Connecticut Seal

Senate Bill No. 482

Public Act No. 04-10

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

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

Section 1. Section 38a-42 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2004):

(a) Except as provided in subsection (b) of this section, no insurance company shall enter into any contract of remuneration with any life or accident and health insurance producer [,] where the initial or any renewal commission is contingent upon (1) such contract being in effect more than two years, or (2) any continuing premium or other volume requirement contained in such contract.

(b) Any insurance company may enter into a contract of remuneration of the kind prohibited in subsection (a) of this section with any such insurance producer if the company [shall have] has offered to such producer a contract which contains no such contingent provisions as described in subdivisions (1) and (2) of subsection (a) of this section and which provides actuarially equivalent remuneration to [that] the contract containing such contingent provisions.

Sec. 2. Section 38a-43 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2004):

Whenever it appears to the commissioner that permission to transact business within any state of the United States or within any foreign country has been refused to any domestic insurance company after a certificate of the solvency and good management of such company has been issued to it by the commissioner and after such company has complied with any reasonable laws of such state or foreign country requiring deposits of money or securities with the government of such state or country, the commissioner may [forthwith] immediately cancel the authority of each company organized under the laws of such state or foreign government and licensed to do business in this state and may refuse a certificate of authority to each such company thereafter applying [to him] for authority to do business in this state, until [his] the commissioner's certificate has been recognized by the government of such state or country.

Sec. 3. Section 38a-45 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2004):

No corporation shall insure or guarantee titles to real estate situated in this state except subject to and in accordance with all laws of this state relating to insurance or insurance companies generally or relating to the powers or duties of the commissioner. No corporation doing title insurance business may do any other line of insurance business. No corporation doing mortgage guaranty insurance business may do any other line of insurance business. The commissioner may [issue] adopt regulations, in accordance with chapter 54, which set requirements concerning the amount of deposits and the establishment and maintenance of unearned premium and loss reserves and other liabilities of domestic title insurance companies and foreign mortgage guaranty insurance companies for the purpose of protecting their policyholders.

Sec. 4. Subsection (c) of section 38a-88b of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2004):

(c) Notwithstanding the provisions of subsection (a) of this section, the provisions of subsections (b) and (l) of section 38a-88a and subdivision (3) of subsection (i) of section 38a-88a [,] shall be applicable to all funds.

Sec. 5. Subsection (f) of section 38a-318 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2004):

(f) For the purposes of this section, "authorized agency" means: (1) The State Fire Marshal or the local fire marshal when authorized or charged with the investigation of fires at the place where the fire actually took place; and (2) the Insurance Commissioner.

Sec. 6. Subsection (a) of section 38a-343 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2004):

(a) No notice of cancellation of a policy to which section 38a-342 applies may be effective unless sent, by registered or certified mail or by mail evidenced by a certificate of mailing, or delivered by the insurer to the named insured, and any third party designated pursuant to section 38a-323a, at least forty-five days before the effective date of cancellation, except that (1) where cancellation is for nonpayment of the first premium on a new policy, at least fifteen days' notice of cancellation accompanied by the reason for cancellation shall be given, and (2) where cancellation is for nonpayment of any other premium, at least ten days' notice of cancellation accompanied by the reason for cancellation shall be given. No notice of cancellation of a policy which has been in effect for less than sixty days may be effective unless mailed or delivered by the insurer to the insured and any third party designee at least forty-five days before the effective date of cancellation, provided (A) at least fifteen days' notice shall be given where cancellation is for nonpayment of the first premium on a new policy, and (B) at least ten days' notice shall be given where cancellation is for nonpayment of any other premium or material misrepresentation. The notice of cancellation shall state or be accompanied by a statement specifying the reason for such cancellation. Any notice of cancellation for nonpayment of the first premium on a new policy may be retroactive to the effective date of such policy, provided at least fifteen days' notice has been given to the insured and any third party designee and payment of such premium has not been received during such notice period.

Sec. 7. Section 38a-417 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2004):

The provisions of section 38a-816 [,] shall govern relationships which favored agents or insurers.

Sec. 8. Subsection (e) of section 38a-702e of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2004):

(e) Each applicant for an insurance producer license shall, before being admitted to an examination under subsection (a) of this section, prove to the satisfaction of the commissioner that such applicant meets one of the following prerequisites: (1) [That the applicant has successfully completed] Successful completion of a course approved by the commissioner requiring not less than forty hours for each line of insurance for which the applicant is applying to be licensed; or (2) [that such applicant has] equivalent experience or training as determined by the commissioner.

Sec. 9. Subdivision (4) of section 38a-844 of the general statutes, as amended by section 1 of public act 03-182, is repealed and the following is substituted in lieu thereof (Effective October 1, 2004):

(4) The association shall have the right to recover from the following persons the amount of any covered claim paid on behalf of such person pursuant to sections 38a-836 to 38a-853, inclusive: [(a)] (A) Any person who is an affiliate of the insolvent insurer and whose liability obligations to other persons are satisfied in whole or in part by payments made under this chapter; and [(b)] (B) any insured whose net worth on December thirty-first of the year next preceding the date the insurer becomes an insolvent insurer exceeds fifty million dollars and whose liability obligations to other persons are satisfied in whole or in part by payments made under said sections.

Sec. 10. Subsection (b) of section 38a-556 of the general statutes, as amended by section 68 of public act 03-6 of the June 30 special session, is repealed and the following is substituted in lieu thereof (Effective October 1, 2004):

(b) The association shall have the general powers and authority granted under the laws of this state to carriers to transact the kinds of insurance defined under section 38a-551, as amended, and in addition thereto, the specific authority to: (1) Enter into contracts necessary or proper to carry out the provisions and purposes of sections 38a-505, 38a-546 and 38a-551 to 38a-559, inclusive, as amended; (2) sue or be sued, including taking any legal actions necessary or proper for recovery of any assessments for, on behalf of, or against participating members; (3) take such legal action as necessary to avoid the payment of improper claims against the association or the coverage provided by or through the association; (4) establish, with respect to health insurance provided by or on behalf of the association, appropriate rates, scales of rates, rate classifications and rating adjustments, such rates not to be unreasonable in relation to the coverage provided and the operational expenses of the association; (5) administer any type of reinsurance program, for or on behalf of participating members; (6) pool risks among participating members; (7) issue policies of insurance on an indemnity or provision of service basis providing the coverage required by sections 38a-505, 38a-546 and 38a-551 to 38a-559, inclusive, as amended, in its own name or on behalf of participating members; (8) administer separate pools, separate accounts or other plans as deemed appropriate for separate members or groups of members; (9) operate and administer any combination of plans, pools, reinsurance arrangements or other mechanisms as deemed appropriate to best accomplish the fair and equitable operation of the association; (10) set limits on the amounts of reinsurance which may be ceded to the association by its members; (11) appoint from among participating members appropriate legal, actuarial and other committees as necessary to provide technical assistance in the operation of the association, policy and other contract design, and any other function within the authority of the association; and (12) apply for and accept grants, gifts and bequests of funds from other states, federal and interstate agencies and independent authorities, private firms, individuals and foundations for the purpose of carrying out its responsibilities. Any such funds received shall be deposited in the General Fund and shall be credited to a separate nonlapsing account within the General Fund for the Health Reinsurance Association and may be used by the Health Reinsurance Association in the performance of its duties.

Sec. 11. Subsection (e) of section 38a-556 of the general statutes, as amended by section 68 of public act 03-6 of the June 30 special session, is repealed and the following is substituted in lieu thereof (Effective October 1, 2004):

(e) All policy forms issued by or through the association shall conform in [substances] substance to prototype forms developed by the association, shall in all other respects conform to the requirements of sections 38a-505, 38a-546 and 38a-551 to 38a-559, inclusive, as amended, and shall be approved by the commissioner. The commissioner may disapprove any such form if it contains a provision or provisions which are unfair or deceptive or which encourage misrepresentation of the policy.

Sec. 12. Subsection (j) of section 38a-553 of the general statutes, as amended by section 67 of public act 03-6 of the June 30 special session, is repealed and the following is substituted in lieu thereof (Effective October 1, 2004):

(j) No comprehensive health care plan issued through the Health Reinsurance Association to a health care tax credit eligible individual shall include any limitation or exclusion of benefit based on a preexisting condition if such individual maintained creditable health insurance coverage for an aggregate period of three months as of the date on which the individual seeks to enroll in the Health Reinsurance Association issued [policy] plan, not counting any period prior to a sixty-three-day break in coverage.

Sec. 13. Section 38a-981 of the general statutes, as amended by section 3 of public act 03-119, is repealed and the following is substituted in lieu thereof (Effective October 1, 2004):

(a) Notwithstanding any provision of the general statutes to the contrary, no insurance institution, agent or insurance-support organization may utilize as its disclosure authorization form in connection with insurance transactions, a form or statement which authorizes the disclosure of personal or privileged information concerning an individual to an insurance institution, agent, or insurance-support organization unless the form or statement: (1) Is written in plain language substantially complying with the tests enumerated in subsection (b) of section 42-152; (2) is dated; (3) specifies the types of persons authorized to disclose information concerning the individual; (4) specifies the nature of the information authorized to be disclosed; (5) identifies the insurance institution or agent and the types of representatives of the insurance institution to whom the individual has authorized the information to be disclosed; (6) specifies the purposes for which the information is collected; (7) specifies the length of time such authorization shall remain valid, which shall be no longer than: (A) In the case of authorizations signed for the purpose of collecting information in connection with an application for an insurance policy, a policy reinstatement or a request for a change in policy benefits: (i) Thirty months from the date the authorization is signed if the application or request involves life, health or disability insurance, (ii) one year from the date the authorization is signed if the application or request involves property or casualty insurance, (B) in the case of authorizations signed for the purpose of collecting information in connection with a claim for benefits under an insurance policy: (i) The term of coverage of the policy if the claim involves a health insurance benefit, (ii) the duration of the claim if it involves an insurance benefit which is not a health insurance benefit; (8) advises the individual or a person authorized to act on his behalf that he is entitled to receive a copy of the authorization form.

(b) (1) An insurance institution or a third-party administrator providing insurance or administrative services with respect to an employer's employee benefit plan which provides its employees with health benefits shall, upon written request of an exclusive bargaining agent for such employees, provide such bargaining agent with information regarding description of health benefits available to such employees, claim experience regarding such benefits and the cost to the employer for such coverage or administrative services, as the case may be, for employees in the bargaining unit represented by such bargaining agent. If such employees constitute a subgroup of a multi-bargaining-unit group, the information provided by the [insurer] insurance institution or administrator shall, upon written request of the exclusive bargaining agent for the subgroup, include a description of available health benefits, claim experience regarding such benefits and the cost to the employer for such coverage or administrative services, as the case may be, for the entire multi-bargaining-unit group or for subgroups within the multi-bargaining-unit group. A copy of such information shall be provided at the same time to the employer by the insurance institution or administrator. Such information shall be made available to the bargaining agent and the employer only if the bargaining agent agrees in writing to pay all reasonable costs, as determined by the insurance institution or administrator, that are incurred by the insurance institution or administrator in developing and distributing the information. The information provided to such agent shall relate to the group of employees as a whole and shall not include any information relating to specific individuals. No requests made pursuant to this subdivision may seek information which relates to a period of time more than twenty-four months prior to the date such request was made.

(2) Prior to providing any information pursuant to subdivision (1) of this subsection, an insurance institution or third-party administrator may require the bargaining agent requesting such information to provide evidence in writing that such bargaining agent is currently designated or certified by the proper state or federal authority as the exclusive bargaining representative or agent of the employees who are the subject of the request.

(3) The provisions of this subsection shall not apply to employees participating in an employee welfare benefit plan subject to the provisions of Title I of the Employee Retirement Income Security Act of 1974 (ERISA), Public Law 93-406, as amended from time to time, or to the exclusive bargaining agents of such employees.

Sec. 14. Section 38a-475 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2004):

The Insurance Department shall only precertify long-term care insurance policies which (1) alert the purchaser to the availability of consumer information and public education provided by the Department of Social Services pursuant to section [17a-307] 17b-251; (2) offer the option of home and community-based services in addition to nursing home care; (3) in all home care plans, include case management services delivered by an access agency approved by the Office of Policy and Management and the Department of Social Services as meeting the requirements for such agency as defined in regulations adopted pursuant to subsection (e) of section 17b-342, which services shall include, but need not be limited to, the development of a comprehensive individualized assessment and care plan and, as needed, the coordination of appropriate services and the monitoring of the delivery of such services; (4) provide inflation protection; (5) provide for the keeping of records and an explanation of benefit reports on insurance payments which count toward Medicaid resource exclusion; and (6) provide the management information and reports necessary to document the extent of Medicaid resource protection offered and to evaluate the Connecticut Partnership for Long-Term Care. No policy shall be precertified if it requires prior hospitalization or a prior stay in a nursing home as a condition of providing benefits. The commissioner may adopt regulations, in accordance with chapter 54, to carry out the precertification provisions of this section.

Approved April 16, 2004