Under Georgia law, “motor vehicle liability insurance policies issued or delivered in this state” must include uninsured motorist coverage that encompasses “underinsured” motorist coverage. OCGA § 33-7-11 a 1 & b 1 D ii. And an insured must be given the option to reject such coverage, select minimum coverage, or select coverage up to the limits of liability under the policy. OCGA § 33-7-11 a 1, 3 & b 1 D ii. The question in this case is whether these requirements apply to motor vehicle liability coverage provided by a municipality to its employees through a contract with the Georgia Interlocal Risk Management Agency “GIRMA”. Authorized by a 1986 law, an interlocal risk management agency may be created “for the development and administration of an interlocal risk management program and one or more group self-insurance funds.” OCGA § 36-85-1 7. Chapter 85 of Title 36 of the Georgia Code authorizes municipalities and counties to jointly purchase insurance or jointly operate self-insurance programs. Ga. L. 1986, p. 1496. In this case, GIRMA operates a self-insurance program in which the city of Newnan participates. A group self-insurance fund is “a pool of public moneys established by an interlocal risk management agency from contributions of its members in order to pool the risks of general liability, motor vehicle liability, property damage, or any combination of such risks.” OCGA § 36-85-1 6. Administration of these funds includes “the processing and defense of claims brought against members of the agency.” OCGA § 36-85-1 8.
The stipulated facts show that on May 13, 2006, Daniel Godfrey, a Newnan police officer, was struck by a motor vehicle owned and operated by Hural Henderson, who had $25,000 of motor vehicle liability coverage. Godfrey and his wife filed a civil action against Henderson in state court and served a copy of the complaint on GIRMA in order to give notice that it might be held responsible as an uninsured motorist carrier pursuant to OCGA § 33-7-11. GIRMA then filed this declaratory judgment action to determine its obligation to provide such coverage. Although the GIRMA contract provides uninsured motorist coverage up to the statutorily defined limits found in OCGA § 33-7-11 a 1 A, it does not provide underinsured coverage and it does not allow a covered individual the option of selecting the amount of such coverage. On these stipulated facts, the trial court held that the motor vehicle liability coverage provided by GIRMA was the substantial equivalent of an insurance policy for the purposes of OCGA § 33-7-11 and therefore subject to the statutory scheme set forth therein for insurers generally. Accordingly, the court held that GIRMA was required to allow the officer to select uninsured/underinsured coverage up to the limits of liability under the GIRMA contract, in this case $1,000,000. GIRMA appeals.
