Connecticut Senate Bill SB01092

Connecticut 2013 Regular Session

• Introduced: 3/7/13
• Refer: 3/7/13
• Report Pass: 3/19/13
• Refer: 4/1/13
• Report Pass: 4/8/13
• Refer: 4/18/13
• Report Pass: 4/24/13
• Refer: 5/8/13
• Report Pass: 5/14/13

Caption

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

Impact

The introduction of SB01092 is expected to enhance the legal framework governing insurance liquidations. By addressing potential fraudulent activities surrounding asset transfers, this bill strengthens the protection provided to creditors and maintains the integrity of the insurance system in Connecticut. Amendments in this bill further prohibit insurers from enacting transfers that could harm the interests of policyholders, thereby reinforcing public trust in the insurance sector during financial difficulties.

Summary

Senate Bill 1092 aims to amend the Insurers Rehabilitation and Liquidation Act to improve the processes concerning insurance company insolvency proceedings. One of its primary goals is to clarify the circumstances under which transfers made by insurers prior to filing a petition for rehabilitation or liquidation may be considered fraudulent. The bill seeks to protect the rights of both policyholders and creditors by ensuring that any attempt to hinder creditors through such transfers can be successfully challenged by receivers of insolvent insurers.

Sentiment

Overall, the sentiment surrounding SB01092 has been positive among proponents who argue that it reinforces accountability in the insurance industry. Supporters, including various stakeholder groups, have emphasized that the bill improves legal clarity and fairness in insolvency proceedings. However, there may be concerns raised by certain insurers about the restrictions this bill imposes on their ability to manage assets prior to entering rehabilitation or liquidation.

Contention

Critics express concern that the bill may impose too strict restrictions on insurers, potentially limiting their operational flexibility just before entering financial distress. Another point of contention is the balance between protecting creditors and ensuring that insurers have the necessary leeway to structure their financial affairs. Stakeholders are worried that overly rigid regulations could inadvertently exacerbate insolvency situations rather than alleviate them.