Connecticut House Bill HB05366

Connecticut 2014 Regular Session

• Introduced: 2/26/14
• Refer: 2/26/14

Caption

An Act Concerning Certain Surplus Lines Insurance Policies And The Duties Of Surplus Lines Insurance Brokers.

Impact

The bill proposes significant changes to existing insurance policies governed by the state’s statutes. By enabling surplus lines insurance brokers to offer coverage options that deviate from state standards, the bill potentially opens up new avenues for businesses seeking insurance that aligns better with their specific risk profiles. This is particularly important in cases where licensed insurers might not provide sufficient coverage, thus filling a gap in the market for hard-to-insure properties or unique commercial risks.

Summary

House Bill 05366 aims to reform certain regulations surrounding surplus lines insurance and the responsibilities of surplus lines insurance brokers in Connecticut. Specifically, the bill allows surplus lines policies for commercial properties to deviate from established standards concerning replacement costs and depreciation. This flexibility aims to cater to the unique insurance needs of commercial properties that might not find adequate coverage through traditional licensed insurers.

Contention

Discussion around HB 05366 has highlighted potential points of contention, particularly regarding consumer protection. Supporters of the bill argue that providing insurers with flexibility will enhance competition and availability of coverage options, which can benefit businesses by reducing premium costs. However, critics express concerns that loosening these regulations might expose consumers to inadequate coverage or misleading policy terms, particularly if the standard practices around defining key terms like 'replacement cost’ and 'depreciation’ are not maintained.