Policyholders Deemed Members of Insurers; Persons Entitled to Become Members; Liability Upon Insurance Contracts of Representatives of Members; Rights of Members Generally

1. Law
2. Georgia Code
3. Insurance
4. Domestic Stock and Mutual Insurers
5. Domestic Mutual Insurers
6. Policyholders Deemed Members of Insurers; Persons Entitled to Become Members; Liability Upon Insurance Contracts of Representatives of Members; Rights of Members Generally

1. Each policyholder of a domestic mutual insurer other than of a reinsurance contract is a member of the insurer with all rights and obligations of such membership, and the policy shall so specify.
2. Any person, government, or governmental agency, state or political subdivision thereof, public or private corporation, board, association, firm, estate, trustee, or fiduciary may be a member of a domestic, foreign, or alien mutual insurer. Any officer, stockholder, trustee, or legal representative of any corporation, board, association, or estate may be recognized as acting for or on its behalf for the purpose of membership, and shall not be personally liable upon any contract of insurance for acting in a representative capacity.
3. Any domestic corporation may participate as a member of a mutual insurer as an incidental purpose for which the corporation is organized and as such is granted the rights and powers expressly conferred.

(Code 1933, § 56-1516, enacted by Ga. L. 1960, p. 289, § 1.)

OPINIONS OF THE ATTORNEY GENERAL

Section does not change restrictions on lending local credit.

- This section cannot be construed to alter or change the restrictions imposed by Ga. Const. 1976, Art. IX, Sec. IV, Para. III (see Ga. Const. 1983, Art. IX, Sec. II, Para. VIII). 1960-61 Op. Att'y Gen. p. 383.

State and its subdivisions may not assume contingent mutual insurance liability.

- The state and its political subdivisions may not insure public property in a mutual company if the insured assumes any contingent liability under the contract. 1945-47 Op. Att'y Gen. p. 371.

Future liability forbidden.

- If, in any way, the state, or any division thereof, taking insurance in a mutual insurance company assumes any future liability, the contract could not be binding upon the state or the division of the state taking the policy, because such a contract is forbidden by law. 1945-47 Op. Att'y Gen. p. 371.

Only bids on nonassessable contracts may be considered.

- The supervisor of purchases (now Department of Administrative Services) may consider bids and quotations from mutual insurers authorized to write fire insurance and fidelity bonds in Georgia only when such contracts are written upon a nonassessable basis and where no contingent liability is assumed or agreed to be paid by the state or any of its political subdivisions. 1960-61 Op. Att'y Gen. p. 383.

RESEARCH REFERENCES

Am. Jur. 2d.

- 43 Am. Jur. 2d, Insurance, § 71.

C.J.S.

- 44 C.J.S., Insurance, § 185.

ALR.

- Power of mutual benefit society to waive restrictions upon eligibility to membership, 28 A.L.R. 93.

Liability of policyholders in mutual insurance companies to assessments, 137 A.L.R. 945.

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