State RegulationsGA specificDifficulty 2/5
Under Georgia's definition of transacting insurance, which of the following activities counts as an insurance transaction?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under O.C.G.A. § 33-1-2, transacting insurance includes soliciting, negotiating, or effecting an insurance contract, as well as other dealings preliminary or subsequent to the contract. Passive investment ownership, back-office clerical work, and simply being a customer do not make a person or entity an insurance transactor. This broad definition sweeps producers and similar actors into the Commissioner's regulatory reach.
Why the other options are wrong
- A) Passively holding an insurer's stock is an investment, not an insurance transaction under O.C.G.A. § 33-1-2.
- B) Internal bookkeeping for a home office is clerical support, not the solicitation, negotiation, or effecting of an insurance contract under O.C.G.A. § 33-1-2.
- D) Buying coverage as a customer is participating in insurance, not transacting it; the definition targets those soliciting or effecting contracts. O.C.G.A. § 33-1-2.
Memory hook
Solicit, negotiate, effect — that's transacting; owning and clerking are not.