Connecticut Seal

Substitute Senate Bill No. 250

Public Act No. 02-24

AN ACT IMPLEMENTING THE LEGISLATIVE COMMISSIONERS' RECOMMENDATIONS FOR TECHNICAL REVISIONS TO CERTAIN INSURANCE AND REAL ESTATE STATUTES.

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

Section 1. Subsection (f) of section 38a-88a of the general statutes, as amended by section 72 of public act 01-6 of the June special session, is repealed and the following is substituted in lieu thereof (Effective October 1, 2002):

(f) The credit allowed by this section may be claimed only with respect to an income year for which a certification of continued eligibility required under subsection (g) of this section has been issued. If, with respect to any year for which a tax credit is claimed, any subject insurance business ceases at any time to employ at least twenty-five per cent of its total work force in new jobs, then, except as provided in subsection (g) of this section, the entitlement to the credit allowed by this section shall not be allowed for the taxable year in which such employment ceases, and there shall not be a pro rata application of the credit to such taxable year; provided, if the reason for such cessation is the dissolution, liquidation or reorganization of such insurance business in a bankruptcy or delinquency proceeding, as defined in section 38a-905, the credit shall be allowed.

Sec. 2. Subsection (c) of section 38a-88b of the general statutes, as amended by section 81 of public act 01-6 of the June special session, is repealed and the following is substituted in lieu thereof (Effective October 1, 2002):

(c) Notwithstanding the provisions of subsection (a) of this section, the provisions of subsections (b) and (l) of section 38a-88a [, as amended by section 1 of public act 97-292,] and subdivision (3) of subsection (i) of section 38a-88a, as amended, shall be applicable to all funds.

Sec. 3. Section 38a-680 of the general statutes, as amended by section 15 of public act 01-174, is repealed and the following is substituted in lieu thereof (Effective October 1, 2002):

Any person, insurer, organization, group or association [who] that fails to comply with the final order of the Insurance Commissioner pursuant to sections 38a-663 to 38a-696, inclusive, as amended, shall be fined not more than one thousand dollars, but if such failure be wilful, not more than ten thousand dollars, or imprisoned not more than one year or both. The commissioner shall collect the amount so payable and such penalties may be in addition to any other penalties provided by law.

Sec. 4. Subdivision (18) of section 38a-862 of the general statutes, as amended by section 2 of public act 01-67, is repealed and the following is substituted in lieu thereof (Effective October 1, 2002):

(18) "Principal place of business" of a plan sponsor or an entity means the single state in which the natural persons who establish policy for the direction, control and coordination of the operations of the plan sponsor or entity as a whole primarily [exercises] exercise that function, as determined by the association in its reasonable judgment by considering the factors set forth in subparagraphs (A) to (G), inclusive, of this subdivision: (A) The state in which the primary executive and administrative headquarters of the plan sponsor or entity is located; (B) the state in which the principal office of the chief executive officer of the plan sponsor or entity is located; (C) the state in which the board of directors, or similar governing person or persons, of the plan sponsor or entity conducts the majority of its meetings; (D) the state in which the executive or management committee of the board of directors, or similar governing person or persons, of the plan sponsor or entity conducts the majority of its meetings; (E) the state from which the management of the overall operations of the plan sponsor or entity is directed; (F) in the case of a benefit plan sponsored by affiliated companies comprising a consolidated corporation, the state in which the holding company or controlling affiliate has its principal place of business as determined using the factors set forth in subparagraphs (A) to (E), inclusive, of this subdivision; and (G) notwithstanding subparagraphs (A) to (F), inclusive, of this subdivision, in the case of a plan sponsor, if more than fifty per cent of the participants in the benefit plan are employed in a single state, that state shall be deemed to be the principal place of business of the plan sponsor. The principal place of business of a plan sponsor of a benefit plan described in subparagraph (C) of subdivision (15) of this section shall be deemed to be the principal place of business of the association, committee, joint board of trustees or other similar group of representatives of the parties who establish or maintain the benefit plan that, in lieu of a specific or clear designation of a principal place of business, shall be deemed to be the principal place of business of the employer or employee organization that has the largest investment in the benefit plan in question.

Sec. 5. Subsection (c) of section 38a-476 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2002):

(c) All health insurance plans and insurance arrangements shall provide coverage, under the terms and conditions of [its] their policies or contracts, for the preexisting conditions of any newly insured individual who was previously covered for such preexisting condition under the terms of the individual's preceding qualifying coverage, provided the preceding coverage was continuous to a date less than one hundred twenty days prior to the effective date of the new coverage, exclusive of any applicable waiting period, except in the case of a newly insured group member whose previous coverage was terminated due to an involuntary loss of employment, the preceding coverage must have been continuous to a date not more than one hundred fifty days prior to the effective date of the new coverage, exclusive of any applicable waiting period, provided such newly insured group member or dependent applies for such succeeding coverage within thirty days of the member's or dependent's initial eligibility.

Sec. 6. Subdivisions (1) to (3), inclusive, of subsection (d) of section 38a-488a of the general statutes are repealed and the following is substituted in lieu thereof (Effective October 1, 2002):

(1) A clinical social worker who is licensed under the provisions of chapter 383b and who has passed the clinical examination of the American Association of State Social Work Boards and has completed at least two thousand hours of [the] post-master's social work experience in a nonprofit agency qualifying as a tax-exempt organization under Section 501(c) of the Internal Revenue Code of 1986 or any subsequent corresponding internal revenue code of the United States, as from time to time amended, in a municipal, state or federal agency or in an institution licensed by the Department of Public Health under section 19a-490, as amended;

(2) A social worker who was certified as an independent social worker under the provisions of chapter 383b prior to October 1, 1990;

(3) A licensed marital and family therapist who has completed at least two thousand hours of [the] post-master's marriage and family therapy work experience in a nonprofit agency qualifying as a tax-exempt organization under Section 501(c) of the Internal Revenue Code of 1986 or any subsequent corresponding internal revenue code of the United States, as from time to time amended, in a municipal, state or federal agency or in an institution licensed by the Department of Public Health under section 19a-490, as amended.

Sec. 7. Subdivisions (1) to (3), inclusive, of subsection (d) of section 38a-514 of the general statutes are repealed and the following is substituted in lieu thereof (Effective October 1, 2002):

(1) A clinical social worker who is licensed under the provisions of chapter 383b and who has passed the clinical examination of the American Association of State Social Work Boards and has completed at least two thousand hours of [the] post-master's social work experience in a nonprofit agency qualifying as a tax-exempt organization under Section 501(c) of the Internal Revenue Code of 1986 or any subsequent corresponding internal revenue code of the United States, as from time to time amended, in a municipal, state or federal agency or in an institution licensed by the Department of Public Health under section 19a-490, as amended;

(2) A social worker who was certified as an independent social worker under the provisions of chapter 383b prior to October 1, 1990;

(3) A licensed marital and family therapist who has completed at least two thousand hours of [the] post-master's marriage and family therapy work experience in a nonprofit agency qualifying as a tax-exempt organization under Section 501(c) of the Internal Revenue Code of 1986 or any subsequent corresponding internal revenue code of the United States, as from time to time amended, in a municipal, state or federal agency or in an institution licensed by the Department of Public Health under section 19a-490, as amended.

Sec. 8. Section 38a-782a of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2002):

The commissioner may adopt regulations in accordance with chapter 54 relating to the establishment of continuing education requirements for persons licensed as [an insurance producer] insurance producers, provided the commissioner shall suspend such requirements for any person who is a public official during the period such person serves as a public official, if the person is prohibited from selling insurance during that period. As used in this section, "public official" means any state-wide elected officer, any member or member-elect of the General Assembly, or a senator or representative in Congress.

Sec. 9. Subsection (b) of section 38a-979 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2002):

(b) The notice shall be in writing and shall state: (1) Whether personal information may be collected from persons other than the individual proposed for coverage, (2) the types of personal information that may be collected, the kinds of investigative techniques that may be used to collect such information and the sources from which such information may be collected, (3) the types of disclosures identified in [subsections (b) to (f), inclusive, (i), (k), (l) and (n)] subdivisions (2) to (6), inclusive, (9), (11), (12) and (14) of section 38a-988, as amended by this act, and the circumstances under which such disclosures may be made without prior authorization; provided only those circumstances need be described which occur with such frequency as to indicate a general business practice, (4) a description of the rights established under sections 38a-983 and 38a-984 and the manner in which these rights may be exercised, and (5) that information obtained from a report prepared by an insurance-support organization may be retained by the organization and disclosed to other persons.

Sec. 10. Section 38a-987 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2002):

No insurance institution or agent may base an adverse underwriting decision in whole or in part:

[(a)] (1) On a previous adverse underwriting decision or on the fact that an individual previously obtained insurance coverage through a residual market mechanism, provided an insurance institution or agent may base an adverse underwriting decision on further information obtained from an insurance institution or agent responsible for a previous adverse underwriting decision;

[(b)] (2) On personal information received from an insurance-support organization whose primary source of information is an insurance institution, provided an insurance institution or agent may base an adverse underwriting decision on further personal information obtained as the result of information received from an insurance-support organization.

Sec. 11. Section 38a-988 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2002):

An insurance institution, agent or insurance-support organization shall not disclose any personal or privileged information concerning an individual collected or received in connection with an insurance transaction unless the disclosure is:

[(a)] (1) Made with the written authorization of the individual, provided: [(1)] (A) If such authorization is submitted by another insurance institution, agent or insurance-support organization, it meets the requirements of section 38a-981, or [(2)] (B) if such authorization is submitted by a person other than an insurance institution, agent or insurance-support organization, it shall be: [(A)] (i) Dated, [(B)] (ii) signed by the individual, and [(C)] (iii) obtained within one year prior to the date a disclosure is sought pursuant to this [subsection] subdivision; [or]

[(b)] (2) Made to a person other than an insurance institution, agent or insurance-support organization, provided such disclosure is reasonably necessary: [(1)] (A) To enable such person to perform a business, professional or insurance function for the disclosing insurance institution, agent or insurance-support organization, and such person agrees not to disclose the information without the individual's written authorization unless the disclosure: [(A)] (i) Would otherwise be permitted by this section if made by an insurance institution, agent, or insurance-support organization, or [(B)] (ii) is reasonably necessary for such person to perform [his] such person's function for the disclosing insurance institution, agent or insurance-support organization; or [(2)] (B) to enable such person to provide information to the disclosing insurance institution, agent or insurance-support organization for the purpose of: [(A)] (i) Determining an individual's eligibility for an insurance benefit or payment, or [(B)] (ii) detecting or preventing criminal activity, fraud, material misrepresentation or material nondisclosure in connection with an insurance transaction; [or]

[(c)] (3) Made to an insurance institution, agent, insurance-support organization or self-insurer, provided the information disclosed is limited to that which is reasonably necessary: [(1)] (A) To detect or prevent criminal activity, fraud, material misrepresentation or material nondisclosure in connection with insurance transactions, or [(2)] (B) for either the disclosing or receiving insurance institution, agent or insurance-support organization to perform its function in connection with an insurance transaction involving the individual; [or]

[(d)] (4) Made to a medical-care institution or medical professional for the purpose of: [(1)] (A) Verifying insurance coverage or benefits; [(2)] (B) informing an individual of a medical problem of which [he] such individual may not be aware; or [(3)] (C) conducting an operations or services audit, provided only such information is disclosed as is reasonably necessary to accomplish the foregoing purposes; [or]

[(e)] (5) Made to an insurance regulatory authority; [or]

[(f)] (6) Made to a law enforcement or other government authority: [(1)] (A) To protect the interests of the insurance institution, agent or insurance-support organization in preventing or prosecuting the perpetration of fraud upon it; or [(2)] (B) if the institution, agent or organization reasonably believes that illegal activities have been conducted by the individual; [or]

[(g)] (7) Otherwise permitted or required by law; [or]

[(h)] (8) In response to a facially valid administrative or judicial order, including a search warrant or subpoena; [or]

[(i)] (9) Made for the purpose of conducting actuarial or research studies, provided: [(1)] (A) No individual may be identified in any actuarial or research report; [(2)] (B) materials in which the individual may be identified are returned or destroyed as soon as they are no longer necessary; and [(3)] (C) the actuarial or research organization agrees not to disclose the information unless the disclosure would otherwise be permitted by this section if made by an insurance institution, agent or insurance-support organization; [or]

[(j)] (10) Made to a party or a representative of a party to a proposed or consummated sale, transfer, merger or consolidation of all or part of the business of the insurance institution, agent or insurance-support organization, provided: [(1)] (A) Prior to the consummation of the sale, transfer, merger or consolidation only such information is disclosed as is reasonably necessary to enable the recipient to make business decisions about the purchase, transfer, merger or consolidation; and [(2)] (B) the recipient agrees not to disclose the information unless the disclosure would otherwise be permitted by this section if made by an insurance institution, agent or insurance-support organization; [or]

[(k)] (11) Made to a person whose only use of such information will be in connection with the marketing of a product or service, provided: [(1)] (A) No medical-record information, privileged information, or personal information relating to an individual's character, personal habits, mode of living or general reputation is disclosed, and no classification derived from such information is disclosed; [(2)] (B) the individual has been afforded an opportunity to indicate that [he] the individual does not wish personal information disclosed for marketing purposes and has given no indication that [he] the individual does not wish the information disclosed; and [(3)] (C) the person receiving such information agrees not to use it except in connection with the marketing of a product or service; [or]

[(l)] (12) Made to an affiliate whose only use of the information will be in connection with an audit of the insurance institution or agent or the marketing of an insurance product or service, provided [(1)] (A) with regard to individually identifiable medical records information, written consent of the individual to whom the individually identifiable medical record pertains is obtained prior to disclosure for marketing purposes, and [(2)] (B) the affiliate agrees not to disclose the information for any other purpose or to unaffiliated persons; [or]

[(m)] (13) Made by a consumer reporting agency, provided the disclosure is made to a person other than an insurance institution or agent; [or]

[(n)] (14) Made to a group policyholder for the purpose of reporting claims experience or conducting an audit of the insurance institution's or agent's operations or services, provided the information disclosed is reasonably necessary for the recipient to conduct the audit; [or]

[(o)] (15) Made to a professional peer review organization for the purpose of reviewing the service or conduct of a medical-care institution or medical professional; [or]

[(p)] (16) Made to a governmental authority for the purpose of determining the individual's eligibility for health benefits for which the governmental authority may be liable; [or]

[(q)] (17) Made to a certificate holder or policyholder for the purpose of providing information regarding the status of an insurance transaction; [or]

[(r)] (18) Made to a lienholder, mortgagee, assignee, lessor or other person shown on the records of an insurance institution or agent as having a legal or beneficial interest in a policy of insurance, provided: [(1)] (A) No medical-record information is disclosed unless the disclosure would otherwise be permitted by this section; and [(2)] (B) the information disclosed is limited to that which is reasonably necessary to permit such person to protect its interests in such policy; [or]

[(s)] (19) Made pursuant to section 53-445.

Sec. 12. Subsections (b) and (c) of section 20-325a of the general statutes are repealed and the following is substituted in lieu thereof (Effective October 1, 2002):

(b) No person, licensed under the provisions of this chapter, shall commence or bring any action with respect to any acts done or services rendered after October 1, 1995, as set forth in subsection (a), unless the acts or services were rendered pursuant to a contract or authorization from the person for whom the acts were done or services rendered. To satisfy the requirements of this subsection any contract or authorization shall: (1) Be in writing, (2) contain the names and addresses of the real estate broker performing the services and the name of the person or persons for whom the acts were done or services rendered, (3) show the date on which such contract was entered into or such authorization given, (4) contain the conditions of such contract or authorization, (5) be signed by the real estate broker or the real estate broker's authorized agent, (6) if such contract or authorization pertains to any real property, include the following statement: "THE REAL ESTATE BROKER MAY BE ENTITLED TO CERTAIN LIEN RIGHTS PURSUANT TO SECTION 20-325a OF THE CONNECTICUT GENERAL STATUTES", and (7) be signed by the person or persons for whom the acts were done or services rendered or by an agent authorized to act on behalf of such person or persons, pursuant to a written document executed in the manner provided for conveyances in section 47-5, except, if the acts to be done or services rendered involve a listing contract for the sale of land containing any building or structure occupied or intended to be occupied by no more than four families, the listing contract shall be signed by the owner of the real estate or by an agent authorized to act on behalf of such owner pursuant to a written document executed in the manner provided for conveyances in section 47-5.

(c) Notwithstanding the provisions of subsection (b) of this section, no person licensed under the provisions of this chapter [,] shall commence or bring any action with respect to any acts done or services rendered after October 1, 2000, in a commercial real estate transaction, unless the acts or services were rendered pursuant to (1) a contract or authorization meeting the requirements of subsection (b) of this section, or (2) a memorandum, letter or other writing stating for whom the licensee will act or has acted, signed by the party for whom the licensee will act or has acted in the commercial real estate transaction, the duration of the authorization and the amount of any compensation payable to the licensee, provided (A) the licensee provides written notice to the party, substantially similar to the following: "THE REAL ESTATE BROKER MAY BE ENTITLED TO CERTAIN LIEN RIGHTS PURSUANT TO SECTION 20-325a OF THE CONNECTICUT GENERAL STATUTES", and (B) the notice is provided at or before the execution of the contract, authorization, memorandum, letter or other writing, and may be made part of the contract, authorization, memorandum, letter or other writing.

Sec. 13. Subsection (r) of section 20-325a of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2002):

(r) No broker is entitled to claim any lien under this section, unless, after the broker is entitled to compensation, without contingencies [,] other than closing or transfer of title, under the terms set forth in the written contract and not later than three days prior to the later of the date of the conveyance or lease as set forth in the real estate sales contract or lease or the actual date of the conveyance or the date when the tenant takes possession, the broker gives written notice of the claim for lien to the owner of the real property and to the prospective buyer or tenant that the broker is entitled to compensation under the terms set forth in the written contract and intends to claim a lien on the real property. The notice shall be served upon the owner and the prospective buyer or tenant, by any indifferent person, state marshal or other proper officer, by leaving with such owner and prospective buyer or at their usual [place] places of abode a true and attested copy thereof. When there are two or more owners, or two or more buyers, the notice shall be served on each owner and on each buyer.

Sec. 14. Subsection (h) of section 38a-866 of the general statutes, as amended by section 5 of public act 01-67 and sections 42 and 43 of public act 01-6 of the June special session, is repealed and the following is substituted in lieu thereof (Effective October 1, 2002):

(h) Each insurer paying an assessment under sections 38a-858 to 38a-875, inclusive, as amended, 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 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 (f) 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 may 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 the subdivision, 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 each such insurer. If the amount that an insurer is required to pay to the Department of Revenue Services 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 portion thereof, from such forty-fifth day to the date of payment.

Sec. 15. Subsection (a) of section 7 of public act 01-113 is repealed and the following is substituted in lieu thereof (Effective September 1, 2002):

(a) Unless a person is denied a license pursuant to section 11 of [this act] public act 01-113, a nonresident person shall receive a nonresident producer license if: (1) The person is currently licensed as a resident and in good standing in the person's home state; (2) the person has submitted the proper request for licensure and has paid the fees required under section 38a-11; (3) the person has submitted or transmitted to the commissioner the application for licensure that the person submitted to the person's home state, or in lieu of the same, a completed uniform application, provided an applicant for a surplus lines [brokers] broker license or limited lines credit insurance producer license may submit any other application acceptable to the commissioner; and (4) the person's home state awards nonresident producer licenses to residents of this state on the same basis.

Approved May 6, 2002