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General Assembly Raised Bill No. 841
January Session, 2021
LCO No. 2712
Referred to Committee on INSURANCE AND REAL ESTATE
Introduced by:
(INS)
AN ACT CONCERNING TH E INSURANCE DEPARTME NT'S
RECOMMENDED CHANGES TO THE INSURANCE STATUTES.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Section 38a-1 of the general statutes is repealed and the 1
following is substituted in lieu thereof (Effective October 1, 2021): 2
Terms used in this title and section 2 of this act, unless it appears from 3
the context to the contrary, shall have a scope and meaning as set forth 4
in this section. 5
(1) "Affiliate" or "affiliated" means a person that directly, or indirectly 6
through one or more intermediaries, controls, is controlled by or is 7
under common control with another person. 8
(2) "Alien insurer" means any insurer that has been chartered by or 9
organized or constituted within or under the laws of any jurisdiction or 10
country without the United States. 11
(3) "Annuities" means all agreements to make periodical payments 12
where the making or continuance of all or some of the series of the 13 Raised Bill No. 841
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payments, or the amount of the payment, is dependent upon the 14
continuance of human life or is for a specified term of years. This 15
definition does not apply to payments made under a policy of life 16
insurance. 17
(4) "Commissioner" means the Insurance Commissioner. 18
(5) "Control", "controlled by" or "under common control with" means 19
the possession, direct or indirect, of the power to direct or cause the 20
direction of the management and policies of a person, whether through 21
the ownership of voting securities, by contract other than a commercial 22
contract for goods or nonmanagement services, or otherwise, unless the 23
power is the result of an official position with the person. 24
(6) "Domestic insurer" means any insurer that has been chartered by, 25
incorporated, organized or constituted within or under the laws of this 26
state. 27
(7) "Domestic surplus lines insurer" means any domestic insurer that 28
has been authorized by the commissioner to write surplus lines 29
insurance. 30
(8) "Foreign country" means any jurisdiction not in any state, district 31
or territory of the United States. 32
(9) "Foreign insurer" means any insurer that has been chartered by or 33
organized or constituted within or under the laws of another state or a 34
territory of the United States. 35
(10) "Insolvency" or "insolvent" means, for any insurer, that it is 36
unable to pay its obligations when they are due, or when its admitted 37
assets do not exceed its liabilities plus the greater of: (A) Capital and 38
surplus required by law for its organization and continued operation; 39
or (B) the total par or stated value of its authorized and issued capital 40
stock. For purposes of this subdivision "liabilities" shall include but not 41
be limited to reserves required by statute or by regulations adopted by 42
the commissioner in accordance with the provisions of chapter 54 or 43 Raised Bill No. 841
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specific requirements imposed by the commissioner upon a subject 44
company at the time of admission or subsequent thereto. 45
(11) "Insurance" means any agreement to pay a sum of money, 46
provide services or any other thing of value on the happening of a 47
particular event or contingency or to provide indemnity for loss in 48
respect to a specified subject by specified perils in return for a 49
consideration. In any contract of insurance, an insured shall have an 50
interest which is subject to a risk of loss through destruction or 51
impairment of that interest, which risk is assumed by the insurer and 52
such assumption shall be part of a general scheme to distribute losses 53
among a large group of persons bearing similar risks in return for a 54
ratable contribution or other consideration. 55
(12) "Insurer" or "insurance company" includes any person or 56
combination of persons doing any kind or form of insurance business 57
other than a fraternal benefit society, and shall include a receiver of any 58
insurer when the context reasonably permits. 59
(13) "Insured" means a person to whom or for whose benefit an 60
insurer makes a promise in an insurance policy. The term includes 61
policyholders, subscribers, members and beneficiaries. This definition 62
applies only to the provisions of this title and does not define the 63
meaning of this word as used in insurance policies or certificates. 64
(14) "Life insurance" means insurance on human lives and insurances 65
pertaining to or connected with human life. The business of life 66
insurance includes granting endowment benefits, granting additional 67
benefits in the event of death by accident or accidental means, granting 68
additional benefits in the event of the total and permanent disability of 69
the insured, and providing optional methods of settlement of proceeds. 70
Life insurance includes burial contracts to the extent provided by 71
section 38a-464. 72
(15) "Mutual insurer" means any insurer without capital stock, the 73
managing directors or officers of which are elected by its members. 74 Raised Bill No. 841
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(16) "Person" means an individual, a corporation, a partnership, a 75
limited liability company, an association, a joint stock company, a 76
business trust, an unincorporated organization or other legal entity. 77
(17) "Policy" means any document, including attached endorsements 78
and riders, purporting to be an enforceable contract, which 79
memorializes in writing some or all of the terms of an insurance 80
contract. 81
(18) "State" means any state, district, or territory of the United States. 82
(19) "Subsidiary" of a specified person means an affiliate controlled 83
by the person directly, or indirectly through one or more intermediaries. 84
(20) "Unauthorized insurer" or "nonadmitted insurer" means an 85
insurer that has not been granted a certificate of authority by the 86
commissioner to transact the business of insurance in this state or an 87
insurer transacting business not authorized by a valid certificate. 88
(21) "United States" means the United States of America, its territories 89
and possessions, the Commonwealth of Puerto Rico and the District of 90
Columbia. 91
Sec. 2. (NEW) (Effective October 1, 2021) No insurer, health care center 92
or fraternal benefit society doing business in this state shall: 93
(1) In connection with the issuance, withholding, extension or 94
renewal of an annuity or an insurance policy for life, credit life, 95
disability, long-term care, accidental injury, specified disease, hospital 96
indemnity or credit accident insurance, request, require, purchase or use 97
information obtained from an entity providing direct-to-consumer 98
genetic testing without the informed written consent of the individual 99
who has been tested; or 100
(2) Condition insurance rates, the provision or renewal of insurance 101
coverage or benefit or other conditions of insurance for an individual 102
on: 103 Raised Bill No. 841
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(A) Any requirement or agreement that the individual undergo 104
genetic testing; or 105
(B) The results of any genetic testing of a member of the individual's 106
family unless the results are contained in the individual's medical 107
record. 108
Sec. 3. Section 38a-816 of the general statutes is repealed and the 109
following is substituted in lieu thereof (Effective October 1, 2021): 110
The following are defined as unfair methods of competition and 111
unfair and deceptive acts or practices in the business of insurance: 112
(1) Misrepresentations and false advertising of insurance policies. 113
Making, issuing or circulating, or causing to be made, issued or 114
circulated, any estimate, illustration, circular or statement, sales 115
presentation, omission or comparison which: (A) Misrepresents the 116
benefits, advantages, conditions or terms of any insurance policy; (B) 117
misrepresents the dividends or share of the surplus to be received, on 118
any insurance policy; (C) makes any false or misleading statements as 119
to the dividends or share of surplus previously paid on any insurance 120
policy; (D) is misleading or is a misrepresentation as to the financial 121
condition of any person, or as to the legal reserve system upon which 122
any life insurer operates; (E) uses any name or title of any insurance 123
policy or class of insurance policies misrepresenting the true nature 124
thereof; (F) is a misrepresentation, including, but not limited to, an 125
intentional misquote of a premium rate, for the purpose of inducing or 126
tending to induce to the purchase, lapse, forfeiture, exchange, 127
conversion or surrender of any insurance policy; (G) is a 128
misrepresentation for the purpose of effecting a pledge or assignment of 129
or effecting a loan against any insurance policy; or (H) misrepresents 130
any insurance policy as being shares of stock. 131
(2) False information and advertising generally. Making, publishing, 132
disseminating, circulating or placing before the public, or causing, 133
directly or indirectly, to be made, published, disseminated, circulated or 134
placed before the public, in a newspaper, magazine or other publication, 135 Raised Bill No. 841
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or in the form of a notice, circular, pamphlet, letter or poster, or over any 136
radio or television station, or in any other way, an advertisement, 137
announcement or statement containing any assertion, representation or 138
statement with respect to the business of insurance or with respect to 139
any person in the conduct of his insurance business, which is untrue, 140
deceptive or misleading. 141
(3) Defamation. Making, publishing, disseminating or circulating, 142
directly or indirectly, or aiding, abetting or encouraging the making, 143
publishing, disseminating or circulating of, any oral or written 144
statement or any pamphlet, circular, article or literature which is false 145
or maliciously critical of or derogatory to the financial condition of an 146
insurer, and which is calculated to injure any person engaged in the 147
business of insurance. 148
(4) Boycott, coercion and intimidation. Entering into any agreement 149
to commit, or by any concerted action committing, any act of boycott, 150
coercion or intimidation resulting in or tending to result in unreasonable 151
restraint of, or monopoly in, the business of insurance. 152
(5) False financial statements. Filing with any supervisory or other 153
public official, or making, publishing, disseminating, circulating or 154
delivering to any person, or placing before the public, or causing, 155
directly or indirectly, to be made, published, disseminated, circulated or 156
delivered to any person, or placed before the public, any false statement 157
of financial condition of an insurer with intent to deceive; or making any 158
false entry in any book, report or statement of any insurer with intent to 159
deceive any agent or examiner lawfully appointed to examine into its 160
condition or into any of its affairs, or any public official to whom such 161
insurer is required by law to report, or who has authority by law to 162
examine into its condition or into any of its affairs, or, with like intent, 163
wilfully omitting to make a true entry of any material fact pertaining to 164
the business of such insurer in any book, report or statement of such 165
insurer. 166
(6) Unfair claim settlement practices. Committing or performing with 167 Raised Bill No. 841
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such frequency as to indicate a general business practice any of the 168
following: (A) Misrepresenting pertinent facts or insurance policy 169
provisions relating to coverages at issue; (B) failing to acknowledge and 170
act with reasonable promptness upon communications with respect to 171
claims arising under insurance policies; (C) failing to adopt and 172
implement reasonable standards for the prompt investigation of claims 173
arising under insurance policies; (D) refusing to pay claims without 174
conducting a reasonable investigation based upon all available 175
information; (E) failing to affirm or deny coverage of claims within a 176
reasonable time after proof of loss statements have been completed; (F) 177
not attempting in good faith to effectuate prompt, fair and equitable 178
settlements of claims in which liability has become reasonably clear; (G) 179
compelling insureds to institute litigation to recover amounts due under 180
an insurance policy by offering substantially less than the amounts 181
ultimately recovered in actions brought by such insureds; (H) 182
attempting to settle a claim for less than the amount to which a 183
reasonable man would have believed he was entitled by reference to 184
written or printed advertising material accompanying or made part of 185
an application; (I) attempting to settle claims on the basis of an 186
application which was altered without notice to, or knowledge or 187
consent of the insured; (J) making claims payments to insureds or 188
beneficiaries not accompanied by statements setting forth the coverage 189
under which the payments are being made; (K) making known to 190
insureds or claimants a policy of appealing from arbitration awards in 191
favor of insureds or claimants for the purpose of compelling them to 192
accept settlements or compromises less than the amount awarded in 193
arbitration; (L) delaying the investigation or payment of claims by 194
requiring an insured, claimant, or the physician of either to submit a 195
preliminary claim report and then requiring the subsequent submission 196
of formal proof of loss forms, both of which submissions contain 197
substantially the same information; (M) failing to promptly settle claims, 198
where liability has become reasonably clear, under one portion of the 199
insurance policy coverage in order to influence settlements under other 200
portions of the insurance policy coverage; (N) failing to promptly 201
provide a reasonable explanation of the basis in the insurance policy in 202 Raised Bill No. 841
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relation to the facts or applicable law for denial of a claim or for the offer 203
of a compromise settlement; (O) using as a basis for cash settlement with 204
a first party automobile insurance claimant an amount which is less than 205
the amount which the insurer would pay if repairs were made unless 206
such amount is agreed to by the insured or provided for by the 207
insurance policy. 208
(7) Failure to maintain complaint handling procedures. Failure of any 209
person to maintain complete record of all the complaints which it has 210
received since the date of its last examination. This record shall indicate 211
the total number of complaints, their classification by line of insurance, 212
the nature of each complaint, the disposition of these complaints, and 213
the time it took to process each complaint. For purposes of this 214
subsection "complaint" means any written communication primarily 215
expressing a grievance. 216
(8) Misrepresentation in insurance applications. Making false or 217
fraudulent statements or representations on or relative to an application 218
for an insurance policy for the purpose of obtaining a fee, commission, 219
money or other benefit from any insurer, producer or individual. 220
(9) Any violation of any one of sections 38a-358, 38a-446, 38a-447, 38a-221
488, 38a-825, 38a-826, 38a-828 and 38a-829. None of the following 222
practices shall be considered discrimination within the meaning of 223
section 38a-446 or 38a-488 or a rebate within the meaning of section 38a-224
825: (A) Paying bonuses to policyholders or otherwise abating their 225
premiums in whole or in part out of surplus accumulated from 226
nonparticipating insurance, provided any such bonuses or abatement of 227
premiums shall be fair and equitable to policyholders and for the best 228
interests of the company and its policyholders; (B) in the case of policies 229
issued on the industrial debit plan, making allowance to policyholders 230
who have continuously for a specified period made premium payments 231
directly to an office of the insurer in an amount which fairly represents 232
the saving in collection expense; (C) readjustment of the rate of premium 233
for a group insurance policy based on loss or expense experience, or 234
both, at the end of the first or any subsequent policy year, which may be 235 Raised Bill No. 841
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made retroactive for such policy year. 236
(10) Notwithstanding any provision of any policy of insurance, 237
certificate or service contract, whenever such insurance policy or 238
certificate or service contract provides for reimbursement for any 239
services which may be legally performed by any practitioner of the 240
healing arts licensed to practice in this state, reimbursement under such 241
insurance policy, certificate or service contract shall not be denied 242
because of race, color or creed nor shall any insurer make or permit any 243
unfair discrimination against particular individuals or persons so 244
licensed. 245
(11) Favored agent or insurer: Coercion of debtors. (A) No person 246
may (i) require, as a condition precedent to the lending of money or 247
extension of credit, or any renewal thereof, that the person to whom 248
such money or credit is extended or whose obligation the creditor is to 249
acquire or finance, negotiate any policy or contract of insurance through 250
a particular insurer or group of insurers or producer or group of 251
producers; (ii) unreasonably disapprove the insurance policy provided 252
by a borrower for the protection of the property securing the credit or 253
lien; (iii) require directly or indirectly that any borrower, mortgagor, 254
purchaser, insurer or producer pay a separate charge, in connection 255
with the handling of any insurance policy required as security for a loan 256
on real estate or pay a separate charge to substitute the insurance policy 257
of one insurer for that of another; or (iv) use or disclose information 258
resulting from a requirement that a borrower, mortgagor or purchaser 259
furnish insurance of any kind on real property being conveyed or used 260
as collateral security to a loan, when such information is to the 261
advantage of the mortgagee, vendor or lender, or is to the detriment of 262
the borrower, mortgagor, purchaser, insurer or the producer complying 263
with such a requirement. 264
(B) (i) Subparagraph (A)(iii) of this subdivision shall not include the 265
interest which may be charged on premium loans or premium 266
advancements in accordance with the security instrument. (ii) For 267
purposes of subparagraph (A)(ii) of this subdivision, such disapproval 268 Raised Bill No. 841
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shall be deemed unreasonable if it is not based solely on reasonable 269
standards uniformly applied, relating to the extent of coverage required 270
and the financial soundness and the services of an insurer. Such 271
standards shall not discriminate against any particular type of insurer, 272
nor shall such standards call for the disapproval of an insurance policy 273
because such policy contains coverage in addition to that required. (iii) 274
The commissioner may investigate the affairs of any person to whom 275
this subdivision applies to determine whether such person has violated 276
this subdivision. If a violation of this subdivision is found, the person in 277
violation shall be subject to the same procedures and penalties as are 278
applicable to other provisions of section 38a-815, subsections (b) and (e) 279
of section 38a-817 and this section. (iv) For purposes of this section, 280
"person" includes any individual, corporation, limited liability 281
company, association, partnership or other legal entity. 282
(12) Refusing to insure, refusing to continue to insure or limiting the 283
amount, extent or kind of coverage available to an individual or 284
charging an individual a different rate for the same coverage because of 285
physical disability, mental or nervous condition as set forth in section 286
38a-488a or intellectual disability, except where the refusal, limitation or 287
rate differential is based on sound actuarial principles or is related to 288
actual or reasonably anticipated experience. 289
(13) Refusing to insure, refusing to continue to insure or limiting the 290
amount, extent or kind of coverage available to an individual or 291
charging an individual a different rate for the same coverage solely 292
because of blindness or partial blindness. For purposes of this 293
subdivision, "refusal to insure" includes the denial by an insurer of 294
disability insurance coverage on the grounds that the policy defines 295
"disability" as being presumed in the event that the insured is blind or 296
partially blind, except that an insurer may exclude from coverage any 297
disability, consisting solely of blindness or partial blindness, when such 298
condition existed at the time the policy was issued. Any individual who 299
is blind or partially blind shall be subject to the same standards of sound 300
actuarial principles or actual or reasonably anticipated experience as are 301
sighted persons with respect to all other conditions, including the 302 Raised Bill No. 841
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underlying cause of the blindness or partial blindness. 303
(14) Refusing to insure, refusing to continue to insure or limiting the 304
amount, extent or kind of coverage available to an individual or 305
charging an individual a different rate for the same coverage because of 306
exposure to diethylstilbestrol through the female parent. 307
(15) (A) Failure by an insurer, or any other entity responsible for 308
providing payment to a health care provider pursuant to an insurance 309
policy, to pay accident and health claims, including, but not limited to, 310
claims for payment or reimbursement to health care providers, within 311
the time periods set forth in subparagraph (B) of this subdivision, unless 312
the Insurance Commissioner determines that a legitimate dispute exists 313
as to coverage, liability or damages or that the claimant has fraudulently 314
caused or contributed to the loss. Any insurer, or any other entity 315
responsible for providing payment to a health care provider pursuant 316
to an insurance policy, who fails to pay such a claim or request within 317
the time periods set forth in subparagraph (B) of this subdivision shall 318
pay the claimant or health care provider the amount of such claim plus 319
interest at the rate of fifteen per cent per annum, in addition to any other 320
penalties which may be imposed pursuant to sections 38a-11, 38a-25, 321
38a-41 to 38a-53, inclusive, 38a-57 to 38a-60, inclusive, 38a-62 to 38a-64, 322
inclusive, 38a-76, 38a-83, 38a-84, 38a-117 to 38a-124, inclusive, 38a-129 323
to 38a-140, inclusive, 38a-146 to 38a-155, inclusive, 38a-283, 38a-288 to 324
38a-290, inclusive, 38a-319, 38a-320, 38a-459, 38a-464, 38a-815 to 38a-819, 325
inclusive, 38a-824 to 38a-826, inclusive, and 38a-828 to 38a-830, 326
inclusive. Whenever the interest due a claimant or health care provider 327
pursuant to this section is less than one dollar, the insurer shall deposit 328
such amount in a separate interest-bearing account in which all such 329
amounts shall be deposited. At the end of each calendar year each such 330
insurer shall donate such amount to The University of Connecticut 331
Health Center. 332
(B) Each insurer or other entity responsible for providing payment to 333
a health care provider pursuant to an insurance policy subject to this 334
section, shall pay claims not later than: 335 Raised Bill No. 841
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(i) For claims filed in paper format, sixty days after receipt by the 336
insurer of the claimant's proof of loss form or the health care provider's 337
request for payment filed in accordance with the insurer's practices or 338
procedures, except that when there is a deficiency in the information 339
needed for processing a claim, as determined in accordance with section 340
38a-477, the insurer shall (I) send written notice to the claimant or health 341
care provider, as the case may be, of all alleged deficiencies in 342
information needed for processing a claim not later than thirty days 343
after the insurer receives a claim for payment or reimbursement under 344
the contract, and (II) pay claims for payment or reimbursement under 345
the contract not later than thirty days after the insurer receives the 346
information requested; and 347
(ii) For claims filed in electronic format, twenty days after receipt by 348
the insurer of the claimant's proof of loss form or the health care 349
provider's request for payment filed in accordance with the insurer's 350
practices or procedures, except that when there is a deficiency in the 351
information needed for processing a claim, as determined in accordance 352
with section 38a-477, the insurer shall (I) notify the claimant or health 353
care provider, as the case may be, of all alleged deficiencies in 354
information needed for processing a claim not later than ten days after 355
the insurer receives a claim for payment or reimbursement under the 356
contract, and (II) pay claims for payment or reimbursement under the 357
contract not later than ten days after the insurer receives the information 358
requested. 359
(C) As used in this subdivision, "health care provider" means a person 360
licensed to provide health care services under chapter 368d, chapter 361
368v, chapters 370 to 373, inclusive, 375 to 383c, inclusive, 384a to 384c, 362
inclusive, or chapter 400j. 363
(16) Failure to pay, as part of any claim for a damaged motor vehicle 364
under any automobile insurance policy where the vehicle has been 365
declared to be a constructive total loss, an amount equal to the sum of 366
(A) the settlement amount on such vehicle plus, whenever the insurer 367
takes title to such vehicle, (B) an amount determined by multiplying 368 Raised Bill No. 841
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such settlement amount by a percentage equivalent to the current sales 369
tax rate established in section 12-408. For purposes of this subdivision, 370
"constructive total loss" means the cost to repair or salvage damaged 371
property, or the cost to both repair and salvage such property, equals or 372
exceeds the total value of the property at the time of the loss. 373
(17) Any violation of section 42-260, by an extended warranty 374
provider subject to the provisions of said section, including, but not 375
limited to: (A) Failure to include all statements required in subsections 376
(c) and (f) of section 42-260 in an issued extended warranty; (B) offering 377
an extended warranty without being (i) insured under an adequate 378
extended warranty reimbursement insurance policy or (ii) able to 379
demonstrate that reserves for claims contained in the provider's 380
financial statements are not in excess of one-half the provider's audited 381
net worth; (C) failure to submit a copy of an issued extended warranty 382
form or a copy of such provider's extended warranty reimbursement 383
policy form to the Insurance Commissioner. 384
(18) With respect to an insurance company, hospital service 385
corporation, health care center or fraternal benefit society providing 386
individual or group health insurance coverage of the types specified in 387
subdivisions (1), (2), (4), (6), (10), (11) and (12) of section 38a-469, 388
refusing to insure, refusing to continue to insure or limiting the amount, 389
extent or kind of coverage available to an individual or charging an 390
individual a different rate for the same coverage because such 391
individual has been a victim of family violence. 392
(19) With respect to an insurance company, hospital service 393
corporation, health care center or fraternal benefit society providing 394
individual or group health insurance coverage of the types specified in 395
subdivisions (1), (2), (3), (4), (6), (9), (10), (11) and (12) of section 38a-469, 396
refusing to insure, refusing to continue to insure or limiting the amount, 397
extent or kind of coverage available to an individual or charging an 398
individual a different rate for the same coverage because of genetic 399
information. Genetic information indicating a predisposition to a 400
disease or condition shall not be deemed a preexisting condition in the 401 Raised Bill No. 841
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absence of a diagnosis of such disease or condition that is based on other 402
medical information. An insurance company, hospital service 403
corporation, health care center or fraternal benefit society providing 404
individual health coverage of the types specified in subdivisions (1), (2), 405
(3), (4), (6), (9), (10), (11) and (12) of section 38a-469, shall not be 406
prohibited from refusing to insure or applying a preexisting condition 407
limitation, to the extent permitted by law, to an individual who has been 408
diagnosed with a disease or condition based on medical information 409
other than genetic information and has exhibited symptoms of such 410
disease or condition. For the purposes of this subsection, "genetic 411
information" means the information about genes, gene products or 412
inherited characteristics that may derive from an individual or family 413
member. 414
(20) Any violation of sections 38a-465 to 38a-465q, inclusive. 415
(21) With respect to a managed care organization, as defined in 416
section 38a-478, failing to establish a confidentiality procedure for 417
medical record information, as required by section 38a-999. 418
(22) Any violation of sections 38a-591d to 38a-591f, inclusive. 419
(23) Any violation of section 38a-472j. 420
(24) Any violation of section 2 of this act. 421
Sec. 4. (NEW) (Effective July 1, 2021) (a) (1) Except as provided in 422
subsection (b) of this section, no insurer that delivers, issues for delivery, 423
renews, amends or endorses a homeowners insurance policy in this 424
state on or after July 1, 2021, that is subject to the requirements of 425
sections 38a-663 to 38a-696, inclusive, of the general statutes shall cancel 426
such policy unless: 427
(A) If such policy is not a renewal policy and has been in effect for 428
fewer than sixty days, such insurer sends a written cancellation notice 429
to the named insured: 430
(i) At least ten days before the effective date of such cancellation for 431 Raised Bill No. 841
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nonpayment of premium disclosing: 432
(I) Such cancellation; 433
(II) That the named insured may avoid such cancellation and 434
continue coverage under such policy by paying, before the effective date 435
of such cancellation, such unpaid premium; and 436
(III) That any excess premium, if not tendered by the insurer, shall be 437
refunded to the named insured upon demand by the named insured; or 438
(ii) At least thirty days before the effective date of such cancellation 439
for any reason other than nonpayment of premium disclosing: 440
(I) Such cancellation; 441
(II) The reason for such cancellation; 442
(III) The effective date of such cancellation; and 443
(IV) That any excess premium, if not tendered by the insurer, shall be 444
refunded to the named insured upon demand by the named insured; or 445
(B) If such policy is not a renewal policy and has been in effect for at 446
least sixty days, or if such policy is an effective renewal policy, such 447
insurer sends a written cancellation notice to the named insured: 448
(i) At least ten days before the effective date of such cancellation for 449
nonpayment of premium disclosing: 450
(I) Such cancellation; 451
(II) That the named insured may avoid such cancellation and 452
continue coverage under such policy by paying, before the effective date 453
of such cancellation, such unpaid premium; and 454
(III) That any excess premium, if not tendered by the insurer, shall be 455
refunded to the named insured upon demand by the named insured; or 456
(ii) At least thirty days before the effective date of such cancellation 457 Raised Bill No. 841
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for fraud or misrepresentation of any material fact made by the named 458
insured in obtaining coverage under such policy that, if discovered by 459
such insurer, would have caused such insurer not to issue or renew such 460
policy, as applicable, or any physical change in the covered property 461
that materially increases a hazard insured against under such policy 462
disclosing: 463
(I) The effective date of such cancellation; and 464
(II) That any excess premium, if not tendered by the insurer, shall be 465
refunded to the named insured upon demand by the named insured. 466
(2) No insurer may cancel a homeowners insurance policy described 467
in subparagraph (B) of subdivision (1) of this subsection for any reason 468
other than: 469
(A) Nonpayment of premium; 470
(B) Fraud or misrepresentation of any material fact made by the 471
named insured in obtaining coverage under such policy that, if 472
discovered by the insurer, would have caused the insurer not to issue or 473
renew such policy, as applicable; or 474
(C) Any physical change in the covered property that materially 475
increases a hazard insured against under such policy. 476
(3) No notice of cancellation required under subdivision (1) of this 477
subsection shall be effective unless such notice is sent to the named 478
insured by registered mail, certified mail or mail evidenced by a 479
certificate of mailing, or, if agreed by the insurer and the named insured, 480
by electronic means evidenced by a delivery receipt. 481
(b) No notice of cancellation is required under subsection (a) of this 482
section if the homeowners insurance policy is transferred from the 483
insurer to an affiliate of such insurer for another policy with no 484
interruption of coverage and the same terms, conditions and provisions, 485
including policy limits, as the transferred policy, except that the insurer 486
to which the policy is transferred shall not be prohibited from applying 487 Raised Bill No. 841
LCO No. 2712 17 of 19
such insurer's rates and rating plans at the time of renewal. 488
(c) The named insured under a homeowners insurance policy 489
described in subsection (a) of this section may cancel such policy at any 490
time by sending to the insurer that delivered, issued for delivery, 491
renewed, amended or endorsed such policy a written notice disclosing 492
the effective date of such cancellation. 493
Sec. 5. Section 38a-646 of the general statutes is repealed and the 494
following is substituted in lieu thereof (Effective October 1, 2021): 495
As used in sections 38a-645 to 38a-658, inclusive, except as otherwise 496
provided herein: 497
(1) "Credit life insurance" means insurance on the life of a debtor 498
pursuant to or in connection with a specific loan or other credit 499
transaction; 500
(2) "Credit accident and health insurance" means insurance on a 501
debtor to provide indemnity for payments becoming due on a specific 502
loan or other credit transaction while the debtor is disabled as defined 503
in the policy; 504
(3) "Creditor" means the lender of money or vendor or lessor of 505
goods, services, property, rights or privileges for which payment is 506
arranged through a credit transaction or any successor to the right, title 507
or interest of any such lender, vendor or lessor, and an affiliate, associate 508
or subsidiary of any of them or any director, officer or employee of any 509
of them or any other person in any way associated with any of them; 510
(4) "Debtor" means a borrower of money or a purchaser or lessee of 511
goods, services, property, rights or privileges for which payment is 512
arranged through a credit transaction; 513
(5) "Indebtedness" means the total amount payable by a debtor to a 514
creditor in connection with a loan or other credit transaction; and 515
(6) "Loss ratio" means annual incurred claims divided by earned 516 Raised Bill No. 841
LCO No. 2712 18 of 19
premiums. 517
Sec. 6. Subsection (b) of section 38a-651 of the general statutes is 518
repealed and the following is substituted in lieu thereof (Effective October 519
1, 2021): 520
(b) The commissioner shall adopt regulations in accordance with the 521
provisions of chapter 54, establishing a procedure for review of such 522
policies, certificates of insurance, notices of proposed insurance, 523
applications for insurance, endorsements and riders, and shall 524
disapprove any such form at any time if: [the] 525
(1) The schedule of premium rates charged or to be charged is, by 526
reasonable assumptions and as determined according to benchmark 527
loss ratio calculations, excessive in relation to the benefits provided; or 528
[if it contains] 529
(2) Such form: 530
(A) Has a prima facie loss ratio of less than fifty per cent for any single 531
or joint credit life insurance or credit accident and health insurance 532
policy unless the commissioner approves a premium rate deviation for 533
such policy; or 534
(B) Contains provisions which (i) are unjust, unfair, inequitable, 535
misleading, deceptive, [or which] (ii) encourage misrepresentation of 536
the coverage, or [which] (iii) are contrary to any provision of the 537
insurance laws or of any rule or regulation promulgated thereunder. 538
Sec. 7. Subsection (e) of section 38a-702e of the general statutes is 539
repealed and the following is substituted in lieu thereof (Effective October 540
1, 2021): 541
(e) Each applicant for an insurance producer license shall, before 542
being admitted to an examination under subsection (a) of this section, 543
prove to the satisfaction of the commissioner that such applicant meets 544
one of the following prerequisites: (1) Successful completion of a course 545
approved by the commissioner requiring not less than [forty] twenty 546 Raised Bill No. 841
LCO No. 2712 19 of 19
hours for each line of insurance for which the applicant is applying to 547
be licensed; or (2) equivalent experience or training as determined by 548
the commissioner. 549
This act shall take effect as follows and shall amend the following
sections:
Section 1 October 1, 2021 38a-1
Sec. 2 October 1, 2021 New section
Sec. 3 October 1, 2021 38a-816
Sec. 4 July 1, 2021 New section
Sec. 5 October 1, 2021 38a-646
Sec. 6 October 1, 2021 38a-651(b)
Sec. 7 October 1, 2021 38a-702e(e)
Statement of Purpose:
To: (1) Prohibit insurers, health care centers and fraternal benefit
societies from requiring, or using the results of, genetic testing in
connection with annuities and certain insurance policies; (2) provide
that prohibited requirements for, and uses of, genetic testing violate the
Connecticut Unfair Insurance Practices Act; (3) specify the reasons for
which certain insurers may cancel certain homeowners insurance
policies and manner in which such insurers must cancel such policies;
(4) require the Insurance Commissioner to disapprove certain credit life
insurance and credit accident and health insurance forms if the loss
ratios contained in such forms do not satisfy certain criteria; and (5)
reduce the total number of hours of study that an applicant for an
insurance producer license must successfully complete for each line of
insurance for which such applicant is seeking such license.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
underlined.]