Connecticut Senate Bill SB00323

Connecticut 2024 Regular Session

• Introduced: 2/29/24
• Refer: 2/29/24

Caption

An Act Concerning Federal Home Loan Banks And The Insurers Rehabilitation And Liquidation Act.

Impact

If enacted, SB00323 is expected to streamline processes related to insurance companies facing insolvency or liquidation. The bill introduces protections for Federal Home Loan Banks, which are essential financial entities for insurers, by preventing the avoidance of their agreements as fraudulent transfers. This change could increase confidence among financial institutions when dealing with insurers in distress, potentially stabilizing the insurance market and ensuring that policyholders' interests are preserved during liquidation processes.

Summary

SB00323, titled An Act Concerning Federal Home Loan Banks And The Insurers Rehabilitation And Liquidation Act, focuses on regulating the procedures surrounding the conservation, rehabilitation, and liquidation of insurance companies. The bill intends to modify existing statutes to ensure that actions taken by Federal Home Loan Banks in relation to insurance companies under rehabilitation are protected and clarified, particularly regarding collateral and obligations. It outlines the conditions under which transfers and obligations may be deemed fraudulent and specifies how these matters should be handled during delinquency proceedings.

Contention

Concerns may arise regarding the potential for these provisions to favor financial institutions over individual policyholders or claimants. Critics might argue that the bill could create a disadvantage for policyholders in situations where insurers are liquidated, allowing obligations to federal banks to take precedence. Balancing the needs of creditors, including Federal Home Loan Banks, against the rights of policyholders is likely to be a contentious topic during discussions surrounding the bill.