Bill Text: CT HB05365 | 2014 | General Assembly | Introduced

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Bill Title: An Act Concerning Surplus Lines Insurance Policies.

Spectrum: Committee Bill

Status: (Introduced - Dead) 2014-03-07 - Public Hearing 03/11 [HB05365 Detail]

Download: Connecticut-2014-HB05365-Introduced.html

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General Assembly		Raised Bill No. 5365
February Session, 2014		LCO No. 790
		*00790_______INS*
Referred to Committee on INSURANCE AND REAL ESTATE
Introduced by:
(INS)

AN ACT CONCERNING SURPLUS LINES INSURANCE POLICIES.

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

Section 1. Section 38a-745 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2014):

Each insurance policy issued pursuant to sections 38a-741 to 38a-744, inclusive, as amended by this act, and 38a-794 by a surplus lines insurer shall bear on its cover, in not less than twelve-point boldface type in capital letters, the following:

NOTICE

THIS IS A SURPLUS LINES POLICY AND IS NOT PROTECTED BY THE CONNECTICUT INSURANCE GUARANTY ASSOCIATION OR SUBJECT TO REVIEW BY THE CONNECTICUT INSURANCE DEPARTMENT. IT IS IMPORTANT THAT YOU READ AND UNDERSTAND THIS POLICY.

Sec. 2. Section 38a-741 of the 2014 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2014):

(a) The commissioner shall maintain on a current basis a list of those lines of insurance or their components for which coverages are believed by the commissioner to be generally unavailable from licensed insurers. The commissioner shall republish the list and make it available to all licensees every six months. Any person may request in writing that the commissioner add or remove a line of insurance or its component from the current list at the next publication of the list. The commissioner's determinations of lines of insurance or their components to be added to or removed from the list shall not be subject to chapter 54 provided prior to making determinations, the commissioner shall provide opportunity for comments from interested persons.

(b) (1) [When] Except as provided in subdivision (2) of this subsection, 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 write signed statements setting forth facts showing that such licensee and such insured were unable after diligent effort 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 file such signed statements in electronic format with the commissioner on February fifteenth, May fifteenth, August fifteenth and November fifteenth of each year.

(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, or (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 Reform and Consumer Protection Act, P.L. 111-203, as amended from time to time, provided [(A)] (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 [(B)] (ii) such exempt commercial purchaser has subsequently requested such broker, in writing, to procure such policy from an unauthorized insurer.

This act shall take effect as follows and shall amend the following sections:
Section 1	October 1, 2014	38a-745
Sec. 2	October 1, 2014	38a-741

Statement of Purpose:

To add language to the disclosure statement required on the cover of a surplus lines insurance policy form and to specify that the signed statement provisions in subsection (b) of section 38a-741 of the general statutes are not applicable to flood insurance policies.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]