Connecticut House Bill HB05046

Connecticut 2021 Regular Session

• Introduced: 1/11/21
• Refer: 1/11/21

Caption

An Act Extending The Sunset Date For Connecticut Foundation Solutions Indemnity Company, Inc.

Impact

By extending the sunset date, this bill allows the Connecticut Foundation Solutions Indemnity Company to continue its operations without interruption, which may facilitate ongoing risk management strategies for businesses in Connecticut. This extension is particularly significant as it enables businesses to maintain a mechanism to cover specific liabilities that might not be addressed by traditional insurance carriers. It reflects the state's commitment to ensuring that entities facing high-risk exposures have adequate coverage options available.

Summary

House Bill 5046 proposes to extend the sunset date for the Connecticut Foundation Solutions Indemnity Company, Inc. This bill seeks to amend existing legislation by extending the operating period of this captive insurance company until June 30, 2030. Captive insurance is a form of insurance where a company creates its own insurance company to provide coverage for itself, primarily used to manage risk, control costs, and ensure a stable source of coverage in specific instances.

Contention

There may be points of contention related to the bill, particularly concerning the effectiveness and oversight of captive insurance companies. Critics may raise concerns about the potential for abuse of such structures where companies may exploit the captive insurance framework to avoid traditional regulatory scrutiny or to minimize their insurance costs. Therefore, while the extension is designed to provide stability and support for businesses, it also necessitates continued oversight to ensure that the captive insurance model is used appropriately and does not undermine the broader insurance market’s integrity.