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Connecticut Public Acts 1996

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House Bill No. 5364

PUBLIC ACT NO. 96-227

AN ACT CONCERNING TECHNICAL AND MINOR CHANGES TO THE INSURANCE STATUTES.

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

Section 1. Subsection (c) of section 38a-9 of the general statutes is repealed and the following is substituted in lieu thereof:

(c) Notwithstanding the provisions of section 4-8, there shall be a Division of Rate Review within the Insurance Department, which division shall act on the commissioner's behalf and at his direction in order to carry out his responsibilities under this title with respect to such matters. Subject to the provisions of sections 38a-663 to 38a-697, inclusive, AS AMENDED the division shall assist the commissioner in reviewing rates and supplementary rate information filed with the department for compliance with statutory requirements and standards. [There shall be a director of said division, who shall be a member of the American Academy of Actuaries.] The division's staff shall include rating examiners with sufficient actuarial expertise. Upon the request of the commissioner, the division shall review rates and supplementary rate information, and any suspected violation of the statutory requirements and standards of sections 38a-663 to 38a-697, inclusive, AS AMENDED found pursuant to such review shall be referred to the commissioner for appropriate action. The division may assist the commissioner in formalizing his findings regarding such actions. The commissioner shall report to the joint standing committee of the General Assembly having cognizance of matters relating to insurance on or before January 15, 1988, and annually thereafter, concerning (1) the number and type of reviews conducted by the division in the prior calendar year, (2) the percentage of increase or decrease in rates reviewed by the division during the preceding calendar year, by line and subline of insurance, and (3) instances of a filed rate found by the division to be a suspected violation of statutory requirements and standards, and the basis for each such finding.

Sec. 2. Subsection (h) of section 38a-14 of the general statutes is repealed and the following is substituted in lieu thereof:

(h) The commissioner shall, at least once in every five years, visit and examine the affairs of each domestic insurance company, health care center, domestic fraternal benefit society, and foreign and alien insurance company doing business in this state. [All the expense of any examination made under the authority of this section, other than examinations of domestic insurance companies and other domestic entities including domestic corporations or associations collecting data utilized by such insurance companies in the underwriting of insurance policies, shall be paid by the company examined, and domestic insurance companies and other domestic entities examined outside the state shall pay the traveling and maintenance expenses of examiners.] NOTWITHSTANDING SUBDIVISION (1) OF SUBSECTION (c) OF THIS SECTION, NO DOMESTIC INSURANCE COMPANY OR OTHER DOMESTIC ENTITY SUBJECT TO EXAMINATION UNDER THIS SECTION SHALL PAY AS COSTS ASSOCIATED WITH THE EXAMINATION THE SALARIES, FRINGE BENEFITS, TRAVELING AND MAINTENANCE EXPENSES OF EXAMINING PERSONNEL OF THE INSURANCE DEPARTMENT ENGAGED IN SUCH EXAMINATION IF SUCH DOMESTIC COMPANY OR ENTITY IS OTHERWISE LIABLE TO ASSESSMENT LEVIED UNDER SECTION 38a-47, EXCEPT THAT A DOMESTIC INSURANCE COMPANY OR OTHER DOMESTIC ENTITY SHALL PAY THE TRAVELING AND MAINTENANCE EXPENSES OF EXAMINING PERSONNEL OF THE INSURANCE DEPARTMENT WHEN SUCH COMPANY OR ENTITY IS EXAMINED OUTSIDE THE STATE.

Sec. 3. Subsection (a) of section 38a-72 of the general statutes is repealed and the following is substituted in lieu thereof:

(a) No property or casualty insurance company and no life insurance company shall be licensed initially to do business in this state unless the company complies with the following minimum capital and minimum surplus requirements to write these specified lines of insurance:

Stock Insurance Companies

Capital Surplus

Health $ 500,000 $ 500,000

Life 1,000,000 2,000,000

Liability 500,000 500,000

Fidelity

and Surety 500,000 500,000

Financial

Guaranty 15,000,000 [600,000,000] 60,000,000

Marine 500,000 250,000

Mortgage

Guaranty 2,000,000 2,000,000

Property 500,000 250,000

Workers'

Compensation 500,000 500,000

Title 500,000 500,000

Mutual Insurance Companies

Surplus

Health $ 1,000,000

Life 3,000,000

Liability 1,000,000

Fidelity and Surety 1,000,000

Financial Guaranty 75,000,000

Marine 750,000

Mortgage Guaranty 4,000,000

Property 750,000

Workers' Compensation 1,000,000

Title 1,000,000

Sec. 4. Section 38a-133 of the general statutes is repealed and the following is substituted in lieu thereof:

The provisions of sections 38a-130, 38a-131, 38a-132 and [subsection (h) of section 38a-136] SUBSECTION (i) OF SECTION 38a-136 shall not apply to: Any offer, request, invitation, agreement or acquisition which the commissioner by order shall exempt therefrom as (A) not having been made or entered into for the purpose and not having the effect of changing or influencing the control of a domestic insurance company, or (B) as otherwise not comprehended within the purposes of sections 38a-129 to 38a-140, inclusive, AS AMENDED.

Sec. 5. Section 38a-163 of the general statutes is repealed and the following is substituted in lieu thereof:

(a) Each applicant for an insurance premium finance company license or for any renewal of such license shall file with the commissioner a written application in such manner and form as the commissioner shall prescribe together with said fee of fifty dollars which fee shall be returned to the applicant if such license is not granted.

[(a)] (b) Upon the filing of an application and payment of the license fee the commissioner shall make an investigation of the applicant and shall issue an insurance premium finance company license if the applicant is qualified in accordance with the provisions of sections 38a-160 to 38a-170, inclusive, AS AMENDED. If the commissioner does not find the applicant so qualified, he shall, within thirty days of receipt of the license application and fee, grant the applicant a full hearing, provided such applicant shall have requested such hearing within said period. Any hearing conducted under said sections may be held by the commissioner or any person duly appointed by him, provided any person acting as a hearing officer on behalf of the commissioner shall submit his findings and recommendations to the commissioner for his decision in the matter.

[(b)] (c) The commissioner may issue or renew any license under this chapter when he is satisfied that the applicant (1) is competent and trustworthy and intends to act in good faith in the capacity of a licensee under the provisions of sections 38a-160 to 38a-170, inclusive, AS AMENDED; (2) has a good business reputation and has had such experience, training or education so as to qualify him for a license under the provisions of said sections, and (3) if the applicant is a corporation, that it is either incorporated under the laws of this state or, if a foreign corporation, it is authorized to transact business in this state.

Sec. 6. Subsection (e) of section 38a-336a of the general statutes is repealed and the following is substituted in lieu thereof:

(e) For purposes of this section, an "underinsured motor vehicle" means a motor vehicle with respect to which the sum of all payments received by or on behalf OF THE COVERED PERSON FROM OR ON BEHALF of the tortfeasor are less than the fair, just and reasonable damages of the covered person.

Sec. 7. Section 38a-357 of the general statutes is repealed and the following is substituted in lieu thereof:

(a) Each insurance company which issues in this state motor vehicle insurance policies providing theft or fire coverage, including policies written under an assigned risk plan under section 38a-329, shall report the theft, larceny or loss due to fire of any motor vehicle, or any of its component parts, to the [National Automobile Theft Bureau] NATIONAL INSURANCE CRIME BUREAU. "Component part", for purposes of this section, means any major part of a motor vehicle, other than a tire, having a manufacturer's identification number or other unique identifier issued in accordance with the laws of this or any other state, jurisdiction or country.

(b) Each insurance company which issues in this state motor vehicle insurance policies, including policies written under an assigned risk plan under section 38a-329, shall report all constructive total losses involving salvage for any motor vehicle to the [National Automobile Theft Bureau] NATIONAL INSURANCE CRIME BUREAU.

(c) Such reports shall include the vehicle identification number and any other information required, pursuant to regulations adopted by the Insurance Commissioner in accordance with the provisions of chapter 54. The commissioner shall designate the [National Automobile Theft Bureau] NATIONAL INSURANCE CRIME BUREAU as the central index reporting bureau in the state. The bureau shall, in cooperation with the Insurance Department, establish a central index file of all such reports. Any costs of administration or operation of such system shall be paid by such insurance companies in accordance with procedures established by the commissioner.

Sec. 8. Subsection (c) of section 38a-433 of the general statutes is repealed and the following is substituted in lieu thereof:

(c) Except to the extent permitted under section 38a-459, no [domestic or other insurance company] DOMESTIC, FOREIGN OR ALIEN INSURANCE COMPANY OR FRATERNAL BENEFIT SOCIETY shall deliver or issue for delivery in this state any such contracts or annuities until the Insurance Commissioner licenses it to do so. Such annuities or other contracts and the sale thereof, and such insurance companies, shall be subject to the exclusive regulatory authority of the Insurance Commissioner, and shall not be subject to The Connecticut Securities Act.

Sec. 9. Section 38a-469 of the general statutes is repealed and the following is substituted in lieu thereof:

As used in title 38a, unless the context otherwise requires or a different meaning is specifically prescribed, "health insurance" policy means insurance providing benefits due to illness or injury, resulting in loss of life, loss of earnings, or expenses incurred, and includes the following types of coverage: (1) Basic hospital expense coverage; (2) basic medical-surgical expense coverage; (3) hospital confinement indemnity coverage; (4) major medical expense coverage; (5) disability income protection coverage; (6) accident only coverage; (7) long term care coverage; (8) specified accident coverage; (9) Medicare supplement coverage; (10) limited benefit health coverage; (11) hospital or medical service plan contract; (12) hospital and medical coverage provided to subscribers of a health care center (13) SPECIFIED DISEASE COVERAGE.

Sec. 10. Section 38a-588 of the general statutes is repealed and the following is substituted in lieu thereof:

[(a)] Any dental plan organization which violates any provision of sections 38a-577 to 38a-590, inclusive, AS AMENDED or neglects, fails or refuses to comply with any of the requirements of said sections, except the failure to file an annual report and the failure to reply in writing to inquiries of the commissioner, shall be liable for a civil penalty of not more than one thousand dollars for each violation. The commissioner may bring a civil action to recover the amount of a civil penalty.

[(b) Whenever any dental plan organization becomes insolvent, the commissioner shall invoke the provisions of sections 38a-903 to 38a-961, inclusive.]

Sec. 11. Section 38a-702 of the general statutes, as amended by sections 145 and 146 of public act 95-79, is repealed and the following is substituted in lieu thereof:

In sections 38a-703 to 38a-706, inclusive, 38a-769, AS AMENDED 38a-774 AS AMENDED and 38a-775, unless the context or subject matter otherwise requires: (1) "Insurance producer" or "producer" means any person, partnership, association, limited liability company or corporation, or any person, partnership, association, limited liability company or corporation acting under a trade name, or any member, stockholder, officer or employee of such an entity, holding a producer's license then in force in this state, and which, for compensation, aids in any manner or acts as a representative on behalf of an insured or client, and who solicits and negotiates coverage of insurance for the public without an agreement or contract with any specific insurance company, and not as an officer, traveling salaried employee or appointed agent of the insurance company, or a licensed producer holding an agent's appointment. A producer's license shall not be used as a substitute for an agent's appointment; (2) "Insurance agent" means a person, partnership, association, limited liability company or corporation, or any person, partnership, association, limited liability company or corporation acting under a trade name, holding an insurance producer's license then in force in this state and a direct appointment in writing, by any insurance company authorized to transact business in this state, to solicit, negotiate or effect contracts of insurance ANNUITIES or surety on behalf of such company or any manager of a limited liability company or any member, stockholder, officer or agent of a partnership, association, limited liability company or corporation, or partnership, association, limited liability company or corporation acting under a trade name when that individual is engaged in soliciting, negotiating or effecting such contracts. "Insurance agent" shall not include persons acting as executive officers or traveling salaried employees of an insurance company authorized to transact business in this state.

Sec. 12. Section 38a-828 of the general statutes is repealed and the following is substituted in lieu thereof:

No insurance company OR HEALTH CARE CENTER authorized to transact business in this state, nor any agent thereof, shall state or represent, either by advertisement in any newspaper, magazine or periodical or by any sign, circular, card or policy of insurance OR CONTRACT or certificate of renewal thereof, or otherwise, any funds or assets to be in its possession not actually possessed by it and available for the payment of losses and claims and held for the protection of its policyholders MEMBERS or creditors. Any advertisement of or representation as to subscribed capital not actually paid up in cash shall constitute a violation of the provisions of this section.

Sec. 13. Subsection (c) of section 38a-937 of the general statutes is repealed and the following is substituted in lieu thereof:

(c) The liquidator shall permit late filing claims to share in distributions, whether past or future, as if they were not late [. If] IF such claims are claims of a guaranty association or foreign guaranty association for reimbursement of covered claims paid or expenses incurred, or both, subsequent to the last day for filing where such payments were made and expenses incurred as provided by law.

Sec. 14. Subsection (a) of section 1 of public act 95-199 is repealed and the following is substituted in lieu thereof:

(a) As used in this section, "carrier" means each insurer, health care center, hospital and medical service corporation, or other entity delivering, issuing for delivery, renewing or amending any individual health insurance policy in this state on or after October 1, 1995, providing coverage of the type specified in subdivisions (1), (2), (4), (6), (10) [and] (11) AND (12) of section 38a-469.

Sec. 15. Subsection (a) of section 2 of public act 95-199 is repealed and the following is substituted in lieu thereof:

(a) As used in this section, "carrier" means each insurer, health care center, hospital and medical service corporation, or other entity delivering, issuing for delivery, renewing or amending any group health insurance policy in this state on or after October 1, 1995, providing coverage of the type specified in subdivisions (1), (2), (4), (6) [and] (11) AND (12) of section 38a-469.

Sec. 16. Section 19a-7b of the general statutes, as amended by sections 12, 21 and 39 of public act 95-257, is repealed and the following is substituted in lieu thereof:

(a) There is established a Health Care Access Commission, within the legislative department, which shall be comprised of: The Commissioners of Public Health and Social Services, the Insurance Commissioner, the chairman of the Office of Health Care Access, three members appointed by the president pro tempore of the Senate, one of whom shall be a member of the joint standing committee of the General Assembly having cognizance of matters relating to public health, one of whom shall represent community health centers and one of whom shall represent mental health services; two members appointed by the majority leader of the Senate one of whom shall represent commercial insurance companies and one of whom shall represent the disabled; three members appointed by the minority leader of the Senate, one of whom shall be a member of the joint standing committee of the General Assembly having cognizance of matters relating to appropriations and the budgets of state agencies, one of whom shall represent Blue Cross and Blue Shield of Connecticut, Inc., and one of whom shall represent small business; three members appointed by the speaker of the House of Representatives, one of whom shall be a member of the joint standing committee of the General Assembly having cognizance of matters relating to human services, one of whom shall represent consumers and one of whom shall represent labor; two members appointed by the majority leader of the House of Representatives one of whom shall represent large business and one of whom shall represent children; three members appointed by the minority leader of the House of Representatives, one of whom shall be a member of the joint standing committee of the General Assembly having cognizance of matters relating to insurance and real estate, one of whom shall represent hospitals and one of whom shall be a pediatric primary care physician. All members of the commission may be represented by designees.

(b) The commission shall develop the design, administrative, actuarial and financing details of program initiatives necessary to attain the goal described in section 19a-7a. The commission shall study the experience of the state under the programs and policies developed pursuant to sections 12-201, AS AMENDED 12-211, 12-212a, 17b-277, 17b-282 to 17b-284, inclusive, 17b-611, AS AMENDED, 19a-7a to 19a-7d, inclusive, AS AMENDED subsection (a) of 19a-59b, AS AMENDED subsection (b) of section 38a-552, subsection [(c)] (d) of section 38a-556 and sections 38a-564 to 38a-573, inclusive, AS AMENDED and shall make interim reports to the General Assembly on its findings by January 15, 1991, and by February 1, 1992, and a final report on such findings by February 1, 1993. The commission shall make recommendations to the General Assembly on any legislation necessary to further the attainment of the goal described in section 19a-7a.

(c) The commission may request from all state agencies such information and assistance as it may require.

(d) The commission may accept any gifts, donations or bequests for any of the purposes of this section and for the achievement of the goal described in section 19a-7a.

Approved June 6, 1996. Effective October 1, 1996.

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