Powers of Sponsors to Contract for Provision of Legal and Administrative Services

  1. Law
  2. Georgia Code
  3. Insurance
  4. Prepaid Legal Services Plans
  5. Powers of Sponsors to Contract for Provision of Legal and Administrative Services

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    1. The sponsor of any prepaid legal services plan or authorized representative of the plan may contract with any company licensed to transact casualty, life, or accident and sickness insurance in this state under which contracts the company agrees for a consideration consisting of a specified premium to assume the monetary obligations of the plan to provide or pay for the legal services covered by the subscription contracts issued under such plan upon the failure of the plan itself to meet such obligations within a specified period. The duration of the contract shall not be longer than three years and each contract shall be filed with and subject to the approval of the Commissioner for the fairness of its terms and premiums.The contracts shall be deemed to be approved 90 days after the date of filing with the Commissioner, unless prior to the expiration of such 90 day period the Commissioner notifies the sponsor of the prepaid legal services plan in writing of the Commissioner's disapproval.
    2. Any sponsor entering into such contracts shall fairly disclose to all subscribers affected by them the nature and extent of the extra protection provided by them. Any plan having lawful access to any other source of funds besides the premiums collected, which may be used to meet the obligations of the plan under its subscription contracts, shall make similar fair disclosure to affected subscribers.
    3. Any sponsor which seeks to limit its liability under its subscription contracts to the total of funds collected in premiums from subscribers shall state such limitation clearly and prominently in all subscription contracts.
  2. Any sponsor of any prepaid legal services plan or authorized representative of the plan may contract with any person to provide administrative services necessary to the administration of the plan and the subscription contracts issued under such plan. The duration of the contracts shall not be longer than three years, and each contract shall be filed with and subject to the approval of the Commissioner as to the fairness of its terms. The contracts shall be deemed to be approved 90 days after the date of filing with the Commissioner, unless prior to the expiration of the 90 day period the Commissioner notifies the sponsor of the prepaid legal services plan in writing of the Commissioner's disapproval.

(Code 1933, § 56-3508, enacted by Ga. L. 1975, p. 1268, § 1; Ga. L. 1983, p. 748, § 4; Ga. L. 1990, p. 8, § 33; Ga. L. 2019, p. 386, § 121/SB 133.)

The 2019 amendment, effective July 1, 2019, deleted "or any corporation organized pursuant to Chapter 18 or 19 of this title," following "in this state" in the middle of the first sentence of paragraph (a)(1).


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