An Act Concerning Surplus Lines Insurance Policies.
One significant change that HB05365 introduces is the requirement for surplus lines brokers to file signed statements with the commissioner at regular intervals. These statements must detail the circumstances under which the policy was procured, particularly emphasizing the inability to find adequate coverage from authorized insurers. This is intended to create a higher standard of accountability among brokers while protecting the interests of consumers by documenting the procurement process. Additionally, the bill specifies that this requirement does not apply to flood insurance policies or to certain exempt commercial purchasers, thus exempting specific types of coverage from these new regulations.
House Bill 05365, titled 'An Act Concerning Surplus Lines Insurance Policies', is aimed at updating and clarifying the regulations surrounding surplus lines insurance in Connecticut. The bill proposes amendments to existing statutes, particularly focusing on the disclosure requirements for surplus lines policies. Notably, it mandates that each insurance policy under this category must include prominent warnings on the cover page, stating that the insurance is not protected by the Connecticut Insurance Guaranty Association. This change seeks to enhance transparency and ensure that policyholders are fully aware of the limitations of surplus lines insurance coverage.
During discussions, concerns were raised regarding the potential burden this bill may place on surplus lines brokers and the insurance industry at large. Opponents argue that these additional requirements could complicate and slow down the process for procuring necessary coverage for consumers. Furthermore, while the intent is to protect insurable interests, there are fears that such regulations might dissuade brokers from seeking coverage through surplus lines, potentially limiting options for consumers who require these policies.