GA Code § 33-3-8 (2021)
2021 Georgia Code|Title 33 - Insurance|Chapter 3 - Authorization and General Requirements for Transaction of Insurance|§ 33-3-8. Requirements as to Deposit of Securities Generally

  The Commissioner shall not issue a certificate of authority to transact insurance to any insurer unless the insurer has deposited in trust with this state securities eligible for the investment of capital funds of domestic insurers under this title in an amount not less than that required in subsection (b) of this Code section. This Code section does not apply to farmers' mutual fire insurance companies.     Except as otherwise provided in this subsection, the amount of the deposit required under this Code section for a certificate to transact any one class of insurance shall be $100,000.00; to transact each additional class of insurance, the amount of deposit shall be $25,000.00, subject to the limitation that not more than $200,000.00 total deposit shall be required for any combination of classes.   As to any foreign insurer, in lieu of such deposit or part of such deposit in this state, the Commissioner shall accept the current certificate in proper form of the public official having supervision over insurers in any other state to the effect that a like deposit or part of like deposit by such insurer is being maintained in public custody in such state in trust for the purpose, among other reasonable purposes, of protection of policyholders and creditors or of the protection of all the insurer's policyholders or of all of its policyholders and obligees.   As to any alien insurer, other than a title insurer, which has entered through and the United States branch of which is licensed to transact insurance in another state, in lieu of such deposit or part thereof in this state, the Commissioner shall accept the certificate of the official having supervision over insurance of such other state in the United States, given under his or her hand and seal, that the insurer maintains within the United States by way of deposits with public depositories, or in trust institutions within the United States approved by such official, assets available for discharge of its United States insurance obligations, which assets shall be in an amount not less than the outstanding liabilities of the insurer arising out of its insurance transactions in the United States together with the larger of the following sums: the largest deposit required by this title to be made in this state by any type of domestic insurer transacting like kinds of insurance or $300,000.00.   As to any alien insurer entering through this state to transact insurance in the United States through a United States branch, such insurer shall deposit in accordance with Chapter 12 of this title assets available for discharge of its United States insurance obligations, which assets shall be in an amount not less than the outstanding liabilities of the insurer arising out of its insurance transactions in the United States together with the larger of the following sums: the largest deposit required by this title to be made in this state by any type of domestic insurer transacting like kinds of insurance or $300,000.00.      (Code 1933, § 56-309, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1982, p. 3, § 33; Ga. L. 1999, p. 584, § 1.)   Cross references.   - Administration of deposits, T. 33, C. 12.   Law reviews.   - For article discussing restrictions on the establishment and transaction of business by a foreign insurer in Georgia with emphasis on threshold requirements for establishment by alien insurers, see 27 Mercer L. Rev. 629 (1976).   JUDICIAL DECISIONS   Editor's notes.   - In light of the similarity of the statutory provisions, annotations decided under former Civil Code 1895, §§ 2035-2043 and former Code 1933, § 22-1210 and Ch. 56-3 are included in the annotations for this Code section.   Purpose of foreign insurer's deposit.    - The bonds which a foreign insurance corporation doing business in this state is required to deposit are to prevent a suit against a dissolved corporation from being futile and unavailing. Manufacturing Lumberman's Underwriters v. South Ga. Ry., 57 Ga. App. 699, 196 S.E. 244 (1938) (decided under former Code 1933, Ch. 56-3, repealed by Ga. L. 1960, p. 289).    The statute as to the depositing of bonds and retaining them so long as there is a pending claim in the state (see O.C.G.A. §§ 33-3-8,33-3-10,33-12-1, and33-12-8) and the statute providing for the prosecution of pending suits after the dissolution of a foreign corporation are a part of the general scheme of the Georgia law to protect Georgia citizens in the collection of just claims against foreign corporations which are dissolved and which have their principal assets in another state. Manufacturing Lumbermen's Underwriters v. South Ga. Ry., 57 Ga. App. 699, 196 S.E. 244 (1938) (decided under former Code 1933, § 22-1210, repealed by Ga. L. 1968, p. 585, and former Code 1933, Ch. 56-3, repealed by Ga. L. 1960, p. 289).   Local action necessary for appropriation of deposit.    - A suit brought in a local court is a condition precedent to the appropriation of the bonds deposited by a foreign insurance corporation to the payment of a fire loss. Manufacturing Lumbermen's Underwriters v. South Ga. Ry., 57 Ga. App. 699, 196 S.E. 244 (1938) (decided under former Code 1933, Ch. 56-3, repealed by Ga. L. 1960, p. 289).    Death of a nonresident fire insurance company does not terminate a suit. Manufacturing Lumbermen's Underwriters v. South Ga. Ry., 57 Ga. App. 699, 196 S.E. 244 (1938) (decided under former Code 1933, Ch. 56-3, repealed by Ga. L. 1960, p. 289).   Deposit remains subject to claims of Georgia citizens over foreign receivers.    - Nonresident fire insurance companies doing business in this state are required to deposit certain bonds. These bonds are for the protection of the citizens of Georgia who have insurance with the nonresident company, and if the foreign company ceases to do business, the bonds remain on deposit until such company shall have settled all claims against it in this state and are subject to the claims of Georgia citizens under certain prescribed conditions. As long as there are any claimants to these bonds under the laws of Georgia, a receiver in another state would have no right to interfere with proceedings of the courts of Georgia instituted to assert the rights of a Georgia claimant in whose behalf the bonds were deposited. Manufacturing Lumbermen's Underwriters v. South Ga. Ry., 57 Ga. App. 699, 196 S.E. 244 (1938) (decided under former Code 1933, Ch. 56-3, repealed by Ga. L. 1960, p. 289).   Deposit primarily secures losses.   - The primary purpose of the deposit is to secure the payment of fire losses, which are the only losses insured against, although it also secures, secondarily, other claims arising on policies, such as the repayment, after the termination of the risk, of unearned premiums paid; even when a company becomes insolvent and the deposit is brought into a court of equity for distribution, fire losses are entitled to priority of payment from the fund over claims for unearned premiums. Kelsey v. Cogswell, 112 F. 599 (N.D. Ga. 1901) (decided under former Civil Code 1895, §§ 2035-2043).   OPINIONS OF THE ATTORNEY GENERAL   Deposit and surplus requirements for fire insurer to issue "homeowner" policies.    - Before a company presently writing fire insurance can be authorized to issue "homeowner" policies, it would be required to meet the surplus requirements of former Code 1933, § 56-1510 (see O.C.G.A. § 33-14-61), as to mutual insurers, that is $200,000.00 for each class of insurance written, and the deposit requirements of this section, that is $100,000.00 for one class and $25,000.00 for each additional class of insurance written. 1960-61 Op. Att'y Gen. p. 274.   Eligibility of securities on deposit in 1960.   - The "savings clause" of former Code 1933, § 56-1002(2), expended to any securities which a domestic insurer may have had on deposit with this state prior to the enactment of this title by Ga. L. 1960, p. 289, and such securities were "eligible for the investment of capital funds of domestic insurers" within the meaning of this section, although such securities did not meet specific qualitative restrictions elsewhere contained in this title. 1971 Op. Att'y Gen. No. 71-170.    Former Code 1933, § 56-1036 (see O.C.G.A. § 33-11-42) vests in the Insurance Commissioner the discretionary determination whether securities deposited in this state by foreign or alien insurers are "of a quality substantially as high" as those required of domestic insurers under this section, as construed in conjunction with former Code 1933, § 56-1002(2), and this is true even though such securities may not meet the specific qualitative restrictions contained in this title, provided such securities are authorized by the law of the insurer's domicile. 1971 Op. Att'y Gen. No. 71-170.   Priority of claims.    - Claims under policies for losses incurred take priority over claims for the refund of unearned premiums against general or special deposits posted by insurance companies pursuant to O.C.G.A. §§ 33-3-8(b) and33-3-9. 1984 Op. Att'y Gen. No. 84-5.   RESEARCH REFERENCES   Am. Jur. 2d.   - 43 Am. Jur. 2d, Insurance, §§ 33, 37.   C.J.S.   - 44 C.J.S., Insurance, §§ 82 et seq., 142, 178, 194 et seq.