Connecticut House Bill HB07013

Connecticut 2017 Regular Session

• Introduced: 2/3/17
• Refer: 2/3/17
• Report Pass: 3/7/17
• Refer: 3/16/17
• Report Pass: 3/22/17
• Refer: 5/5/17
• Report Pass: 5/8/17
• Engrossed: 5/30/17
• Report Pass: 5/31/17
• Chaptered: 6/16/17
• Enrolled: 6/21/17
• Passed: 6/30/17

Caption

An Act Establishing Standards To Allow The Insurance Commissioner To Designate Certain Domestic Insurance Companies As Domestic Surplus Lines Insurers.

Impact

This legislative change is significant because it aims to provide greater operational flexibility for insurers within the state while potentially expanding the range of surplus lines coverage available to consumers. By allowing domestic insurers to function as surplus lines entities, the bill effectively enhances the competitiveness of local insurance firms, potentially leading to better insurance offerings for policyholders. Furthermore, establishing a clearer definition and process for domestic surplus lines insurers may help streamline insurance transactions and regulation within the state.

Summary

House Bill 7013 establishes standards that allow the Insurance Commissioner to designate certain domestic insurance companies as domestic surplus lines insurers. A domestic insurance company able to meet a policyholder surplus of at least fifteen million dollars can gain this designation, subject to board resolution and Insurance Commissioner approval. The bill outlines that designated surplus lines insurers would still have to meet financial and solvency requirements mandated for domestic insurers yet be classified as unauthorized insurers in their capacity to write surplus lines coverage in Connecticut.

Sentiment

General sentiment surrounding HB 7013 appears supportive of its goals to modernize and expand domestic insurance capabilities. By creating pathways for domestic insurers to engage more actively in surplus lines markets, there is an optimistic outlook that the bill can lead to a more robust insurance market in Connecticut. However, there may also be some apprehension regarding the implications of having fewer consumer protections typically associated with unauthorized insurers, as surplus lines coverage often carries different mandates than traditional insurance.

Contention

A point of contention within discussions of HB 7013 may center on the regulatory safeguards associated with the newly designated domestic surplus lines insurers. Critics may argue that the reduced oversight for surplus lines coverage could lead to less consumer protection, particularly in regard to claims handling and policy terms, as these insurers would be exempt from certain regulatory provisions. Balancing the need for competitive insurance options and consumer protection will be pivotal in future discussions as the bill is implemented.