Collateral Protection Insurance Act; enact
House Bill 1554 creates the “Collateral Protection Insurance Act” and adds a new article to Georgia’s insurance code governing collateral protection insurance on mortgaged real property. The bill defines the coverage and the parties involved, limits the law’s application to mortgage-related real property insurance (including manufactured and mobile homes), and excludes certain business, commercial, agricultural, optional lender-offered, real-estate-owned, and no-charge arrangements. It sets rules for when coverage may begin and end, how premiums may be charged, what property value basis must be used to calculate coverage, and requires that any excess replacement-cost proceeds above the unpaid mortgage balance be paid to the mortgagor.
The bill also imposes market-conduct restrictions on insurers and agents, including prohibitions on issuing coverage where the insurer or affiliate owns or services the loan, sharing premiums or risk with lenders or servicers, paying contingent commissions or profit-sharing tied to profitability or loss ratios, and providing below-cost services or other payments to secure business. It requires delivery of an individual policy or certificate with specified disclosures, subjects forms and rates to existing filing and approval laws, requires rate refiling at least every four years, and mandates annual reporting to the Department of Insurance for insurers with significant premium volume. The act would take effect January 1, 2028, and apply to policies issued, delivered, renewed, or deemed renewed on or after that date.
The bill’s impact would be to add a detailed regulatory framework to Georgia law for lender-placed or force-placed insurance on mortgaged property, increasing oversight of pricing, disclosures, and insurer-lender relationships. It would likely affect insurers, insurance agents, mortgage lenders, servicers, investors, and mortgagors by limiting certain compensation arrangements, requiring more standardized policy information, and creating reporting obligations and rate-review triggers for insurers writing this line of business.
No committee transcript or vote record is provided, so there is no documented debate or recorded sentiment in the materials supplied. Based on the bill text alone, the measure appears consumer-protective and aimed at curbing perceived abuses or conflicts of interest in collateral protection insurance, while still preserving the availability of coverage for lenders and servicers when borrowers fail to maintain required insurance. Potential points of contention would likely center on the restrictions on lender/servicer-affiliated business arrangements, the premium and rate-filing requirements, and the requirement that excess replacement-cost proceeds be paid to the mortgagor.
HB1554 would amend Chapter 24 of Title 33 of the Georgia Code by creating a new article regulating collateral protection insurance on mortgaged real property. It would establish definitions, coverage timing rules, premium calculation standards, disclosure requirements, filing and rate-review obligations, annual reporting duties, and prohibitions on certain insurer, agent, lender, and servicer practices. The bill would primarily affect insurers, insurance agents, mortgage lenders, mortgage servicers, investors, and borrowers with mortgaged real property, including manufactured and mobile homes.
No committee discussion or vote history is included, so there is no direct record of legislative sentiment. From the bill’s structure and findings, the measure is framed as a consumer-protection and market-conduct reform intended to strengthen oversight and reduce conflicts of interest in collateral protection insurance. The absence of recorded opposition or support in the provided materials means any assessment of sentiment is limited to the bill’s text, which suggests a policy goal of tighter regulation rather than expansion of insurer discretion.
The most likely areas of contention are the bill’s restrictions on insurer and agent relationships with lenders and servicers, including bans on commissions, profit-sharing, risk-sharing, and certain outsourced-service arrangements. Another possible point of dispute is the requirement that insurers base coverage and premiums on replacement cost value and pay excess replacement-cost proceeds to the mortgagor, which could affect pricing and claims handling. Insurers may also object to the annual reporting requirements, the four-year rate-refiling mandate, and the rule that annual loss ratios below 35 percent for two consecutive years trigger a new rate filing.