O F F I C E O F L E G I S L A T I V E R E S E A R C H
P U B L I C A C T S U M M A R Y
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PA 24-138—sHB 5503
Commerce Committee
Insurance and Real Estate Committee
AN ACT CONCERNING IN SURANCE MARKET CONDU CT AND
INSURANCE LICENSING, THE INSURANCE DEPARTMENT'S
TECHNICAL CORRECTION S AND OTHER REVISION S TO THE
INSURANCE STATUTES A ND CAPTIVE INSURANCE
TABLE OF CONTENTS:
§§ 1 & 2 — INSURANCE COMMISSIONER’S ENFORCEMENT
AUTHORITY
Allows the insurance commissioner to impose restitution, with interest, when someone violates the
state’s insurance laws, regulations, or commissioner orders; allows the commissioner to ask the
attorney general to apply for a court order enforcing insurance laws and commissioner orders or
providing restitution with interest
§ 3 — 30 DAYS TO TURN OVER DOCUMENTS
Sets a 30-day deadline to comply with an Insurance Department request to provide documents
related to an investigation
§§ 4 & 5 — EXPIRATION DATE FOR CERTAIN INITIAL LICENSES
Revises the expiration date for initial licenses issued to motor vehicle damage appraisers and
casualty claims adjusters from June 30 in an odd-numbered year to two years after the licensee’s
birthday preceding the license’s issuance
§ 6 — GENERAL INSURANCE ASSESSMENT PROCE SS
Removes the Office of the Healthcare Advocate from the Insurance Department’s annual process
of assessing carriers for the general insurance assessment
§§ 7, 8 & 12 — ELECTRONIC FILINGS IN LIEU OF PAPER FILINGS
Removes requirements that insurers file copies of annual financial statements and audited
financial reports with the insurance commissioner, allowing electronic filings to the NAIC to
suffice
§ 9 — NON-ENGLISH INSURANCE DOCUMENTS AN D TRANSLATIONS
Requires insurers who file policies in a non-English language to certify that they comply with
readable language requirements and bear the risks associated with any translations; allows the
insurance commissioner to hire translation services at the insurer’s cost
§ 10 — PHARMACY BENE FIT MANAGER REPORT DUE DA TE
Moves up the annual due date for PBMs to report rebate information to the insurance
commissioner by one month; requires the commissioner to give the PBMs a copy of his annual O L R P U B L I C A C T S U M M A R Y
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report to the Insurance and Real Estate Committee at least 10 days before it is due to the
committee
§ 11 — SMALL EMPLOYER DEFINITION
Beginning January 1, 2025, updates the state’s definition of “small employer” in the health
insurance statutes to mean having no more than 50 employees
§ 13 — INDEPENDENT REVIEW ORGANIZATION A CCREDITATION
PERIOD
Extends the accreditation approval or reapproval period for independent review organizations
from two to three years
§§ 14 & 15 — CAPTIVE INSURER CONVERSION OF PROTECTED CELLS
Allows a captive insurer’s protected cell to convert into a new protected cell, incorporated cell, or
captive insurance company without any impact on the protected cell’s assets, rights, benefits,
obligations, and liabilities
§ 16 — COVERED CONNECTICUT PROGRAM
Requires the Covered Connecticut program to include only in-network providers and services,
unless the insurance commissioner determines the health carrier’s network is inadequate
§§ 17 & 18 — CONNECTICUT CLEARINGHOUSE REPEALED
Repeals a requirement that the Health Reinsurance Association develop the Connecticut
Clearinghouse on health insurance policies available in the state
SUMMARY: This act makes numerous unrelated changes to insurance statutes, as
summarized in the section-by-section analysis below.
EFFECTIVE DATE: October 1, 2024, unless otherwise stated below.
§§ 1 & 2 — INSURANCE COMMISSIONER’S ENFORCEMENT AUTHORITY
Allows the insurance commissioner to impose restitution, with interest, when someone violates the
state’s insurance laws, regulations, or commissioner orders; allows the commissioner to ask the
attorney general to apply for a court order enforcing insurance laws and commissioner orders or
providing restitution with interest
By law, the insurance commissioner must administer and enforce the laws on
insurance companies and health care centers (i.e., HMOs). Relatedly, the law grants
him the reasonable and necessary powers to protect the public interest.
The act explicitly allows the commissioner to order restitution of any amount
obtained in violation of the state’s insurance laws, regulations, or commissioner
orders, plus interest as allowed under another state law. This is generally 10%
interest per year (CGS § 37-3a).
The act also allows the commissioner to ask the attorney general to apply to
Superior Court for an order (1) restraining and enjoining a person from violating
any Title 38a provision (i.e., the insurance laws); (2) enforcing any commissioner-
imposed order, penalty, or remedy; or (3) for restitution, with interest, for the O L R P U B L I C A C T S U M M A R Y
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amount the person obtained in violation of the insurance laws. (Under existing law,
the commissioner may already ask the attorney general to apply to Superior Court
for a permanent or temporary order restraining a person from violating the
insurance laws (CGS § 38a-16(b)).)
Additionally, state law allows the commissioner to enforce the insurance laws,
and impose a penalty or remedy authorized by them, against any person even if the
person’s license or registration has been surrendered or has lapsed. The act also
allows him to take these actions if the person’s license or registration has been
revoked.
§ 3 — 30 DAYS TO TURN OVER DOCUMEN TS
Sets a 30-day deadline to comply with an Insurance Department request to provide documents
related to an investigation
By law, the insurance commissioner may conduct investigations and hearings
on any matter under the insurance laws. He may, among other things, order the
production of books, records, papers, or documents for an investigation.
The act requires that anyone who receives a request to produce books, records,
papers, or documents comply with the order within 30 days after the date of the
order. By law, if a person refuses to comply, the commissioner may ask the Superior
Court to order compliance.
§§ 4 & 5 — EXPIRATION DATE FOR CERTAIN INITIAL LICENSES
Revises the expiration date for initial licenses issued to motor vehicle damage appraisers and
casualty claims adjusters from June 30 in an odd-numbered year to two years after the licensee’s
birthday preceding the license’s issuance
Under prior law, initial licenses for motor vehicle damage appraisers and
casualty claim adjusters expired on June 30 of the odd-numbered year following
the license issuance, unless revoked or suspended earlier. The act changes this
expiration date to two years after the licensee’s birthday preceding the date the
license was issued, unless it was already revoked or suspended. By law, a licensee
may renew the license every two years at the insurance commissioner’s discretion
with payment of the required renewal fees.
§ 6 — GENERAL INSURANCE ASSESSMENT PROCESS
Removes the Office of the Healthcare Advocate from the Insurance Department’s annual process
of assessing carriers for the general insurance assessment
By law, domestic insurers and HMOs pay an annual assessment to the Insurance
Department to cover the expenses of the Insurance Department, Office of the
Healthcare Advocate, and Office of Health Strategy, among other things.
Under prior law, the insurance commissioner and the Office of the Healthcare
Advocate assessed the entities following a process set in state law. The act removes
the Office of the Healthcare Advocate from this process, leaving the insurance O L R P U B L I C A C T S U M M A R Y
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commissioner to manage the assessment process.
It also makes technical and conforming changes.
§§ 7, 8 & 12 — ELECTRONIC FILINGS IN LIEU OF PAPER FILINGS
Removes requirements that insurers file copies of annual financial statements and audited
financial reports with the insurance commissioner, allowing electronic filings to the NAIC to
suffice
Prior law required domestic insurers, HMOs, and fraternal benefit societies to
file copies of annual financial statements and audited financial reports with the
insurance commissioner as well as electronically with the National Association of
Insurance Commissioners (NAIC). The act eliminates the requirement to submit
these to the commissioner. Instead, it deems the companies’ electronic submissions
to the NAIC to have been filed with the commissioner.
§ 9 — NON-ENGLISH INSURANCE DOCUMENTS AN D TRANSLATIONS
Requires insurers who file policies in a non-English language to certify that they comply with
readable language requirements and bear the risks associated with any translations; allows the
insurance commissioner to hire translation services at the insurer’s cost
By law, insurance policies filed with the Insurance Department must meet
certain readability standards (e.g., Flesch reading ease scores and print
specifications). As under prior law, the act allows insurers to file policies in any
language. The insurer must certify that the policy complies with the readability
standards or is translated from a policy that complies.
The act allows the insurance commissioner to hire a translation service to
review a non-English-language policy filed by an insurer. The insurer that filed the
policy must pay the cost of the translation. Alternatively, the commissioner may
require the insurer to provide an English-translated copy of the policy and a
certification as to the translation’s accuracy. The act requires the insurer to accept
all risks associated with a translation.
The act also allows the commissioner to adopt implementing regulations.
§ 10 — PHARMACY BENE FIT MANAGER REPORT DUE DATE
Moves up the annual due date for PBMs to report rebate information to the insurance
commissioner by one month; requires the commissioner to give the PBMs a copy of his annual
report to the Insurance and Real Estate Committee at least 10 days before it is due to the
committee
By law, each pharmacy benefit manager (PBM) must annually file a report on
prescription drug rebates with the insurance commissioner. Under prior law, the
report was due by March 1. The act moves up the due date to February 1, beginning
in 2025.
The law also requires the commissioner to report annually to the Insurance and
Real Estate Committee by March 1 on the PBMs’ rebate reports. Under prior law, O L R P U B L I C A C T S U M M A R Y
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the commissioner had to give the PBMs an advanced copy of this report by
February 1 annually. The act instead requires him to provide the copy at least 10
days before he reports to the committee.
EFFECTIVE DATE: January 1, 2025
§ 11 — SMALL EMPLOYER DEFINITION
Beginning January 1, 2025, updates the state’s definition of “small employer” in the health
insurance statutes to mean having no more than 50 employees
Beginning January 1, 2025, the act defines “small employer” under the health
insurance laws to mean an employer with an average of at least one and no more
than 50 employees on business days in the prior calendar year and at least one
employee on the first day of the group health insurance plan year.
Prior law extended the definition to employers with an average of no more than
100 employees, except that the insurance commissioner could postpone that
definition to be consistent with the federal Affordable Care Act. (The commissioner
did so in Insurance Bulletin HC-106 (2015). So, in practice, the small employer
definition has been no more than an average of 50 employees since before 2016.)
§ 13 — INDEPENDENT REVIEW ORGANIZATION A CCREDITATION
PERIOD
Extends the accreditation approval or reapproval period for independent review organizations
from two to three years
By law, the insurance commissioner maintains a list of accredited independent
review organizations available to conduct regular or expedited external reviews of
health insurance grievances. The act extends the accreditation period from two
years under prior law to three. As under existing law, if the commissioner
determines that an organization no longer meets the minimum requirements for
accreditation, he must end its approval and remove it from the list of approved
organizations.
§§ 14 & 15 — CAPTIVE INSURER CONVERSION OF PROTECTED CELLS
Allows a captive insurer’s protected cell to convert into a new protected cell, incorporated cell, or
captive insurance company without any impact on the protected cell’s assets, rights, benefits,
obligations, and liabilities
Captive Insurer
Generally, a captive insurer is an insurance company formed to insure or
reinsure the risks of its owners, parent company, or affiliated company. The law
allows several different types of captive insurers to be licensed and operate in the
state, including a sponsored captive insurer.
A sponsored captive insurer is an insurance company (1) for which one or more
sponsors provide the minimum paid-in capital and surplus, (2) that insures its O L R P U B L I C A C T S U M M A R Y
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participants through separate participant contracts, and (3) that funds its liability to
each participant through protected cells and separates each cell’s assets from that
of other cells and the captive insurer as a whole. PA 23-15 allowed these protected
cells to establish, with the insurance commissioner’s prior written approval,
separate accounts and allocate assets to them, subject to certain requirements.
Conversion of Protected Cell Allowed
The act allows sponsored captive insurers to convert protected or incorporated
protected cells into one of the following other insurance company structures or
types of accounts:
1. a single protected or incorporated protected cell;
2. a new sponsored captive insurer (including those licensed as a special
purpose financial captive insurer);
3. a new special purpose financial captive, pure captive, agency captive,
industrial insured captive, or association captive insurer; or
4. a new risk retention group.
Any conversion is deemed to (1) be a continuation of the cell’s existence, with
all of its assets, rights, benefits, obligations, and liabilities, and (2) occur without
any transfer or assignment of these assets, rights, benefits, obligations, and
liabilities and without creating any reversionary interest in or impairment of them.
The act specifies that the conversion does not limit any rights or protections
applicable to the cell or the sponsored captive that existed before the conversion.
Conversion Process
Under the act, a sponsored captive must apply to the insurance commissioner
and receive his prior written approval for the conversion. Additionally, the act
subjects the conversion to the existing laws regulating captives and the sponsored
captive insurer’s plan of operation approved by the commissioner, without
affecting the converted cell’s assets, rights, benefits, obligations, and liabilities.
For cells that convert into an incorporated protected cell or a new captive insurer
or risk retention group, the conversion must follow all existing business corporation
or limited liability company laws that apply to the newly formed business or legal
entity.
§ 16 — COVERED CONNECTICUT PROGRAM
Requires the Covered Connecticut program to include only in-network providers and services,
unless the insurance commissioner determines the health carrier’s network is inadequate
By law, the Covered Connecticut program provides eligible individuals with
health insurance, including dental benefits and non-emergency medical transport,
at no out-of-pocket cost to them.
The act requires that the program only include in-network providers and
services, unless the insurance commissioner determines the health carrier’s network
is inadequate. Eligible individuals will only receive the benefits and cost-sharing O L R P U B L I C A C T S U M M A R Y
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subsidies available under the program if they use in-network providers or facilities.
§§ 17 & 18 — CONNECTICUT CLEARINGHOUSE REPEALED
Repeals a requirement that the Health Reinsurance Association develop the Connecticut
Clearinghouse on health insurance policies available in the state
Prior law required the Health Reinsurance Association to develop the
Connecticut Clearinghouse as a resource for individuals and small employers to get
information on health insurance policies and plans available in the state. The act
repeals this requirement. (The clearinghouse has largely been replaced by the health
insurance exchange, Access Health CT.)
EFFECTIVE DATE: Upon passage