Regulation of Financial Interests in and Transactions With Insurers by Officers, Directors, Committee Members, or Employees

  1. Law
  2. Georgia Code
  3. Insurance
  4. Domestic Stock and Mutual Insurers
  5. General Provisions
  6. Regulation of Financial Interests in and Transactions With Insurers by Officers, Directors, Committee Members, or Employees

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  1. Any officer, director, member of any committee, or an employee of a domestic insurer who is charged with the duty of investing or handling the insurer's funds shall not:
    1. Deposit or invest the funds except in the insurer's corporate name, except as otherwise authorized by this title;
    2. Borrow the funds of the insurer;
    3. Be pecuniarily interested in any loan, pledge of deposit, security, investment, sale, purchase, exchange, reinsurance, or other similar transaction or property of such insurer except as a stockholder or member unless:
      1. The insurer has provided the Commissioner with written notice of the proposed transaction no later than 30 days prior to such transaction, or such lesser period as may be permitted by the Commissioner, and the Commissioner has not disapproved the proposed transaction within that period; provided, however, that the Commissioner may, upon written notice given to the insurer no less than five days prior to the expiration of the initial review period, extend the review period for an additional time not to exceed 30 days; and
      2. The proposed transaction has been approved by directors' action in accordance with the provisions of Code Section 14-2-862, or by shareholders' action in accordance with the provisions of Code Section 14-2-863, if the proposed transaction would be a director's conflicting interest transaction as defined by Code Section 14-2-860; or
    4. Take or receive to his or her own use any fee, brokerage, commission, gift, or other consideration for or on account of any such transaction made by or on behalf of the insurer.
  2. No insurer shall guarantee any financial obligation of any of its officers or directors.
  3. This Code section shall not prohibit a director, officer, member of a committee, or employee from becoming a policyholder of the insurer and enjoying the usual rights provided for its policyholders.
  4. The Commissioner may by regulation define and permit additional exceptions to the prohibition contained in subsection (a) of this Code section solely to enable payment of reasonable compensation to a director who is not otherwise an officer or employee of the insurer or to a corporation or firm in which a director is interested for necessary services performed or sales or purchases made to or for the insurer in the ordinary course of the insurer's business and in the usual private professional or business capacity of the director or the corporation or firm.

(Code 1933, § 56-1533, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1980, p. 1108, § 8; Ga. L. 1995, p. 776, § 1.)

Law reviews.

- For note on the 1995 amendment of this Code section, see 12 Ga. St. U.L. Rev. 264 (1995).

RESEARCH REFERENCES

Am. Jur. 2d.

- 43 Am. Jur. 2d, Insurance, § 70.

C.J.S.

- 44 C.J.S., Insurance, §§ 170 et seq., 189 et seq.


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