said company to transact business in this State. All licenses shall be renewed annually on July 1st, and any company desiring to renew its license shall file the aforesaid statement not later than March 1st of any year. Licenses heretofore issued by the Insurance Commissioner to expire on J anual-Y 1, 1951, or within 60 days thel'eafter are hereby extended to and including June 30, 1951, and will expire on that date. All licenses issued after the effective date of this section shall expire on June 30th next following the date of issuance. The issuance or renewal of a license, or the refusal thereof, shall be based on the financial condition of the company as shown by its annual statement filed as of the preceding December 31st, and on such further information as the Insurance Commissioner shall require or learn regarding the company's financial condition or manner of conducting its operations. Should any company when once licensed fail or refuse to make and file its annual statement as herein required, it shall, by such failure or refusal forfeit its right to do business in this State until and including June 30th the next year, and on such failure or refusal the Insurance Commissioner shall recall and cancel the license of such delinquent company. At the time of filing such statement with the Insurance Commissioner, each company shall publish at its own expense in a newspaper of general circulation published in this State a copy of the statement in short form showing income, assets, expenditures, and liabilities in gross, as of December 31st preceding, to be sworn to by the officer or agent making the same. (Acts 1887, p. 115; 1893, p. 80; 1947, p. 1622; 1951, pp. 664, 665.) Cross.references.-Provisions of Constitution as to requirements of insurance companies before doing business, see 2-2901 to 2-2903. As to their reports, see ~ 2-2905. Life insurance on assessment plan, see 56-917 through 56-920. PunIshment for false statements, see 56-9902. Insurance companies may deposit drainage district bonds as security, see 23-2567. Renewal procedure, see 56-419 through 56-422. Editorial Note.-The Act from which this section is codified was approved February 21, 1951. 56-404. (2553) Fidelity insurance companies.-Fidelity insurance companies or other corporations or companies doing a fidelity insurance 56-405 LICENSE TO Do BUSINESS 34 business, before beginning business in this State or signing any bond, shall obtain a license from the Insurance Commissioner, which license shall be revoked if said companies shall begin in a United States court, or remove or cause to be removed thereto, any suit as to any bond signed or business done in this State. (Acts 1887, p. 108.) Editorial ote.-See 257 U. S. 529 (42 Sup. Ct. Rep. 188, 66 L. Ed. 352), a to constitutionality of this section. 56-405. (2462) Same; applicability of requirements relating to life insurance companies.-Any corporation organized under the laws of this State for the purpose of transacting the business of fidelity insurance shall be licensed to transact business upon compliance with all the requirements in this law prescribed with reference to life insurance companies organized under the laws of this State, so far as the same may be applicable to such fidelity insurance company; any fidelity insurance company incorporated and organized under the laws of any other State or foreign Government, and which has a paid-up capital of not less than $250,000, may be licensed to transact business in this State upon compliance with all the requirements prescribed by law, as far as the same may be applicable, for license to foreign life insurance companies to transact business in this State. (Acts 1887, p. 127.) 56-406. Issuance of license.-It shall be the duty of the Insurance Commissioner to issue licenses to the insurance companies and agents when they shall have complied with the requirements of the laws of this State and the rules and regulations prescribed by the Commissioner so as to entitle them to do business. In each case, license shall be issued under the seal of the Commissioner, authorizing and empowering the person, firm, association or company to transact the kind of business specified in the license. Before an insurance company shall be licensed to transact business, the Insurance Commissioner shall be satisfied by such examination as he may make or such evidence as he may require that such company is duly qualified under the laws of this State to transact business herein. (Acts 1912, pp. 119, 123.) Cross-references.-Annual license of fraternal benefit societies, see 56-1622, 56-1640. Organization of fraternal benefit societies, see 56-1614 through 56-1617. Penalty on agents of unauthorized companies, see 56-9905. 56-407. Revocation of license.-Whenever it shall appear to the Insurance Commissioner that a license granted to an insurance company should be revoked, the Insurance Commissioner shall, by first giving the company 10 days' notice, require the company to show cause befOl'e a board to be composed of the Insurance Commissioner, the Attorney General and the Governor why said license should not be revoked. Upon the hearing of the said cause, the said board may in its discretion revoke the license of any such insurance company or prescribe the conditions upon which the company may be allowed to continue business in this State. (Acts 1912, pp. 119, 123.) Cross-references.-Revocation of license of fraternal benefit society, see 56-1640, of company failing to make required deposit, see 56-30 . Method of putting companies in hands of receivers, see 56-223. 56-408. (2416) Revocation of license of company removing cause to Federal court.-r selling, or purchasing or offering to give, sell, or purchase as inducement to such insurance or annuity or in connection therewith, any stock, bonds, or other securities of any insurance company or other corporation, association, or partnership, or any dividends or profits accrued thereon, or anything of value whatsoever not specified in the contract. (b) Nothing in subsection 7 or paragraph (a) of this subsection shall be construed as including within the definition of discrimination or rebates any of the following practices: (i) in the case of any contract of life insurance or life annuity, paying bonuses to policyholders or otherwise abating their premiums in whole or in part out of surplus accumulated from nonparticipating insurance, provided that any such bonuses or abatement of premiums shall be fair and equitable to policyholders and for the best interests of the company and its policyholders; (ii) in the case of life insurance policies issued on the industrial debit plan, making allowance to policyholders who have continuously for a specified period made premium payments directly to an office of the insurer in an amount which fairly represents the saving in collection expense; (iii) readjustment of the rate of premium for a group insurance policy based on the loss or expense experience thereunder, at the end of the first or any subsequent policy year of insurance thereunder, which may be made retroactive only for such policy year. (9) Failing to properly. instruct and require that agents shall in the solicitation of insurance and the filling out of applications of insurance on behalf of policyholders, incorporate therein all material facts relevant to the risk being written known to the agent, or which could have been known by proper diligence. Tacitly or indirectly encouraging agents to accept applications either with or without intentional fraud of the policyholder, which contain material misrepresentations or conceal material information which, if stated in the application, would prevent the issuance of the policy, thus collecting premiums under circumstances which void a policy from its inception according to its terms, whel'eby the company illegally and unjustly receives and retains funds as to policies on which no claims are presented or, if claims are presented, the company intends to rely and does rely on the parol evidence rule and other technicalities of the law to protect it from liability. (10) Requiring or imposing as a condition to the sale of real or personal property or to the financing of the same, or as a condition 56405a UNFAIR TRADE PRACTICES 42 to the granting of or an extension of a loan which is to be secured by the title to or a lien of any kind on real or personal property, or to the performance of any other act in connection with such sale, financing, or lending whether such person thus acts for himself or for anyone else, whatever, that the insurance or any renewal thereof to be issued on said property as collateral to said sale or loan, shall be written through any particular insurance company or agent: Provided, that thiS' section shall not apply to a policy purchased by the seller, financier, or lender from his or its own funds and is not charged to the purchaser or borrower in the sale price of the property or the amount of the loan or required to be paid for out of his personal funds: Provided, further, that such seller, financier, or lender may disapprove for reasons affecting solvency or other sensible and sufficient reasons, the insurance company selected by the buyer or borrower. (Acts 1950, pp. 326, 327.) 56405a. Power of Commissioner.-The Commissioner shall have power to examine and investigate into the affairs of every person engaged in the business of insurance in this State in order to determine whether such person has been or is engaged in any unfair method of competition or in any unfair or deceptive act or practice prohibited by section 56-403a. (Acts 1950, pp, 326, 330.) 56406a. Hearings, witnesses, appearances, production of books and service of process.-(a) Whenever the Commissioner shall have reason to believe that any such person has been engaged or is engaging in this State in any unfair method of competition, or any unfair or deceptive act or practice defined in section 56-404a, and that a proceeding by him in respect thereto would be to the interest of the public, he shall issue and serve upon such person a statement of the charges in that respect and a notice of a hearing thereon to be held at a time and place fixed in the notice, which shall not be less than 15 days after the date of the service thereof. (b) At the time and place fixed for such hearing, such person shall have an opportunity to be heard and to show cause why an order should not be made by the Commissioner requiring such person to cease and desist from the acts, methods or practices so complained of. Upon good cause shown, the Commissioner shall permit any person to intervene, appear and be heard at such hearing by counselor in person. (c) Nothing contained in this Chapter shall require the observance at any such hearing of formal rules of pleading or evidence. (d) The Commissioner, upon such hearing, may administer oaths, examine and cross-examine witnesses, receive oral and documentary evidence, and shall have the power to subpoena witnesses, compel their attendance, and require the production of books, papers, records, correspondence, or other documents which he deems relevant to the inquiry. The Commissioner, upon such hearing, may, and upon the request of any party shall, cause to be made a stenographic record of all the evidence and all the proceedings had at such hearing. In case of a refusal of any person to comply with any subpoena issued hereunder or to testify with respect to any matter concerning which he may be lawfully interrogated, the superior court of Fulton county, or the county where such party resides, on application of the Commissioner, may 43 U FAIR TRADE PRACTICES 56-408a issue an order requiring such person to comply with such subpoena and to testify; and any failure to obey any such order of the court may be punished by the court as a contempt thereof. (e) Statements of charges, notices, orders, and other processes of the Commissioner under this Chapter may be served by anyone duly authorized by the Commissioner, either in the manner provided by law for service of process in civil actions, or by registering and mailing a copy thereof to the person affected by such statement, notice, order, or other process at his or its residence or principal office or place of business. The verified return by the person so serving such statement, notice, order, or other process, setting forth the manner of such service, shall be proof of the same, and the return postcard receipt for such statement, notice, order, or other process, registered and mailed as aforesaid, shall be proof of the service of the same. (Acts 1950, pp. 326, 331.) 56-407a. Cease and desist orders and modifications thereof.-(a) If, after such hearing, the Commissioner shall determine that the method of competition or the act or practice in question is defined in section 56-404a, and that the person complained of has engaged in such method of competition, act or practice in violation of this Chapter, he shall reduce his findings to writing and shall issue and cause to be served upon the person charged with the violation, an order requiring such person to cease and desist from engaging in such method of competition, act or practice. (b) The Commissioner may at any time before the serving of a writ of certiorari upon him (as hereinafter provided for), or after the expiration of the time allowed by law for the serving of such writ, if no such writ has been thus served, amend or set aside in whole or in part any order issued by him under this section, whenever in his opinion the facts and circumstances surrounding the case have so changed as to require such action, or if the public interest shall so require. No change of an order in a manner unfavorable to the person charged, or to the parties at interest, shall be made except after notice and opportunity for hearing. The date of the Commissioner's last order shall be the point of time from which it may be reviewed by' writ of certiorari. (Acts 1950, pp. 326, 332.) 56-408a. Procedure as to unfair methods of competition and unfair or deceptive acts or practices other than those defined in section 56-404a.-(a) Whenever the Commissioner shall have reason to be- lieve that any person engaged in the business of insurance is engaging in this State in any method of competition or in any act 01' practice in the conduct of such business which is not defined in section 56-404a, that such method of competition is unfair or that such act or practice is unfair or deceptive and that a proceeding by him in respect thereto would be to the interest of the public, he may issue and serve upon such person a statement of the charges in that respect and a notice of a hearing thereon to be held at a time and place fixed in the notice, which shall not be less than 15 days after the date of the service thereof. Each such hearing shall be conducted in the same manner as the hearings provided for in section 56-406a. The Commissioner shall, after such hearing, make a report in writing in which he shall state his findings as to the facts, and he shall serve a copy thereof upon such person. 56-409a UNFAIR TRADE PRACTICES 44 (b) If such report charges a violation of this Chapter and if such method of competition, act or practice has not been discontinued, the Commissioner may, through the Attorney General of this State, at any time after 15 days after the service of such report, cause a petition to be filed in the superior court of this State within the county wherein the person resides, or has his principal place of business, to enjoin and restrain such person from engaging in such method, act or practice. The court shall have jurisdiction of the proceeding and shall have power to make and enter appropriate orders in connection the}'ewith and to issue such writs as are ancillary to its jurisdiction or are necessary in its judgment to prevent injury to the public pendente lite. (c) A transcript of the proceedings before the Commissioner and of his findings shall be filed with such petition. The court may, in its discretion, order additional evidence to be taken before the Commissioner, and to be.adduced upon the hearing, in such manner and upon such terms and conditions as to the court may seem proper. The Commissioner may modify his findings of fact or make new findings by reason of the additional evidence so taken, and he shall file such modified or new findings with the return of such additional evidence. (d) If the court finds that the method of competition complained of is unfair or that the act or practice complained of is unfair or deceptive, it shall so rule. Having so found, if it further finds that the findings of the Commissioner are supported by evidence it shall issue its order enjoining and restraining the continuance of such method of competition, act, or practice. (Acts 1950, pp. 326, 332.) 56-409a. Judicial review of orders of the Commissioner.-(a) Any order, decision, or the imposition of any penalty by the Commissioner shall be subject to review by writ of certiorari as now provided by law. The Commissioner's findings, upon questions of facts shall be final if sustained by evidence. (b) To the extent that the order of the Commissioner is affinned, the court shall thereupon issue its own order commanding obedience to the terms of such order of the Commissioner. (c) Cease and desist orders issued by the Commissioner under section 56-407a shall become final: (1) upon the expiration of the time allowed by law for the filing of a petition for the writ of certiorari, if no such petition has been filed within such time, except that the Commissioner may thereafter modify or set aside his order to the extent provided in section 56-407a, subsection (b) ; or (2) upon the final decision of the court, if the court directs that the order of the commissioner be affinned or the writ dismissed. (Acts 1950, pp. 326, 334.) 56-410a. Same; certiorari by intervenor.-If the report of the Commissioner does not charge a violation of this Chapter, then any inter- venor in the proceedings may cause a review of such decision by certiorari to the superior court of Fulton county as provided in section 56-409a. Upon such a review, the court shall have authority to issue appropriate orders and decrees in connection therewith, including, if the court finds that it is to the interest of the public, orders enjoining and restraining the continuance of any method of competition, act or practice which it finds, notwithstanding such report of the Commis- 45 AGENTS AND SOLICITORS 56501 sioner, constitutes a violation of this Chapter. (Acts 1950, pp. 326, 334.) 56-411a. Penalty for violation of cease and desist order.-Any per- son who violates a cease and desist order of the Commissioner under section 56-407a, after it has become final and while such order is in effect, shall, upon proof thereof to the satisfaction of the court, forfeit and pay to the State of Georgia a sum of not less than $50 and not exceeding $1,000, which may be recovered in a civil action. (Acts 1950, pp. 326, 334.) 56412a. Provisions of Chapter additional to existing law.-The powers vested in the Commissioner by this Chapter, shall be additional to any other powers to enforce any penalties, fines, or forfeitures authorized by law with respect to the methods, acts and practices hereby declared to be unfair or deceptive. Nothing contained in this Chapter shall be construed as repealing or amending the power of the Commissioner to revoke the license of any insurer or agent thereof, when he is commanded or authorized to do so by existing laws, or on account of a violation of this Chapter. (Acts 1950, pp. 326, 335.) 56-413a. Appointment of staff member to conduct hearing.-Where under the terms of this Chapter the Commissioner is required to hold a hearing, he is-authorized to appoint a member of his official staff to conduct it, who shall report to the Commissioner in writing all the testimony taken and the proceedings had at the hearing, together with his findings of fact for the Commissioner's action thereon. (Acts 1950, pp. 326, 335.) CHAPTER 56-5. AGENTS AND SOLICITORS. Sec. 56-50l. 56-502. 56-503. 56-504. 56-505. 56-506. 56-507. 56-508. 56-509. 56-510. 56-511. 56-512. 56-513. Definition of insurance agent. Civil liability of agents of un- authorized companies. License and occupation tax. Prerequisites to obtaining li- cense. Statement by managing agent of company showing agents, etc. Acting as agent of company not complying with law; fees; reports. Fire and casualty insurance agents; liabilities; definitions. Same; license of agents by Insurance Commissioner. Same; nonresident's license; application for; term; fee. Same; license of corporation. Same; where to place busi- ness; revocation of license. Same; investigation of agents; revocation or suspension of licenses. Same; inquiry into immoral or Sec. 56-514. 56-515. 56-516. 56517. 56-518. 56-519. 56-520. 56-521. 56-522. improper conduct of nonresident agents; suspension or revocation. Same; sections 56-503 and 56-504 superseded to certain extent. Same; sections 56-1408 to 56-1425 and 569910 saved. Licenses to agents of assessment life insurance companies. Industrial life, accident, or health insurance companies, etc. Agents. Corporations soliciting or writing life insurance. False or fraudulent representations. Nonresident solicitors of life insurance. Agencies of foreign mutual insurance companies to be licensed. Commissions on sale of stock, life' insurance policies, or agency contracts. 56-413a AGENTS AND SOLICITORS 46 Sec. 56-523. 56-524. 56-525. 56-526. 56-527. 56-528. 56-529. Examination by Commissioner. Who may be appointed as agent. Temporary license. Renewal of licenses. Agency associations. Unlicensed company forbidden to do business; penalty. Report and payment of license Sec. 56-530. 56-531. 56-532. 56-533. fee and premium tax. Penalty for failure to report and pay tax. Assessment of penalty by Insurance Commissioner. Notice and hearing; appeal. Provisions as to penalty, cu- mulative. 56501. (2443) Definition of insurance agent.-Any person who shall solicit in behalf of any insurance company, or agent of the same, incorporated by the laws of this or any other State or foreign Government, or who shall take or transmit, other than for himself, any application for insurance or any policy of insurance to or from such company or agent of the same, or who shall advertise or otherwise give notice that he will receive or transmit the same, or who shall receive or deliver a policy of insurance of any such company, or who shall examine or inspect any risk at any time, or receive or collect or transmit any premium of insurance, or make or forward any diagram of any building or buildings, or do or perform any other act or thing in the making or consummating of any contract of insurance for or with any such insurance company, other than for himself, or who shall examine into or adjust or aid in adjusting any loss for or in behalf of any such company, whether any of such acts shall be done at the instance or request or by the employment of such insurance company, or of, or by, any broker or other person, shall be held"to be the agent of the company for which the act shall be done or the risk shall be taken. (Acts 1887, p. 121.) Cross-referenees.-Licenses to agents of assessment life insurance companies, see 56-516. Unlawful for companies to make contracts affecting competition, see 56-219. Regulating business of fire and casualty insurance companies, see 56-805, 56-1001. Penalty on agents of unauthorized companies, see 56-9905. Excess fire and casualty agents, see Ch. 56-5A. Licensing of life, health, and accident agents, see Ch. 56-5B. 56502. (2445) Civil liability of agents of unauthorized companies.-Any person who shall do any of the acts mentioned in section 56-501 without such insurance company's having obtained from the Insurance Commissioner a certificate of authority as required by law, shall also be personally liable to the holder of any policy of insurance, in respect of which such act was done, for any loss covered by the same: Provided, that the penalties provided for shall not apply to adjusters or inspectors of authorized insurance companies from whom the citizens of this State have pUl'chased insurance for themselves, as provided for in this section, whenever the person or persons purchasing said insurance shall immediately notify the Insurance Commissioner, giving the name and locality of said company in which they have policies, and at the same time pay to said Insurance Commissioner the same licenses, fees, and taxes for each company as are now or may hereafter be required of :fire insurance companies authorized to do business by the laws of this State; and when the license fees for any company have been paid in anyone year by any person or persons who have purchased insurance from said company, no person or persons purchasing insurance from said company thereafter shall be liable for the license -fees of said company during the said year, but only for such taxes on premiums as may be required from time to 47 AGENTS AND SOLICITORS 56-507 time of insurance companies authorized to do business: Provided, further, that said inspectors shall not solicit business for their companies. (Acts 1890-1, p. 205.) Cross-references.-Unlawful for companies to make contracts affecting competition, see 56-219. Criminal liability, see 56-9905. 56-503. License and occupation tax.-Each local insurance agent, solicitor or subagent, or general, special, traveling, state or district agent, manager or assistant manager, superintendent or assistant superintendent, by whatever name designated, of any insurance company doing business in Georgia, shall pay annually to the Insurance Commissioner in advance and on or before March 1st of each calendar year, an occupation tax of $10 for that calendar year which shall be the full amount of said annual occupation tax payable to the Insurance Commissioner by said persons regardless of the number of counties or extent of territory in which he shall pursue said occupation. (Acts 1950, pp. 122, 123.) Cross-references.-Licenses to agents of assessment life insurance companies, see 56-516. Agent or solicitor required to procure license, see 56-517. See editorial note following 56-514. Editorial ote.-Acts 1950, pp. 122, 123, specificially repealed the former subjectmatter of this section, and enacted the above provision which has been codified in its place. The same Act also repealed 56-506 as to agents of companies not complying with the law, and 92-2501 to 92-2504, prescribing fees for various types of insurance agents. 56504. Prerequisites to obtaining license.-All agents soliciting insurance shall, before procuring the license from the Insurance Commissioner, make application to the Commissioner, and before the Commissioner shall issue such license, he shall satisfy himself that such agent is authorized by some reputable insurance company to do business, and the Commissioner shall be advised and convinced as to the moral character and integrity of such applicant for license. (Acts 1912, pp. 119, 124; 151 Ga. 609 (1) (107 S. E. 857).) Cross-reference.-This section partly superseded, see 56-514. 56-505. Statement by managing agent of company showing agents, etc.-The managing agent of each insurance company shall, on the first day of each quarter of the calendar year, file with the Insurance Commissioner a statement showing the agents of his company, the amount paid for the license of each agent, and the date of its payment, which statement shall be verified by such managing agent. (Acts 1912, pp. 119, 128.) 56-506. (2448) Acting as agent of company not complying with law; fees; reports.-(Repealed by Acts 1950, pp. 122, 124.) 56-507. Fire and casualty insurance agents; liabilities; definitions. -For the purpose of section 56-507 to 56-515, an "insurance agent" is hereby defined to be an individual or a corporation, or any member of a pa~ership or association, or any officer or agent of a corporation, autho~zed by any insurance company lawfully qualified to transact busmess, to solicit, negotiate or effect contracts of insurance on behalf of any insurance company. All such agents shall thereby become liable to all the duties, requirements, liabilities and penalties herein provided. 56-508 AGENTS AND SOLICITORS 48 but this law shall not apply to any executive or traveling salaried employee of any such insurance company. The phrase "company" or "insurance company" shall include only insurance companies writing fire or casualty insurance or both. (Acts 1925, pp. 211, 212.) Cross-references.-As to effect of this and the following sections on prior law, see 56-514, 56-515. 56-508. Same; license of agents by Insurance Commissioner.-No licensed fire or casualty insurance company or company writing fidelity or surety bonds, shall write or issue any policy or indemnity contract on any risk in this State except through a resident agent licensed by the Insurance Commissioner: Provided, that no contract bond shall be issued by any company, except through an agent, resident of the county in which the work under contract is located, if the company has an agent, resident in the county in question. The full commission thereon, (meaning thereby the commission paid for the production of business by hfm) shall be paid to such resident agent: Provided, however, that such resident agent may pay a commission on business placed with him by another duly licensed resident agent, and, provided further, that such resident agent may pay a commission not exceeding 50 per centum of the regular commission allowed resident agents upon the issuance of such policies or contracts, to a duly licensed nonresident on any business originated by such nonresident. This section shall not apply to policies covering property in transit while in the custody of any common carrier or to rolling stock of any common carrier, nor to cotton insurance issued under a per bale reporting form of coverage. The words "resident agent" as used in this section are deemed to mean resident agents engaged in the solicitation of such business from the public generally and shall not include any salaried employee of any insurance company doing business in this State; but shall include any agents of mutual insurance companies however compensated. Nothing in this section, however, shall be construed to relieve from license requirements any State or special agent, or traveling and/or salaried employee, who performs any of the acts, services or things mentioned in section 56-501, in behalf of any insurer or agent of the same. Such resident agent shall keep a true record of all policies and /01' bonds thus issued through him on business originated by such licensed nonresident and shall furnish, if requested by the Insurance Commissioner, a verified statement showing the risk covered, amount of insurance and premium involved, and such other information as may be required to aid the said Commissioner in the collection of all premium taxes due in this State and the enforcement of the provisions of this Chapter as amended. No person except as hereinafter provided shall be licensed as an insurance agent except upon the application of a company authorized to do business in this State, which said application shall be accompanied by a certificate signed by an executive officer of such company and certifying that after inquiring into the facts to the best knowledge, judgment and belief of such company, such person is of ,good character, is now a bona fide resident of the State of Georgia, and in good faith intends to remain as such resident for a period of 12 months or more from the date of the filing of said application, and is or expects to become bona fide engaged in the business of an insurance agent (as defined in this Chapter), that he has such moral and financial standing as to make it probable that he can carryon such an agency without detriment to the public, that he expects bona fide to solicit'and serve the public generally and not to pro- 49 AGENTS AND SOLICITORS 56-512 cure the license chiefly for the purpose of getting a rebate or commission on insurance written for himself or his family or some partnership or corporation in which he is interested or with which he is connected, and that he has such knowledge of the business and of the law and practices governing and relating to the same as will enable him to carryon the business in a competent manner and without deteriment to the public. (Acts 1935, p. 140.) Cross-references.-Examination of applicants for license, see 56-523. Who may be appointed agent, see 56-524. Temporary license, see 56-525. Renewal of license, see 56-526. Agency associations, see 56-527. Editorial Note.-This is a new section superseding original section 56-508. Following this section and purporting to be part of it are five additional sectiOlls relating to the licensing of insurance agents, numbered 56-508(a), 56-508(b), 56-508 (c), 56-508 (d), and 56-508 (e). Instead of breaking into the numerical arrangement of the Code by inserting these lettered sections, they have been placed at the end of the Chapter and renumbered 56-523, 56-524, 56-525, 56-526, and 56-527. 56-509. Same; nonresident's license; application for; term; fee.-A license to be known as a "nonresident's license" shall be granted by the Insurance Commissioner to any nonresident of this State upon the written application of such nonresident certifying that he is regularly licensed by the department of insurance of the State in which he resides, and that he will not negotiate nor effect any contract of insurance on property in this State in whole or in part in any company not qualified to do business in this State, and upon payment to the Insurance Commissioner of a fee of $10. The license shall be good for one year from date of its issuance. (Acts 1925, p. 213.) 56-510. Same; license of corporations.-N0 corporation shall be licensed as an insurance agent unless its charter expressly authorizes it to engage in that business and unless the company such corporation represents or is to represent certifies in the manner provided for in section 56-508 that some officer of said corporation is qualified to act as insurance agent; the name of such officer shall be stated in the license of such corporation and such license shall automatically expire if and when such officer so certified ceases to hold active connection with said corporation, but may be revived upon the substitution of some other officer of said corporation, duly certified to and licensed as provided in section 56-508. (Acts 1925, p. 213.) 56-511. Same; where to place business; revocation of license.-No agent or nonresident shall solicit or be instrumental in placing insurance upon any risk except in a company or companies admitted to do business in this State; and the violation of this provision shall be sufficient cause for the revocation of such agent's or nonresident's license. (Acts 1925, p. 213.) . 56-512. Same; investigation of agents; revocation or suspension of licenses.-The Insurance Commissioner may, upon his own motion, and shall, upon a written complaint signed by a citizen of this State ~nd filed with the Commissioner, inquire into any alleged illegal or ~proper conduct of any licensed insurance agent, and any agent's li<:en~e may be revoked or may be suspended by the Insurance CommISSIOner after giving such agent notice and opportunity to be heard, ~pon satisfactory proof that the agent has been guilty of immoral or Illegal conduct or such practices as to render him unfit to carryon 56-513 AGENTS AND SOLICITORS 50 the business or to make his continuance therein deterimental to the public interests, or that he is no longer bona fide carrying on the business of an insurance agent, but holds his license chiefly for the purpose of securing rebates or commissions on insurance written for himself or his family or some partnership or corpomtion in which he is interested or with which he is connected, or that the license was improperly or improvidently granted. Notice to such agent shall be sufficient if given personally or by registered mail to the last known address of such agent, or, if the agent's address shall be unknown, by posting in the public office of the Insurance Commissioner in the State capitol for 10 days prior to the date of such inquiry. In connection with such inquiry, the Insurance Commissioner shall have the power to summon witnesses against any agent, and shall, upon the application of such agent, summon his witnesses for the purpose of testifying at such inquiry. (Acts 1925, p. 214.) 56-513. Same; inquiry into immoral or improper conduct of non- l'esident agents; suspension or revocation of licenses.-The Insurance Commissioner may, upon his own motion, and shall, upon a written complaint signed by a citizen of this State and filed with the Com- missioner, inquire into any alleged illegal or improper conduct of any licensed nonresident insurance agent, and any nonresident's license may be revoked or may be suspended by the Insurance Commissioner after giving such nonresident notice an opportunity to be heard, upon satisfactory proof that the nonresident has been guilty of immoral or illegal conduct or such practices as to render him unfit to carryon the business or to make his continuance therein detrimental to the public interests, or that the license was improperly or improvidently granted. Notice to such nonresident shall be sufficient if given personally or by registered mail to the last known address of such nonresident or if the nonresident's address be unknown by posting in the public office of the Insurance Commissioner in the State capitol for 10 days prior to the date of such inquiry. In connection with such inquiry, the Insurance Commissioner may summon witnesses against any agent, and shall, upon the application of such non-resident, summon his witnesses for the purpose of testifying at such inquiry. (Acts 1925, p. 214.) 56-514. Same; sections 56-503 and 56-504 superseded to certain extent.--Sections 56-507 to 56-513 shall supersede the provisions of sections 56-503 and 56-504, as far as they relate to the business of fire and casualty insurance, except to the extent that the agent shall first be designated by some company authorized to do business in this State as its agent before a license other than a nonresident license shall be issued to him. (Acts 1925, p. 215.) Editorial Note.-While this section provides that sections 56-507 to 56-513 shall partially supersede sections 56-503 and 56-504, this provision relates to these latter two sections as they appear in the Code of 1933. It should be noted that section 56-503 was repealed in its entirety by Acts 1950, pp. 122, 123, and that the present section 56-503 was codified from this same Act. Since present section 56-503 is now later in date, it would seem that the provisions of this section no longer apply insofar as that section is concerned. 56-515. Same; sections 56-1408 to 56-1425 and 56-9910 saved.Nothing in sections 56-507 to 56-514 contained shall be construed as repealing or affecting the provisions of sections 56-1408 to 56-1425 or 56-9910, relating to the organization of, or the regulation and taxation 51 AGE 'TS AXD SOLICIT9RS 56520 of incorporated mutual cooperative fire insurance companies; nor shall the provisions of said ~ections apply to .said compa~ies or to their agents in the transacbo?- of ~heir busme~~: ProvIded,. also, that mutual insurance compames whlCh Issue po!lcies upon whlCh no compensation is paid to a local agent in this State, licensed to do business in this State, may have their agents licensed on the application for the license and the payment of the license fee, and the requirements of section 56-508 as to the qualifications for agents to obtain license shall not apply in such instances. (Acts 1925, p. 215.) 56-516. (2456) Licenses to agents of assessment life insurance companies.-Mter authorizing a life indemnity or insurance corporation or association to do business upon the assessment plan as provided in sections 56-322 and 56-1501, the Insurance Commissioner shall issue licenses to agents thereof, to be designated by the corporation or association, or a general agent thereof, authorizing them to act as such agents during the year for which said company is licensed; but such licenses must be renewed annually. (Acts 1887, p. 125.) Cross-references.-Regulating business of fire and casualty insurance companies, see 56-805, 56-1001. Agent's license, see 56-503. Penalty on agents of unauthorized companies, see 56-9905. 56-517. Industrial life, accident, or health insurance companies, etc. Agents.-No person shall act as agent or solicitor for any insurance company, benefit association, or fraternal organization issuing industrial life, accident, or health policies, membership, or beneficial certificates without first having procured a license therefor from the Insurance Department as required by law. (Acts 1913, pp. 98, 99.) 56518. Corporations soliciting or writing life insurance.-Any company incorporated for the purpose of soliciting or writing life insurance or for the purpose of offering stock in said company for sale to the public, before procuring a license for such corporation, shall comply with such reasonable rules and regulations as the Insurance Commissioner may in his discretion prescribe. (Acts 1912, pp. 119, 130.) 56-519. False or fraudulent representations.-It shall be unlawful for any person, firm or corporation to make or cause to be made any fraudulent or false representations as to the form, nature and character of the policy offered for sale, and no person shall sell a different form or character of policy from that which he represents himself as selling, or make any other material misrepresentation as to the benefits accuring under any policy which he sells or offers for sale. Any note or other evidence of debt given in consideration of said policy shall be null and void and any premiums paid on such policy may be recovered by such policyholder in any court having jurisdiction thereof. (Acts 1912, pp. 119, 124.) Cross-reference.-Punishment for violation, see 56-9906. 56520. Nonresident solicitors of life insurance.-Residents of other States which permit residents of this State to be licensed to solicit life insurance in such States may reciprocally be authorized to solicit life insurance in this State, upon procuring a certificate of authority from the Insurance Commissioner, and upon paying the fee 56521 ACE 'T AND SOLICITORS 52 required by law for issuing licenses to resident agents: Provided, application shall be made for such certificate by a life insurance company, duly authorized to do business in this State. (Acts 1933, p. 180.) 56-521. (2534) Agencies of foreign mutual insurance companies to be licensed.-Agents of all foreign insurance companies shall obtain a license before taking insurance in this State, under the penalties and in accordance with the provisions of this Code. Cross-references.-Definition of insurance agent, see 56-501. Licenses to agents of assessment companies, see 56-516. 56-522. Commissions on sale of stock, life insurance policies, or agency contracts.-No officer, agent or other person selling or negotiating stock in any insurance company shall receive either directly or indirectly more than 10 per cent. of the sales of any of said stock. No president, vice president, secretary, treasUler, or director or any other executive officer of any insurance company shall participate in the commissions received by any person selling or negotiating the sale of any stock of any insurance company either directly or indirectly, nor shall any salaried officer of any insurance company participate in the commissions arising from the sale of life insurance policies or agency contracts of such companies. (Acts 1912, pp. 119, 129.) 56-523. Examination by Commissioner.-After receipt of application for such agent's license in due form (and if said application is from a first time applicant for license, it shall be accompanied by an examination fee of $10, to be paid by agent), it shall be the duty of the Insurance Commissioner, or his deputy or any person he may designate to represent him, within a reasonable time and in a place reasonably accessible to the applicant, in order to determine the trustworthiness and competency of an applicant, for a license, to subject each first-time applicant for license, if he deems necessary, any applicant for renewal of license, to a personal written examination as to his or her competency to act as such agent in the community which he intends to serve. When it is shown from such application and examination that the applicant is intending in good faith to act as an insurance agent or solicitor and to be principally engaged in the insurance business and is of good character, is now a bona fide resident of the State of Georgia, and in good faith intends to remain as such resident for a period of 12 months or more from the date of the filing of said application, and is or expects to become bona fide engaged in the business of an insurance agent (as defined in this Chapter), that he has such moral and financial standing as to make it probable that he can carryon such an agency without detriment to the public, that he expects bona fide to solicit and serve the public generally and not to procure the license chiefly for the purpose of getting a rebate or commission on insurance written for himself or his family or some partnership or corporation in which he is interested or with which he is connected, and that he has such knowledge of the business and of the law and practices governing and relating to the same as will enable him to carryon the business in a competent manner and without deteriment to the public, and is worthy of a license, the Insurance Commissioner shall issue to the applicant a license to transact business in this State as an insurance agent or solicitor. Such license shall "expire annually on the first day of March unless sooner revoked for cause by the Insurance Commissioner: Provided, that no agent holding a license 53 ACE TS AND SOLICITORS 56528 at the time of the enactment of this law shall be deemed a first-time applicant. (Acts 1935, p. 141.) Cross_references.-Insurance agent defined, see 56-501. License of agents, see 56-508. Editorial Note.-This is a new section, numbered 56-508(a) in the Act. The Act was approved March 28, 1935. 56-524. Who may be appointed as agent.-Any company lawfully authorized to transact business in this State may contract with and appoint as its representative in this State any person as its agent who holds an unexpired agent's license issued under the provisions of this Chapter by filing with the Insurance Commissioner a certificate showing the ~ame and address of such appointee and by paying such fee as is provided by law. (Acts 1935, p. 142.) Editorial Note.-This new section is numbered 56-508(b) in the Act. 56-525. Temporary license.-In the event of the death or the inability further to act, of an agent holding a certificate of authority from any company, where no other agent in the copartnership, association or corporation is authorized to represent such company, the Insurance Commissioner may issue a temporary license to another person enabling such other person to represent any such company upon an application being made in conformity with section 56-523 and the additional information required by this section. Such temporary license shall continue only until the licensee is afforded an opportunity of taking the examination provided in section 56-523. (Acts 1935, p. 143.) Editorial Note.-This new section is numbered 56-508(c) in the Act. 56-526. Renewal of licenses.-Renewal of all expiring licenses shall be upon application in writing, subject to the conditions of examination of such applicants as set forth in section 56-523 for renewal of license, and upon payment of the annual insurance agent's occupational tax: Provided, that should the Commissioner require an examination for renewal of such license, no examination fee shall be required. (Acts 1935, p. 143.) Editorial Note.-This new section is numbered 56-508(d) in the Act. 56-527. Agency associations.-Associations may be formed or maintained by all or any class of the regularly licensed insurance agents referred to in this Chapter for the purpose of maintaining the ethics of the profession and forwarding their aims. It shall be lawful for such associations to make and enforce bylaws deemed by such associations needful to carry out such purposes. (Acts 1935, p. 143.) Editorial Note.-This new section and the four preceding sections follow new 56-508 in the Act of 1935, being numbered 56-508(a), 56-508(b), 56-508(c), 56-508(d), and 56-508(e). In order to preserve the numerical arrangement of the Code these five sections have been placed in their present position and numbered 56-523, 56-524, 56-525, 56-526, and 56-527. 56-528. Unlicensed company forbidden to do business; penalty.- No corporation, individual, firm or association not licensed in Georgia to tt:ansact the business of fire and casualty insurance, or the writing and Issue of fidelity and surety bonds, shall so engage in such business 56-529 ACE TS A 'D SOLICITORS within the limits of this State; nor shall any person act as agent for any company, individual, firm, or association engaged in the writing of such business, unless such person has himself first received a license from the Insurance Department to represent a company duly authorized in the State. Penalty for the violation of this provision on the part of the corporation, individual, firm or association illegally engaged in the writing of business in this State as herein provided shall be $1,000 for the first offense and $2,000 for each additional offense. (Acts 1935, p. 144.) Cross-reference.-Penalty for acting as agent for unlicensed company, see 56-9919. Editorial ote.-This section as it appears in the published laws for 1935 in the second and third lines reads "the business of a fh'e and casualty insurance." This appears to be a clerical error. It should be as above, or "company" should follow "insurance." 56-529. Report and payment of license fee and premium tax.-No individual, firm, corporation, or association residing or doing business in this State shall accept a policy of fire or casualty insurance, or fidelity or surety bond issued by a nonadmitted company, individual, firm or association in violation of section 56-528, unless such individual, firm, corporation, or association shall immediately report the fact to the Insurance Commissioner, giving the name of the company issuing the policy or contract stating its amount and the premium paid thereon, and shall thereupon pay to the Insurance Commissioner the license fee properly chal'geable against such company if it were admitted to the State, and the premium tax chargeable under section 92-2509 upon the amount of premium so paid. (Acts 1935, p. 144.) Editorial ote.-Section 92-2509 was repealed by Acts 1945, pp. 419, 421. 56-530. Penalty for failure to report and pay tax.-Failure so to report and pay the license fee and premium tax mentioned in section 56-529 shall subject such individual, firm, corporation or association to a penalty of 10 per cent. of any such sum as may be paid as indemnity by such insurer to the assured in the event of a loss. Such penalty may be collected upon the establishment of such fact in a civil suit by any informer in any court having jurisdiction thereof, one-half of the amount of such recovery to go to the informer and the other half to be paid to the Insurance Commissioner to be placed by him in the general funds of the State; or the same may likewise be recovered upon the establishment of such fact in a civil suit brought in the name of the State of Georgia by the solicitor general of the circuit where such act may have been done, in which event the solicitor general shall be paid 10 per cent. of the amount received. (Acts 1935, p. 144.) 56-531. Assessment of penalty by Insurance Commissioner.-If any licensed company shall violate any of the provisions of this Chapter as amended, the Insurance Commissioner may, upon his own motion, and shall upon sworn information in writing signed by a citizen of this State and filed with the Commissioner, make due inquiry, in the form and manner hereinafter provided, into any such . alleged violation of the provisions of this Chapter, and upon proof being presented, the sufficiency of which shall be determined by him, the Commissioner shall assess a penalty of $100 for each offense. (Acts 1935, p. 145.) 55 EXCESS FIRE, ETC. 56-501a 56-532. Notice and hearing; appeal.-No penalty as provided in section 56-531 shall be imposed upon such alleged violator until a written copy of such charges, together with a citation, requiring appearance before the Insurance Commissioner at the State capitol on a day certain to be fixed by the Insurance Commissioner, at a time not less than 20 days after the service of such citation and copy of charges then and there to show cause in writing why such penalties should ~ot be inflicted. Service of such citation and copy of charges shall be made upon its attorney in fact designated to acknowledge or receive service in the manner provided by law for such service. For the purpose of such inquiry the Insurance Commissioner is hereby empowered to summon witnesses, so as to enable him to make a determination of the merits. Any order of the Insurance Commissioner suspending or revoking any license shall be subject to an appeal on the same terms and in the same manner and form as is now provided by law for appeals from the decisions of the courts of ordinary of this State. (Acts 1935, p. 145.) 56-533. Provisions as to penalty, cumulative.-Any penalty or penalties provided for in sections 56-528 to 56-532, inclusive, shall be in addition to and cumulative to any other penalty or penalties heretofore provided for by law. (Acts 1935, p. 145.) Editorial ote.-Acts 1935, p. 139, is codified as sections 56-508, 56-523 to 56-533, inclusive. Section 3 of the Act provides: "That it is specifically declared to be the intention of the General Assembly to enact each and every one of the ections herein contained separately and independently of each other; and therefore, in the event that any section of this Act shall be declared to be void or unconstitutional by any court of competent jurisdiction, such decision shall not affect the remainder of this Act or any other section hereof." CHAPTER 56-5A. EXCESS FIRE OR CASUALTY INSURANCE AGENTS. ec. 56-SOla. Certificate of ~uthority to place excess Insurance in companies not admitted to do business in State. 56-502a. Definition of "casualty insur- ance." 56-503a. Application for licen e; con- tents. 56-504a. Terms of license. 56-505a. Procedure after policy of in- Sec. surance procured. 56-506a. Accounts and records to be kept by licensee. 56-507a. Specifications as to policy of insurance. 56-508a. Surety bond of agent; con- tents; tax. 56-509a. Recovery of tax. !", f, I 1t;'1 f{ult.. ~ 'lnf~ rc:4!tl!~tl1 r.~ 56-511a. Revocation of license. 56-50la. Certificate of authority to place excess insurance in companies not admitted to do business in this State.-The Insurance Commissioner, upon payment of an annual license fee of $200, may issue to an agent who is already regularly licensed to represent one or more companies writing fire and allied lines of insurance or casualty insurance authorized to do business in this State, a certificate of authority authorizing him to place excess lines of fire or casualty insurance in companies or with insurers not admitted to do business in this State, by complying with the conditions stated in this law. (Acts 1949, p. 1201.) 56-502a. Definition of "casualty insurance."-"Casualty insurance," as herein used, shall not include insurance against sickness, 56-503a EXCESS FIRE, ETC. 56 disease or accidental death, or against medical, surgical or hospital expense, or similar insurance customarily insured under personal accident-and-health policies, but shall include bodily injury liability and property damage liability insurance. The agent so licensed shall have the general character of an insurance broker and shall be liable to the insured in such capacity. (Acts 1949, pp. 1201, 1202.) 56503a. Application for license; contents.-Before any such license shall be issued or renewed by the InsUlance Commissioner, there shall be filed in his office a written application by the person desiring such license in such form or forms, and supplements thereto, and containing such information as the Commissioner may prescribe. (Acts 1949, pp. 1201, 1202.) 56504a. Terms of license.-Every such license shall be issued for a term expiring on the first day of March next following the date of its issuance, and may be renewed annually upon the filing of an application in conformity with this section and paying the fee prescribed by section 56-501a. (Acts 1949, pp. 1201, 1202.) 56-505a. Procedure after policy of insurance procured.-When any policy of insurance is procured under the authority of such license, there shall be executed, both by the licensee and by the insured, affidavits setting forth facts showing that such insured and such licensee were unable after diligent effort to procure, from any authorized insurer or insurers, the full amount or kind of insurance required to protect the property or the risk insured, and further showing that the amount of insurance procured from an unauthorized insurer or insurers is only the excess over the amount, if any, so procurable from authorized insurers. Such affidavits shall be filed by such licensee with the Insurance Commissioner within 30 days after such policies have been procured. (Acts 1949, pp. 1201, 1202.) 56-506a. Accounts and records to be kept by licensee.-Each person so licensed shall keep a separate account of each policy written or renewed, open for inspection at all times, without notice, by the Insurance Commissioner or his representative, showing the exact amount of insurance placed, the name and post office address of the insured, the name and home address of the insurance company or insurer, the location of the insured property, the gross premium charged therefore, the nature of the risk, the number, date and term of the policy and such other information as may be required by the Insurance Commissioner. (Acts 1949, pp. 1201, 12'02.) 56-507a. Specifications as to policy of insurance.-Each policy shall have written or printed on the outside of it the name of the licensed agent who obtained the same and introduced it into the State, and after his name shall appear the words "licensed excess insurance agent," followed by his post office address. The licensee shall also stamp or write upon the filing face and the first page of each policy so issued the words "this company is not licensed to do business in Georgia." (Acts 1949, pp. 1201, 1203.) 56-508a. Surety bond of agent; contents; tax.-Before receiving such license or any renewal thereof, such person shall execute and 57 LICE sINe OF LIFE ETC. 56-SUa deliver to the Insurance Commissioner a bond, to be aI?pl:oved by t~e Commissioner, made payable to the Insurance CommIsSIOner or hIs successors in office, executed by such person as principal and by a surety company authorized to do business in this State, as surety, in the penal sum of $5,000, conditioned that the licensee shall faithfully comply with all requirements of this law and will file with the said Commissioner before March 1 of each year a sworn statement showing the gross premiums charged for insurance procured or placed in such unauthorized companies and the gross premiums returned on canceled policies during the year ending the 31st day of December next preceding, and that at the time of filing such statement will pay to the Insurance Commissioner a sum equal to three per cent. of such gross premiums less premiums returned on account of canceied policies so reported. It shall be the duty of the licensee to file such report a}ld to pay said tax, as herein provided. (Acts 1949, pp. 1201, 1203.) 56-509a. Recovery of tax.-Such tax if not paid shall be recoverable in a suit brought by the Insurance Commissioner against the licensee and his surety. (Acts 1949, pp. 1201, 1203.) 56-510a. Rules and regulations.-The Insurance Commissioner is authorized to prescribe any rules and regulations which shall Pl'()mote the enforcement of this law. (Acts 1949, pp. 1201, 1203.) 56-511a. Revocation of license.-The license provided for in this law may be revoked or the renewal thereof refused for the failure of the agent to pay the tax or to file the affidavits specified herein, or if the agent procures excess line policies or contracts without exercising diligent effort to secure the required business in duly authorized and licensed companies, or if the agent procures excess line policies or contracts from companies having standards of solvency and management which do not meet the requirements necessary for the protection of the policyholders, or for his failure to comply with any other provisions of this or other laws regulating the licensing of insurance agents. (Acts 1949, pp. 1201, 1203.) CHAPTER 56-5B. LICENSING OF LIFE, HEALTH AND ACCIDENT INSURANCE AGENTS. Sec. 56-501b. Definitions. 56-502b. Representing unauthorized in- surers prohibited; personal liability of agent. 56-503b. Necessity for license; doing business with unlicensed agent prohibited. 56-504b. Application for license; certificate of insurer; examination fee. 56-505b. Examination of applicants. 56-506b. Rules and regulations of Com- missioner as to classification of applicants; type and conduct of examinations; advisory board. 56-507b. Notice as to results of exami- Sec: nation; issuance of license; types of licenses. 56-508b. Licenses to nonresidents; reciprocal agreements; requirements. 56-509b. Additional licenses; placement of excess or rejected risks. 56-510b. Expiration and renewal of licenses; requests for renewal. 56-511b. Temporary licenses. 56-512b. License revoked upon termination of appointment of agent; relative information as privileged communication. 5650lb LICE- SING OF LIFE, ETC. 58 Sec. 56-513b. Refusal, suspension, or revocation of license; notice; hearing; revocation as bar to issuance of new license. 56-514b. Notice of change of address by licensee. 56-515b. Rules and regulations estab- Sec. lished by Commissioner. 56-516b. Inquisitorial powers in con duct of hearings; evidence adduced as privileged. 56-517b. License without examination of persons presently acting as agents. Editorial Note.-This Chapter was approved March 4, 1953, and was to become effective 90 days thereafter. The budget authority was authorized and required to set aside funds for its administration. (See Acts 1953, pp. 497, 612.) 56501b. Definitions.-Wherever used in this Chapter certain terms shall be defined as follows: A. The term "agent" shall mean any authorized or acknowledged agent of an insurer and any subagent of such agent who acts as such in the solicitation of, negotiation for, or procurement or making of a contract of life, health or accident insurance, or making of an annuity contract; except that the term "agent" shall not include any regula salaried officer or employee of a licensed insurer or of a licensed insurance agent who does not solicit or accept from the public appli cations for any such contract. The term "agent" shall not include an representative of a nonprofit hospital service corporation as define and regulated in Chapter 99-10, or the representative of a nonprofi medical service corporation as defined and regulated in Chapte 99-10A, or the representative of any fraternal benefit society defined and regulated in Chapter 56-16. A regular salaried officer 0 employee of an insurer authorized to do business in this State shall not be deemed to be an "agent" by reason of rendering assistance to or on behalf of a licensed insurance agent, provided that such salaried officer or employee devotes substantially all of his time to activities other than the solicitation of applications for life, health or accident insurance or annuity contracts, and receives no commission or other compensation diTectly dependent upon the amount of business obtained: Provided, however, that 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 such person, or of a firm or corporation by which he is employed, and who does not receive insurance commissions for such services, shall not be deemed to be an agent. B. The term "subagent" shall mean any person (except as provided in paragraph A of this section) who acts for or on behalf 0 a licensed agent in the solicitation of, negotiation for, or procuremen or making of a life, health or accident insurance contract or annuit contract, whether or not he be designated by such agent as subagent or a solicitor or by any other title including the members of a partnership and the officers, directors, stockholders or employees of a corporation. Each subagent shall be deemed to be an agent as defined in paragraph A of this section and wherever in succeeding sections of this Chapter the term "agent" is used, it shall include subagents whether or not they are specifically mentioned. Each such person shall individually file an application for license and submit to a written examination as hereafter provided for applicants for an agent's license. 59 56-503b C The term "insurance contract" for the purposes of this Chapter shail mean any contract or policy effecting life insurance as defined in section 56-901, or health or accident insurance or any annuity contract on behalf of any company or insurer engaged in the business of writing life, health or accident insurance or annuity contracts. D. The term "excess risk" shall mean all or any portion of a life, health or accident insurance risk or contract of annuity for which application is made to an agent, and which exceeds the amount of insurance or annuity which shall be provided by the insurer for which uch agent is licensed. E. The term "rejected risk" shall mean a life, health or accident insurance risk or annuity contract for which application has been made to an agent and which insurance or annuity contract is declined by the insurer for which such agent is licensed. F. The term "agency" shall mean any person, partnership or corporation engaged in business as an agent as defined in pamgraph A of this section: Provided that if the agency shall be a partnership or corporation, all partners, officers, directors, stockholders and employees who shall act as agents shall be licensed in lieu of the partnership or corporation, and no license shall be issued to or in the name of the partnership or corporation. G. The term "Commissioner" shall mean the Commissioner of Insurance of the State of Georgia. H. The terms "company" and "insurer" shall mean a corporation, association, order, or society, subject to the insurance laws of this State, writing life, health and accident insurance, or annuity contracts, but shall not include fraternal benefit societies as defined and regulated by Chapter 56-16, nonprofit hospital service corporations as defined and regulated by Chapter 99-10, or nonprofit medical service corporations as defined and regulated by Chapter 99-10A. (Acts 1953, pp. 497,498.) Cross-referenee.-Penalty for violation of Chapter, see 56-9935. 56502b. Representing unauthorized insurers prohibited; personal liability of agent.-No person, partnership or corporation shall, within this State, solicit, procure, receive or forward applications for life, health or accident insurance or annuities or issue or deliver poIrcies for or in any manner secure, help or aid in the plaeing of any contract of life, health or accident insurance or annuity fOl" any person other than himself, directly or indirectly, with any insurer not authorized to do business in this State. Any person, partnership or corporation shall be liable for the full amount of any loss sustained on any contract of life, health or accident insurance or annuity made by or through him or it, directly or indirectly, with any insurer not auth~rized to do business in this State, and, in addition for any prenuum taxes which may become due under any law of this State by reason of such contract. (Acts 1953, pp. 497, 500.) 56503b. Necessity for license; doing business with unlicensed agent prohibited.-A. No person shall act as an agent within this S~te until he shall have first procured a license from the CommissIoner. 56504b LICE 51 G OF LIFE, ETC. 60 B. No insurer or agent doing business in this State shall pay, di. rectly or indirectly, any commission or any other valuable consideration to any person for services as an agent within this State, unless such person shall hold a currently valid license to act as an agent as required by the laws of this State; nor shall any person, partnership or corporation, other than a 'duly licensed agent or an agency as herein defined, accept any such commission or' other valuable consideration: Provided, however, that the provisions of this section shall not prevent the payment or receipt of renewal or other deferred commissions to or by any person solely because such person has ceased to hold a license to act as an agent; and Provided, further, that the provisions of this section shall not prevent the payment or receipt of any commission or any other valuable consideration to or by a person who has applied for a temporary license pursuant to section 56-51lb, paragraph (C) pending issuance of such temporary license. (Acts 1953, pp. 497, 500.) 56-504b.-Application for license; certificate of insurer; examina tion fee.-A. Each applicant for a license to act as an agent within this State shall file with the Commissioner his written application on forms furnished by the Commissioner. The application shall be signed and verified by oath of the applicant. The prescribed form shall require the applicant to state his full name, residence, age, occupation and place of business for five years preceding date of the application; whether applicant has ever held a license to solicit insurance contracts in any State, and if so, what State; whether he has been refused, or has had suspended or revoked, a license to solicit insurance contracts in any State; what insurance experience, if any, he has had; what instruction in insurance and in the insurance laws of this State he has had or expects to have; whether any insurer or general agent claims that the applicant is indebted under an agency contracted or otherwise, and if so, the name of the claimant, the nature of the claim, and the applicant's defense thereto; whether applicant has had an agency contract cancelled, if so, when, by what company or general agent and the reason therefor; whether applicant will devote all or part of his efforts to acting as an insurance agent, and if part only, how much time he expects to devote to such work and in what other business or businesses he is engaged or employed; whether, if applicant is a married person, the husband or wife has ever applied for or held a license to solicit life or any other insurance in any State, and whether such license has been refused, suspended, or revoked; and such other information as the Commissioner, in his discretion, may require. B. The application shall be accompanied by a certificate on forms furnished by the Commissioner and signed by an officer or properly authorized representative of an insurer stating that the insurer has investigated the character and background of the applicant and is satisfied that he is trustworthy and qualified to act as its agent and to hold himself out in good faith to the general public as an agent and that the insurer desires that the applicant be licensed as an agent to represent it in this State. C. If an applicant shall be required to take an examination, as hereinafter prescribed, his application shall be accompanied by an examination fee in the amount of $5, which shall not be refunded. This fee shall be charged for the privilege of taking only the first 61 LICENSING OF LIFE, ETC. 56506b examination, or combination thereof, as set forth in section 56-506b, paragraph (B) (4) and (5), and the fee for the privilege of taking any subsequent examination, or combination thereof, shall be $3. (Acts 1953, pp. 497, 501.) 56-505b. Examination of applicants.-Each applicant for a license to act as an agent within this State shall submit to a personal written examination to determine his competence to act as an agent and his familiarity with the pertinent provisions of the insurance laws of this State, and shall pass the same to the satisfaction of the Commissioner; except that no such written examination shall be required : A. Of an applicant for a renewal license, unless the Commissioner determines that such an examination is necessary to establish the competency of the applicant; or unless a license had not been effective as to such applicant within two years preceding the date of filing the application. B. Of an applicant who is a ticket-selling agent of a railroad or steamship company, carrier by air or public bus carrier who shall act as agent or solicitor in the sale of accident insurance tickets to individuals. C. In the discretion of the Commissioner of an applicant who shall be licensed to act only as an agent with respect to group life, health and accident insurance on borrowers or debtors commonly known as group credit life, health and accident insurance. D. In the discretion of the Commissioner of an applicant whose license to do business or act as an agent in this State was suspended less than one year prior to the date of application. (Acts 1953, pp. 497, 502.) 56-506b. Rules and regulations of Commissioner as to classification of applicants; type and conduct of examination; advisory board. -A. The Commissioner may establish rules and regulations with respect to: (1) The classification of applicants according to the type of insurance contracts to be effected by them if licensed as agents. (2) The scope, type and conduct of written examinations to be given pursuant to this section, and the times and places within this State for the holding of such examinations: Provided, however, that an applicant shall be permitted to take an examination once in each two weeks in the principal office of the Commissioner: and Provided further that an examination shall be held at least as often as once in each two months, in each Congressional District. .B. Such rules and regulations, when established, shall classify applIcants for purposes of this section as follows: (1) Those desiring to write life insurance. (2) Those desiring to write accident and health insurance other than weekly premium accident and health insurance. . (3) Those desiring to write weekly premium accident and health Insurance. (4) Those desiring to write any combination of two or more of the above classifications, and 56507b LICENSING OF LIFE, ETC. 62 (5) Such other classifications as, in the opinion of the Commissioner, are necessary or appropriate. C. Examinations shall be prepared and given in those subjects only which pertain to the classification or classifications which the applicant desires to write, and no applicant shall be required to take an examination on a subject or subjects pertaining to any other classification. D. The rules and regulations of the Commissioner, when established, shall designate textbooks, manuals and other materials to be studied by the applicants in preparation for examinations in each classification designated by the Commissioner pursuant to this section. Such textbooks, manuals or other materials may consist of matter available to applicants by purchase from the publisher or may consist of matter prepared at the direction of the Commissioner and distributed to applicants upon request therefor, and payment of reasonable costs thereof. When textbooks, manuals or other materials shall have been designated or prepared by the Commissioner pursuant to this section, all examination questions shall be prepared from the contents of such textbooks, manuals or other materials. E. No person who shall have taken and failed to pass two examinations given pursuant to this section with respect to a particular class or classes of insurance shall be entitled to take any further examination with respect to such class or classes until after the expiration of six months from the date of the last examination in which he failed. If such person shall thereafter fail to pass two or more such examinations. he shall not be eligible to take any further examination until after the expiration of one year from the date of his last unsuccessful examination. An examination fee shall be paid for each and every examination: Provided, however, that an applicant shall be permitted to take a single examination covering all classes of insurance contracts as defined in paragraph (C), section 56-501b. F. The Commissioner may appoint an advisory board of five or more persons to make recommendation to him with respect to the scope, type, and conduct of written examinations and the times and places in the State where they shall be held. This advisory board, if appointed, shall consist of individuals experienced in the life, annuity, health and accident insurance business, and may include officers and employees, general agents and managers and licensed agents of companies engaged in such business. The members of the advisory board shall serve without pay, but upon the authorization of the Commissioner, shall be reimbursed for their reasonable expenses in attending meetings of the advisory board. (Acts 1953, pp. 497, 503.) Cross-reference.-General authority of Commissioner to promulgate rules and regulations for administration of Chapter, see 56-515b. 56-507b. Notice as to results of examination; issuance of license; types of licenses.-A. If the Commissioner is satisfied that the applicant is trustworthy and competent and the applicant, if required, has passed a written examination, the Commissioner shall forthwith issue a license limited to the insurer and class or classes of insurance for which the agent is to be appointed. If the applicant has not passed his written examination or for any of the reasons set forth in 63 LICE SINe OF LJFE, ETC. 565l0b section 56-513b, the Commissioner shall notify the applicant and the insurer, in writing, that a license will not be issued to him. B. In any case where a license is applied for to represent an insurer authorized in this State to transact an accident and health. as well as a life insurance business, the Commissioner may, on request of the applicant, issue a single license authorizing the applicant to represent the insurer with respect to both types of business, provided that the applicant, in addition to qualifying under this Chapter, has ~tisfied the Commissioner as required by the laws of this State and the regulations of the Commissioner, if any, that he is competent to represent such insurer with respect to the types of accident and health insurance issued by it. (Acts 1953, pp. 497, 505.) 56-508b. Licenses to nonresidents; reciprocal agreements; requirements.-A. A person not resident in this State may be licensed as an agent upon compliance with the provisions of this Chapter: Provided that the State in which such person resides will accord the same privilege to a citizen of this State. B. The Commissioner is further authorized to enter into reciprocal agreement with the appropriate official of any other State waiving the written examination of any applicant resident in such other State: Provided: (1) That a written examination is required of applicants for an agent's license in such other State; (2) That the appropriate official of such other State certifies that the applicant holds a currently valid license as an agent in such other State and either passed such written examination or was the holder of an agent's license prior to the time such written examination was required; (3) That the applicant has no place of business within this State nor is an officer, director, stockholder, or partner in any corporation or partnership doing business in this State as an insurance agency; (4) That in such other State, a resident of this State is privileged to procure an agent's license upon the foregoing conditions and without discrimina,tion as to fees or otherwise in favor of the residents of such other State. (Acts 1953, pp. 497, 506.) 56-509b. Additional licenses ; placement of excess or rejected risks. -A. Additional licenses shall be issued to any agent when requested by an official or duly authorized representative of an insurer: Provided such additional license shall be limited to the class or classes for which the agent holds a license. . B. Any agent licensed in this State may place excess or rejected nsks with any insurer lawfully doing business in this State, other than an insurer that such agent is licensed to represent, and an agent ~o placing excess or rejected risks shall not be required to hold a license to represent the insurer accepting such excess or rejected risks. (Acts 1953, pp. 497, 506.) 56-SlOb. Expiration and renewal of licenses; requests for renewal. :-A. Each license issued to an agent shall expire on March 1 followlDg the date of issue, unless prior thereto it is revoked or suspended 56-SUb LICE SING OF LIFE, ETC. 64 by the Commissioner of Insurance or the authority of the agent to act for the insurer is terminated. B. In the absence of a contrary ruling by the Commissioner, license renewals may be issued from year to year upon request of the insurer, without further action on the part of the agent. C. Each request for renewal of license shall show whether the agent devotes all or part of his efforts to acting as an agent, and, if part only, how much time he devotes to such work and in what other business or businesses he is engaged or employed. D. Upon the filing of a request for renewal of license, the current license shall continue in force until the renewal license is issued by the Commissioner or until the Commissioner has refused for cause to issue such renewal license, as provided in section 56-513b, and has given notice of such refusal in writing to the insurer and the agent. (Acts 1953, pp. 497, 507.) 56-5Ub. Temporary licenses.-Any other provision of this Chapter to the contrary notwithstanding, the Commissioner, if satisfied with the trustworthiness of the applicant, may, without requiring a written examination, issue a temporary license: A. To the executor or administrator of the estate of a deceased person who at the time of his death was a licensed agent, or to the person or persons assisting an agent who is totally disabled; B. To a surviving next of kin of such a deceased person if no administrator or executor has been appointed or qualified, but any license issued under this subsection shall be revoked upon issuance of a license to an administrator or executor under subsection A. of this section; C. To any person who has been appointed or who is being considered for appointment as an agent by an insurer immediately upon receipt by the Commissioner of an application executed by such person in the form required by section 56-504b, (A), together with a certificate signed by an officer or properly authorized representative of such insurer stating: (1) That such insurer has investigated the character and background of such person and is satisfied that he is trustworthy; (2) That such person has been appointed or is being considered for appointment by such insurer as its agent; and (3) That such insurer desires that such person be issued a temporary license: Provided, however, that if such temporary license shall not have been received from the Commissioner within seven days from the date on which the application and certificate were delivered to or mailed to the Commissioner. the insurer may assume that such temporary license will be issued in due course and may continue such person in its employment; D. To an applicant for license pending completion of the examination herein provided: Provided, that a temporary license issued under this section shall be effective for 90 days unless sooner terminated for cause pursuant to the provisions of this Chapter. (Acts 1953, pp. 494, 507.) 65 LICENSING OF LIFE, ETC. 56513b 56.5l2b. License rev.oked up?n. termination ~f ~ppointment of r:seunrt~rreslhaatlilv, e information as prIvileged upon termination of the communlcatIon.-A. appointment of any Every agent, immediately file with the Commissioner a statement of the facts relative to the termination of the appointment and the date and cause thereof. The Commissioner shall thereupon terminate the license of such agent to represent such insurer in this State. B. Any information, docume.nt,. record or statement. requi~ed to be made or disclosed to the COmmISSIOner pursuant to this sectIon shall be deemed a privilege? communicat~on and shall not be used as evidence in any court actIon or proceedmg. (Acts 1953, pp. 497, 509.) Cross.reference.-Privileged communications generally, see 38-418 et seq. Evidence adduced at hearings before Commissioner as privileged, see 56516b. 56-513b. Refusal, suspension, or revocation of license; notice; hearing; revocation as bar to issuance of new license.-A. A license may be refused, or a license duly issued may be suspended or revoked or the renewal thereof refused by the Commissioner if, after notice and hearing as hereafter provided, he finds that the applicant for, or holder of such license: (1) Has wilfully violated any provision of the insurance laws of this State; or (2) Has intentionally made material misstatement in the application for such license; or (3) Has obtained, or attempted to obtain, such license by fraud or misrepresentation; or (4) Has misappropriated or converted to his own use or illegally withheld money belonging to an insurer or an insured or beneficiary; or (5) Has otherwise demonstrated lack of trustworthiness or competence to act as an agent; or (6) Has been guilty of fraudulent or dishonest practices; or (7) Has materially misrepresented the terms and conditions of insurance policies or contracts; or (8) Has made or issued, or caused to be made or issued, any statement misrepresenting or making incomplete comparisons regarding the terms or conditions of any insurance or annuity contract legally ~sued by any insurer, for the purpose of inducing or attempting to mduce the owner of such contract to forfeit or surrender such cont~ct or allow it to lapse for the purpose of replacing such contract WIth another; or (9) Has obtained, or attempted to obtain such license, not for the pU!pos~ of holding himself out to the general public as an agent, but pnmarily for the purpose of soliciting, negotiating or procuring insurance or annuity contracts covering himself or members of his family, or the o~cers, directors, stockholders, partners, employees, of a phis~ner~~, association, or corporation of which he or a member of fanuly IS an officer, director, stockholder, partner or employee. B. Before any license shall be suspended or revoked or the renewal 56-5l4b LICENSING OF LIFE, ETC. 66 thereof refused hereunder, the Commissioner shall give notice of his intention so to do, by registered mail, to the applicant for, or holder of such license and the insurer whom he represents or who desires that he be licensed, and shall set a date not less than 20 days from the date of mailing such notice when the applicant or licensee and a duly authorized representative of the insurer may appear to be heard and produce evidence. In the conduct of such hearing, the Commissioner or any deputy Commissioner specially designated by him for such purpose shall have power to administer oaths, to require the appearance of, and examine any person under oath, and to require the production of books, records, or papers relevant to the inquiry upon his own initiative or upon request of the applicant or licensee. Upon termination of such hearing, findings shall be reduced to writing and, upon approval by the Commissioner, shall be filed in his office and notice of the findings sent by registered mail to the applicant or licensee and the insurer concerned. C. No licensee whose license has been revoked hereunder shall be entitled to file another application for a license as an agent within one year from the effective date of such revocation or, if judicial review of such revocation is sought within one year from the date of final court order or decree affirming such revocation. Such application when filed, may be refused by the Commissioner unless the applicant shows good cause why the revocation of his license shall not be deemed a bar to the issuance of a new license. D. Any applicant whose application for a license has been rejected (except for failure to pass a required written examination) shall, upon request therefor in writing within 10 days after notice of such rejection, be entitled to a hearing as provided for by this section and the procedure set forth by this section shall apply to the same. (Acts 1953, pp. 497, 509.) 56-514b. Notice of change of address by licensee.-Every licensed agent shall inform the Commissioner promptly in writing of a change of his principal business address. (Acts 1953, pp. 497, 511.) 56-515b. Rules and regulations established by Cornrnissioner.-The Commissioner is hereby authorized to establish such rules and regulations as shall be necessary for the administration of this Chapter. (Acts 1953, pp. 497, 511.) Cross-reference.-Rules and regulations as to classification of applicants and examinations, see 56-506b. 56-516b. Inquisitorial powers in conduct of hearings; evidence adduced as privileged.-For the purpose of making such investigations as he may deem necessary for the proper administration of this Chapter, the Commissioner and his deputy specially designated by him for the pm'pose of conducting a hearing or an investigation shall have inquisitorial powers and shall be empowered to subpoena witnesses and examine them under oath: Provided, that all testimony, documents and other evidence required to be submitted to the Commissioner, pursuant to this Chapter, shall be privileged and shall not be admissible as evidence in any other proceeding. (Acts 1953, pp. 497, 511.) 67 56-603 Cross_references.-Privileged c0J.Tl~unications generally, see 38-418 et seq. Report of discharge of agent as prIvIleged, see 56-512b. 56-517b. License without examination of persons presently acting as agents.-Agents holding licenses authorizing them to transact business in the State of Georgia. on the effective date of this qhapter shall continue to be so authorized to the same extent as if such agents had been examined pursuant to this Chapter and duly licensed. (Acts 1953, pp. 497, 512.) Editorial ote.-This Chapter was to become effective 90 days after its approval date. It was approved March 4, 1953. CHAPTER 56.6. ACTIONS AGAINST INSURANCE COMPANIES. See. 56-601. 56-602. 56-603. 56-604. Venue. Service of process. Same; nonresident companies. Same; nonresident cooperative or assessment life insurance companies. Sec. 56-605. 56-606. Same; attorney appointed by Insurance Commission to receive service, when. Same; appointment of agent by title insurance company. 56-601. (2563) Venue.-Whenever any person shall have any claim or demand upon any insurance company having agencies or more than one place of doing business, such person may institute suit against the company in the county where the principal office of the company is located, or in any county where the company shall have an agent or place of doing business, or in any county where such agent or place of doing business was located at the time the cause of action accrued or the contract was made, out of which said cause of action arose. (Acts 1861, pp. 58, 59; 1862-3, p. 161; 1878-9, p. 54; 1902, p. 53.) 56-602. (2564) Service of process.-In all such suits service shall be perfected upon such insurance company by leaving a copy of the petition or writ with the agent of the company, if any. (Acts 1861, p. 58; 1890-1, p. 75.) Cr08s-referenees.-Service on nonresident companies, see 56-603. Service on corporations, how perfected, see 22-1101. Where suits on contracts or for torts may be brought against corporations, see 22-1102. Power of attorney, and service of process on fraternal benefit societies, see 56-1624. Editorial Note.-The second sentence of the above section as it appears in the Code of 1910 has been omitted because it was declared unconstitutional in 140/637 (2) (79 S. E. 467). That sentence provided: "If no agent should be in the county, then !it the agency or place of doing business, or where the same was located at the time such cause of action OCCUlTed, or the contract made out of which the same arose." 56-603. (2446) Same; nonresident companies.-Any insurance company not organized under the laws of this State, desiring to t~ansact business in this State, shall file with the Insurance Commisloner a w~tten instrument or power of attorney, duly signed and sealed, appolllting and authorizing some person, who shall be a resident .of this State, to acknowledge or accept service of process for and III !:>ehalf of such company, and upon whom process may be rve