Connecticut House Bill HB05253

Connecticut 2024 Regular Session

• Introduced: 2/22/24
• Refer: 2/22/24

Caption

An Act Requiring A Feasibility Study Of Insurance Pooling For Nonprofit Entities.

Impact

If enacted, the findings of this feasibility study could lead to significant changes in how insurance is structured for nonprofits in the state. By potentially allowing these organizations to pool their risk, the bill could promote better financial stability within the nonprofit sector, which is vital for the delivery of services and support to communities. The study, which must be reported back to the legislature by January 1, 2025, could set a precedent for collective insurance approaches that may result in lower premiums and broadened coverage for nonprofit organizations.

Summary

House Bill 05253 aims to direct the Insurance Commissioner to study the feasibility of pooling liability insurance policies among nonprofit entities. This includes both general liability and automobile liability insurance. The intent behind this bill is to explore collaborative insurance solutions that may provide cost savings and improved coverage options for nonprofit organizations, which often face higher insurance costs due to their operational risks and funding limitations.

Contention

One notable aspect of HB 05253 is its potential for introducing a captive insurance company model for nonprofit entities. This has led to discussions regarding the viability and regulatory implications of such a setup. Supporters of the bill argue that it would create innovative insurance solutions tailored specifically for the needs of the nonprofit sector. However, there may be concerns from regulatory bodies about the implications of establishing captive insurers, including issues of oversight and the management of pooled funds. Critics might also express concerns about the equitable access to benefits among smaller nonprofit organizations compared to larger entities.