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Rules and Regulations of the State of Georgia
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Subject 120-2-76 SALE OF INSURANCE BY FINANCIAL INSTITUTIONS

Rule 120-2-76-.01 Sale of Insurance by Financial Institutions

(1) Insurance may be sold by certain lending institutions, bank holding companies, or subsidiaries or affiliates of either of the foregoing doing business in this State. However, insurance is underwritten by insurers and sold by insurance agents. Therefore, the purpose of this Regulation Chapter is to specify the requirements for the sale of insurance products by lending institutions, bank holding companies, and their subsidiaries and affiliates.
(2) Nothing in this Regulation Chapter shall authorize any of the following activities by a lending institution, bank holding company, or subsidiary or affiliate of either:
(a) The sale of any insurance product that is not underwritten by an insurer which has a certificate of authority to transact business in Georgia;
(b) Failure to comply with the licensing requirements for agents and agencies;
(c) Failure to comply with any other provisions of this Regulation Chapter with respect to the sale of insurance.
(d) Failure to comply with Title 33 of the Official Code of Georgia Annotated or the Rules and Regulations of the Commissioner of Insurance of the State of Georgia.
(e) Failure to comply with Title 7 of the Official Code of Georgia or the Rules and Regulations of the Department of Banking and Finance.
(3) These regulations do not negate or affect the following: exceptions set out in O.C.G.A. § 33-3-23 such as sale and underwriting of credit insurance (O.C.G.A. § 33-3-23(b)); sale of products regulated by O.C.G.A. § 33-23-12(b)(3); and insurance sold pursuant to Regulation § 120-2-11, all of which are otherwise regulated by the Office of Commissioner of Insurance.

Rule 120-2-76-.02 Definitions

As used in this Regulation Chapter, the term:

(a) "Agency" means a person, including corporations, subsidiary corporations, partnerships, non-natural persons, etc., associated with or in the form of a financial institution who represents one or more insurers and is engaged in the business of soliciting or procuring or accepting applications for insurance or countersigning, issuing, or delivering contracts of insurance for one or more insurers;
(b) "Agent" means an individual appointed or employed by an insurer who solicits or procures applications for insurance; who in any way, directly or indirectly, makes or causes to be made any insurance contract for or on account of an insurer; or who as a representative of an insurer receives money for transmission to the insurer for an insurance contract, anything in the application or contract to the contrary notwithstanding, and who has on file with the Commissioner a certificate of authority from each insurer with whom the agent places insurance;
(c) "Financial Institution" means a domestic state bank, national bank, building and loan or savings and loan association or other federally insured depository institution which is authorized to accept deposits in the State of Georgia; a bank holding company; or a subsidiary or affiliate of any of the above;
(d) "Insurance Agent" means an individual appointed or employed by a financial institution who solicits or procures applications for insurance; who in any way, directly or indirectly, makes or causes to be made any insurance contract for or on account of an insurer; and who has on file with the Commissioner a certificate of authority from each insurer with whom the agent places insurance;
(e) "Insurance" means a contract which is an integral part of a plan for distributing individual losses whereby one undertakes to indemnify another or to pay a specified amount or benefits upon determinable contingencies. The term does not include credit insurance products referenced in O.C.G.A. § 33-23-12(b).

Rule 120-2-76-.03 Notification to Department of Intent to Sell Insurance In or Through Financial Institutions; Registration of Bank Holding Company with the Department of Banking and Finance

(1) Prior to marketing insurance products, a financial institution shall provide notification to the Department of Insurance on Form GID 423FI and file a copy with the Department of Banking and Finance (DBF). Such report shall:
(a) Identify any financial institution location where an insurance agent will be physically present. Each branch must be identified specifically in the registration;
(b) Acknowledge that the financial institution has read and understands these rules; and
(c) Identify any insurance company and the policy form numbers of the insurance which will be marketed in association with the financial institution.
(2) An Amended Form shall be filed within 15 days after the end of the month in which it learns of each change or addition.
(3) Any financial institution with a holding company, which is marketing or selling insurance products in this state, shall register said holding company with the Department of Banking and Finance pursuant to DBF Regulation § 80-5-4-.02.

Rule 120-2-76-.04 Financial Institutions Registering as an Agency

(1) The conduct of insurance transactions in association with a financial institution shall be subject to the requirements of O.C.G.A. § 33-23-3 and Georgia Insurance Department Regulation 120-2-3-.05.
(2) Each financial institution where a licensed and appointed insurance agent is engaged in transactions with respect to insurance products shall be considered an insurance agency for purposes of O.C.G.A. § 33-23-3 and must register with this Department pursuant to Georgia Regulation Chapter 120-2-3-.05 using Form GID 130FI.
(3) GID Form 423FI must identify all locations or branches from which insurance will be sold.

Rule 120-2-76-.05 Licensure of Agents

(1) Any individual soliciting, selling or marketing insurance products to individuals permanently or temporarily residing in this state must be licensed and appointed as an insurance agent in accordance with the provisions of the Georgia Insurance Code and Georgia Insurance Department Regulation Chapter 120-2-22-.07.
(2) No licensed and appointed insurance agent shall, while working from within and on behalf of a financial institution, market or sell insurance, except to the extent permitted by O.C.G.A. § 33-3-23.

Rule 120-2-76-.06 Underwriting of Insurance

Nothing in this Regulation Chapter shall authorize a state or federally chartered bank or other federally insured lending institution to itself directly assume the obligation to provide the benefits of an insurance contract or otherwise undertake to perform the obligations of an insurance contract.

Rule 120-2-76-.07 Location for the Sale of Insurance

(1) If insurance is sold on the premises of a financial institution, the area utilized by an insurance agent for such transactions must be sufficiently segregated and distinct from areas utilized by the financial institution for accepting insured deposits so as to avoid confusion as to the separate identities and activities of the financial institution and the licensed agent.
(2) No insurance agent or employee of the financial institution shall under any circumstances conduct insurance transactions from the teller area. The acceptance of mortgage payments which include insurance escrow payments will not be considered to be conducting an insurance transaction. See DBF Regulation 80-5-4-.05.

Rule 120-2-76-.08 Insurer Notification to the Office of Commissioner of Insurance

(1) Any insurer marketing insurance in association with one or more financial institutions shall notify the Office of Commissioner of Insurance in writing of the existence of such program(s).

Rule 120-2-76-.09 Agent Activities

(1) Only a licensed and appointed agent shall:
(a) solicit the sale of insurance or describe the benefits of the insurance contract or otherwise describe the terms of coverage including premiums or rates of return;
(b) provide an application, enrollment form or other document by which a purchaser effectuates coverage; or
(c) accept an initial premium payment from the insurance purchaser.
(2) In connection with the marketing of insurance, employees of a financial institution who are not licensed and appointed as insurance agents shall not:
(a) make general or specific recommendations as to insurance products;
(b) qualify or screen a purchaser for such products;
(c) respond to questions from prospective purchasers regarding insurance products. Any individual seeking general or specific information about insurance products shall be advised as to the location of the licensed agent or otherwise advised as to how the agent may be contacted; or
(d) refer to insurance products as any type of deposit product or insured deposit.
(3) The licensed and appointed insurance agent shall be identified as an insurance agent on stationery and business cards utilized by the licensee, on other materials provided to the purchaser as well as in any verbal discussions with the purchaser. If the agent is licensed as a securities broker, the additional license may be disclosed on the materials as well as in any verbal discussions with the purchaser regarding insurance products, provided the marketer is also identified as an insurance agent.

Rule 120-2-76-.10 Disclosure of Employment Status for Agents Employed by Financial Institutions

If employees of the financial institution that have contact with the general public or financial institution customers with respect to lending, checking, deposit taking, or trust activities are licensed as insurance agents to sell insurance, in addition to the other disclosures required by this section, the employee shall disclose verbally at the time a solicitation is made or an application is taken that the employee is acting as an insurance agent representing one or more specifically identified insurance companies, and that the insurance product is not issued or guaranteed by the financial institution.

Rule 120-2-76-.11 Premium Collection

(1) Only a licensed agent or insurance agent may accept the initial premium paid for an insurance contract.
(2) A financial institution or affiliate may, at the request of the purchaser, send premium billings or notices to purchasers and debit the purchaser's account or credit arrangement for the payment of insurance premiums subsequent to the initial payment. Upon the written request of the purchaser or insurer to discontinue this form of premium payment, the financial institution shall immediately discontinue such debits.

Rule 120-2-76-.12 Utilization of Independent Agents in Financial Institutions

(1) Any financial institution may contract with agents or an insurance agency on a full-time or part-time basis for the sale of insurance products from bank locations. Such agents shall be appointed by the licensed insurers issuing and underwriting the insurance product. Commissions shall be paid to the agent or agency and may be paid to the financial institution subject to the conditions of paragraphs (2) and (3) of this section.
(2) An insurance agent or agency may not share any commissions with the financial institution and the financial institution shall not accept any such commission unless it has registered as an agency using the GID Form 130FI.
(3) Any lease of space by a financial institution to an insurance agent under which the amount of the rent is based directly or indirectly on the volume of premium written by the insurance agent entails the sharing of commission.

Rule 120-2-76-.13 Compensation of Agents

Licensed independent agents may be paid by an insurer for their activities in connection with the sale of insurance. The insurer and agent shall independently determine the terms of the agent contract including compensation.

Rule 120-2-76-.14 Access to Records and Premises

(1) An insurance agent marketing insurance is responsible for maintaining such records as are necessary to enable the Department to determine that transactions under his or her license comply with all applicable requirements of the insurance code and for making such records available to the Georgia Insurance Department.
(2) If the licensed insurance agent markets other products, provides other services, or maintains other information regarding the customer which relate to other than insurance transactions, all records relating to insurance transactions shall be separately maintained.
(3) The Commissioner of Insurance shall have access to the books and records relating to the sale of insurance irrespective of the physical location of such books and records.
(4) A contract or agreement regarding the sale of insurance between the financial institution and any independent insurance agent or other person conducting insurance transactions shall be in writing and available for inspection by the Georgia Insurance Department.

Rule 120-2-76-.15 Advertising

(1) Advertisements of insurance products marketed pursuant to this regulation shall be subject to the provisions of O.C.G.A. § 33-6-1et seq. and other applicable Georgia law and Insurance Department and Department of Banking and Finance regulations.
(2) No licensed or unlicensed person shall in connection with the marketing of insurance refer to coverage available by the Georgia Life and Health Insurance Guaranty Association, Georgia Insurers' Insolvency Pool, or any other guaranty association, unless specifically asked by the purchaser.
(3) If insurance product advertisements directed to prospective purchasers are included in mailings of bank statements or other documents generated by the financial institution relating to products or services provided by the financial institution, the mailings shall clearly identify the sources of the materials.
(4) If the product or program name under which an insurance product is marketed includes the name of a financial institution or the name of a program associated with the financial institution, the product or program name must also identify the insurance company which is issuing and underwriting the product.
(5) Premiums shall not be referred to as "deposits". Terminology used in connection with insurance must be sufficiently different than that used in connection with traditional banking products and services so as to avoid confusion.
(6) Advertisements of insurance are the responsibility of the insurer and subject to review by the Georgia Insurance Department. If an advertisement describes insurance products and other types of financial services or investments, the entire advertisement must be submitted to the Georgia Insurance Department in the form in which it will be communicated to consumers.
(7) An unlicensed employee of a financial institution may distribute an advertisement describing an insurance product to a prospective purchaser or may refer a customer to a display containing such advertisements. However, that employee shall not recommend the purchase of an insurance product, describe the features of an insurance product, or respond to questions regarding the content of the advertisement. In response to any questions, the employee must indicate that the consumer should pose that question to the licensed agent.

Rule 120-2-76-.16 Communication with Customers

(1) Premium notices, notices of cancellation, renewal notices, statements of values or other communications relating to in-force insurance shall be separated from financial institution account information.
(2) A financial institution shall not provide to an affiliated insurance agency or an insurance agent, insurance policy specific information to be used to solicit or sell the same line or type of insurance to a financial institution customer, unless the customer has authorized such use in writing on a document independent of any other information provided to the customer. This prohibition shall not be applicable to renewal business nor shall it apply when the financial institution must use the information to insure its collateral because the customer has failed to keep the policy in force. A customer's name, address and telephone number shall not be considered insurance policy specific information.

Rule 120-2-76-.17 Disclosures to Prospective and Existing Customers

Disclosures to the customer must be made in accordance with Department of Banking and Finance Regulation 80-5-4-.08.

Rule 120-2-76-.18 Joint Announcements

Endorsements, announcements, or advertisements regarding insurance by a financial institution in conjunction with an agent or insurer, communicated to financial institution customers or prospective customers by direct mail or otherwise shall be subject to the requirements of O.C.G.A. § 33-6-1et seq.

Rule 120-2-76-.19 Prohibition Against Tying; Prohibition Against Rebating and Impermissible Discounting

(1) Tying availability of credit, establishment or maintenance of a trust account or deposit account, or the provision of other traditional bank products from a lending institution to the purchase of insurance from that lending institution is not permitted. Federal bank on these activities.
(2) If insurance is marketed in connection with or in conjunction with any activities described in this section, any marketing to a loan applicant on bank premises shall not occur until the financial institution discloses both verbally and in writing that the purchase of an insurance product is unrelated to and not a condition to the provision or term of any banking service or activity and has committed to such banking service or activity. The written disclosure required by this section shall be a part of the disclosures required by the Department of Banking and Finance Regulation § 80-5-4-.08.
(3) No rebating of premiums or discounting except in accordance with an applicable rate filing, rating plan, or rating system filed with and approved by the Commissioner of Insurance shall be permitted.

Rule 120-2-76-.20 Related Laws and Rules

In addition to the statutes and rules referenced herein products and transactions addressed by these Rules shall be subject to all applicable provisions of Title 33 and Title 7 of the Official Code of Georgia Annotated.

Rule 120-2-76-.21 Penalties

Any person, insurer, agent, agency, or financial institution violating the provisions of this Regulation Chapter shall be subject to the administrative actions and procedures, including but not limited to suspension, fine, revocation of license, as provided to the Commissioner of Insurance and/or the Commissioner of Banking and Finance pursuant to O.C.G.A. § 33-23-21 and § 7-1-91.

Rule 120-2-76-.22 Severability

If any provision of this Regulation Chapter or the application of it to any person or circumstance is held invalid, such invalidity shall not affect the provisions or applications of the rules herein which can be given effect without the invalid portion. To that end, the provisions of this rule are declared to be severable.