General Assembly Substitute Bill No. 93
February Session, 2010 *_____SB00093INS___031810____*
General Assembly
Substitute Bill No. 93
February Session, 2010
*_____SB00093INS___031810____*
AN ACT CONCERNING REVISIONS TO THE INSURANCE STATUTES.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. Subsection (d) of section 38a-8 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2010):
(d) The commissioner shall develop a program of periodic review to ensure compliance by the Insurance Department with the minimum standards established by the National Association of Insurance Commissioners for effective financial surveillance and regulation of insurance companies operating in this state. The commissioner shall adopt regulations, in accordance with the provisions of chapter 54, pertaining to the financial surveillance and solvency regulation of insurance companies and health care centers as are reasonable and necessary to obtain or maintain the accreditation of the Insurance Department by the National Association of Insurance Commissioners. The commissioner shall maintain, as confidential, any confidential documents or information received from the National Association of Insurance Commissioners, or the International Association of Insurance Supervisors, or any documents or information received from state or federal insurance, banking or securities regulators or similar regulators in a foreign country which are confidential in such jurisdictions. The commissioner may share any information, including confidential information, with the National Association of Insurance Commissioners, the International Association of Insurance Supervisors, or state or federal insurance, banking or securities regulators or similar regulators in a foreign country so long as the commissioner determines that such entities agree to maintain the same level of confidentiality in their jurisdiction as is available in this state. The commissioner may engage the services of [, at the expense of a domestic, alien or foreign insurer,] attorneys, actuaries, accountants and other experts not otherwise part of the commissioner's staff as may be necessary, at the expense of a domestic, alien or foreign insurer or other entity requiring licensure or registration under this title, to assist the commissioner in the financial analysis of the insurer or other entity, the review of the insurer's or other entity's license or registration applications, and the review of transactions within a holding company system involving an insurer domiciled in this state. No duties of a person employed by the Insurance Department on November 1, 2002, shall be performed by such attorney, actuary, accountant or expert.
Sec. 2. Section 38a-9 of the 2010 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(a) Notwithstanding the provisions of section 4-8, there shall be a [Division of Consumer Affairs] division within the Insurance Department [, which division] that shall act on the Insurance Commissioner's behalf and at [his] said commissioner's direction in order to carry out his responsibilities under this title with respect to [such] consumer and market conduct matters. The division shall receive and review complaints from residents of this state concerning their insurance problems, including claims disputes, and serve as a mediator in such disputes in order to assist the commissioner in determining whether statutory requirements and contractual obligations within the commissioner's jurisdiction have been fulfilled. There shall be a director of said division, who shall be provided with sufficient staff. The division shall serve to coordinate all appropriate facilities in the department in addressing such complaints, and conduct any outreach programs deemed necessary to properly inform and educate the public on insurance matters. The director shall submit quarterly reports to the commissioner, which shall state the number of complaints received by the division in such calendar quarter, the Connecticut premium volume of the appropriate line of each insurance company against which a complaint has been filed, the types of complaints received, and the number of such complaints which have been resolved. Such reports shall be published every six months and copies shall be made available to any interested resident of this state upon request. The commissioner shall report, in accordance with section 11-4a, to the joint standing committee of the General Assembly having cognizance of matters relating to insurance on or before January fifteenth, annually, concerning the findings of such reports and suggestions for legislative initiatives to address recurring problems.
(b) (1) The [Division of Consumer Affairs] division set forth in subsection (a) of this section shall provide an independent arbitration procedure for the settlement of disputes between claimants and insurance companies concerning automobile physical damage and automobile property damage liability claims in which liability and coverage are not in dispute. Such procedure shall apply only to disputes involving private passenger motor vehicles as defined in subsection (e) of section 38a-363. Any company licensed to write private passenger automobile insurance, including collision, comprehensive and theft, in this state shall participate in the arbitration procedure. The commissioner shall appoint an administrator for such procedure. Only those disputes in which attempts at mediation by [the Division of Consumer Affairs] said division have failed shall be accepted as arbitrable. The referral of the complaint to arbitration shall be made by the Insurance Department examiner who investigated the complaint. [Each party to] The claimant and the insurance company involved in the dispute shall pay a filing fee of [twenty] fifty dollars and one hundred dollars, respectively. The insurance company shall pay the consumer the undisputed amount of the claim upon written notification from the department that the complaint has been referred to arbitration. Such payment shall not affect any right of the consumer to pursue the disputed amount of the claim.
(2) The commissioner shall prepare a list of at least ten persons, who have not been employed by the department or an insurance company during the preceding twelve months, to serve as arbitrators in the settlement of such disputes. The arbitrators shall be members of any dispute resolution organization approved by the commissioner. One arbitrator shall be appointed to hear and decide each complaint. Appointment shall be based solely on the order of the list. If an arbitrator is unable to serve on a given day, or if either party objects to the arbitrator, then the next arbitrator on the list will be selected. The department shall schedule arbitration hearings as often, and in such locations, as it deems necessary. Parties to the dispute shall be provided written notice of the hearing, at least ten days prior to the hearing date. The commissioner may issue subpoenas on behalf of the arbitrator to compel the attendance of witnesses and the production of documents, papers and records relevant to the dispute. Decisions shall be made on the basis of the evidence presented at the arbitration hearing. Where the arbitrator believes that technical expertise is necessary to decide a case, he may consult with an independent expert recommended by the commissioner. The arbitrator and any independent technical expert shall be paid by the department on a per dispute basis as established by the commissioner. The arbitrator, as expeditiously as possible, but not later than fifteen days after the arbitration hearing, shall render a written decision based on the information gathered and disclose the findings and the reasons to the parties involved. The arbitrator shall award filing fees to the prevailing party. If the decision favors the consumer the decision shall provide specific and appropriate remedies including interest at the rate of ten per cent on the arbitration award concerning the disputed amount of the claim, retroactive to the date of payment for the undisputed amount of the claim. The decision may include costs for loss of use and storage of the motor vehicle and shall specify a date for performance and completion of all awarded remedies. Notwithstanding any provision of the general statutes or any regulation to the contrary, the Insurance Department shall not amend, reverse, rescind, or revoke any decision or action of any arbitrator. The department shall contact the consumer within ten working days after the date for performance, to determine whether performance has occurred. Either party may make application to the superior court for the judicial district in which one of the parties resides or, when the court is not in session, any judge thereof for an order confirming, vacating, modifying or correcting any award, in accordance with the provisions of sections 52-417, 52-418, 52-419 and 52-420. If it is determined by the court that either party's position after review has been improved by at least ten per cent over that party's position after arbitration, the court, in its discretion, may grant to that party its costs and reasonable attorney's fees. No evidence, testimony, findings, or decision from the department arbitration procedure shall be admissible in any civil proceeding, except judicial review of the arbitrator's decision as contemplated by this subsection.
(3) The department shall maintain records of each dispute, including names of parties to the arbitration, the decision of the arbitrator, compliance, the appeal, if any, and the decision of the court. The department shall annually compile such statistics and send a copy to the committee of the General Assembly having cognizance of matters relating to insurance. The report shall be considered a public document.
(c) Notwithstanding the provisions of section 4-8, there shall be [a Division of Rate Review] divisions within the Insurance Department [, which division] that shall act on the commissioner's behalf and at the commissioner's direction in order to carry out the commissioner's responsibilities under this title with respect to [such matters] rate review. Subject to the provisions of sections 38a-663 to 38a-696, inclusive, the [division] divisions shall assist the commissioner in reviewing rates and supplementary rate information filed with the department for compliance with statutory requirements and standards. The [division's staff] divisions' staffs shall include rating examiners with sufficient actuarial expertise. Upon the request of the commissioner, the [division] divisions shall review rates and supplementary rate information, and any suspected violation of the statutory requirements and standards of sections 38a-663 to 38a-696, inclusive, found pursuant to such review shall be referred to the commissioner for appropriate action. The [division] divisions may assist the commissioner in formalizing the commissioner's findings regarding such actions. The commissioner shall report, in accordance with section 11-4a, to the joint standing committee of the General Assembly having cognizance of matters relating to insurance on or before January fifteenth annually, concerning (1) the number and type of reviews conducted by the property and casualty division in the prior calendar year, and (2) the percentage of increase or decrease in rates reviewed by the property and casualty division during the preceding calendar year, by line and subline of insurance.
(d) The directors and staff of [both the Division of Consumer Affairs and the Division of Rate Review] the divisions set forth in subsections (a) and (c) of this section shall be appointed by the commissioner under the provisions of chapter 67.
Sec. 3. Subsection (a) of section 38a-11 of the 2010 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2010):
(a) The commissioner shall demand and receive the following fees: (1) For the annual fee for each license issued to a domestic insurance company, two hundred dollars; (2) for receiving and filing annual reports of domestic insurance companies, fifty dollars; (3) for filing all documents prerequisite to the issuance of a license to an insurance company, two hundred twenty dollars, except that the fee for such filings by any health care center, as defined in section 38a-175, shall be one thousand three hundred fifty dollars; (4) for filing any additional paper required by law, thirty dollars; (5) for each certificate of valuation, organization, reciprocity or compliance, forty dollars; (6) for each certified copy of a license to a company, forty dollars; (7) for each certified copy of a report or certificate of condition of a company to be filed in any other state, forty dollars; (8) for amending a certificate of authority, two hundred dollars; (9) for each license issued to a rating organization, two hundred dollars. In addition, insurance companies shall pay any fees imposed under section 12-211; (10) a filing fee of fifty dollars for each initial application for a license made pursuant to section 38a-769; (11) with respect to insurance agents' appointments: (A) A filing fee of fifty dollars for each request for any agent appointment, except that no filing fee shall be payable for a request for agent appointment by an insurance company domiciled in a state or foreign country which does not require any filing fee for a request for agent appointment for a Connecticut insurance company; (B) a fee of one hundred dollars for each appointment issued to an agent of a domestic insurance company or for each appointment continued; and (C) a fee of eighty dollars for each appointment issued to an agent of any other insurance company or for each appointment continued, except that (i) no fee shall be payable for an appointment issued to an agent of an insurance company domiciled in a state or foreign country which does not require any fee for an appointment issued to an agent of a Connecticut insurance company, and (ii) the fee shall be twenty dollars for each appointment issued or continued to an agent of an insurance company domiciled in a state or foreign country with a premium tax rate below Connecticut's premium tax rate; (12) with respect to insurance producers: (A) An examination fee of fifteen dollars for each examination taken, except when a testing service is used, the testing service shall pay a fee of fifteen dollars to the commissioner for each examination taken by an applicant; (B) a fee of eighty dollars for each license issued; (C) a fee of eighty dollars per year, or any portion thereof, for each license renewed; and (D) a fee of eighty dollars for any license renewed under the transitional process established in section 38a-784; (13) with respect to public adjusters: (A) An examination fee of fifteen dollars for each examination taken, except when a testing service is used, the testing service shall pay a fee of fifteen dollars to the commissioner for each examination taken by an applicant; and (B) a fee of two hundred fifty dollars for each license issued or renewed; (14) with respect to casualty adjusters: (A) An examination fee of twenty dollars for each examination taken, except when a testing service is used, the testing service shall pay a fee of twenty dollars to the commissioner for each examination taken by an applicant; (B) a fee of eighty dollars for each license issued or renewed; and (C) the expense of any examination administered outside the state shall be the responsibility of the entity making the request and such entity shall pay to the commissioner two hundred dollars for such examination and the actual traveling expenses of the examination administrator to administer such examination; (15) with respect to motor vehicle physical damage appraisers: (A) An examination fee of eighty dollars for each examination taken, except when a testing service is used, the testing service shall pay a fee of eighty dollars to the commissioner for each examination taken by an applicant; (B) a fee of eighty dollars for each license issued or renewed; and (C) the expense of any examination administered outside the state shall be the responsibility of the entity making the request and such entity shall pay to the commissioner two hundred dollars for such examination and the actual traveling expenses of the examination administrator to administer such examination; (16) with respect to certified insurance consultants: (A) An examination fee of twenty-six dollars for each examination taken, except when a testing service is used, the testing service shall pay a fee of twenty-six dollars to the commissioner for each examination taken by an applicant; (B) a fee of two hundred fifty dollars for each license issued; and (C) a fee of two hundred fifty dollars for each license renewed; (17) with respect to surplus lines brokers: (A) An examination fee of twenty dollars for each examination taken, except when a testing service is used, the testing service shall pay a fee of twenty dollars to the commissioner for each examination taken by an applicant; and (B) a fee of six hundred twenty-five dollars for each license issued or renewed; (18) with respect to fraternal agents, a fee of eighty dollars for each license issued or renewed; (19) a fee of twenty-six dollars for each license certificate requested, whether or not a license has been issued; (20) with respect to domestic and foreign benefit societies shall pay: (A) For service of process, fifty dollars for each person or insurer to be served; (B) for filing a certified copy of its charter or articles of association, fifteen dollars; (C) for filing the annual report, twenty dollars; and (D) for filing any additional paper required by law, fifteen dollars; (21) with respect to foreign benefit societies: (A) For each certificate of organization or compliance, fifteen dollars; (B) for each certified copy of permit, fifteen dollars; and (C) for each copy of a report or certificate of condition of a society to be filed in any other state, fifteen dollars; (22) with respect to reinsurance intermediaries: A fee of six hundred twenty-five dollars for each license issued or renewed; (23) with respect to life settlement providers: (A) A filing fee of twenty-six dollars for each initial application for a license made pursuant to section 38a-465a; and (B) a fee of forty dollars for each license issued or renewed; (24) with respect to life settlement brokers: (A) A filing fee of twenty-six dollars for each initial application for a license made pursuant to section 38a-465a; and (B) a fee of forty dollars for each license issued or renewed; (25) with respect to preferred provider networks, a fee of two thousand seven hundred fifty dollars for each license issued or renewed; (26) with respect to rental companies, as defined in section 38a-799, a fee of eighty dollars for each permit issued or renewed; (27) with respect to medical discount plan organizations licensed under section 38a-479rr, a fee of six hundred twenty-five dollars for each license issued or renewed; (28) with respect to pharmacy benefits managers, an application fee of one hundred dollars for each registration issued or renewed; (29) with respect to captive insurance companies, as defined in section 38a-91aa, a fee of three hundred seventy-five dollars for each license issued or renewed; [and] (30) with respect to each duplicate license issued a fee of fifty dollars for each license issued; and (31) a filing fee of two thousand five hundred dollars for each statement of acquisition of control of a domestic insurance company filed pursuant to section 38a-130.
Sec. 4. Section 38a-14a of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2010):
(a) Subject to the limitation contained in this section and in addition to the powers which the Insurance Commissioner has under sections 38a-14 and 38a-15, as amended by this act, relating to the examination of insurance companies and health care centers doing business in this state, the commissioner shall have the power to order any insurance company registered under section 38a-135 or health care center to produce such records, books or other information in the possession of the insurance company or the health care center or its affiliates as are reasonably necessary to ascertain the financial condition of such insurance company or health care center or to determine compliance with sections 38a-129 to 38a-140, inclusive. In the event such insurance company or health care center fails to comply with such order, the commissioner shall have the power to examine any such affiliate to obtain such information.
(b) The commissioner may engage the services of attorneys, actuaries, accountants and other experts not otherwise a part of the commissioner's staff, at the registered insurance company's or health care center's expense, as shall be reasonably necessary to assist in the conduct of the examination under subsection (a) of this section. All persons so engaged shall be under the direction and control of the commissioner and shall act in a purely advisory capacity.
(c) Each registered insurance company or health care center producing for examination records, books and papers pursuant to subsection (a) of this section shall be liable for and shall pay the expense of such examination in accordance with sections 38a-14 and 38a-15, as amended by this act.
Sec. 5. Section 38a-15 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2010):
(a) The commissioner shall, as often as [he] the commissioner deems it expedient, undertake a market conduct examination of the affairs of any insurance company, health care center or fraternal benefit society doing business in this state.
(b) To carry out the examinations under this section, the commissioner may appoint, as market conduct examiners, one or more competent persons [, not officers] who shall not be officers of, or connected with or interested in any insurance company, health care center or fraternal benefit society, other than as a policyholder. In conducting the examination, the commissioner, [his] the commissioner's actuary or any examiner authorized by the commissioner may examine, under oath, the officers and agents of such an insurance company, health care center or fraternal benefit society and all persons deemed to have material information regarding the company's, center's or society's property or business. Each such company, center or society, its officers and agents, shall produce the books and papers, in its or their possession, relating to its business or affairs, and any other person may be required to produce any book or paper [, in his] in such person's custody [,] deemed to be relevant to the examination, for the inspection of the commissioner, [his] the commissioner's actuary or examiners, when required. The officers and agents of the company, center or association shall facilitate the examination and aid the examiners in making the same so far as it is in their power to do so.
(c) Each market conduct examiner shall make a full and true report of each market conduct examination made by [him] such examiner, which shall comprise only facts appearing upon the books, papers, records or documents of the examined company, center or society or ascertained from the sworn testimony of its officers or agents or of other persons examined under oath concerning its affairs. The examiner's report shall be presumptive evidence of the facts therein stated in any action or proceeding in the name of the state against the company, center or society, its officers or agents. [The] Before filing such report, the commissioner shall grant a hearing to the company, center or society examined, [before filing any such report,] and may withhold any such report from public inspection for such time as [he] the commissioner deems proper. The commissioner may, if [he] said commissioner deems it in the public interest, publish any such report, or the result of any such examination contained therein, in one or more newspapers of the state.
[(d) All the expense of any examination made under the authority of this section, other than examinations of domestic insurance companies, shall be paid by the company, center or society examined, and domestic insurance companies and other domestic entities examined outside the state shall pay the traveling and maintenance expenses of examiners.]
(d) (1) The commissioner may engage the services of attorneys, appraisers, independent actuaries, independent certified public accountants or other professionals and specialists to assist in conducting the examinations under this section as examiners, the cost of which shall be borne by the company that is the subject of the examination.
(2) No cause of action shall arise nor shall any liability be imposed against the commissioner, the commissioner's authorized representatives or any examiner appointed by the commissioner for any statements made or conduct performed in good faith while carrying out the provisions of this section.
(3) No cause of action shall arise nor shall any liability be imposed against any person for the act of communicating or delivering information or data to the commissioner or the commissioner's authorized representative or examiner pursuant to an examination made under this section, if such act of communication or delivery was performed in good faith and without fraudulent intent or the intent to deceive.
(4) This section shall not abrogate or modify any common law or statutory privilege or immunity heretofore enjoyed by any person identified in subdivision (2) of this subsection.
(5) A person identified in subdivision (2) of this subsection shall be entitled to an award of attorney's fees and costs if such person is the prevailing party in a civil cause of action for libel, slander or any other relevant tort arising out of activities in carrying out the provisions of this section and the party bringing the action was not substantially justified in doing so. For the purposes of this section, a proceeding is "substantially justified" if it had a reasonable basis in law or fact at the time that it was initiated.
(e) Notwithstanding subdivision (1) of subsection (d) of this section, no domestic insurance company or other domestic entity subject to examination under this section shall pay, as costs associated with the examination, the salaries, fringe benefits, and travel and maintenance expenses of examining personnel of the Insurance Department engaged in such examination if such domestic company or entity is otherwise liable to an assessment levied under section 38a-47, except that a domestic insurance company or other domestic entity shall pay the traveling and maintenance expenses of examining personnel of the Insurance Department when such company or entity is examined outside the state.
(f) Nothing in this section shall be construed to prevent or prohibit the commissioner from disclosing the content of an examination report, preliminary examination report or results, or any matter relating thereto, to the Insurance Department of this or any other state or country, or to law enforcement officials of this or any other state or to any agency of the federal government at any time, as long as such agency or office receiving the report or matters relating thereto agrees in writing to hold such report or matters confidential.
(g) All working papers, recorded information, documents and copies thereof produced by, obtained by or disclosed to the commissioner or any other person in the course of an examination made under this section shall be given confidential treatment, shall not be subject to subpoena and shall not be made public by the commissioner or any other person, except to the extent provided in subsection (f) of this section. Access to such working papers, recorded information, documents and copies may be granted by the commissioner to the National Association of Insurance Commissioners as long as it agrees, in writing, to hold such working papers, recorded information, documents and copies confidential.
Sec. 6. Subdivision (1) of subsection (d) of section 38a-91bb of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2010):
(d) (1) Each captive insurance company shall pay to the commissioner a nonrefundable fee of eight hundred dollars for examining, investigating and processing its application for a license. [, and the] The commissioner may retain legal, financial and examination services from outside the department for the licensing and financial oversight of a captive insurance company, the reasonable cost of which may be charged against [the applicant] such company. The provisions of subdivisions (2) to (5), inclusive, of subsection (k) of section 38a-14 shall apply to [examinations, investigations and processing conducted under] the services retained pursuant to this [section] subsection.
Sec. 7. Subsection (g) of section 38a-91hh of the 2010 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(g) Nothing contained in this section shall prevent or be construed as prohibiting the commissioner from disclosing the content of an examination report, preliminary examination report or results, or any matter relating to such report to (1) the [Insurance Department] insurance regulatory officials of this or any other state or country, (2) law enforcement officials of this or any other state, or (3) any agency of this or any other state or of the federal government at any time, so long as such agency or office receiving the report or matters relating to such report agrees, in writing, that such documents shall be confidential.
Sec. 8. Section 38a-91nn of the 2010 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage and applicable to calendar years commencing on and after January 1, 2010):
(a) Each captive insurance company shall pay to the Commissioner of Revenue Services, [in the month of February of each year] on or before March first, annually, a tax at the rate of thirty-eight hundredths of one per cent on the first twenty million dollars and two hundred eighty-five thousandths of one per cent on the next twenty million dollars and nineteen hundredths of one per cent on the next twenty million dollars and seventy-two thousandths of one per cent on each dollar thereafter, on the direct premiums collected or contracted for on policies or contracts of insurance written by the captive insurance company during the year ending December thirty-first next preceding, after deducting from the direct premiums subject to the tax the amounts paid to policyholders as return premiums which shall include dividends on unabsorbed premiums or premium deposits returned or credited to policyholders, except that no tax shall be due or payable as to considerations received for annuity contracts.
(b) The annual minimum aggregate tax to be paid by a captive insurance company calculated under subsection (a) of this section shall be seven thousand five hundred dollars, and the annual maximum aggregate tax shall be two hundred thousand dollars.
(c) [A captive insurance company failing to file returns as required in this section or failing to pay within the time required all taxes assessed by this section shall be subject to penalty under section 12-229.] The provisions of sections 12-204, 12-204d, 12-204g and 12-205 to 12-208, inclusive, shall apply to sections 38a-91aa to 38a-91qq, inclusive, as amended by this act, in the same manner and with the same force and effect as if the language of sections 12-204, 12-204d, 12-204g and 12-205 to 12-208, inclusive, had been incorporated in full into this section and had expressly referred to the tax due under this section, except to the extent such language is inconsistent with a provision of sections 38a-91aa to 38a-91qq, inclusive, as amended by this act.
(d) Two or more captive insurance companies under common ownership and control shall be taxed as though they were a single captive insurance company.
(e) For the purposes of this section common ownership and control means:
(1) In the case of stock corporations, the direct or indirect ownership of eighty per cent or more of the outstanding voting stock of two or more corporations by the same shareholder or shareholders; and
(2) In the case of mutual or nonprofit corporations, the direct or indirect ownership of eighty per cent or more of the surplus and the voting power of two or more corporations by the same member or members.
(f) The tax provided for in this section shall constitute all taxes collectible under the laws of this state from any captive insurance company, and no other occupation tax or other taxes shall be levied or collected from any captive insurance company by the state or any county, city or municipality within this state, except taxes on real and personal property used in the production of income.
(g) The tax provided for in this section shall be calculated on an annual basis, notwithstanding policies or contracts of insurance or contracts of reinsurance issued on a multiyear basis. In the case of multiyear policies or contracts, the premium shall be prorated for purposes of determining the tax under this section.
Sec. 9. Subparagraph (B) of subdivision (1) of section 38a-92a of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2010):
(B) "Financial guaranty insurance" shall not include:
(i) Insurance of any loss resulting from any event described in subparagraph (A) of this subdivision if the loss is payable only upon the occurrence of any of the following, as specified in a surety bond, insurance policy or indemnity contract: A fortuitous physical event; a failure of or deficiency in the operation of equipment; or an inability to extract or recover a natural resource;
(ii) Surety insurance, defined as insurance: Guaranteeing the fidelity of persons holding positions of public or private trusts; indemnifying financial institutions against loss of moneys, securities, negotiable instruments and other tangible items of personal property caused by larceny, misplacement, destruction or other stated perils; insuring against loss caused by forgery of signatures on, or alterations of specified documents, instruments and papers; becoming surety on or guaranteeing the performance of a bond which shall not exceed a period greater than five years, that guarantees the payment of a premium, deductible, or self-insured retention to an insurer issuing a workers' compensation or liability policy; insuring deposits in financial institutions to the extent of the excess over the amount insured by the Federal Deposit Insurance Corporation; guaranteeing the performance of contracts for services, including a bid, payment or performance bond where the bond is guaranteeing the execution of any contract other than a contract of indebtedness or other monetary obligation; and guaranteeing or otherwise becoming surety for the performance of any lawful contract, not specifically provided for in this subdivision, except any insurance contract which constitutes either mortgage guaranty insurance or financial guaranty insurance, as defined in subparagraph (A) of this subdivision;
(iii) Credit unemployment insurance, defined as insurance on a debtor in connection with a specific loan or other credit transaction, to provide payments to a creditor in the event of unemployment of the debtor for the installments or other periodic payments becoming due while a debtor is unemployed;
(iv) Credit insurance indemnifying a manufacturer, merchant or educational institution which extends credit against loss or damage resulting from nonpayment of debts owed to such entity for goods or services provided in the normal course of business;
(v) Guaranteed investment contracts issued by a life insurance company which provides that the life insurer will make specified payments in exchange for specific premiums or contributions;
(vi) Mortgage guaranty insurance, defined as insurance against financial loss by reason of the nonpayment of principal, interest and other sums agreed to be paid under the terms of any note or bond or other evidence of indebtedness secured by a mortgage, deed of trust or other instrument constituting a first lien or charge on residential real estate consisting of less than five units;
(vii) Indemnity contracts or similar guaranties, to the extent that they are not otherwise limited or proscribed by sections 38a-92 to 38a-92n, inclusive, in which a life insurer does any of the following: Guarantees its obligations or indebtedness or the obligations or indebtedness of a subsidiary, as defined in section 38a-1, other than a financial guaranty insurance corporation, provided: To the extent that any such obligations or indebtedness are backed by specific assets, those assets shall be at all times owned by the life insurer or the subsidiary, and in the case of the guaranty of the obligations or indebtedness of the subsidiary that are not backed by specific assets of the life insurer, the guaranty terminates once the subsidiary ceases to be a subsidiary; guarantees obligations or indebtedness, including the obligation to substitute assets where appropriate, with respect to specific assets acquired by a life insurer in the course of normal investment activities and not for the purpose of resale with credit enhancement or guarantees obligations or indebtedness acquired by a subsidiary, provided the assets acquired pursuant to this subparagraph have been either acquired by a special purpose entity, whose sole purpose is to acquire specific assets of the life insurer or the subsidiary and issue securities or participation certificates backed by the assets, or sold to an independent third party, or guarantees obligations or indebtedness of an employee or agent of the life insurer;
(viii) Any cramdown bond or mortgage repurchase bond, as those phrases are used by nationally recognized rating agencies in respect to mortgage-backed securities;
(ix) Residual value insurance, defined as insurance issued in connection with a lease or contract which sets forth a specific termination value at the end of the term of the lease or contract for the property covered by the lease or contract and which insures against loss of economic value, other than loss due to physical damage, of tangible personal property, real property and improvements thereto;
(x) Any letter of credit or similar transaction effected by a bank, trust company or savings association;
(xi) Accumulation fund arrangements of any life insurance contract or annuity contract made pursuant to section 38a-460, or any funding agreements made pursuant to section 38a-459; or
(xii) Any other form of insurance covering risks that the commissioner determines to be substantially similar to any of the foregoing.
Sec. 10. Subsection (b) of section 38a-364 of the 2010 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(b) Each insurance company that issues private passenger motor vehicle liability insurance providing the security required by sections 38a-19 and 38a-363 to 38a-388, inclusive, shall issue annually to each such insured an automobile insurance identification card, in duplicate, for each insured vehicle, one of which shall be presented to the commissioner as provided in section 14-12b and the other carried in the vehicle as provided in section [14-12f] 14-13. Except as provided in subsection (c) of this section, such card shall be effective for a period of one year and shall include the name of the insured and insurer, the policy number, the effective date of coverage, the year, make or model and vehicle identification number of the insured vehicle and an appropriate space wherein the insured may set forth the year, make or model and vehicle identification number of any private passenger motor vehicle that becomes covered as a result of a change in the covered vehicle during the effective period of the identification card. When an insured has five or more private passenger motor vehicles registered in this state, the insurer may use the designation "all owned vehicles" on each card in lieu of a specific vehicle description. Each insurance company that delivers, issues for delivery or renews such private passenger motor vehicle liability insurance in this state on or after January 1, 2009, shall include on such card, the following notice, printed in capital letters and boldface type:
NOTICE:
YOU HAVE THE RIGHT TO CHOOSE THE LICENSED REPAIR SHOP WHERE THE DAMAGE TO YOUR MOTOR VEHICLE WILL BE REPAIRED.
Sec. 11. Section 38a-430 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2010):
(a) No life insurance or annuity policy or contract shall be delivered or issued for delivery to any person in this state, nor shall any application, rider or endorsement be used in connection therewith, until a copy of the form thereof shall have been filed with and approved by the commissioner. The commissioner shall adopt regulations in accordance with the provisions of chapter 54, establishing a procedure for review of such policies. The commissioner shall issue [an order] a decision disapproving the use of any such form at any time if it does not comply with the requirements of law, or if it contains a provision or provisions which are unfair or deceptive or which encourage misrepresentation of the policy. The commissioner shall specify the reason for his disapproval. The provisions of section 38a-19 shall apply to any such [order] decision issued by the commissioner.
(b) The commissioner may prescribe requirements for disclosure notices, illustrations or other explanatory materials said commissioner deems necessary to protect policyholders.
[(b)] (c) Nothing in this chapter shall preclude the issuance of a life insurance contract, including, but not limited to, a long-term care policy as provided in section 38a-458, which includes an optional health insurance rider, provided [,] the optional health insurance rider [must be] is filed with and approved by the Insurance Commissioner pursuant to section 38a-481, as amended by this act. Any company offering such policies for sale in this state shall be licensed to sell health insurance in this state pursuant to the provisions of section 38a-41.
Sec. 12. Subsections (a) to (d), inclusive, of section 38a-481 of the 2010 supplement to the general statutes are repealed and the following is substituted in lieu thereof (Effective October 1, 2010):
(a) (1) No individual health insurance policy shall be delivered or issued for delivery to any person in this state, nor shall any application, rider or endorsement be used in connection with such policy, until a copy of the form thereof and of the classification of risks and the premium rates have been filed with the commissioner. The commissioner shall adopt regulations, in accordance with chapter 54, to establish a procedure for reviewing such policies. The commissioner shall disapprove the use of such form at any time if it does not comply with the requirements of law, or if it contains a provision or provisions [which] that are unfair or deceptive or [which] that encourage misrepresentation of the policy. The commissioner shall notify, in writing, the insurer [which] that has filed any such form of the commissioner's disapproval, specifying the reasons for disapproval, and [ordering] communicating that no such insurer shall deliver or issue for delivery to any person in this state a policy on or containing such form. The provisions of section 38a-19 shall apply to such [orders] notifications of disapprovals.
(2) The commissioner may prescribe requirements for disclosure notices, illustrations or other explanatory materials said commissioner deems necessary to protect policyholders.
(b) No rate filed under the provisions of subsection (a) of this section shall be effective until the expiration of thirty days after it has been filed or unless sooner approved by the commissioner in accordance with regulations adopted pursuant to this subsection. The commissioner shall adopt regulations, in accordance with chapter 54, to prescribe standards to [insure] ensure that such rates shall not be excessive, inadequate or unfairly discriminatory. The commissioner may disapprove such rate within thirty days after it has been filed if it fails to comply with such standards, except that no rate filed under the provisions of subsection (a) of this section for any Medicare supplement policy shall be effective unless approved in accordance with section 38a-474, as amended by this act.
(c) No insurance company, fraternal benefit society, hospital service corporation, medical service corporation, health care center or other entity which delivers or issues for delivery in this state any Medicare supplement policies or certificates shall incorporate in its rates or determinations to grant coverage for Medicare supplement insurance policies or certificates any factors or values based on the age, gender, previous claims history or the medical condition of any person covered by such policy or certificate. [, except for plans "H" to "J", inclusive, as provided in section 38a-495b. In plans "H" to "J", inclusive, previous claims history and the medical condition of the applicant may be used in determinations to grant coverage under Medicare supplement policies and certificates issued prior to January 1, 2006.]
(d) Rates on a particular policy form [will] shall not be deemed excessive if the insurer has filed a loss ratio guarantee with the Insurance Commissioner [which] that meets the requirements of subsection (e) of this section provided (1) the form of such loss ratio guarantee has been explicitly approved by the Insurance Commissioner, and (2) the current expected lifetime loss ratio is not more than five per cent less than the filed lifetime loss ratio as certified by an actuary. The insurer shall withdraw the policy form if the commissioner determines that the lifetime loss ratio will not be met. Rates also [will] shall not be deemed excessive if the insurer complies with the terms of the loss ratio guarantee. The Insurance Commissioner may adopt regulations, in accordance with chapter 54, to [assure] ensure that the use of a loss ratio guarantee does not constitute an unfair practice.
Sec. 13. Subsection (b) of section 38a-495b of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(b) In accordance with the regulations adopted pursuant to section 38a-495a, on and after July 1, 2005, there [are] shall be standardized Medicare supplement insurance policies or certificates as designated [as plans "A" to "L", inclusive] by the Centers for Medicare and Medicaid Services.
Sec. 14. Section 38a-513 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2010):
(a) (1) No group health insurance policy, as defined by the commissioner, or certificate shall be issued or delivered in this state unless a copy of the form for such policy or certificate has been submitted to and approved by the commissioner under the regulations adopted pursuant to this section. The commissioner shall adopt regulations, in accordance with chapter 54, concerning the provisions, submission and approval of such policies and certificates and establishing a procedure for reviewing such policies and certificates. [If the commissioner issues an order disapproving the use of such form, the] The commissioner shall disapprove the use of such form at any time if it does not comply with the requirements of law, or if it contains a provision or provisions that are unfair or deceptive or that encourage misrepresentation of the policy. The commissioner shall notify, in writing, the insurer that has filed any such form of the commissioner's disapproval, specifying the reasons for disapproval, and communicating that no such insurer shall deliver or issue for delivery to any person in this state a policy on or containing such form. The provisions of section 38a-19 shall apply to such [order] notifications of disapprovals.
(2) The commissioner may prescribe requirements for disclosure notices, illustrations or other explanatory materials said commissioner deems necessary to protect policyholders.
(b) No insurance company, fraternal benefit society, hospital service corporation, medical service corporation, health care center or other entity [which] that delivers or issues for delivery in this state any Medicare supplement policies or certificates shall incorporate in its rates or determinations to grant coverage for Medicare supplement insurance policies or certificates any factors or values based on the age, gender, previous claims history or the medical condition of any person covered by such policy or certificate. [, except for plans "H" to "J", inclusive, as provided in section 38a-495b. In plans "H" to "J", inclusive, previous claims history and the medical condition of the applicant may be used in determinations to grant coverage under Medicare supplement policies and certificates issued prior to January 1, 2006.]
(c) Nothing in this chapter shall preclude the issuance of a group health insurance policy which includes an optional life insurance rider, provided the optional life insurance rider must be filed with and approved by the Insurance Commissioner pursuant to section 38a-430, as amended by this act. Any company offering such policies for sale in this state shall be licensed to sell life insurance in this state pursuant to the provisions of section 38a-41.
(d) Not later than January 1, 2009, the commissioner shall adopt regulations, in accordance with chapter 54, to establish minimum standards for benefits in group specified disease policies, certificates, riders, endorsements and benefits.
Sec. 15. Subdivision (15) of section 38a-816 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2010):
(15) (A) Failure by an insurer, or any other entity responsible for providing payment to a health care provider pursuant to an insurance policy, to pay accident and health claims, including, but not limited to, claims for payment or reimbursement to health care providers, within the time periods set forth in subparagraph (B) of this subdivision, unless the Insurance Commissioner determines that a legitimate dispute exists as to coverage, liability or damages or that the claimant has fraudulently caused or contributed to the loss. Any insurer, or any other entity responsible for providing payment to a health care provider pursuant to an insurance policy, who fails to pay such a claim or request within the time periods set forth in subparagraph (B) of this subdivision shall pay the claimant or health care provider the amount of such claim plus interest at the rate of fifteen per cent per annum, in addition to any other penalties which may be imposed pursuant to sections 38a-11, as amended by this act, 38a-25, 38a-41 to 38a-53, inclusive, 38a-57 to 38a-60, inclusive, 38a-62 to 38a-64, inclusive, 38a-76, 38a-83, 38a-84, 38a-117 to 38a-124, inclusive, 38a-129 to 38a-140, inclusive, 38a-146 to 38a-155, inclusive, 38a-283, 38a-288 to 38a-290, inclusive, 38a-319, 38a-320, 38a-459, 38a-464, 38a-815 to 38a-819, inclusive, 38a-824 to 38a-826, inclusive, and 38a-828 to 38a-830, inclusive. Whenever the interest due a claimant or health care provider pursuant to this section is less than one dollar, the insurer shall deposit such amount in a separate interest-bearing account in which all such amounts shall be deposited. At the end of each calendar year each such insurer shall donate such amount to The University of Connecticut Health Center.
(B) Each insurer, or other entity responsible for providing payment to a health care provider pursuant to an insurance policy subject to this section, shall pay claims not later than forty-five days after receipt by the insurer of the claimant's proof of loss form or the health care provider's request for payment filed in accordance with the insurer's practices or procedures, except that when there is a deficiency in the information needed for processing a claim, as determined in accordance with section 38a-477, the insurer shall (i) send written notice to the claimant or health care provider, as the case may be, of all alleged deficiencies in information needed for processing a claim not later than thirty days after the insurer receives a claim for payment or reimbursement under the contract, and (ii) pay claims for payment or reimbursement under the contract not later than thirty days after the insurer receives the information requested.
(C) As used in this subdivision, "health care provider" means (i) a person licensed to provide health care services under chapter 368d, chapter 368v, chapters 370 to 373, inclusive, 375 to 383c, inclusive, 384a to 384c, inclusive, or chapter 400j, and (ii) a person who holds an equivalent license from any other state.
Sec. 16. Subsection (a) of section 38a-478n of the 2010 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(a) Any enrollee, or any provider acting on behalf of an enrollee with the enrollee's consent, who has exhausted the internal mechanisms provided by a managed care organization, health insurer or utilization review company to appeal the denial of a claim based on medical necessity or a determination not to certify an admission, service, procedure or extension of stay, regardless of whether such determination was made before, during or after the admission, service, procedure or extension of stay, may appeal such denial or determination to the commissioner. As used in this section and section 38a-478m, "health insurer" means any entity, other than a managed care organization that delivers, issues for delivery, renews, amends or continues an individual or group health insurance plan in this state providing coverage of the type specified in subdivision (1), (2), (4), (10), (11), (12), [and] (13) and (16) of section 38a-469, and "enrollee" means a person who has contracted for or who participates in coverage under an individual or group health insurance plan or a managed care plan for such person or such person's eligible dependents.
Sec. 17. Section 2 of public act 09-179 is repealed and the following is substituted in lieu thereof (Effective from passage):
The commissioner shall carry out a review as set forth in section 1 of [this act] public act 09-179 of statutorily mandated health benefits existing on or effective on July 1, 2009. The commissioner shall submit, in accordance with section 11-4a of the general statutes, the findings to the joint standing committee of the General Assembly having cognizance of matters relating to insurance not later than January 1, [2010] 2011.
Sec. 18. Subsection (b) of section 38a-473 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(b) No insurance company, fraternal benefit society, hospital service corporation, medical service corporation, health care center or other entity which delivers or issues for delivery in this state any Medicare supplement policies or certificates shall incorporate in its rates or determinations to grant coverage for Medicare supplement insurance policies or certificates any factors or values based on the age, gender, previous claims history or the medical condition of any person covered by such policy or certificate. [, except for plans "H" to "J", inclusive, as provided in section 38a-495b. In plans "H" to "J", inclusive, previous claims history and the medical condition of the applicant may be used in determinations to grant coverage under Medicare supplement policies and certificates issued prior to January 1, 2006.]
Sec. 19. Subsection (b) of section 38a-474 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(b) No insurance company, fraternal benefit society, hospital service corporation, medical service corporation, health care center or other entity which delivers or issues for delivery in this state any Medicare supplement policies or certificates shall incorporate in its rates or determinations to grant coverage for Medicare supplement insurance policies or certificates any factors or values based on the age, gender, previous claims history or the medical condition of the person covered by such policy or certificate. [, except for plans "H" to "J", inclusive, as provided in section 38a-495b. In plans "H" to "J", inclusive, previous claims history and the medical condition of the applicant may be used in determinations to grant coverage under Medicare supplement policies and certificates issued prior to January 1, 2006.]
Sec. 20. Subsections (a) and (b) of section 38a-495c of the general statutes are repealed and the following is substituted in lieu thereof (Effective from passage):
(a) Each insurance company, fraternal benefit society, hospital service corporation, medical service corporation, health care center or other entity in this state, on or after January 1, 1994, which delivers, issues for delivery, continues or renews any Medicare supplement insurance policies or certificates shall base the premium rates charged on a community rate. Such rate shall not be based on age, gender, previous claims history or the medical condition of the person covered by such policy or certificate. Except as provided in subsection (c) of this section, coverage shall not be denied on the basis of age, gender, previous claim history or the medical condition of the person covered by such policy or certificate. [, except for plans "H" to "J", inclusive, as provided in section 38a-495b. In plans "H" to "J", inclusive, previous claims history and the medical condition of the applicant may be used in determinations to grant coverage under Medicare supplement policies and certificates issued prior to January 1, 2006.]
(b) Nothing in this section shall prohibit an insurance company, fraternal benefit society, hospital service corporation, medical service corporation, health care center or other entity in this state issuing Medicare supplement insurance policies or certificates from using its usual and customary underwriting procedures, provided no such company, society, corporation, center or other entity shall issue a Medicare supplement policy or certificate based on the age, gender, previous claims history or the medical condition of the applicant. [, except that the previous claims history and the medical condition of the applicant may be used in determinations to grant coverage under Medicare supplement policies and certificates issued prior to January 1, 2006, for plans "H" to "J", inclusive.]
Sec. 21. Subdivision (1) of subsection (k) of section 38a-865 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(k) (1) A person receiving benefits under sections 38a-858 to 38a-875, inclusive, whether the benefits are payments of or on account of contractual obligations, continuation of coverage or provision of substitute or alternative coverages, shall be deemed to have assigned (A) the rights under the covered policy or contract to the association to the extent of the benefits received under sections 38a-858 to 38a-875, inclusive, and (B) any [causes] cause of action against any person for losses arising under, resulting from or otherwise relating to, the covered policy or contract to the association to the extent of the benefits received because of sections 38a-858 to 38a-875, inclusive. The association may require an assignment to it of such rights or cause of action by any payee, policy or contract owner, beneficiary, insured or annuitant as a condition precedent to the receipt of any right or benefits under sections 38a-858 to 38a-875, inclusive, upon the person. The provisions of sections 52-225g to 52-225l, inclusive, shall not apply to such rights or cause of action assigned to the association pursuant to this subsection.
This act shall take effect as follows and shall amend the following sections:
Section 1 October 1, 2010 38a-8(d)
Sec. 2 from passage 38a-9
Sec. 3 October 1, 2010 38a-11(a)
Sec. 4 October 1, 2010 38a-14a
Sec. 5 October 1, 2010 38a-15
Sec. 6 October 1, 2010 38a-91bb(d)(1)
Sec. 7 from passage 38a-91hh(g)
Sec. 8 from passage and applicable to calendar years commencing on and after January 1, 2010 38a-91nn
Sec. 9 October 1, 2010 38a-92a(1)(B)
Sec. 10 from passage 38a-364(b)
Sec. 11 October 1, 2010 38a-430
Sec. 12 October 1, 2010 38a-481(a) to (d)
Sec. 13 from passage 38a-495b(b)
Sec. 14 October 1, 2010 38a-513
Sec. 15 October 1, 2010 38a-816(15)
Sec. 16 from passage 38a-478n(a)
Sec. 17 from passage PA 09-179, Sec. 2
Sec. 18 from passage 38a-473(b)
Sec. 19 from passage 38a-474(b)
Sec. 20 from passage 38a-495c(a) and (b)
Sec. 21 from passage 38a-865(k)(1)
This act shall take effect as follows and shall amend the following sections:
Section 1
October 1, 2010
38a-8(d)
Sec. 2
from passage
38a-9
Sec. 3
October 1, 2010
38a-11(a)
Sec. 4
October 1, 2010
38a-14a
Sec. 5
October 1, 2010
38a-15
Sec. 6
October 1, 2010
38a-91bb(d)(1)
Sec. 7
from passage
38a-91hh(g)
Sec. 8
from passage and applicable to calendar years commencing on and after January 1, 2010
38a-91nn
Sec. 9
October 1, 2010
38a-92a(1)(B)
Sec. 10
from passage
38a-364(b)
Sec. 11
October 1, 2010
38a-430
Sec. 12
October 1, 2010
38a-481(a) to (d)
Sec. 13
from passage
38a-495b(b)
Sec. 14
October 1, 2010
38a-513
Sec. 15
October 1, 2010
38a-816(15)
Sec. 16
from passage
38a-478n(a)
Sec. 17
from passage
PA 09-179, Sec. 2
Sec. 18
from passage
38a-473(b)
Sec. 19
from passage
38a-474(b)
Sec. 20
from passage
38a-495c(a) and (b)
Sec. 21
from passage
38a-865(k)(1)
INS Joint Favorable Subst.
INS
Joint Favorable Subst.