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Senate hearing weighs bill to penalize insurers for misleading rate filings, members press due‑process questions
Summary
A state Senate committee heard SB364, which would let the insurance commissioner order refunds and levy penalties up to 10 times improperly collected premiums when filings are found knowingly false; members pressed the sponsor on definitions of willfulness and whether existing commissioner powers and due process protections are sufficient.
The Senate Insurance and Labor Committee on a hearing-only considered SB364 (LC461237), a bill that would strengthen oversight of insurer rate filings and allow the insurance commissioner to order refunds to policyholders and impose penalties up to 10 times improperly collected amounts when filings are found to be knowingly false or misleading.
The sponsor told the committee that families and small businesses are facing ‘‘nuclear premiums,’’ and that the bill is ‘‘not an anti‑insurance bill. This is a pro‑transparency bill, honestly.’’ He said the change would ensure companies ‘‘give us honest numbers before rates go up,’’ and that the proposed multiplier is meant as a deterrent for deliberate wrongdoing.
Supporters framed the measure as a consumer‑protection tool aimed at preventing inflated rates based on false data. The sponsor described the mechanism this way: if an insurer’s filings are later found to have knowingly misrepresented loss experience or projections and that misinformation affected approved rates, the commissioner could require refunds to affected policyholders and impose additional penalties.
Several committee members pressed the sponsor on key legal and practical questions. One asked how the bill distinguishes ‘‘willfully withheld’’ or ‘‘knowingly gave false or misleading information’’ from honest forecasting errors; the sponsor said the commissioner would make an initial determination and that contested cases could proceed to the courts. Another member warned that a 10x penalty could push small, in‑state insurers toward insolvency and asked whether the commissioner’s existing powers already allow restitution and fines.
Department of Insurance legislative affairs director Bridal Rossen told the committee that some statutory penalty provisions already exist (she cited the Mental Health Parity Act framework as an example, saying current per‑violation statutory caps are set at up to $2,000 for unknowing violations and up to $5,000 for knowing violations) and explained that companies may appeal commissioner orders to superior court. Rossen also described the department’s consumer‑services complaint work and multi‑year market‑conduct examinations used to detect systemic problems.
Members also debated whether deliberate falsehoods in rate filings should be handled as civil sanctions or as criminal offenses. One member asked, ‘‘Why not just make it a criminal violation?’’ — warning that civil penalties of the magnitude proposed raise due‑process and jury‑trial concerns. The sponsor said he would work with colleagues to build in clearer due‑process protections while preserving a strong deterrent against intentional misconduct.
The committee closed the hearing with no vote. The sponsor said he planned to revise language after testimony to clarify refund mechanics and due‑process protections and indicated he would return with a substitute version when the item is refiled for action.
The hearing included extensive back‑and‑forth about the evidence of willful misrepresentation in Georgia, with members and department staff noting reports from other states (including cited coverage of misconduct in Florida) but saying they had not identified similar findings in Georgia to date. The committee left the bill pending further drafting and the sponsor’s follow‑up with stakeholders.
