Connecticut Senate Bill SB00087

Connecticut 2019 Regular Session

• Introduced: 1/17/19
• Refer: 1/17/19
• Refer: 3/8/19
• Report Pass: 3/14/19
• Refer: 3/27/19
• Report Pass: 4/2/19

Caption

An Act Prohibiting Discretionary Clauses In Disability Income Insurance Policies.

Impact

If enacted, SB00087 would significantly revise existing disability income insurance regulations in the state. It would prevent insurers and related entities from including provisions that grant them undue discretion in interpreting policy terms. This measure is intended to align insurance practices with consumer rights, ensuring that individuals pursuing claims for disability benefits do so with an added layer of reassurance and fairness. As a result, the bill could lead to improved claim approval rates and establish a more consistent standard for handling disability insurance claims across the state.

Summary

SB00087, titled 'An Act Prohibiting Discretionary Clauses In Disability Income Insurance Policies', aims to eliminate discretionary clauses that allow insurers to interpret policy terms in a manner inconsistent with state laws. The bill seeks to enhance transparency and fairness in disability income insurance, ensuring that policyholders have clearer expectations regarding their coverage. By prohibiting these clauses, the legislation intends to protect consumers from potential misuse and arbitrary decision-making by insurers that could lead to unfair denials of claims.

Sentiment

The overall sentiment surrounding SB00087 appears to be one of support among consumer advocates and certain legislators who view it as a necessary step toward protecting consumers in the insurance industry. Supporters argue that the removal of discretionary clauses could result in a more balanced relationship between insurers and policyholders. Conversely, some insurance industry representatives may express reservations, arguing that eliminating discretionary clauses could limit their ability to manage risk appropriately and potentially increase costs for consumers.

Contention

Despite the support for the bill, there are notable contentions regarding the potential implications it may have on the insurance market. Critics fear that proscribing discretionary clauses might lead to stricter underwriting practices or higher premiums, as insurers may look for ways to mitigate the increased risk. Additionally, there may be concerns that the legislation could lead to litigation over policy interpretations, shifting disputes from insurers to the courts. Thus, while there is widespread support for greater consumer protection, there are underlying fears about the broader implications for the insurance industry and the consumers it serves.