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Georgia Mennonites Challenge Car Insurance Law

A small community of Mennonites living in the southern part of Georgia is coming closer to winning the right to self insure rather than being forced into purchasing auto insurance policies for drivers as required by state law. A bill in the state Senate passed by a vote of 40-5. The bill would allow the group, numbered at about 100 people, to self insure rather than to have to buy car insurance. Auto insurance is considered gambling by the Mennonites.

Bill Brings Group into Compliance

Certain members of the group have in the past purchased policies to keep in compliance with state law but have paid for damages out of pocket following accidents. The bill allows members of the group to come into legal compliance without having to compromise their religious beliefs by buying a policy, even one they would not ever use. The bill passed the state House in March. It now awaits the governor's signature for passage into law.

Details of Georgia HB 656

The House bill, numbered HB 656, is called the Act to Amend Chapter 34 of Title 33 of the Official Code of Georgia Annotated. The bill provides a legal mechanism by which religious organizations in the state of Georgia can qualify as self insurers. Currently no such provisions exist. Businesses meeting certain fleet requirements can currently apply for self insurance qualification. For example, fleet of upward of 25 taxi cabs can apply. There are certain financial requirements as well. Any fleet applying for a self insurance waiver must place cash on deposit with the state insurance commissioner or meet the financial responsibility obligation in some other way.

The same scenario exists in the Act to Amend Chapter 34. This act calls for self insuring religious organizations to place cash deposits with the state insurance commissioner; or alternately, send letters of credit from a chartered financial institution or purchase bonds issued by the state of Georgia. The monetary amount of the security deposit required varies by the number of cars being self insured. It starts at $150,000 for fleets of 50 cars or fewer, and tops out at $600,000 for fleets numbering greater than 351 vehicles [1].

The Act to Amend Chapter 34 lists out all acceptable forms of security, and it also provides for the cancellation of the certificate of self insurance if a religious organization fails to meet the specific guidelines of the Act. These guidelines include the financial factors, as well as a requirement to apply for renewal of the certificate every year. That renewal application includes certain information such as the number of vehicles being self insured, and information on claims over the past 12 months. The report on claims must include details of payment on those claims. Failure to pay promptly for claims and judgments handed down in civil court is one of the conditions under which an organization could be stripped of its certificate of self insurance. Another is if the group no longer qualified under the initial terms of eligibility; that is, if the group as it was currently assembled no longer met the state's definition for a religious organization [1].

Significance of Self Insurance Act

This Act to Amend Chapter 34 has quite a bit of significance in the state of Georgia. To the Mennonite community who moved down there almost two decades ago from the state of Pennsylvania, it means that in the context of state auto insurance law, group members can now be free to practice their religious beliefs without coming into conflict with the state law. It gives the Mennonite believers a way to uphold their belief that auto insurance is a form of gambling (a practice they stay away from) and still keep the law and get their vehicles out on state roads without any compliance issues.

For the state at large, it creates the possibility for a new way of looking at auto insurance law as it pertains to groups who are large enough to meet these new self insurance standards. It remains to be seen whether any other state religious groups might show an interest in applying to be self insurers under the terms of the bill once it is passed into law. But it is clear that the law creates a shift in favor of the separation of church and state and of the free practice of religion; because by passing this piece of legislation by such a comfortable margin, the Georgia legislature has shown a significant willingness to allow for the free expression of religion as long as it doesn't impede on the rights of others. The specifics of the bill's stipulations ensure that self insured religious groups will be financially prepared to deal with liability expenses following accidents.

[1] Retrieved 2010-04-25.



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