The words "actual controversy" mean justiciable controversy where interested parties have asserted adverse claims upon a set of facts when a legal judgment is sought that would have controlled or directed future action. The danger, dilemma, or injury must not be speculative or contingent upon a future event, but there must be a present, concrete issue between the parties wherein there is a definite assertion of legal rights and positive legal duty on the part of the adverse party. The threat to the plaintiff must be actual and genuine, not merely possible or remote. See: Darnell v. Tate, 206 Ga. 576 (1950).

The Georgia courts have previously held that unless there is a pending lawsuit which could expose an insurer to uncertainty with regard to its duty to defend or indemnify, a Declaratory Judgment action will not lie. To file such a suit for declaratory relief would result in an action seeking an advisory opinion which is not permitted under Georgia law. Chastain v. U.S.F. & G., 190 Ga. App. 215 (1989); Reliance Insurance Company v. Brooks Lumber Company, 101 Ga. App. 620 (1960).

However, the Georgia Supreme Court recently held in Atlanta Casualty Company v. Fountain, 262 Ga. 16, 413 S.E.2d 450 (1992), that when a demand for payment has been made, and the insurance company has not yet acted to deny the claim, and it cannot determine whether the claim should be paid under Georgia law, a Declaratory Judgment action may be appropriate. The Supreme Court in Fountain reversed an earlier ruling of the Georgia Court of Appeals in the same case, wherein the Supreme Court found that Atlanta Casualty had adequately demonstrated a need for a legal judgment that would control its future actions where it had shown:

That a demand for payment on the policy had been made;

That the insurance company had not acted to deny the claim;

That legitimate questions existed as to the validity and applicability of the policy exclusion clause; and

Existing Georgia law does not provide a clear answer.

It is imperative that Insurers not send out correspondence to the insured or the claimants denying the claims since, in so doing, they would forfeit its right to seek a Declaratory Judgment in the future See: State Farm Mutual Insurance Company v. Allstate, 132 Ga. App. 332 (1974).