Committee raises maximum penalties insurers can face in enforcement update

The House Insurance Committee advanced House Bill 12 62, a Department of Insurance-sponsored bill that updates penalty caps for certain insurance-code violations. The bill enumerates four enforcement areas — mental-health parity, general finding authority, surprise-billing violations and prepaid legal service plans — and increases the statutory fine caps to reflect contemporary market conditions.

The sponsor said the $2,000 and $5,000 caps have not been adjusted in decades and have been eroded by inflation and market growth. "The bill increases the maximum fine for unknowing violations from 2,000 to 10,000 and for knowing violations from 5,000 to 25,000," the sponsor said.

Committee members asked technical questions, including what specific conduct in prepaid legal-service plans would trigger fines. Bryce Rawson, identified in the hearing as director of legislative affairs for the Georgia Insurance Commissioner, said the code section (section 3357 as referenced) has enumerated violations and the update brings those penalty figures into alignment with the rest of the section. He said he did not have a specific example to offer in the hearing but offered to follow up.

With no public comment required (the bill had been through subcommittee), the committee moved to a "do pass" motion, approved it by voice vote and the chair stated the bill is in Rules.