As in any litigation, an insured filing suit against its insurer must name the proper party. Litigation involving insurance companies can present challenges in this regard, as many insurers operate myriad companies under similar names. For example, the Georgia Secretary of State website lists no fewer than eight entities beginning with the words “State Farm,” six of which would appear to be underwriters of insurance policies. Accordingly, special care must be taken to avoid dismissal for failure to name the proper party. The declarations page of the insured’s policy should state the correct name of the insuring company. Further research is advisable, as insurers frequently merge, are acquired or simply change names. Most insurers maintain detailed websites with information about their companies, and a simple Google search will turn up such information. Information found during such searches should be confirmed by reference to records of the appropriate secretary of state. The Georgia Safety Fire & Insurance Commissioner’s website provides a “company search” form. The search form will provide detailed information about the company, including the type of company, the date it was licensed to do business in Georgia, the status of the company’s license, the insurer’s agents (if any), contact information, and lines of authority (what types of insurance the insurer is licensed to write). In addition, the Georgia Secretary of State’s website should reveal current agents for service of process for most companies.
O.C.G.A. § 33-4-1 sets out the venue provisions for actions against insurers. Such actions may be brought:
- in the county where the insurer’s principal office is
- in any county where the insurer has an agent
- in any county where an agent or place of doing
- in any county in which the property covered by the located; place of doing business; business was located when the cause of action accrued; policy is located or where a person entitled to the proceeds of an insurance policy maintains his legal residence.O.C.G.A. § 33-5-34 provides for venue in actions against unauthorized or surplus lines insurers “in the superior court of the county in which the cause of action arose.”
Choice Of Law
Georgia adheres to the traditional rule of lex loci contractus. Under the rule, the validity, nature, construction, and interpretation of a contract are governed by the substantive law of the state where the contract was made. In Georgia, an insurance contract is “made” at the place where the contract is delivered. For example, if a Georgia company obtains an insurance policy from a Minnesota insurer and the policy is delivered to the company in Georgia, a Georgia court will apply Georgia law to the interpretation of the contract. Care should be taken when the insured has corporate officers or uses insurance brokers in places other than Georgia, as the policy may be delivered to a risk manager in an office in Miami or to a broker headquartered in New York. In 1984, the Georgia Supreme Court expressly rejected the “center of gravity” test outlined in the Restatement (Second) of Conflicts § 188. Nonetheless, litigants should not ignore attempts to apply the concept in the proper case. Federal courts sitting in diversity apply the forum state’s choice-of-law principles. Thus, if the bad-faith case is removed to federal court or initiated by the insurer in federal court, the district court should apply Georgia’s rule of lex loci contractus.
Service Of Process
Service of process may be effected differently depending on the type of insurer.
For most “domestic insurers” service of process may be accomplished “in the manner provided by laws applying to corporations generally.” Reciprocal insurers and Lloyd’s associations may be served in the same manner or upon their attorney in fact. Alien or foreign insurers must file with the Georgia Insurance Commissioner a power of attorney appointing a resident of Georgia to receive service of process. The power of attorney is irrevocable and may only be terminated by the filing of a new appointment by the insurer. Alien or foreign insurers must also appoint the Georgia Insurance Commissioner as its attorney to receive service of process. A party attempting to serve an alien or foreign insurer can only serve the Commissioner if service upon the attorney-in-fact cannot be effected.
Service upon nonresident religious or mutual aid societies and certain other cooperative insurers may be made by personal service upon certain officers or certain officers of local lodges. Unauthorized or surplus lines insurers are deemed to have appointed the Georgia Insurance Commissioner as their attorney for acceptance of service of process issued in Georgia for any action or proceeding arising out of the policy. Surplus lines policies must contain a provision stating the substance of O.C.G.A. § 33-5-34 and designating a person to whom the Commissioner will mail process according to O.C.G.A. § 33-5-34.