An Act Establishing A Surcharge On Insurance Companies In This State That Underwrite Fossil Fuel Companies.
Impact
The proceeds from this surcharge will be allocated to two primary funds: seventy percent will go to the General Fund to support the Commissioner of Energy and Environmental Protection in initiatives related to energy policies, while thirty percent will be directed to the Insurance Fund. This approach not only generates revenue for the state but also signals a policy shift towards discouraging investments in fossil fuels by imposing an additional financial burden on insurance companies engaged in this sector.
Summary
SB01115 aims to establish a surcharge on insurance companies that underwrite fossil fuel companies. Effective from October 1, 2023, the bill mandates that each insurance company licensed in Connecticut that receives premium payments from fossil fuel companies will be assessed a surcharge equal to five percent of the total premiums collected from these companies in the previous calendar year. The Insurance Department is tasked with identifying the total premium amount received from fossil fuel companies annually, facilitating the collection of this surcharge.
Contention
The bill is likely to provoke a debate around environmental responsibility versus economic implications. Proponents may argue that the surcharge is necessary to hold fossil fuel companies accountable for their environmental impacts and direct funds towards sustainable practices. Conversely, opponents may raise concerns regarding the potential effects on insurance premiums for businesses and how this might create barriers to entry for certain companies relying on fossil fuels.
Noteworthy_points
Additionally, the definition of 'fossil fuel company' includes entities involved in the exploration and production of traditional fuel sources like coal, oil, and natural gas, but explicitly excludes renewable energy sources, which may draw discussions on the ongoing energy transition. The implementation timeline and compliance mechanisms will also be key areas of focus as the bill moves through the legislative process.
An Act Concerning Insurance Market Conduct And Insurance Licensing, The Insurance Department's Technical Corrections And Other Revisions To The Insurance Statutes And Captive Insurance.