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Connecticut Public Acts 1996

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Substitute House Bill No. 5630

PUBLIC ACT NO. 96-48

AN ACT CONCERNING AGENTS REGISTERED UNDER THE FEDERAL INVESTMENT ADVISORY ACT.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 38a-707 of the general statutes is repealed and the following is substituted in lieu thereof:

(a) No insurance producer shall have any right to compensation, other than commissions deductible from premiums on insurance policies or contracts, from any insured or prospective insured for or on account of the negotiation or procurement of, or other services in connection with, any contract of insurance made or negotiated in this state or for any other services on account of any such insurance policies or contracts, including, but not limited to, adjustment of claims arising therefrom, unless such right to compensation is based upon a written memorandum, signed by the party to be charged, and specifying or clearly defining the amount or extent of such compensation, provided such compensation is in compliance with regulations adopted pursuant to subsection (b) of this section.

(b) The Insurance Commissioner may, by regulation, establish a reasonable schedule of maximum fees which may be charged by insurance producers or he may regulate such fees on an individual basis.

(c) Nothing herein contained shall affect the right of any such producer to recover from the insured the amount of any premium or premiums for insurance effected by or through such producer. [4m(d) [0m THE PROVISIONS OF THIS SECTION SHALL NOT APPLY TO AN INSURANCE PRODUCER WHO IS AN ADVISORY REPRESENTATIVE OF A REGISTERED INVESTMENT ADVISER REGISTERED PURSUANT TO THE INVESTMENT ADVISERS ACT OF 1940, 15 USC 80b-1, ET SEQ., PROVIDED THE INSURANCE PRODUCER MAKES FULL DISCLOSURE IN A WRITTEN MEMORANDUM, SIGNED BY THE PARTY TO BE CHARGED, WHICH SPECIFIES THE AMOUNT OF SUCH FEE OR COMPENSATION FOR SERVICES PERFORMED PURSUANT TO THE INVESTMENT ADVISERS ACT OF 1940 AND WHICH ALSO DISCLOSES THAT A COMMISSION MAY BE PAID TO THE INSURANCE PRODUCER FROM THE SALE OF ANY INSURANCE.

Sec. 2. Section 38a-734 of the general statutes is repealed and the following is substituted in lieu thereof:

No person, acting in the capacity of a certified insurance consultant and as such serving any person, firm, association, organization or corporation, not engaged in the insurance business, for compensation paid or to be paid by the person served, shall directly or indirectly receive any part of any commission or compensation paid by any insurer or producer in connection with the sale or writing of any insurance which is within the subject matter of any such service. THE PROVISIONS OF THIS SECTION SHALL NOT APPLY TO AN INSURANCE PRODUCER WHO IS AN ADVISORY REPRESENTATIVE OF A REGISTERED INVESTMENT ADVISER REGISTERED PURSUANT TO THE INVESTMENT ADVISERS ACT OF 1940, 15 USC 80b-1, ET SEQ., PROVIDED THE INSURANCE PRODUCER MAKES FULL DISCLOSURE IN A WRITTEN MEMORANDUM, SIGNED BY THE PARTY TO BE CHARGED, WHICH SPECIFIES THE AMOUNT OF SUCH FEE OR COMPENSATION FOR SERVICES PERFORMED PURSUANT TO THE INVESTMENT ADVISERS ACT OF 1940 AND WHICH ALSO DISCLOSES THAT A COMMISSION MAY BE PAID TO THE INSURANCE PRODUCER FROM THE SALE OF ANY INSURANCE. Any person violating the provisions of this section shall be fined not less than fifty nor more than five hundred dollars or be imprisoned not less than thirty nor more than ninety days or both.

Approved May 2, 1996. Effective October 1, 1996.

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