Georgia insurance commissioner outlines enforcement, fraud and market stability goals at rate study hearing

Georgia Insurance Commissioner John King told the House Insurance Rate Study Committee on Aug. 15 that his office is focused on consumer protection and market stability while urging lawmakers to consider expanding enforcement penalties.

King, who said his “number one job is to ensure that we have access to quality coverage at an affordable price,” reviewed recent enforcement actions and consumer-service workload, discussed fraud and the limits of the department’s civil penalties, and outlined factors driving premium increases across the state.

Why it matters: The committee is charged with examining how rates are set and what actions state government can take to lower premiums or make the market more stable. King’s testimony framed enforcement, fraud prosecution and how statutory authority and market conditions intersect — areas lawmakers can change through code revisions, budget decisions or new statutes.

King told the committee his office handled more than 11,000 consumer complaints a year and has returned more than $100 million to Georgians since he took office; he also said the department recently announced more than $20 million in fines for mental-health-parity violations. King and his staff urged the committee to consider giving the department greater penalty authority, noting that current statutory maximums for civil fines for violations are low (commonly $2,000 for nonwillful and $5,000 for willful violations), which he said limits the department’s deterrent effect.

King described insurance fraud as a major cost driver for Georgia consumers and said the state ranks second in the nation for fraud activity. “Every consumer is affected by this level of fraud, between $4 to $700 of additional cost to the consumers as a result,” King said. He said his office has expanded its investigators and market-conduct work but needs stronger prosecution support from district attorneys because many of the fraud schemes are complex and resource-intensive to pursue.

Committee members pressed the commissioner on several questions: how to ensure penalties do not simply get passed to consumers through higher premiums; how to encourage carriers to re-enter or expand in Georgia; whether insurers are using investment income to justify maintaining or raising premiums; and whether recent tort-reform laws will prompt companies to cut rates.

Steve Manders, the commissioner’s deputy, provided market data the department will use to track changes. He said Hurricane Helene has been Georgia’s largest single-loss event, and that insurers have paid roughly $2.86 billion on about 165,000 claims so far (department figures cited to committee). Manders also said roughly 1,100 companies are actively writing some product in Georgia and that about 400 write personal-lines business. He noted that the department receives roughly 3,000 rate filings and 3,500 form filings a year and that reviews require actuarial capacity the department is actively recruiting.

King and his team described how rate filings are reviewed: insurers submit actuarial filings that the department and outside actuaries examine; filings may be negotiated and in many cases are modified downward in that process. Manders said about 40% of filings have negotiated reductions and that the department often requests additional information. He also noted that Georgia’s statute requires rates to be adequate, not excessive and not unfairly discriminatory — and that regulators have limited tools if the market is demonstrably competitive.

On tort reform, King said legislative changes earlier this year gave regulators new tools and that Florida’s 2023 reforms have produced measurable market responses there, but he told the committee that the department must “run the numbers” before it can conclude how much Georgia consumers will save. Committee members were told to expect multiyear lag before industry responses and rate effects are fully visible.

Ending: The committee scheduled four additional hearings across the state and invited materials and witnesses who can provide evidence-based proposals. King and his staff offered to provide legal and technical recommendations to legislators on potential statutory updates in areas such as fines, market conduct procedures, and consumer protections.