In this declaratory judgment action, Bankers Insurance Company contends that OCGA 33-34-3
(a) (2) is unconstitutional under the Commerce Clause of the United States Constitution. The trial court entered judgment against Bankers. Because the McCarran-Ferguson Act removes laws regulating insurance from Commerce Clause scrutiny, we affirm.
Nadine Taylor is a Florida resident who obtained automobile insurance with Bankers Insurance. Taylor's policy did not provide bodily injury or uninsured motorist coverage. Taylor was involved in an accident in Georgia with Cynthia Bailey and her passengers. The Baileys sued Taylor for personal injuries they suffered in the accident and made demand upon Bankers for payment under the policy. Bankers denied coverage and filed a declaratory judgment action. The trial court denied Bankers' motion for summary judgment and granted the Baileys' cross-motion based on OCGA 33-34-3
(a) (2), which requires insurers authorized to transact business in Georgia to provide its insured with the minimum coverage required under Georgia law when the insured is involved in an accident in Georgia, even though the policy was purchased out-of-state.
1. Under OCGA 33-34-3
(a) (2) motor vehicle insurance policies issued by insurers authorized to transact business in this state are deemed to provide the minimum coverage required under Georgia law when the insured is involved in an accident in Georgia. 1
Under the plain language of 33-34-3
(a) (2), Bankers' policy of insurance on Taylor's car is deemed to provide this minimum coverage. Bankers, however, contends that this provision violates the Commerce Clause.
The Commerce Clause has long been recognized as placing a limitation on the power of states to impose burdens on interstate commerce. 2
The McCarran-Ferguson Act, however, provides that "the continued regulation and taxation of the business of insurance by the several states is in the public interest," 3
and that "[t]he business of insurance . . . shall be subject to the laws of the several states which relate to the regulation or taxation of such business." 4
The effect of the McCarran-Ferguson Act is to remove Commerce Clause restrictions from the regulation and taxation of insurance. 5
In Western & Southern Life Insurance, the United States Supreme Court expressly held that "Congress removed all Commerce Clause limitations on the authority of the States to regulate and tax the business of insurance when it passed the McCarran-Ferguson Act." 6
Furthermore, courts have recognized that laws like OCGA 33-34-3
(a) (2) that mandate specific benefits within insurance contracts are laws that "regulate the business of insurance." 7
Because OCGA 33-34-3
(a) (2) is a law regulating the business of insurance, it is shielded from Commerce Clause attack by the McCarran-Ferguson Act.
2. Bankers also contends that the McCarran-Ferguson Act does not remove Commerce Clause restrictions from laws that have an effect wholly outside the state. OCGA 33-34-3
(a) (2), however, does not have a wholly extraterritorial effect because it becomes operative only when personal injury or property damage occurs in Georgia. Furthermore, even if this law's effect were wholly extraterritorial, the McCarran-Ferguson Act limits the viability of a challenge under the Commerce Clause. 8
3. OCGA 33-34-3
(a) (2) does not unconstitutionally impair Bankers' obligations under its contract. 9
The statute was in existence at the time Bankers issued its policy to Taylor. Therefore, the terms of the statute are read into the contract, and the statute has no retroactive application that impairs Bankers' obligations under the policy. 10
4. Finally, Bankers also raises an equal protection challenge under the state constitution to OCGA 33-34-3
(a) (2). Bankers has not, however, established that the statute treats similarly situated persons differently. All insurers doing business in this state must provide the same minimum coverage in motor vehicle liability policies.
Michael J. Bowers, Attorney General, Brenda H. Cole, Deputy Attorney General, Alan Gantzhorn, Senior Assistant Attorney General, Freedman & Sinowski, Marc H. Bardack, amici curiae.