AN ACT CONCERNING THE INSURANCE DEPARTMENT'S RECOMMENDATIONS FOR REVISIONS TO THE INSURANCE STATUTES.

Substitute House Bill No. 5373

Public Act No. 26-69

AN ACT CONCERNING THE INSURANCE DEPARTMENT'S
RECOMMENDATIONS FOR REVISIONS TO THE INSURANCE
STATUTES.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:

Section 1. Section 38a -26 of the general statutes is repealed and the
following is substituted in lieu thereof (Effective October 1, 2026):
(a) Service of process on the commissioner as provided in section 38a-
25 shall be made by delivering two copies thereof to the commissioner,
or to the office of the commissioner, or to an official or office of an official
designated by the commissioner to receive service. The person serving
process shall pay to the office of the commissioner the fee set for that
service by section 38a-11, for each person or insurer to be served.
(b) The commissioner shall immediately send by registered , [or]
certified or electronic mail one copy of the process to the person to be
served as follows: (1) To that person's last -known principal place of
business, residence, [or] post-office address or electronic mail address ,
or (2) if a foreign insurance company, to the secretary of the company or
designee of the company, or (3) if an alien insurance company, to the
resident manager, if any, in this country, or (4) if a fraternal benefit
society, to the secretary or corresponding officer of the society. Service
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by electronic mail as provided in this subsection shall be made to the
last-known electronic mail address of the person, secretary, designee,
resident manager, secretary or officer to be notified, as applicable, as
filed with and maintained by the commissioner.
(c) The commissioner shall retain the second copy of the process for
his files. The commissioner shall keep a record of all process served,
showing the day and hour of service.
(d) Proof of service shall be evidenced by a certificate signed by the
commissioner or by the official designated to receive service of process,
showing the service made on him and mailing by him, attached to the
second copy of the process.
(e) No plaintiff or complainant shall be entitled to a judgment or
determination by default in any action or proceeding in which the
process is served under this section until the expiration of forty-five
days from the date of service of process commencing the action or
proceeding.
Sec. 2. Section 38a -774 of the general statutes is repealed and the
following is substituted in lieu thereof (Effective October 1, 2026):
(a) The commissioner, after reasonable notice to and hearing of any
licensee, may suspend or revoke the licensee's license for cause shown.
In addition to or in lieu of suspension or revocation, the commissioner
may impose a fine not to exceed five thousand dollars. Hearings may be
held by the commissioner or by any person designated by the
commissioner. Whenever a person other than the commissioner acts as
the hearing officer, such person shall submit to the commissioner a
memorandum of the findings and recommenda tions upon which the
commissioner may base a decision.
(b) Notwithstanding the provisions of subsection (c) of section 4-182,
the commissioner may provide notice of suspension or revocation of a
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license pursuant to this section or section 4 -182 to any person licensed
by or registered with the commissioner by personal delivery, as defined
in section 4-166. For any firm, association or corporation licensed by or
registered with the commissioner, the electronic mail address of any
natural persons designated as a primary contact by such firm,
association or corporation shall constitute an acceptable means of
communication for personal delivery, and a notice sent by electronic
mail to such primary conta ct at the primary contact's electronic mail
address shall constitute notice of suspension or revocation of such
license. For any natural person licensed by or registered with the
commissioner, the electronic mail address for such licensed or registered
person shall constitute an acceptable means of communication for
personal delivery, and a notice sent by electronic mail to such natural
person's electronic mail address shall constitute notice of suspension or
revocation of such license. Any notice provided in accordance with the
provisions of this section shall be deemed received by such primary
contact or natural person on the earlier of the date of actual receipt by
such primary contact or natural person to whom such notice was sent
or seven days after the date such notice is postmarked or sent by
electronic mail.
[(b)] (c) If an insurance license held by a firm, association or
corporation is revoked, the insurance licenses of any principal of such
firm or association or any officer or director of such corporation shall be
revoked, unless the commissioner determines that such principal,
officer or director was not personally at fault in the matter on account of
which such license held by the firm, association or corporation was
revoked.
[(c)] (d) Any person aggrieved by the action of the commissioner in
revoking, suspending or refusing to grant or reissue a license or in
imposing a fine may appeal therefrom in accordance with the provisions
of section 4 -183, except venue for such appeal shall be in the judicial
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district of New Britain. Appeals under this section shall be privileged in
respect to the order of trial assignment.
Sec. 3. Section 51-344b of the 2026 supplement to the general statutes
is repealed and the following is substituted in lieu thereof (Effective
October 1, 2026):
Whenever the term "judicial district of Hartford" is used or referred
to in the following sections of the general statutes, the term "judicial
district of New Britain" shall be substituted in lieu thereof: Subsection
(b) of section 3-70a, sections 3-71a and 4-164, subsection (c) of section 4-
183, subdivision (4) of subsection (g) of section 10 -153e, subparagraph
(C) of subdivision (4) of subsection (e) of section 10a -109n, sections 12-
3a, 12-89, 12-103, 12-208, 12 -237, 12-242hh, 12 -242ii, 12-242kk, 12 -268l,
12-307, 12-312, 12-330m, 12-405k, 12-422, 12-448, 12-454, 12-463, 12-489,
12-522, 12 -554, 12 -586g and 12 -597, subsection (b) of section 12 -638i,
sections 12 -730, 14 -57, 14 -66, 14 -195, 14 -324, 14 -331 and 19a -85,
subsection (f) of section 19a-332e, sections 20-156, 20-247, 20-307, 20-373,
20-583 and 21a -55, subsection (e) of section 22 -7, sections 22 -320d and
22-386, subsection (e) of section 22a-6b, section 22a-30, subsection (a) of
section 22a -34, subsection (b) of section 22a -34, section 22a -182a,
subsection (f) of section 22a -225, sections 22a-227, 22a-344, 22a-374 and
22a-408, subsection (f) of section 25-32e, section 29-158, subsection (f) of
section 29-161z, sections 36b-30 and 36b-76, subsection (f) of section 38a-
41, section 38a -52, subsection (c) of section 38a -150, sections 38a -185,
38a-209 and 38a -225, subdivision (3) of section 38a -226b, sections 38a -
241, 38a -337 and 38a -657, subsection [(c)] (d) of section 38a -774, as
amended by this act , section 38a -776, subsection (c) of section 38a -817
and section 38a-994.
Sec. 4. Subdivision (5) of subsection (b) of section 19a-7j of the general
statutes is repealed and the following is substituted in lieu thereof
(Effective October 1, 2026):
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(5) (A) Not later than December first, annually, the Insurance
Commissioner shall submit a statement to each such insurer, health care
center, third-party administrator and exempt insurer that includes the
proposed fee, identified on such statement as the "Health and Welfare
fee", for the insurer, health care center, third -party administrator or
exempt insurer calculated in accordance with this subsection. Not later
than December twentieth, annually, any insurer, health care center,
third-party administrator or exempt insurer may submit an objection to
the commissioner concerning the proposed fee. The commissioner, after
making any adjustment that the commissioner deems necessary, shall,
not later than January first, annually, submit a final statement to eac h
insurer, health care center, third -party administrator and exempt
insurer that includes the final fee for the insurer, health care center,
third-party administrator or exempt insurer. Each such insurer, health
care center, third-party administrator and exempt insurer shall pay such
fee to the Insurance Commissioner not later than February first,
annually.
(B) Any such insurer, health care center, third-party administrator or
exempt insurer aggrieved by an assessment levied under this subsection
may appeal therefrom in the same manner as provided for appeals
under section 38a-52.
Sec. 5. Section 38a -48 of the general statutes is repealed and the
following is substituted in lieu thereof (Effective October 1, 2026):
(a) On or before [June thirtieth ] August thirty -first, annually, the
Commissioner of Revenue Services shall render to the Insurance
Commissioner a statement certifying the total amount of taxes reported
to the Commissioner of Revenue Services on returns filed with said
commissioner by each domestic insurance company or other domestic
entity under chapter 207 on business done in this state during the
calendar year immediately preceding the prior calendar year. For
purposes of preparing the annual statement u nder this subsection, the
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total amount of taxes required to be set forth in such statement shall be
the amount of tax reported by each domestic insurance company or
other domestic entity under chapter 207 to the Commissioner of
Revenue Services prior to the application of any credi ts allowable or
available under law to each such domestic insurance company or other
domestic entity under chapter 207.
(b) On or before [July thirty-first] September fifteenth, annually, the
Insurance Commissioner shall render to each domestic insurance
company or other domestic entity liable for payment under section 38a-
47:
(1) A statement that includes (A) the amount appropriated to the
Insurance Department, the Office of the Healthcare Advocate, the Office
of the Behavioral Health Advocate and the Office of Health Strategy
from the Insurance Fund established under section 38a-52a for the fiscal
year beginning July first of the same year, (B) the cost of fringe benefits
for department and office personnel for such year, as estimated by the
Comptroller, (C) the estimated expenditures on behalf of the
department and the offices from the Capital Equipment Purchase Fund
pursuant to section 4a -9 for such year, not including such estimated
expenditures made on behalf of the Health Systems Planning Unit of the
Office of Health Strategy, and (D) the amount appropriated to the
Department of Aging and Disability Service s for the fall prevention
program established in section 17a-859 from the Insurance Fund for the
fiscal year;
(2) A statement of the total amount of taxes reported in the annual
statement rendered to the Insurance Commissioner pursuant to
subsection (a) of this section; and
(3) The proposed assessment against that company or entity,
calculated in accordance with the provisions of subsection (c) of this
section, provided for the purposes of this calculation the amount
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appropriated to the Insurance Department, the Office of the Healthcare
Advocate, the Office of the Behavioral Health Advocate and the Office
of Health Strategy from the Insurance Fund plus the cost of fringe
benefits for department and office personnel and the estimated
expenditures on behalf of the department and said offices from the
Capital Equipment Purchase Fund pursuant to section 4a -9, not
including such expenditures made on behalf of the Health Systems
Planning Unit of the Office of Health Strategy shall be deemed to be the
actual expenditures of the department and said offices, and the amount
appropriated to the Department of Aging and Disability Services from
the Insurance Fund for the fiscal year for the fall prevention program
established in sect ion 17a -859 shall be deemed to be the actual
expenditures for the program.
(c) (1) The proposed assessments for each domestic insurance
company or other domestic entity shall be calculated by (A) allocating
twenty per cent of the amount to be paid under section 38a -47 among
the domestic entities organized under sections 38a -199 to 38a -209,
inclusive, and 38a -214 to 38a -225, inclusive, in proportion to their
respective shares of the total amount of taxes reported in the annual
statement rendered to the Insurance Commissioner pursuant to
subsection (a) of this section, and (B) alloc ating eighty per cent of the
amount to be paid under section 38a -47 among all domestic insurance
companies and domestic entities other than those organized under
sections 38a-199 to 38a-209, inclusive, and 38a-214 to 38a-225, inclusive,
in proportion to th eir respective shares of the total amount of taxes
reported in the annual statement rendered to the Insurance
Commissioner pursuant to subsection (a) of this section, provided if
there are no domestic entities organized under sections 38a -199 to 38a-
209, i nclusive, and 38a -214 to 38a -225, inclusive, at the time of
assessment, one hundred per cent of the amount to be paid under
section 38a -47 shall be allocated among such domestic insurance
companies and domestic entities.
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(2) When the amount any such company or entity is assessed
pursuant to this section exceeds twenty -five per cent of the actual
expenditures of the Insurance Department, the Office of the Healthcare
Advocate, the Office of the Behavioral Health Advocate and the Office
of Health Strategy from the Insurance Fund, such excess amount shall
not be paid by such company or entity but rather shall be assessed
against and paid by all other such companies and entities in proportion
to their respective shares of th e total amount of taxes reported in the
annual statement rendered to the Insurance Commissioner pursuant to
subsection (a) of this section, except that for purposes of any assessment
made to fund payments to the Department of Public Health to purchase
vaccines, such company or entity shall be responsible for its share of the
costs, notwithstanding whether its assessment exceeds twenty -five per
cent of the actual expenditures of the Insurance Department, the Office
of the Healthcare Advocate , the Office of the B ehavioral Health
Advocate and the Office of Health Strategy from the Insurance Fund.
The provisions of this subdivision shall not be applicable to any
corporation that has converted to a domestic mutual insurance
company pursuant to section 38a -155 upon the effective date of any
public act that amends said section to modify or remove any restriction
on the business such a company may engage in, for purposes of any
assessment due from such company on and after such effective date.
(d) Each annual payment determined under section 38a -47 and each
annual assessment determined under this section shall be calculated
based on the total amount of taxes reported in the annual statement
rendered to the Insurance Commissioner pursuant to subsecti on (a) of
this section.
(e) On or before [September] October first, annually, for each fiscal
year, the Insurance Commissioner, after receiving any objections to the
proposed assessments and making such adjustments as in the
commissioner's opinion may be indicated, shall assess each such
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domestic insurance company or other domestic entity an amount equal
to its proposed assessment as so adjusted. Each domestic insurance
company or other domestic entity shall pay to the Insurance
Commissioner (1) on or before June thirtieth, annually, an es timated
payment against its assessment for the following year equal to [twenty-
five] thirty-five per cent of its assessment for the fiscal year ending such
June thirtieth, (2) on or before [September thirtieth] October thirty-first,
annually, twenty-five per cent of its assessment adjusted to reflect any
credit or amount due from the preceding fiscal year as determined by
the commissioner under subsection (f) of this section, and (3) on or
before the following December thirty -first and March thirty -first,
annually, each domestic insurance company or other domestic entity
shall pay to the Insurance Commissioner the remaining [fifty] forty per
cent of its proposed assessment to the department in two equal
installments.
(f) If the actual expenditures for the fall prevention program
established in section 17a -859 are less than the amount allocated, the
Commissioner of Aging and Disability Services shall notify the
Insurance Commissioner. Immediately following the close of the fiscal
year, the Insurance Commissioner shall recalculate the proposed
assessment for each domestic insurance company or other domestic
entity in accordance with subsection (c) of this section using the actual
expenditures made during the fiscal year by the Insurance Department,
the Office of the Healthcare Advocate , the Office of the Behavioral
Health Advocate and the Office of Health Strategy from the Insurance
Fund, the actual expenditures made on behalf of the department and
said offices from the Capital Equipment Purchase Fund pursuant to
section 4a -9, not including such expenditures made on behalf of the
Health Systems Planning Unit of the Office of Health Strategy, and the
actual expenditures for the fall prevention program. On or before July
thirty-first, annually, the Insurance Commissioner shall render to each
such domestic insurance company and other domestic entity a
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statement showing the difference between their respective recalculated
assessments and the amount they have previously paid. On or before
August thirty -first, the Insurance Commissioner, after receiving any
objections to such statements, shall make such ad justments that in the
commissioner's opinion may be indicated, and shall render an adjusted
assessment, if any, to the affected companies. Any such domestic
insurance company or other domestic entity may pay to the Insurance
Commissioner the entire assessm ent required under this subsection in
one payment when the first installment of such assessment is due.
(g) If any assessment is not paid when due, a penalty of twenty -five
dollars shall be added thereto, and interest at the rate of six per cent per
annum shall be paid thereafter on such assessment and penalty.
(h) The Insurance Commissioner shall deposit all payments made
under this section with the State Treasurer. On and after June 6, 1991,
the moneys so deposited shall be credited to the Insurance Fund
established under section 38a-52a and shall be accounted for as expenses
recovered from insurance companies.
Sec. 6. Section 38a -307a of the general statutes is repealed and the
following is substituted in lieu thereof (Effective from passage):
From July 1, 2004, until the expiration of the Terrorism Insurance
Program established in the federal Terrorism Risk Insurance Act of 2002,
P.L. 107-297, as amended and reauthorized from time to time, [(1) for
any master policy that is required to be purchased by a condominium
association pursuant to section 47 -83 or by a unit owners' association
pursuant to section 47-255, the standard form of fire insurance policy set
forth in section 38a -307 shall not exclude coverage for loss by fire or
other perils insured against in the policy caused, directly or indirectly,
by terrorism, as defined by the Insurance Commissioner; and (2) ] for
any [other] commercial risk insurance policy, the standard form of fire
insurance policy set forth in section 38a -307 may provide that the
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company shall not be liable for loss by fire or other perils insured against
in the policy caused, directly or indirectly, by terrorism, as defined by
the Insurance Commissioner, provided the premiums charged for such
policy shall reflect any savings proje cted from the exclusion of such
perils.
Sec. 7. Subsection (b) of section 38a-323 of the 2026 supplement to the
general statutes is repealed and the following is substituted in lieu
thereof (Effective January 1, 2027):
(b) (1) A premium billing notice for any policy subject to the
requirements of sections 38a-663 to 38a-696, inclusive, except a workers'
compensation policy, shall be mailed or delivered to the insured by the
insurer or its agent or, if agreed between the insurer and the named
insured, by electronic means, not less than thirty days in advance of the
policy's renewal or anniversary date, except that such notice shall not be
required for a commercial risk policy if the premium for the ensuing
policy period is to increase less than ten per cent on an annual basis. The
premium billing notice shall be based on the rates and rules applicable
to the ensuing policy period and shall include a notice of transfer when
the policy has been transferred from an insurer to an affiliate of such
insurer pursuant to the provisions of subparagraph (C) of subdivision
(1) of subsection (a) of this section. The provisions of this subsection
shall apply to any such policy for which the annual premium was less
than fifty thousand dollars for the preceding annual policy period.
(2) For purposes of any commercial risk policy subject to the
requirements of sections 38a-663 to 38a-696, inclusive, except a workers'
compensation policy, the mailing or delivery of a premium billing notice
by an insurer's managing general agent, in accordan ce with the
provisions of subdivision (1) of this subsection, including by electronic
means, shall constitute compliance by such insurer with said
subdivision.
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(3) For a policy providing personal risk insurance, as defined in
section 38a -663, the premium billing notice required pursuant to this
subsection shall (A) state that the insurer shall provide a reasonable
explanation for premium increases not later than twenty business days
after the named insured requests, in writing or by other means of
communication, as prescribed by the commissioner, information
identifying the reasons for any such premium increase, and (B) include
a prominent statement in a location and format prescribed by the
commissioner, that includes contact information of such insurer to
which such request may be submitted. Any insurer who receives such a
request for a reasonable explanation for a premium increase shall
provide such reasonable e xplanation to the insured not later than
twenty business days after the date such request is received by such
insurer. As used in this subdivision, "reasonable explanation" means
sufficient information, in terms that are understandable to an average
policyholder that enables the policyholder to determine the basic nature
of any premium increase.
Sec. 8. Subsection (a) of section 38a -353 of the general statutes is
repealed and the following is substituted in lieu thereof ( Effective from
passage):
(a) Whenever any damaged motor vehicle covered under an
automobile insurance policy has been declared to be a constructive total
loss by the insurer, the insurer shall, in calculating the value of such
vehicle for purposes of determining the settlement amount to be paid to
the claimant, use at least the average of the retail values given such
vehicle by (1) the [National Automobile Dealers Association] J.D. Power
used car guide or its successor, or any other publicly available
automobile industry source that has been approved for such use by the
Insurance Commissioner, and (2) one other automobile industry source
that has been approved for such use by said commissioner. For the
purposes of this section, "constructive total loss" means the cost to repair
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or salvage damaged property, or the cost to both repair and salvage such
property, equals or exceeds the total value of the property at the time of
loss.
Sec. 9. Section 38a -356 of the general statutes is repealed and the
following is substituted in lieu thereof (Effective October 1, 2026):
(a) Any authorized employee of the Department of Emergency
Services and Public Protection, Department of Motor Vehicles or a local
police department may in writing request any insurance company to
release to such employee information relative to any investigation it has
made concerning a motor vehicle's loss or potential loss or any
information relating to fraud or potential fraud in any claim under a
motor vehicle insurance policy. Any insurance company, on its own
initiative, may provide and disclose info rmation relating to fraud or
potential fraud to such authorized persons. Such information shall
include, but not be limited to: (1) An insurance policy relative to such
loss, (2) policy premium records, (3) history of previous claims, and (4)
other relevant material relating to such loss or potential loss or to such
fraud or potential fraud.
(b) Any insurance company so requested shall furnish such
information to any such employee and shall permit the Insurance
Commissioner or the commissioner's designee and any person ordered
by a court to inspect its records pertaining to the policy and loss. An y
insurance company may request any such employee to release
information relative to any departmental investigation concerning the
loss. Any information obtained relative to fraud or potential fraud may
be disclosed to any central reporting bureau and any law enforcement
agency.
[(c) On or before March thirty -first of each year, each insurance
company shall provide the Insurance Commissioner annual reports
detailing all information received or investigations conducted by such
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company during the past year concerning insurance fraud in any claim
under a motor vehicle insurance policy. Such reports shall be filed in a
manner prescribed by the commissioner.]
[(d)] (c) In the absence of fraud, malice or criminal act, no insurance
company, authorized employee or person who furnished information
on behalf of such company or department, shall be liable for damages
in a civil action or subject to criminal prosecution for any oral or written
statement made pursuant to the provisions of this section.
[(e)] (d) Information furnished pursuant to this section shall be held
in confidence until its release is required pursuant to a criminal or civil
proceeding.
Sec. 10. Section 38a -465d of the general statutes is repealed and the
following is substituted in lieu thereof (Effective October 1, 2026):
[(a) On or before March first of each year, each provider shall file with
the commissioner an annual statement containing such information as
the commissioner may prescribe. The commissioner shall adopt
regulations, in accordance with chapter 54, to prescri be the contents of
such annual statement, which shall include, but not be limited to, for
any policy settled within five years of policy issuance, the total number,
aggregate face amount and life settlement proceeds of policies settled
during the immediat ely preceding calendar year, a breakdown of the
information by policy issue year, the names of the insurance companies
whose policies have been settled and the brokers that have settled said
policies. Such information shall be limited to only those transac tions
where the insured is a resident of this state and shall not include
individual transaction data regarding the business of life settlements or
information where there is a reasonable basis to conclude such data or
information could be used to identify the owner or the insured.
(b) Each provider that wilfully fails to file an annual statement as
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required in this section or wilfully fails to reply not later than thirty days
to a written inquiry by the commissioner in connection therewith, shall,
in addition to other penalties provided by this part, be subject upon due
notice and opportunity to be h eard to a penalty of up to two hundred
fifty dollars per day of delay, not to exceed twenty-five thousand dollars
in the aggregate, for each such failure.]
[(c)] (a) Except as otherwise required or permitted by law, no person,
including, but not limited to, a provider, broker, insurance company,
insurance producer, information bureau, rating agency or company, or
any other person with actual knowledge of an insured's i dentity, shall
disclose such identity or information where there is a reasonable basis
to conclude such information could be used to identify the insured or
the insured's financial or medical information to any other person unless
such disclosure : (1) Is necessary to effect a life settlement contract
between the owner and a provider and the owner and insured have
provided prior written consent to such disclosure; (2) is provided in
response to an investigation or examination by the commissioner or any
other governmental office or agency or pursuant to the requirements of
section 38a-465i; (3) is necessary to effectuate the sale of life settlement
contracts or interests therein as investments, provided the sale is
conducted in accordance with applic able state and federal securities
laws, and provided further the owner and the insured have both
provided prior written consent to the disclosure; (4) is a term of or
condition to the transfer of a policy by one provider to another provider,
in which case the provider receiving such information shall comply with
the confidentiality requirements specified in this subsection; (5) is
necessary to allow the provider or broker or their authorized
representatives to make contacts for the purpose of determining health
status. For the purpose of this section, "authorized representative" does
not include any person who has or may have a financial interest in the
settlement contract other than a provider, licensed broker, financing
entity, related provider trust or special purpose entity. Each provider or
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broker shall require its authorized representative to agree in writing to
comply with the privacy provisions of this part; or (6) is required to
purchase stop loss coverage.
[(d)] (b) Nonpublic personal information solicited or obtained in
connection with a proposed or actual life settlement contract shall be
subject to the provisions applicable to financial institutions under the
federal Gramm-Leach-Bliley Act of 1999, P.L. 106-102, as amended from
time to time, and all other applicable state and federal laws relating to
confidentiality of nonpublic personal information.
Sec. 11. Section 38a -477jj of the general statutes is repealed and the
following is substituted in lieu thereof (Effective January 1, 2027):
(a) For the purposes of this section:
(1) "Affordable Care Act" has the same meaning as provided in
section 38a-1080;
(2) "Exchange" has the same meaning as provided in section 38a-1080;
(3) "Health benefit plan" has the same meaning as provided in section
38a-1080, except that such term shall not include a grandfathered health
plan as such term is used in the Affordable Care Act;
(4) "Health care provider" has the same meaning as provided in
section 38a-477aa;
[(4)] (5) "Health carrier" has the same meaning as provided in section
38a-1080;
[(5)] (6) "Office of Health Strategy" means the Office of Health
Strategy established under section 19a-754a; and
[(6)] (7) "Qualified health plan" has the same meaning as provided in
section 38a-1080.
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(b) Notwithstanding any provision of the general statutes and except
as provided in subsection (c) of this section, no health carrier offering a
health benefit plan in this state on or after January 1, 2022, that includes
a pharmacy benefit and uses a drug for mulary or list of covered drugs
may:
(1) Remove a prescription drug from the drug formulary or list of
covered drugs during a plan year; or
(2) Move a prescription drug from a cost -sharing tier that imposes a
lesser coinsurance, copayment or deductible for the prescription drug to
a cost -sharing tier that imposes a greater coinsurance, copayment or
deductible for the prescription drug during a pla n year, unless the
prescription drug is subject to an in-network coinsurance, copayment or
deductible that is not greater than forty dollars per prescription per
month in any tier.
(c) A health carrier offering a health benefit plan in this state on or
after January 1, 2022, that includes a pharmacy benefit and uses a drug
formulary or list of covered drugs may during the plan year:
(1) Remove a prescription drug from the drug formulary or list of
covered drugs, upon at least ninety days' advance notice to a covered
person and the covered person's [treating physician] prescribing health
care provider, if:
(A) The federal Food and Drug Administration issues an
announcement, guidance, notice, warning or statement concerning the
prescription drug that calls into question the clinical safety of the
prescription drug, unless the covered person's [treating physician ]
prescribing health care provider states, in writing, that the prescription
drug remains medically necessary despite such announcement,
guidance, notice, warning or statement; or
(B) The prescription drug is approved by the federal Food and Drug
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Administration for use without a prescription; and
(2) Move a brand -name prescription drug from a cost -sharing tier
that imposes a lesser coinsurance, copayment or deductible for the
brand-name prescription drug to a cost -sharing tier that imposes a
greater coinsurance, copayment or deductible for the brand -name
prescription drug if the health carrier adds to the drug formulary or list
of covered drugs a generic prescription drug that is:
(A) Approved by the federal Food and Drug Administration for use
as an alternative to such brand-name prescription drug; and
(B) In a cost -sharing tier that imposes a coinsurance, copayment or
deductible for the generic prescription drug that is lesser than the
coinsurance, copayment or deductible that is imposed for such brand -
name prescription drug.
(d) A health carrier offering a health benefit plan in this state on or
after January 1, 2027, that includes a pharmacy benefit and uses a drug
formulary or list of covered drugs shall annually, in advance of the
applicable open enrollment period for such plan , make available for
review by any person, in a readily accessible format, a list of any
prescription drugs that are being removed from the formulary and a list
of covered drugs effective for the new plan year.
[(d)] (e) Nothing in this section shall prevent or prohibit a health
carrier from adding a prescription drug to a formulary or list of covered
drugs at any time.
[(e) (1) The Office of Health Strategy shall, at least annually, conduct
a study to determine the impact that the requirements established in
subsections (a) to (d), inclusive, of this section have on the cost of health
benefit plans offered, delivered, issued for delivery, renewed, amended
or continued in this state and qualified health plans offered and sold
through the exchange.
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(2) Not later than January 31, 2023, and annually thereafter, the Office
of Health Strategy shall submit a report, in accordance with the
provisions of section 11 -4a, to the commissioner and the joint standing
committee of the General Assembly having cognizanc e of matters
relating to insurance. Such report shall disclose the results of the study
conducted pursuant to subdivision (1) of this subsection for the
preceding year.]
Sec. 12. Subdivision (4) of subsection (e) of section 38a -591g of the
general statutes is repealed and the following is substituted in lieu
thereof (Effective July 1, 2026):
(4) (A) Not later than one business day after the preliminary review
of an external review request or the day the preliminary review of an
expedited external review request is completed, the health carrier shall
notify the commissioner, the assigned independent review
organization, the covered person and, if applicable, the covered person's
authorized representative in writing whether the request for an external
review or an expedited external review is complete and eligible for such
review. The commissioner may specify the form for the health carrier's
notice of initial determination under this subdivision and any
supporting information required to be included in the notice.
(B) If the external review or the expedited external review is accepted,
the health carrier shall notify the commissioner, the assigned
independent review organization, the covered person and, if applicable,
the covered person's authorized representative in writing of the
request's eligibility and acceptance for external review or expedited
external review. For an external review, the health carrier shall include
in such notice (i) a statement that the covered person or the covered
person's authorized repre sentative may submit, not later than five
business days after the covered person or the covered person's
authorized representative, as applicable, received such notice,
additional information in writing to the assigned independent review
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organization that such organization shall consider when conducting the
external review, and (ii) where and how such additional information is
to be submitted. If additional information is submitted later than five
business days after the covered person or the covered person's
authorized representative, as applicable, received such notice, the
independent review organization may, but shall not be required to,
accept and consider such additional information.
(C) If the request:
(i) Is not complete, the health carrier shall notify the commissioner
and the covered person and, if applicable, the covered person's
authorized representative in writing and include in the notice what
information or materials are needed to perfect the request; or
(ii) Is not eligible for external review or expedited external review,
the health carrier shall notify the commissioner, the covered person and,
if applicable, the covered person's authorized representative in writing
and include in the notice the reasons for its ineligibility.
(D) The notice of initial determination shall include a statement
informing the covered person and, if applicable, the covered person's
authorized representative that a health carrier's initial determination
that the request for an external review or an expedi ted external review
is ineligible for review may be appealed to the commissioner.
(E) Notwithstanding a health carrier's initial determination that a
request for an external review or an expedited external review is
ineligible for review, the commissioner may determine, pursuant to the
terms of the covered person's health benefit plan, that such request is
eligible for such review and assign an independent review organization
to conduct such review. Any such review shall be conducted in
accordance with this section.
Sec. 13. Subsection (i) of section 38a -591g of the general statutes is
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repealed and the following is substituted in lieu thereof (Effective July 1,
2026):
(i) (1) The independent review organization shall notify the
commissioner, the health carrier, the covered person and, if applicable,
the covered person's authorized representative in writing of its decision
to uphold, reverse or revise the adverse determination o r the final
adverse determination, not later than:
(A) For external reviews, forty -five calendar days after such
organization receives [the assignment from the commissioner to
conduct such review ] notice that the health carrier has completed a
preliminary review of the request and determined that the review is
complete and eligible for review;
(B) For external reviews involving a determination that the
recommended or requested health care service or treatment is
experimental or investigational, twenty calendar days after such
organization receives [the assignment from the commissioner to
conduct such review ] notice that the health carrier has completed a
preliminary review of the request and determined that the review is
complete and eligible for review;
(C) For expedited external reviews, except as specified under
subparagraph (D) of this subdivision, as expeditiously as the covered
person's medical condition requires, but not later than forty-eight hours
after such organization receives [the assignment from the commissioner
to conduct such review ] notice that the health carrier has completed a
preliminary review of the request and determined that the review is
complete and eligible for review or seventy -two hours after such
organization receives such [assignment] notice if any portion of such
forty-eight-hour period falls on a weekend;
(D) For expedited external reviews involving a health care service or
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course of treatment specified under subparagraph (B) or (C) of
subdivision (38) of section 38a -591a, as expeditiously as the covered
person's medical condition requires, but not later than twenty -four
hours after such organization receives [the assignment from the
commissioner to conduct such review] notice that the health carrier has
completed a preliminary review of the request and determined that the
review is complete and eligible for review; and
(E) For expedited external reviews involving a determination that the
recommended or requested health care service or treatment is
experimental or investigational, as expeditiously as the covered person's
medical condition requires, but not later than five cal endar days after
such organization receives [the assignment from the commissioner to
conduct such review ] notice that the health carrier has completed a
preliminary review of the request and determined that the review is
complete and eligible for review.
(2) Such notice shall include:
(A) A general description of the reason for the request for the review;
(B) The date the independent review organization received [the
assignment from the commissioner to conduct the review ] notice that
the health carrier has completed a preliminary review of the request and
determined that the review is complete and eligible for review;
(C) The date the review was conducted;
(D) The date the organization made its decision;
(E) The principal reason or reasons for its decision, including what
applicable evidence-based standards, if any, were used as a basis for its
decision;
(F) The rationale for the organization's decision;
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(G) Reference to the evidence or documentation, including any
evidence-based standards, considered by the organization in reaching
its decision; and
(H) For a review involving a determination that the recommended or
requested health care service or treatment is experimental or
investigational:
(i) A description of the covered person's medical condition;
(ii) A description of the indicators relevant to determining whether
there is sufficient evidence to demonstrate that (I) the recommended or
requested health care service or treatment is likely to be more beneficial
to the covered person than any available stan dard health care services
or treatments, and (II) the adverse risks of the recommended or
requested health care service or treatment would not be substantially
increased over those of available standard health care services or
treatments;
(iii) A description and analysis of any medical or scientific evidence
considered in reaching the opinion;
(iv) A description and analysis of any evidence-based standard; and
(v) Information on whether the clinical peer's rationale for the
opinion is based on the documents and information set forth in
subsection (f) of this section.
(3) Upon the receipt of a notice of the independent review
organization's decision to reverse or revise an adverse determination or
a final adverse determination, the health carrier shall immediately
approve the coverage that was the subject of the adverse determination
or the final adverse determination.
Sec. 14. Section 38a -708 of the general statutes is repealed and the
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following is substituted in lieu thereof (Effective October 1, 2026):
Upon the request of the Insurance Commissioner, any insurance
company shall furnish to the Insurance Department the facts relative to
the termination of an agent's appointment and the causes thereof. If a
company terminates an agent's appointment for cause, such termination
shall be reported to the commissioner not later than thirty calendar days
after such termination. No agent shall have a cause of action against any
insurance company as a result of such company's having furnished to
said department pursuant to this section any statement, oral or written,
unless such statement is false and was known by such company to be
false when made.
Sec. 15. Section 38a -720a of the general statutes is repealed and the
following is substituted in lieu thereof (Effective October 1, 2026):
(a) No person shall offer to act as or hold himself out to be a third -
party administrator in this state unless such person is licensed pursuant
to section 38a -720j, or is exempt from licensure pursuant to subsection
(b) of this section. This requirement shall not apply to a person
employed by a third-party administrator to the extent that such person's
activities are under the supervision and control of the third -party
administrator. The authority granted to a third -party administrator
pursuant to sections 38a-720 to 38a-720i, inclusive, shall not exempt such
third-party administrator's employees from the licensing requirements
of chapters 701b and 702.
(b) (1) Any insurer licensed in this state that directly or indirectly
underwrites, collects premiums or charges from, or adjusts or settles
claims for other than its policyholders, subscribers and certificate
holders shall be exempt from sections 38a -720 to 38a -720n, inclusive,
provided such activities only involve the lines of insurance for which
such insurer is licensed in this state. Any such insurer shall (A) be
subject to the provisions of chapter 704, (B) respond to all complaint
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inquiries received from the Insurance Department, not later than ten
calendar days after the date a complaint is received by the insurer, and
(C) with respect to any advertising that mentions any customer, obtain
such customer's prior written consent.
(2) Nothing in this section shall authorize the commissioner to
regulate a self-insured health plan subject to the Employee Retirement
Income Security Act of 1974. The commissioner is authorized to regulate
those activities an insurer undertakes for the admini stration of a self -
insured health plan that do not relate to the health benefit plan and that
comport with the commissioner's statutory authority to regulate
insurance and the business of insurance as provided for in 29 USC 1144,
as amended from time to time.
(c) No third-party administrator shall act as such without a written
agreement between such third -party administrator and an insurer or
other person utilizing the services of the third -party administrator,
which shall be retained as part of the official record s of both the third -
party administrator and such insurer or other person for the duration of
such agreement and for five years thereafter. The agreement shall
contain all provisions required by this section, except insofar as those
provisions that do n ot apply to the activities performed by the third -
party administrator.
(d) The written agreement set forth in subsection (c) of this section
shall include, but not be limited to:
(1) A statement of activities that the third -party administrator shall
undertake on behalf of the insurer or other person utilizing the services
of the third -party administrator, and the lines, classes or types of
insurance such third-party administrator is authorized to administer;
(2) A statement of the activities and responsibilities of the third-party
administrator regarding the administration of or any standards
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pertaining to business underwritten by the insurer, benefits, premium
rates, underwriting criteria or claims payment;
(3) A provision requiring the third -party administrator to render an
accounting, on such frequency as the parties agree, that details all
transactions performed by the third -party administrator pertaining to
the business underwritten by the insurer or the busi ness of the person
utilizing the services of the third-party administrator;
(4) The procedures for any withdrawals to be made by the third-party
administrator from the fiduciary account established under section 38a-
720f. Such procedures shall address, but not be limited to: (A)
Remittance to an insurer or other person utilizing the s ervices of the
third-party administrator who is entitled to remittance, (B) deposit in an
account maintained in the name of the insurer or other person utilizing
the services of the third-party administrator, (C) transfer to and deposit
in a claims -paying account, with claims to be paid as provided for in
subsection (d) of section 38a-720f, (D) payment to a group policyholder
for remittance to the insurer or other person utilizing the services of the
third-party administrator entitled to such remittance, (E) payment to the
third-party administrator for its commissions, fees or charges, and (F)
remittance of return premiums to the person or persons entitled to such
return premiums;
(5) Procedures and requirements for the disclosures required to be
made by the third-party administrator under section 38a-720h; [and]
(6) A termination provision, by which either party to the written
agreement may terminate such agreement for cause, that includes a
procedure to resolve any disputes regarding the cause for termination
of such agreement; and
(7) A provision requiring the third-party administrator to continue to
provide the services contemplated under the agreement in the event of
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the insolvency or receivership of the insurer.
(e) A third-party administrator or insurer or other person utilizing
the services of the third -party administrator may, with written notice,
terminate the written agreement for cause as provided in such written
agreement. The insurer may suspend the underwriting authority of the
third-party administrator during the pendency of any dispute regarding
the cause for termination of the written agreement. The insurer or other
person utilizing the services of the third-party administrator shall fulfill
any legal o bligations with respect to policies or plans affected by the
written agreement, regardless of any dispute between the third -party
administrator and the insurer or other person utilizing the services of
the third-party administrator.
(f) No license issued to a third -party administrator shall be renewed
unless the third -party administrator has complied with the
requirements of section 19a-7j, as amended by this act.
Sec. 16. Section 38a -720e of the general statutes is repealed and the
following is substituted in lieu thereof (Effective October 1, 2026):
(a) Each insurer or other person utilizing the services of a third-party
administrator shall be responsible for determining the benefits,
premium rates, underwriting criteria and claims payment procedures
for the lines, classes or types of insurance such third-party administrator
is authorized to administer, and for securing reinsurance, if any. The
insurer or other person utilizing the services of a third -party
administrator shall provide to such third -party administrator, in
writing, procedures pertaining to such third -party administrator's
administration of benefits, premium rates, underwriting criteria and
claims payment. Each insurer or other person utilizing the services of a
third-party administrator shall be responsible for the competent
administration of such insurer's or other person's benefit and service
programs.
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(b) If a third-party administrator administers benefits for more than
one hundred certificate holders on behalf of an insurer or other person
utilizing the services of a third -party administrator, such insurer or
other person shall, at least semiannually, cond uct a review of the
operations of the third -party administrator. [At least one such review
shall be an on -site audit of the operations of the third -party
administrator.]
Sec. 17. Subsection (b) of section 38a -792 of the 2026 supplement to
the general statutes is repealed and the following is substituted in lieu
thereof (Effective October 1, 2026):
(b) The commissioner may prescribe reasonable regulations, in
accordance with the provisions of chapter 54, governing the licensing of
casualty claims adjusters , [and] the adjustment of casualty claims and
the establishment of continuing education requirements for persons
licensed as casualty claims adjusters.
Sec. 18. Section 38a -837 of the general statutes is repealed and the
following is substituted in lieu thereof (Effective October 1, 2026):
Sections 38a-836 to 38a-853, inclusive, shall apply to all kinds of direct
insurance, [except] but shall not be applicable to the following:
(1) Life, annuity, health or disability insurance;
(2) Mortgage guaranty, financial guaranty or other forms of insurance
offering protection against investment risks;
(3) Fidelity or surety or any bonding obligations;
(4) Credit insurance, vendors' single interest insurance, or collateral
protection insurance or any similar insurance protecting the interests of
a creditor arising out of a creditor-debtor transaction;
(5) [Insurance] Except for coverages that may be set forth in a
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cybersecurity policy, insurance of warranties or service contracts,
including insurance that provides for the repair, replacement or service
of goods or property, or indemnification for repair, replacement or
service, for the operational or structural failure of the goods or property
due to a defect in materials, workmanship or normal wear and tear, or
that provides reimbursement for the liability incurred by the issuer of
agreements or service contracts that provide such benefits;
(6) Title insurance;
(7) Ocean marine insurance;
(8) Any transaction or combination of transactions between a person,
including affiliates of such person, and an insurer, including affiliates of
such insurer, which involves the transfer of investment or credit risk
unaccompanied by transfer of insurance risk;
(9) Any insurance provided by or guaranteed by government; or
(10) Flood insurance pursuant to the federal Flood Disaster Protection
Act of 1973, as amended, 42 USC Section 4001, et seq.
Sec. 19. Section 38a -838 of the general statutes is repealed and the
following is substituted in lieu thereof (Effective October 1, 2026):
The following terms as used in sections 38a-836 to 38a-853, inclusive,
unless the context otherwise requires or a different meaning is
specifically prescribed, shall have the following meanings:
(1) "Account" means any one of the three accounts created by section
38a-839;
(2) "Affiliate" means any affiliate, as defined in section 38a -1, as
amended by this act, of an insolvent insurer;
(3) "Association" means the Connecticut Insurance Guaranty
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Association created under section 38a-839;
(4) "Commissioner" means the Insurance Commissioner;
(5) (A) "Covered claim" means an unpaid claim, including, but not
limited to, one for unearned premiums, that arises out of and is within
the coverage and subject to the applicable limits of an insurance policy
to which sections 38a -836 to 38a -853, inclusive, apply, if such insurer
becomes an insolvent insurer or such claim was assumed as a direct
obligation by an insurer that becomes an insolvent insurer, [where such
obligation was assumed through a merger or an acquisition, pursuant
to an acquisition of assets an d assumption of liabilities or pursuant to
an assumption reinsurance transaction,] and (i) the claimant or insured
is a resident of this state at the time of the insured event, or (ii) the claim
is a first party claim for damage to property with a permanent location
in this state. For the purposes of this subparagraph, the residence of a
claimant or an insured that is not an individual shall be the state in
which such claimant's or insured's principal place of business is located
at the time of the insured event. "Covered claim" includes claim
obligations arising from the issuance of an insurance policy by a
member insurer, which are later allocated, transferred, merged into,
novated, assumed by or otherwise made the sole responsibility of
another member or nonmemb er insurer if all the following conditions
are satisfied: (I) The original member insurer has no remaining
obligations on the policy after the transfer; (II) a final order of
liquidation with a finding of insolvency has been entered against the
insurer that assumed the member insurer's coverage obligations by a
court of competent jurisdiction in the insurer's state of domicile; (III) the
claim would have been a covered claim if the claim had remained the
responsibility of the original member insurer and the order of
liquidation had been entered against the original member insurer, with
the same claim submission date and liquidation date; and (IV) in cases
where the member insurer's coverage obligations were assumed by a
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nonmember insurer, the transaction received prior regulatory or judicial
approval.
(B) "Covered claim" does not include (i) any claim by or for the benefit
of any reinsurer, insurer, insurance pool or underwriting association, as
subrogation recoveries or otherwise, provided a claim for any such
amount, asserted against a person insured under a policy issued by an
insurer that has become an insolvent insurer, that, if it were not a claim
by or for the benefit of a reinsurer, insurer, insurance pool or
underwriting association, would be a "covered claim", may be filed
directly with the rec eiver of the insolvent insurer but in no event shall
any such claim be asserted against the insured of such insolvent insurer,
(ii) any claim by or on behalf of an individual who is neither a citizen of
the United States nor an alien legally resident in the United States at the
time of the insured event, or an entity other than an individual whose
principal place of business is not in the United States at the time of the
insured event, and it arises out of an accident, occurrence, offense, act,
error or omission that takes place outside of the United States, or a loss
to property normally located outside of the United States or, if a
workers' compensation claim, it arises out of employment outside of the
United States, (iii) any claim by or on behalf of a pe rson who is not a
resident of this state, other than a claim for compensation or any other
benefit that arises out of and is within the coverage of a workers'
compensation policy, against an insured whose net worth at the time
the policy was issued or at a ny time thereafter exceeded twenty -five
million dollars, provided an insured's net worth for purposes of this
section and section 38a-844 shall be deemed to include the aggregate net
worth of the insured and all of its subsidiaries as calculated on a
consolidated basis, (iv) any claim by or on behalf of an affiliate of the
insolvent insurer at the time the policy was issued or at the time of the
insured event, (v) any claim arising out of a policy issued by an insurer
that was not licensed to transact insur ance in this state at the time the
policy was issued, when it assumed the obligation for the covered claim
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or when the insured event occurred, unless the assumption of the
obligation was effected pursuant to subsection (g) of section 23 of this
act, (vi) any amount due under any policy originally issued by a surplus
lines carrier, risk retention group, self-insurer or group self-insurer, (vii)
any obligation assumed by an insolvent insurer after the
commencement of any delinquency proceeding, as defi ned in section
38a-905, involving the insolvent insurer or the original insurer, unless it
would have been a covered claim absent such assumption, or (viii) any
obligation assumed by an insolvent insurer in a transaction in which the
original insurer remains separately liable;
(6) "Cybersecurity insurance", for purposes of sections 38a-836 to 38a-
853, inclusive, includes first and third -party coverage, in a policy or
endorsement, written on a direct, admitted basis for losses and loss
mitigation arising out of or relating to dat a privacy breaches,
unauthorized information network security intrusions, computer
viruses, ransomware, cyber extortion, identity theft and similar
exposures;
[(6)] (7) "Insolvent insurer" means an insurer (A) [(i)] licensed to
transact insurance in this state at the time the policy was issued, [when
it assumed the obligation for the covered claim ] or when the insured
event occurred, and [(ii)] (B) against which a final order of liquidation
with a finding of insolvency has been entered by a court of competent
jurisdiction in the insurer's state of domicile; [(B) that is (i) the legal
successor of an insurer that was licensed to transact insurance in this
state either at the time the policy was issued or when the insured event
occurred, by reason of a merger, provided such merger is approved by
an insurance regulator h aving jurisdiction over such merger, and (ii)
against which a final order of liquidation with a finding of insolvenc y
has been entered by a court of competent jurisdiction in the insurer's
state of domicile; or (C) that (i) succeeds to the policy obligations of an
insurer that was licensed to transact insurance in this state either at the
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time the policy was issued or when the insured event occurred, by
reason of a division whereby policies issued by such licensed insurer are
allocated to or otherwise become the obligation of a successor insurer,
provided such division is approved (I) in a jurisdiction that allows such
division, and (II) by an insurance regulator having jurisdiction over such
division, and (ii) against which a final order of liquidation with a finding
of insolvency has been entered by a court of competent jurisdiction in
the succeeding insurer's state of domicile. "Insolvent insurer" shall not
be construed to mean any insurer with respect to which an order, decree,
judgment or finding of insolvency, whether permanent or temporary in
nature, or order of rehabilitation or conse rvation has been issued by a
court of competent jurisdiction prior to October 1, 1971;]
[(7)] (8) "Member insurer" means any person who (A) writes any kind
of insurance to which sections 38a-836 to 38a-853, inclusive, apply under
section 38a-837, as amended by this act , including, but not limited to,
the exchange of reciprocal or interinsurance contracts, and (B) is
licensed to transact insurance in this state. An insurer shall cease to be a
member insurer effective on the day following the termination or
expiration of its license to transact the kinds of insurance to which said
sections 38a-836 to 38a-853, inclusive, apply, however such insurer shall
remain liable as a member insurer for any obligations, including
obligations for assessments levied prior to the termination or expiration
of the insurer's license and for assessments levied after the termination
or expiration which relate to any insurer which became an insolvent
insurer prior to the termination or expiration of such insurer's license.
In the case of such insurer, the average of its net direct written premium
for the five calendar years prior to expiration or termination of its
license, whether or not the insurer has net direct written premium in the
year preceding such expiration or termination, shall be used as its
assessment base for any year following such expiration or terminat ion
in which the insurer has no direct written premium;
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[(8)] (9) "Net direct written premiums" means direct gross premiums
written in this state on insurance policies to which sections 38a -836 to
38a-853, inclusive, apply, less return premiums thereon and dividends
paid or credited to policyholders on such direct busine ss, provided the
term "net direct written premiums" shall not include premiums on any
contract between insurers or reinsurers;
[(9)] (10) "Person" means an individual, corporation, partnership,
association, joint stock company, business trust, limited liability
company, unincorporated organization, voluntary organization,
governmental entity or other legal entity;
[(10)] (11) "Residence" means, when used in reference to a
corporation, its principal place of business; and
[(11)] (12) "United States" has the same meaning as provided in
section 38a-1, as amended by this act.
Sec. 20. Section 38a -841 of the general statutes is repealed and the
following is substituted in lieu thereof (Effective October 1, 2026):
(a) Said association shall:
(1) Be obligated to the extent of the covered claims existing prior to
the determination of insolvency or the entry of a final order of
liquidation with a finding of insolvency, as applicable, and arising
within thirty days after the determination of insolvenc y or the entry of
such order, or before the policy expiration date if less than thirty days
after the determination or the entry of such order, or before the insured
replaces the policy or causes its cancellation if the insured does so within
thirty days after such determination or entry of such order, provided
such obligation shall be limited as follows: (A) With respect to covered
claims for unearned premiums [, to one-half of the unearned premium
on any policy,] subject to a maximum of [two] fifty thousand dollars per
policy; (B) with respect to covered claims other than for unearned
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premiums and claims specified in subparagraph (C) or (D) of this
subdivision, such obligation shall include only that amount of each such
claim that [is in excess of one hundred dollars and] is less than or equal
to (i) three hundred thousand dollars for claims arising under policies
of insurers determined to be insolvent prior to October 1, 2007, (ii) four
hundred thousand dollars for claims arising under policies of insurers
determined to be insolvent on or after October 1, 2007, and prior to
October 1, 2 015, and (iii) five hundred thousand dollars for claims
arising under policies of insurers against which a final order of
liquidation with a finding of insolvency has been entered by a court of
competent jurisdiction in the insurer's state of domicile on o r after
October 1, 2015 ; (C) with respect to first -party real property claims
arising under policies of insurers determined to be insolvent on or after
June 1, 2026, an amount not exceeding one million dollars for claims
arising from a single occurrence under a policy covering commercial or
residential property; and (D) in no event shall the association be
obligated to pay an amount in excess of five hundred thousand dollars
for all first and third -party claims under a policy or endorsement
providing, or that is found to provide, cybersecurity insurance coverage
and arising out of or related to a single insured event, regardless of the
number of claims made or the number of claimants . Said association
shall pay the full amount of any such claim arising out o f a workers'
compensation policy, provided in no event shall said association be
obligated [(I)] (i) to any claimant in an amount in excess of the obligation
of the insolvent insurer under the policy form or coverage from which
the claim arises, or [(II)] (ii) for any claim filed with the association after
the expiration of two years from the date of the declaration of insolvency
unless such claim arose out of a workers' compensation policy and was
timely filed in accordance with section 31-294c;
(2) Be deemed the insurer to the extent of its obligations on the
covered claims and to such extent shall have all rights, duties, and
obligations of the insolvent insurer as if the insurer had not become
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insolvent, including, but not limited to, the right to pursue and retain
salvage and subrogation recoverable on covered claim obligations to the
extent paid by the association, provided the association shall not be
deemed the insolvent insurer for the purpose of conferring jurisdiction;
(3) Allocate claims paid and expenses incurred among the three
accounts, created by section 38a -839, separately, and assess member
insurers separately (A) in respect of each such account for such amounts
as shall be necessary to pay the obligations of said association under
subdivision (1) of this subsection subsequent to an insolvency; (B) the
expenses of handling covered claims subsequent to an insolvency; (C)
the cost of examinations under section 38a -846; and (D) such other
expenses as are authorized by sections 38a-836 to 38a-853, inclusive. The
assessments of each member insurer shall be in the proportion that the
net direct written premiums of such member insurer for the calendar
year preceding the assessment on the kinds of insurance in such account
bears to the net direct written premiums of all member insurers for the
calendar year preceding the assessment on the kinds of insurance in
such account. Each member insurer shall be notified of its assessment
not later than thirty days before it is due. No member ins urer may be
assessed in any year on any account an amount greater than two per
cent of that member insurer's net direct written premiums for the
calendar year preceding the assessment on the kinds of insurance in said
account, provided if, at the time an assessment is levied on the all other
insurance account, as defined in subdivision (3) of section 38a -839, the
board of directors finds that at least fifty per cent of the total net direct
written premiums of a member insurer and all its affiliates, for the year
on which such assessment is based, were from policies issued or
delivered in Connecticut, on risks located in this state, such member
insurer shall be assessed only on such member insurer's net direct
written premium that is attributable to the kind of insurance that gives
rise to each covered claim. If the maximum assessment, together with
the other assets of said association in any account, does not provide in
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any one year in any account an amount sufficient to make all necessary
payments from that account, the funds available may be prorated and
the unpaid portion shall be paid as soon thereafter as funds become
available. Said association may defer, in whole or in part, the assessment
of any member insurer if the assessment would cause the member
insurer's financial statement to reflect amounts of capital or surplus less
than the minimum amounts required for a certificate of authority by any
jurisdiction in whi ch the member insurer is authorized to transact
insurance, provided during the period of deferment, no dividends shall
be paid to shareholders or policyholders. Deferred assessments shall be
paid when such payment will not reduce capital or surplus below t he
minimum amounts required for a certificate of authority. Such
payments shall be refunded to those insurers receiving greater
assessments because of such deferment or, at the election of the insurer,
be credited against future assessments. Each member insurer serving as
a servicing facility may set off against any assessment, authorized
payments made on covered claims and expenses incurred in the
payment of such claims by such member insurer if they are chargeable
to the account in respect of which the assessment is made;
(4) Investigate claims brought against said association and adjust,
compromise, settle, and pay covered claims to the extent of said
association's obligations and deny all other claims. The association shall
pay claims in any order it deems reasonable including, but not limited
to, payment in the order of receipt or by classification. It may review
settlements, releases and judgments to which the insolvent insurer or its
insureds were parties to determine the extent to which such settlements,
releases and judgments may be properly contested;
(5) Notify such persons as the commissioner may direct under
subdivision (1) of subsection (b) of section 38a-843;
(6) Handle claims through its employees or through one or more
insurers or other persons designated by said association as servicing
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facilities, provided such designation of a servicing facility is approved
by the commissioner and may be declined by a member insurer;
(7) Reimburse each such servicing facility for obligations of said
association paid by such facility and for expenses incurred by such
facility while handling claims on behalf of said association and shall pay
such other expenses of said association as are authorized b y sections
38a-836 to 38a-853, inclusive.
(b) Said association may: (1) Employ or retain such persons as are
necessary to handle claims and perform other duties of said association
and shall have the right to appoint and direct legal counsel retained
under liability insurance policies for the defense of covered claims and
to appoint and direct other service providers for covered services ; (2)
borrow such funds as may be necessary from time to time to effect the
purposes of sections 38a -836 to 38a -853, inclusive, in accord with the
plan of operation under section 38a-842; (3) sue or be sued; (4) intervene
as a matter of right as a party in any proceeding before any court in this
state that has jurisdiction over an insolvent insurer, as defined in section
38a-838, as amended by this act; (5) negotiate and become a party to such
contracts as are necessary to carry out the purpose of sections 38a-836 to
38a-853, inclusive; (6) perform such other acts as are necessary or proper
to effectuate the purpose of said sections; (7) refund to the m ember
insurers in proportion to the contribution of each such member insurer
to that account, that amount by which the assets of the account exceed
the liabilities, if, at the end of any calendar year, the board of directors
finds that the assets of said association in a ny account exceed the
liabilities of that account as estimated by the board of directors for the
coming year.
(c) (1) Each insurer paying an assessment under sections 38a -836 to
38a-853, inclusive, may offset one hundred per cent of the amount of
such assessment against its premium tax liability to this state under
chapter 207. Such offset shall be taken over a period of the five
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successive tax years following the year of payment of the assessment, at
the rate of twenty per cent per year of the assessment paid to the
association. Each insurer to which has been refunded by the association,
pursuant to subsection (b) of this section, all or a portion of an
assessment previously paid to the association by the insurer shall be
required to pay to the Department of Revenue Services an amount equal
to the total amount that has been claimed as an offset against the
premiums tax liability on the premiums tax return or returns, as the case
may be, filed by such insurer and that is attributable to such refunded
assessment, provided the amount required to be paid to said
department shall not exceed the amount of the refunded assessment. If
the amount of the refunded assessment exceeds the total amount that
has been claimed as an offset against the premiums tax liability on the
premiums tax return or returns filed by such insurer and that is
attributable to such refunded assessment, such excess ma y not be
claimed as an offset against the premiums tax liability on a premiums
tax return or returns filed by such insurer or, if the offset has been
transferred to another person pursuant to subdivision (2) of this
subsection, by such other person. For purposes of this subparagraph, if
the offset has been transferred to another person pursuant to
subdivision (2) of this subsection, the total amount that has been claimed
as an offset against the premiums tax liability on the premiums tax
return or returns filed by such insurer includes the total amount that has
been claimed as an offset against the premiums tax liability on the
premiums tax return or returns filed by such other person. The
association shall promptly notify the Commissioner of Revenue Services
of the name and address of the insurers to which such refunds have been
made, the amount of such refunds and the date on which such refunds
were mailed to such insurer. If the amount that an insurer is required to
pay to the Department of Revenue Service s has not been so paid on or
before the forty -fifth day after the date of mailing of such refunds, the
insurer shall be liable for interest on such amount at the rate of one per
cent per month or fraction thereof from such forty -fifth day to the date
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of payment.
(2) An insurer, in this subparagraph called "the transferor", may
transfer any offset provided under subdivision (1) of this subsection to
an affiliate, as defined in section 38a -1, as amended by this act , of the
transferor. Any such transfer of the offset by the transferor and any
subsequent transfer or transfers of the same offset shall not affect the
obligation of the transferor to pay to the Department of Revenue
Services any sums which are acquired by refund from the association
pursuant to subsection (b) of this section and which are required to be
paid to the Department of Revenue Services pursuant to subdivision (1)
of this subsection. Such offset may be taken by any transferee only
against the transferee's premium tax liability to this state under chapter
207. The Commissioner of Revenue Services shall not allow such offset
to a transferee against its premium tax liability unless the transferor, the
affiliate to which the offset was originally transferred, each subsequent
transferor and each subseque nt transferee have filed such information
as may be required on forms provided by said commissioner with
respect to any such transfer or transfers on or before the due date of the
premium tax return on which such offset would have been taken by the
transferor if no transfer had been made by the transferor.
Sec. 21. Subsection (a) of section 38a -860 of the general statutes is
repealed and the following is substituted in lieu thereof (Effective October
1, 2026):
(a) Sections 38a-858 to 38a-875, inclusive, shall provide coverage for
the policies and contracts specified in subsection (f) of this section: (1)
To any person, except for a nonresident certificate holder under a group
policy or contract, who is the beneficiary, assignee or payee, including a
health care provider rendering services covered under a health
insurance policy or certificate, of the person covered under subdivision
(2) of this subsection, regardless of where the person resides, and (2) any
person who is the owner of, or certificate holder or enrollee under, such
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policy or contract, other than an unallocated annuity contract or a
structured settlement annuity, and in each case who (A) is a resident, or
(B) is not a resident, provided (i) the member insurer that issued such
policy or contract is domiciled in this st ate, (ii) the state in which the
person resides has an association similar to the association created by
this section and sections 38a -837, 38a-838, as amended by this act , 38a-
845, 38a-853, 38a-859, 38a-862, 38a-863, 38a-865, and 38a-866, and (iii) the
person is not eligible for coverage by an association in any other state
because the insurer was not licensed in the state in which the person
resides at the time specified in the state's guaranty association law ,
unless the assumption of the obligation was effected pursuant to
subsection (g) of section 23 of this act.
Sec. 22. Section 38a -1 of the general statutes is repealed and the
following is substituted in lieu thereof (Effective October 1, 2026):
Terms used in this title and section 23 of this act , unless it appears
from the context to the contrary, shall have a scope and meaning as set
forth in this section.
(1) "Affiliate" or "affiliated" means a person that directly, or indirectly
through one or more intermediaries, controls, is controlled by or is
under common control with another person.
(2) "Alien insurer" means any insurer that has been chartered by or
organized or constituted within or under the laws of any jurisdiction or
country without the United States.
(3) "Annuities" means all agreements to make periodical payments
where the making or continuance of all or some of the series of the
payments, or the amount of the payment, is dependent upon the
continuance of human life or is for a specified term of years. Th is
definition does not apply to payments made under a policy of life
insurance.
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(4) "Commissioner" means the Insurance Commissioner.
(5) "Control", "controlled by" or "under common control with" means
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a person, whether through
the ownership of voting securities, by contract other than a commercial
contract for goods or nonmanagement services, or otherwise, unless the
power is the result of an official position with the person.
(6) "Domestic insurer" means any insurer that has been chartered by,
incorporated, organized or constituted within or under the laws of this
state.
(7) "Domestic surplus lines insurer" means any domestic insurer that
has been authorized by the commissioner to write surplus lines
insurance.
(8) "Foreign country" means any jurisdiction not in any state, district
or territory of the United States.
(9) "Foreign insurer" means any insurer that has been chartered by or
organized or constituted within or under the laws of another state or a
territory of the United States.
(10) "Insolvency" or "insolvent" means, for any insurer, that it is
unable to pay its obligations when they are due, or when its admitted
assets do not exceed its liabilities plus the greater of: (A) Capital and
surplus required by law for its organization and continued operation;
or (B) the total par or stated value of its authorized and issued capital
stock. For purposes of this subdivision "liabilities" shall include but not
be limited to reserves required by statute or by regulations adopted by
the comm issioner in accordance with the provisions of chapter 54 or
specific requirements imposed by the commissioner upon a subject
company at the time of admission or subsequent thereto.
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(11) "Insurance" means any agreement to pay a sum of money,
provide services or any other thing of value on the happening of a
particular event or contingency or to provide indemnity for loss in
respect to a specified subject by specified perils in return for a
consideration. In any contract of insurance, an insured shall have an
interest which is subject to a risk of loss through destruction or
impairment of that interest, which risk is assumed by the insurer and
such assumption shall be part of a general scheme to distribute losses
among a large group of persons bearing similar risks in return for a
ratable contribution or other consideration.
(12) "Insurer" or "insurance company" includes any person or
combination of persons doing any kind or form of insurance business
other than a fraternal benefit society, and shall include a receiver of any
insurer when the context reasonably permits.
(13) "Insured" means a person to whom or for whose benefit an
insurer makes a promise in an insurance policy. The term includes
policyholders, subscribers, members and beneficiaries. This definition
applies only to the provisions of this title and does not define the
meaning of this word as used in insurance policies or certificates.
(14) "Life insurance" means insurance on human lives and insurances
pertaining to or connected with human life. The business of life
insurance includes granting endowment benefits, granting additional
benefits in the event of death by accident or accidental means, granting
additional benefits in the event of the total and permanent disability of
the insured, and providing optional methods of settlement of proceeds.
Life insurance includes burial contracts to the extent provided by
section 38a-464.
(15) "Mutual insurer" means any insurer without capital stock, the
managing directors or officers of which are elected by its members.
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(16) "Person" means an individual, a corporation, a partnership, a
limited liability company, an association, a joint stock company, a
business trust, an unincorporated organization or other legal entity.
(17) "Policy" means any document, including attached endorsements
and riders, purporting to be an enforceable contract, which
memorializes in writing some or all of the terms of an insurance
contract.
(18) "State" means any state, district, or territory of the United States.
(19) "Subsidiary" of a specified person means an affiliate controlled
by the person directly, or indirectly through one or more intermediaries.
(20) "Unauthorized insurer" or "nonadmitted insurer" means an
insurer that has not been granted a certificate of authority by the
commissioner to transact the business of insurance in this state or an
insurer transacting business not authorized by a valid certificate.
(21) "United States" means the United States of America, its territories
and possessions, the Commonwealth of Puerto Rico and the District of
Columbia.
Sec. 23. (NEW) (Effective October 1, 2026) (a) As used in this section:
(1) "Assuming insurer" means any insurer that acquires an insurance
obligation or risk, or both, from any transferring insurer pursuant to an
assumption reinsurance agreement.
(2) "Assumption reinsurance agreement" means any contract that (A)
transfers insurance obligations or risks, or both, of existing or in -force
contracts of insurance from a transferring insurer to an assuming
insurer, and (B) is intended to effect a novatio n of the transferred
contract of insurance with the result that the assuming insurer becomes
directly liable to the policyholders of the transferring insurer and the
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transferring insurer's insurance obligations or risks, or both, under the
contracts are extinguished.
(3) "Home service business" means any insurance business for which
premiums are collected on a weekly or monthly basis by an agent of the
insurer.
(4) "Notice of transfer" means the written notice to policyholders
required pursuant to subsection (c) of this section.
(5) "Policyholder" means any individual or entity that has the right to
terminate or otherwise alter the terms of an insurance agreement.
"Policyholder" includes any certificate holder whose certificate is in
force on the proposed effective date of the assumption, if such certificate
holder has the right to keep such certificate in force without a change in
benefits following termination of the group policy, except that the right
to keep such certificate in force shall not include the right to elect
individual coverage under the Consolidated Omnibus Budget
Reconciliation Act, Section 601, et seq., of the Employee Retirement
Income Security Act of 1974, as amended from time to time.
(6) "Transferring insurer" means any insurer that transfers an
insurance obligation or risk, or both, to any assuming insurer pursuant
to an assumption reinsurance agreement.
(b) (1) The provisions of this section shall apply to any insurer
authorized in the state that assumes or transfers the obligations or risks,
or both, on insurance agreements pursuant to an assumption
reinsurance agreement.
(2) The provisions of this section shall not apply to:
(A) Any reinsurance agreement or transaction in which the
transferring insurer continues to remain directly liable for such insurer's
insurance obligations or risks, or both, under any such insurance
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agreement subject to the reinsurance agreement;
(B) The substitution of one insurer for another insurer upon the
expiration of insurance coverage pursuant to statutory or contractual
requirements and the issuance of a new insurance agreement by such
other insurer;
(C) The transfer of insurance agreements pursuant to mergers or
consolidations of two or more insurers to the extent that such mergers
or consolidations are regulated by statute;
(D) Any insurer subject to a judicial order of liquidation or
rehabilitation;
(E) Any reinsurance agreement or transaction to which a state
insurance guaranty association is a party, provided policyholders do not
lose any rights or claims afforded under such policyholders' original
policies pursuant to chapter 704a of the general statutes; or
(F) The transfer of liabilities from one insurer to another insurer
under a group health insurance policy upon the request of the group
policyholder.
(c) (1) The transferring insurer shall provide or cause to be provided
a notice of transfer to (A) (i) each policyholder by first -class mail,
addressed to such policyholder's last -known address or to the address
to which premium notices or other policy doc uments are sent, or (ii)
with respect to a home service business, such home service business by
personal delivery with acknowledged receipt, and (B) the transferring
insurer's agents or brokers of record on the affected policies.
(2) The notice of transfer shall provide:
(A) The date such transfer and novation of the policyholder's
insurance agreement is proposed to take place;
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(B) The name, address and telephone number of the assuming and
transferring insurer;
(C) That the policyholder has the right to consent to or reject the
transfer and novation;
(D) The procedures and time limit for the policyholder to consent to
or reject the transfer and novation;
(E) A summary of any effect that such consent to or rejection of the
transfer and novation will have on the policyholder's rights pursuant to
such insurance agreement;
(F) A statement that the assuming insurer is licensed to write the type
of business being assumed in the state where the policyholder resides,
or is otherwise authorized, pursuant to the provisions of this section, to
assume such type of business;
(G) The name and address of the person at the transferring insurer to
whom the policyholder may send such policyholder's written statement
of consent to or rejection of the transfer and novation;
(H) The address and telephone number of the insurance regulatory
official of the state where the policyholder resides to whom such
policyholder may write or call such official for further information
regarding the financial condition of the assuming insurer; and
(I) The following financial data of the transferring and assuming
insurers:
(i) Insurance ratings for the last five years, if available, or for such
lesser period as is available, from two nationally recognized insurance
rating services approved by the commissioner, including each rating
service's explanation of the meaning of such ratings. If any such ratings
are unavailable for any year of the five-year period, the unavailability of
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such ratings shall be disclosed in the notice of transfer;
(ii) A balance sheet as of December thirty -first for the previous three
years, if available, or for such lesser period as is available and as of the
date of the most recent quarterly statement;
(iii) A copy of the management's discussion and analysis filed as a
supplement to the previous year's annual statement; and
(iv) An explanation of the reason for the transfer.
(3) Any such notice of transfer in a form prescribed by the
commissioner pursuant to subsection (h) of this section or a
substantially similar form of notice shall be deemed to comply with the
requirements of subdivision (2) of this subsection.
(4) The notice of transfer shall include a preaddressed, postage
prepaid response card that each policyholder may return as such
policyholder's written statement of acceptance or rejection of the
transfer and novation.
(5) The notice of transfer shall be filed as part of the prior approval
requirement set forth in subdivision (1) of subsection (d) of this section.
(d) (1) Prior approval by the commissioner is required for any
transaction where any insurer domiciled in this state assumes or
transfers obligations or risks, or both, on insurance agreements under
an assumption reinsurance agreement. No insurer licensed in this state
shall transfer obligations or risks, or both, on insurance agreements
issued to or owned by residents of this state to any insurer that is not
licensed in this state. No insurer domiciled in this state shall assume
obligations or risks, or bo th, on insurance agreements issued to or
owned by policyholders residing in any other state unless such insurer
is licensed in such other state, or the insurance regulatory official of such
other state has approved such assumption reinsurance agreement.
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(2) Any licensed foreign insurer that enters into an assumption
reinsurance agreement that transfers the obligations or risks, or both, on
insurance agreements issued to or owned by residents of this state shall
file or cause to be filed with the commissioner the assumption certificate,
a copy of the notice of transfer and an affidavit that the transaction is
subject to substantially similar requirements in the state of domicile of
both the transferring and assuming insurers. If no such requirements
exist in the domicile of either the transferring or assuming insurers, the
requirements of subdivision (3) of this subsection shall apply.
(3) Any licensed foreign insurer that enters into an assumption
reinsurance agreement that transfers the obligations or risks, or both, on
insurance agreements issued to or owned by residents of this state shall
obtain prior approval of the commissioner an d be subject to all other
requirements of this section applicable to residents of this state, unless
the transferring and assuming insurers are subject to assumption
reinsurance requirements adopted by state law or regulation in the
jurisdiction of such transferring or assuming insurer's domicile that are
substantially similar to the requirements of this section, as determined
by the commissioner.
(4) The following factors, along with such other factors as the
commissioner deems appropriate shall be considered by the
commissioner in reviewing a request for approval of any such proposed
transfer:
(A) The financial condition of the transferring and assuming insurers
and the effect such proposed transfer will have on the financial
condition of such transferring and assuming insurers;
(B) The competence, experience and integrity of persons who control
the operation of the assuming insurer;
(C) The plans or proposals of the assuming insurer applicable to the
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administration of the policies subject to the proposed transfer;
(D) Whether the transfer is fair and reasonable to the policyholders
of the transferring and assuming insurers; and
(E) Whether the notice of proposed transfer is fair, adequate and not
misleading.
(e) (1) Any policyholder shall have the right to reject the transfer and
novation of such policyholder's insurance agreement. Any such
policyholder electing to reject such transfer and novation shall return to
the transferring insurer the preaddressed, pos tage prepaid response
card, provided pursuant to subdivision (4) of subsection (c) of this
section, or provide other written notice of such rejection, and indicate
on such card or other written notice, as applicable, that such transfer
and novation is rejected by such policyholder.
(2) Payment of any premium to the assuming insurer during the
twenty-four-month period after notice is received shall be deemed to
indicate the policyholder's acceptance of the transfer to the assuming
insurer and a novation shall be deemed to have been effected, provided
the premium notice clearly states that payment of the premium to the
assuming insurer shall constitute acceptance of the transfer. The
premium notice shall also provide a method for the policyholder to pay
the premium while reserving the right to reject the transfer. With respect
to any home service business or any other business not using premium
notices, the disclosures and procedural requirements of this subsection
shall be set forth in the notice of transfer required pursuant to
subsections (c) and (d) of this section and in the assumption certificate.
(3) Not less than twenty -four months after the mailing of the initial
notice of transfer required pursuant to subsection (c) of this section, if
consent to, or rejection of, the transfer and assumption has not been
received or consent has not been deemed t o have occurred under
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subdivision (2) of this subsection, the transferring company shall send
to the policyholder a second and final notice of transfer as specified in
subsection (c) of this section. If the policyholder does not consent to, or
reject the transfer during the one -month period immediately following
the date on which the transferring insurer mails the second and final
notice of transfer, such policyholder's consent shall be deemed to have
occurred and novation of the insurance agreement will be effected. With
respect to any home service business, or any other business not using
premium notices, the twenty -four and one -month periods shall be
measured from the date of delivery of the notice of transfer pursuant to
subdivision (1) of subsection (c) of this section.
(4) The transferring insurer shall be deemed to have received the
response card on the date it is postmarked, provided if a policyholder
provides such policyholder's response card by facsimile or other
electronic transmission or by registered mail, express delivery or courier
service, such response card shall be deemed to have been received by
the assuming insurer on the date of actual receipt by the transferring
insurer.
(f) If a policyholder consents to the transfer pursuant to subsection (e)
of this section or if the transfer is effected under subsection (g) of this
section, there shall be a novation of the insurance agreement subject to
the assumption reinsurance agreem ent. A novation pursuant to this
subsection shall result in (1) the transferring insurer being relieved of all
insurance obligations or risks, or both, transferred under the
assumption reinsurance agreement, and (2) the assuming insurer being
directly and solely liable to such policyholder for such insurance
obligations or risks, or both.
(g) If an insurer domiciled in this state or in a jurisdiction having a
substantially similar law is deemed by the domiciliary commissioner to
be in hazardous financial condition, as provided for in section 38a-8-103
of the regulations of Connecticut state agencies, as amended from time
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to time, or an administrative proceeding has been instituted against
such insurer for the purpose of reorganizing or conserving such insurer,
and the transfer of the insurance agreements is in the best interest of the
policyholders, as determined by the do miciliary commissioner, a
transfer and novation may be effected notwithstanding the provisions
of this section, including, but not limited to, a form of implied consent
and adequate notification to such policyholders of the circumstances
requiring the transfer as approved by the commissioner.
(h) The commissioner may adopt regulations, in accordance with
chapter 54 of the general statutes, to establish the form of notice of
transfer required in this section.
Sec. 24. Subsection (b) of section 38a -741 of the 2026 supplement to
the general statutes is repealed and the following is substituted in lieu
thereof (Effective October 1, 2026):
(b) (1) [When any policy of insurance is procured or renewed under
the authority of such license providing a line of insurance or its
component that does not, on the effective date of coverage, appear on
the current published list, both the licensee and the insured shall first
make a diligent effort, as defined by the commissioner, to procure, from
any authorized insurer or insurers, the full amount of insurance
required to protect the interest of such insured, and further showing (A)
that the amount of insurance procured from an unauthorized insurer or
insurers is only the excess over the amount so procurable from
authorized insurers, (B) the type of policy, and (C) if such policy is for
real property, the location of such property. Such licensee shall keep, in
a form approved by the commissioner, and make available for
examination by the commissioner upon request, all (i) documentation
concerning such licensee's and insured's diligent effort to procure, from
any authorized insurer or insurers, the full amou nt of insurance
required to protect the interest of such insured, and (ii) information
concerning each policy placed in the surplus lines market. ] The
Substitute House Bill No. 5373

Public Act No. 26-69 53 of 53

commissioner may require, annually, that each surplus lines broker,
licensed pursuant to section 38a -794, authorized to place surplus lines
insurance in this state, submit a report to the commissioner, in a form
and manner prescribed by the commissioner, that contains the following
information applicable to surplus lines policies issued in this state: (A)
The number and types of policies issued; (B) for any policy covering real
property, the location of such property, and the total premium paid by
insureds for coverage under such policy; and (C) the number of policies
renewed in the prior year. The provisions of this subdivision shall not
prevent the commissioner from requesting and obtaining any such
additional information pursuant to the provisions of this title.
(2) The provisions of subdivision (1) of this subsection shall not apply
to (A) [any such policy providing or including flood insurance,
including] flood insurance procured from the National Flood Insurance
Program, (B) any policy of insurance procured under the authority of
such license for an insured that is an exempt commercial purchaser, as
defined in Section 527 of the Dodd -Frank Wall Street Refo rm and
Consumer Protection Act, P.L. 111 -203, as amended from time to time,
[provided (i) the surplus lines broker has disclosed to such exempt
commercial purchaser that such insurance may or may not be available
from an authorized insurer, that may provide greater protection with
more regulatory oversight, and (ii) such exempt commercial purchaser
has subsequen tly requested such broker, in writing, to procure such
policy from an unauthorized insurer, ] or (C) any policy of insurance
where the broker seeks to procure or place such insurance through an
unaffiliated wholesale surplus lines insurance broker.
Sec. 25 . Section 38a-66 of the general statutes is repealed. ( Effective
October 1, 2026)