At the request of another one of our readers, this week we are going to take a look at Assignment of Benefits (“AOBs”) in Georgia and how they are handled there.
In Georgia, the contract is king and its terms will be upheld. “It is axiomatic that parties are bound by the terms of their insurance contracts. [] Contractual limitations are valid and will be enforced by the courts. [] Most significantly, Georgia law expressly provides that insurers may limit the assignability of rights under polices through the use of non-assignability clauses.”1
The statute governing non-assignability clauses is Georgia is Ga. Code Ann., § 33-24-17, and it states as follows:
A policy may be assignable or not assignable, as provided by its terms. Subject to its terms relating to assignability, any life or accident and sickness policy issued under the terms of which the beneficiary may be changed upon the sole request of the policy owner may be assigned either by pledge or by transfer of title by an assignment executed by the policy owner alone and delivered to the insurer, whether or not the pledgee or assignee is the insurer. Any assignment shall entitle the insurer to deal with the assignee as the owner or pledgee of the policy in accordance with the terms of the assignment until the insurer has received at its home office written notice of termination of the assignment or pledge or written notice by or on behalf of some other person claiming some interest in the policy in conflict with the assignment.
However, as we have seen in some other states, so long as the assignment takes place after a loss, the claim can be assigned without the consent of the insurer. Back in 1905, the Supreme Court of Georgia addressed this issue and held:
The assignment of a fire insurance policy without the consent of the insurer, after a loss has occurred thereunder, does not render the policy void, but the assignee has the right to bring an action thereon.
Such assignment is valid without the consent of the insurer, although the written transfer of the policy purports, by its terms, to be subject to the consent of the insurer. . . .
An assignment of a fire insurance policy, after a loss has occurred, does not violate a provision against assignment.2
Georgia law also provides to the assignee, the right to bring suit against the carrier. Georgia Code § 44-12-22, states, “all choses in action arising upon contract may be assigned so as to vest the title in the assignee. . . .” Further, Georgia Code § 44-12-24, notes that, “a right of action is assignable if it involves, directly or indirectly, a right of property,” but does not permit assignment of actions for, “personal torts, for legal malpractice, or for injuries arising from fraud to the assignor.”
If you have any specific questions on AOBs or would like to see your state come up sooner, please comment below, or send me an email at cmathis@merlinlawgroup.com.
As always, I’ll leave you with a (mildly) related tune, here’s Georgia’s own R.E.M. with one of their many hits, It’s the End of the World as We Know It (And I Feel Fine):
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1 Williams v. Mayflower Ins. Co., Ltd., 238 Ga.App. 581, 583 (1999) (internal citations omitted).
2 Georgia Co-op. Fire Ass’n v. Borchardt & Co., 123 Ga. 181, 181 (1905).
