Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. Subsection (a) of section 38a-27 of the general statutes is repealed and the following is substituted in lieu thereof:
(a) Before any unauthorized person or insurer files or causes to be filed any pleading in any court action or proceeding or in any administrative proceeding before the commissioner instituted against the person or insurer by service made in accordance with the provisions of section 38a-25, section 38a-26 or section 38a-273, the person or insurer shall either: (1) Deposit with the clerk of the court in which the action or proceeding is pending, or with the commissioner in administrative proceedings before the commissioner, cash or securities or a bond with good and sufficient sureties to be approved by the court or the commissioner, in an amount to be fixed by the court or the commissioner sufficient to secure the payment of any final judgment which may be rendered in the action or proceeding, provided the court or the commissioner in administrative proceedings may in its or his discretion make an order dispensing with the deposit or bond where the insurer shows to the satisfaction of the court or the commissioner that it maintains in [a] THIS state [of the United States] funds or securities, in trust or otherwise, sufficient and available to satisfy any final judgment which may be entered in the action or proceeding; or (2) procure proper authorization to do an insurance business in this state.
Sec. 2. Section 38a-271 of the general statutes is repealed and the following is substituted in lieu thereof:
(a) Unless otherwise indicated, as used in sections 38a-27 AS AMENDED BY SECTION 1 OF THIS ACT and 38a-271 to 38a-278, inclusive, "insurer" includes all corporations, associations, partnerships and individuals engaged as principals in the business of insurance and also includes interinsurance exchanges and mutual benefit societies and "commissioner" means the Insurance Commissioner. Any of the following acts effected in this state by mail or otherwise is defined to be doing an insurance business in this state: (1) The making of or proposing to make, as an insurer, an insurance contract; (2) the making of or proposing to make, as guarantor or surety, any contract of guaranty or suretyship as a vocation and not merely incidental to any other legitimate business or activity of the guarantor or surety; (3) the taking or receiving of any application for insurance; (4) the receiving or collection of any premium, commission, membership fees, assessments, dues or other consideration for any insurance or any part thereof; (5) the issuance or delivery of contracts of insurance to residents of this state or to persons authorized to do business in this state; (6) directly or indirectly acting as an agent for or otherwise representing or aiding on behalf of another any person or insurer in the solicitation, negotiation, procurement or effectuation of insurance or renewals thereof or in the dissemination of information as to coverage or rates, or forwarding of applications, or delivery of policies or contracts, or inspection of risks, a filing of rates or investigation or adjustment of claims or losses or in the transaction of matters subsequent to effectuation of the contract and arising out of it, or in any other manner representing or assisting a person or insurer in the transaction of insurance with respect to subjects of insurance resident, located or to be performed in this state. The provisions of this subdivision shall not operate to prohibit full-time salaried employees of a corporate insured from acting in the capacity of an insurance manager or buyer in placing insurance in behalf of such employer; (7) the doing of or proposing to do any insurance business in substance equivalent to any of the foregoing in a manner designed to evade the provisions of the general statutes relating to insurance; and (8) any other transactions of business in this state by an insurer. The venue of an act committed by mail is at the point where the matter transmitted by mail is delivered and takes effect.
(b) The provisions of sections [38a-27 and] 38a-271 to 38a-278, inclusive, AS AMENDED other than section 38a-277, AS AMENDED do not apply to: (1) The lawful transaction of surplus lines insurance; (2) the lawful transaction of reinsurance by insurers; (3) transactions, in this state, involving a policy lawfully solicited, written and delivered outside of this state covering only subjects of insurance not resident, located or expressly to be performed in this state at the time of issuance, and which transactions are subsequent to the issuance of such policy; (4) transactions involving contracts of insurance independently procured pursuant to the unsolicited application of the insured or his agent which are reported and on which a premium tax is paid in accordance with section 38a-277 AS AMENDED; (5) attorneys acting in the ordinary relation of attorney-client in the adjustment of claims or losses; (6) transactions, in this state, involving contracts of insurance issued to one or more industrial insureds, provided nothing herein shall relieve an industrial insured from the taxation imposed upon independently procured insurance in subsection (c) of section 38a-277. For the purpose of this subdivision, an "industrial insured" shall mean an insured (i) which procures the insurance of any risk by the use of the services of a full-time employee acting as an insurance manager or buyer, or the services of a regularly and continuously retained qualified insurance consultant and (ii) whose aggregate annual premiums for insurance, excluding life, accident and health insurance, total at least fifty thousand dollars; (7) transactions involving contracts issued by a life insurance or annuity company, organized and operated without profit, to any private shareholder or individual exclusively for the purpose of aiding and strengthening educational institutions or charitable, health and welfare organizations by issuing insurance and annuity contracts only to or for the benefit of such institutions or organizations and individuals engaged in the service of such institutions or organizations; (8) transactions in this state involving group life and group sickness and accident or franchise sickness and accident insurance or group annuities where the master policy of such groups was lawfully issued and delivered in and pursuant to the laws of a state in which the insurer was authorized to do an insurance business to a group organized for purposes other than the procurement of insurance, and where the policyholder is domiciled or otherwise has a bona fide situs; (9) transactions in this state involving any policy of insurance or annuity contract issued prior to January 1, 1970.
(c) THE PROVISIONS OF SECTION 38a-27, AS AMENDED BY SECTION 1 OF THIS ACT, DO NOT APPLY TO: (1) THE LAWFUL TRANSACTION OF SURPLUS LINES INSURANCE; (2) TRANSACTIONS, IN THIS STATE, INVOLVING A POLICY LAWFULLY SOLICITED, WRITTEN AND DELIVERED OUTSIDE OF THIS STATE COVERING ONLY SUBJECTS OF INSURANCE NOT RESIDENT, LOCATED OR EXPRESSLY TO BE PERFORMED IN THIS STATE AT THE TIME OF ISSUANCE, AND WHICH TRANSACTIONS ARE SUBSEQUENT TO THE ISSUANCE OF SUCH POLICY; (3) TRANSACTIONS INVOLVING CONTRACTS OF INSURANCE INDEPENDENTLY PROCURED PURSUANT TO THE UNSOLICITED APPLICATION OF THE INSURED OR HIS AGENT WHICH ARE REPORTED AND ON WHICH A PREMIUM TAX IS PAID IN ACCORDANCE WITH SECTION 38a-277, AS AMENDED; (4) ATTORNEYS ACTING IN THE ORDINARY RELATION OF ATTORNEY-CLIENT IN THE ADJUSTMENT OF CLAIMS OR LOSSES; (5) TRANSACTIONS, IN THIS STATE, INVOLVING CONTRACTS OF INSURANCE ISSUED TO ONE OR MORE INDUSTRIAL INSUREDS, PROVIDED NOTHING IN THIS SECTION SHALL RELIEVE AN INDUSTRIAL INSURED FROM THE TAXATION IMPOSED UPON INDEPENDENTLY PROCURED INSURANCE IN SUBSECTION (c) OF SECTION 38a-277; (6) TRANSACTIONS INVOLVING CONTRACTS ISSUED BY A LIFE INSURANCE OR ANNUITY COMPANY, ORGANIZED AND OPERATED WITHOUT PROFIT, TO ANY PRIVATE SHAREHOLDER OR INDIVIDUAL EXCLUSIVELY FOR THE PURPOSE OF AIDING AND STRENGTHENING EDUCATIONAL INSTITUTIONS OR CHARITABLE, HEALTH AND WELFARE ORGANIZATIONS BY ISSUING INSURANCE AND ANNUITY CONTRACTS ONLY TO OR FOR THE BENEFIT OF SUCH INSTITUTIONS OR ORGANIZATIONS AND INDIVIDUALS ENGAGED IN THE SERVICE OF SUCH INSTITUTIONS OR ORGANIZATIONS; (7) TRANSACTIONS IN THIS STATE INVOLVING GROUP LIFE AND GROUP SICKNESS AND ACCIDENT OR FRANCHISE SICKNESS AND ACCIDENT INSURANCE OR GROUP ANNUITIES WHERE THE MASTER POLICY OF SUCH GROUP WAS LAWFULLY ISSUED AND DELIVERED IN AND PURSUANT TO THE LAWS OF A STATE IN WHICH THE INSURER WAS AUTHORIZED TO DO AN INSURANCE BUSINESS TO A GROUP ORGANIZED FOR PURPOSES OTHER THAN THE PROCUREMENT OF INSURANCE, AND WHERE THE POLICYHOLDER IS DOMICILED OR OTHERWISE HAS A BONA FIDE SITUS; (8) TRANSACTIONS IN THIS STATE INVOLVING ANY POLICY OF INSURANCE OR ANNUITY CONTRACT, OTHER THAN A REINSURANCE CONTRACT, ISSUED PRIOR TO JANUARY 1, 1970. FOR THE PURPOSES OF SUBDIVISION (5) OF THIS SUBSECTION, AN "INDUSTRIAL INSURED" MEANS AN INSURED (A) WHICH PROCURES THE INSURANCE OF ANY RISK BY THE USE OF THE SERVICES OF A FULL-TIME EMPLOYEE ACTING AS AN INSURANCE MANAGER OR BUYER, OR THE SERVICES OF A REGULARLY AND CONTINUOUSLY RETAINED QUALIFIED INSURANCE CONSULTANT, AND (B) WHOSE AGGREGATE ANNUAL PREMIUMS FOR INSURANCE, EXCLUDING LIFE, ACCIDENT AND HEALTH INSURANCE, TOTAL AT LEAST FIFTY THOUSAND DOLLARS.
Approved May 8, 1996. Effective October 1, 1996.[footer.htm]