CHAPTER 697
GENERAL PROVISIONS

Table of Contents

Sec. 38a-9. (Formerly Sec. 38-4b). Divisions of Consumer Affairs and Rate Review. Duties. Annual reports by commissioner. Arbitration procedure.
Sec. 38a-11. (Formerly Sec. 38-50). Fees to be paid commissioner.
Sec. 38a-12. (Formerly Sec. 38-5). Annual reports.
Sec. 38a-14. (Formerly Sec. 38-7). Examination of affairs of insurance companies, corporations, associations or health care centers collecting underwriting data. Costs.
Sec. 38a-16. (Formerly Sec. 38-7a). Investigations and hearings by Insurance Commissioner. Subpoenas. Injunctive relief.
Sec. 38a-17. (Formerly Sec. 38-8). Authority of commissioner when business is being conducted improperly.
Sec. 38a-18. (Formerly Sec. 38-9). Application by commissioner to act as receiver.
Sec. 38a-21. Review and evaluation of mandated health benefits. Costs and assessments. Commissioner to contract with The University of Connecticut Center for Public Health and Health Policy. Report.

PART II
INSURANCE COMMISSIONER. POWERS AND DUTIES

      Sec. 38a-9. (Formerly Sec. 38-4b). Divisions of Consumer Affairs and Rate Review. Duties. Annual reports by commissioner. Arbitration procedure. (a) Notwithstanding the provisions of section 4-8, there shall be a Division of Consumer Affairs within the Insurance Department, which division shall act on the Insurance Commissioner's behalf and at his direction in order to carry out his responsibilities under this title with respect to such matters. The division shall receive and review complaints from residents of this state concerning their insurance problems, including claims disputes, and serve as a mediator in such disputes in order to assist the commissioner in determining whether statutory requirements and contractual obligations within the commissioner's jurisdiction have been fulfilled. There shall be a director of said division, who shall be provided with sufficient staff. The division shall serve to coordinate all appropriate facilities in the department in addressing such complaints, and conduct any outreach programs deemed necessary to properly inform and educate the public on insurance matters. The director shall submit quarterly reports to the commissioner, which shall state the number of complaints received by the division in such calendar quarter, the Connecticut premium volume of the appropriate line of each insurance company against which a complaint has been filed, the types of complaints received, and the number of such complaints which have been resolved. Such reports shall be published every six months and copies shall be made available to any interested resident of this state upon request. The commissioner shall report, in accordance with section 11-4a, to the joint standing committee of the General Assembly having cognizance of matters relating to insurance on or before January fifteenth annually, concerning the findings of such reports and suggestions for legislative initiatives to address recurring problems.

      (b) (1) The Division of Consumer Affairs shall provide an independent arbitration procedure for the settlement of disputes between claimants and insurance companies concerning automobile physical damage and automobile property damage liability claims in which liability and coverage are not in dispute. Such procedure shall apply only to disputes involving private passenger motor vehicles as defined in subsection (e) of section 38a-363. Any company licensed to write private passenger automobile insurance, including collision, comprehensive and theft, in this state shall participate in the arbitration procedure. The commissioner shall appoint an administrator for such procedure. Only those disputes in which attempts at mediation by the Division of Consumer Affairs have failed shall be accepted as arbitrable. The referral of the complaint to arbitration shall be made by the Insurance Department examiner who investigated the complaint. Each party to the dispute shall pay a filing fee of twenty dollars. The insurance company shall pay the consumer the undisputed amount of the claim upon written notification from the department that the complaint has been referred to arbitration. Such payment shall not affect any right of the consumer to pursue the disputed amount of the claim.

      (2) The commissioner shall prepare a list of at least ten persons, who have not been employed by the department or an insurance company during the preceding twelve months, to serve as arbitrators in the settlement of such disputes. The arbitrators shall be members of any dispute resolution organization approved by the commissioner. One arbitrator shall be appointed to hear and decide each complaint. Appointment shall be based solely on the order of the list. If an arbitrator is unable to serve on a given day, or if either party objects to the arbitrator, then the next arbitrator on the list will be selected. The department shall schedule arbitration hearings as often, and in such locations, as it deems necessary. Parties to the dispute shall be provided written notice of the hearing, at least ten days prior to the hearing date. The commissioner may issue subpoenas on behalf of the arbitrator to compel the attendance of witnesses and the production of documents, papers and records relevant to the dispute. Decisions shall be made on the basis of the evidence presented at the arbitration hearing. Where the arbitrator believes that technical expertise is necessary to decide a case, he may consult with an independent expert recommended by the commissioner. The arbitrator and any independent technical expert shall be paid by the department on a per dispute basis as established by the commissioner. The arbitrator, as expeditiously as possible, but not later than fifteen days after the arbitration hearing, shall render a written decision based on the information gathered and disclose the findings and the reasons to the parties involved. The arbitrator shall award filing fees to the prevailing party. If the decision favors the consumer the decision shall provide specific and appropriate remedies including interest at the rate of ten per cent on the arbitration award concerning the disputed amount of the claim, retroactive to the date of payment for the undisputed amount of the claim. The decision may include costs for loss of use and storage of the motor vehicle and shall specify a date for performance and completion of all awarded remedies. Notwithstanding any provision of the general statutes or any regulation to the contrary, the Insurance Department shall not amend, reverse, rescind, or revoke any decision or action of any arbitrator. The department shall contact the consumer within ten working days after the date for performance, to determine whether performance has occurred. Either party may make application to the superior court for the judicial district in which one of the parties resides or, when the court is not in session, any judge thereof for an order confirming, vacating, modifying or correcting any award, in accordance with the provisions of sections 52-417, 52-418, 52-419 and 52-420. If it is determined by the court that either party's position after review has been improved by at least ten per cent over that party's position after arbitration, the court, in its discretion, may grant to that party its costs and reasonable attorney's fees. No evidence, testimony, findings, or decision from the department arbitration procedure shall be admissible in any civil proceeding, except judicial review of the arbitrator's decision as contemplated by this subsection.

      (3) The department shall maintain records of each dispute, including names of parties to the arbitration, the decision of the arbitrator, compliance, the appeal, if any, and the decision of the court. The department shall annually compile such statistics and send a copy to the committee of the General Assembly having cognizance of matters relating to insurance. The report shall be considered a public document.

      (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 the commissioner's direction in order to carry out the commissioner's responsibilities under this title with respect to such matters. Subject to the provisions of sections 38a-663 to 38a-696, inclusive, the division shall assist the commissioner in reviewing rates and supplementary rate information filed with the department for compliance with statutory requirements and standards. 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-696, inclusive, found pursuant to such review shall be referred to the commissioner for appropriate action. The division may assist the commissioner in formalizing the commissioner's findings regarding such actions. The commissioner shall report, in accordance with section 11-4a, to the joint standing committee of the General Assembly having cognizance of matters relating to insurance on or before January fifteenth annually, concerning (1) the number and type of reviews conducted by the division in the prior calendar year, and (2) the percentage of increase or decrease in rates reviewed by the division during the preceding calendar year, by line and subline of insurance.

      (d) The directors and staff of both the Division of Consumer Affairs and the Division of Rate Review shall be appointed by the commissioner under the provisions of chapter 67.

      (P.A. 87-515, S. 1, 4; P.A. 88-326, S. 9, 11; P.A. 96-227, S. 1; P.A. 99-145, S. 2, 23; P.A. 01-174, S. 1; P.A. 09-74, S. 1, 2.)

      History: P.A. 88-326 required the Connecticut premium volume of the line of each insurance company against which a complaint has been filed to be stated in quarterly reports to the commissioner, required reports from the director to be published and made available every six months, and inserted a new Subsec. (b) establishing an arbitration procedure for automobile damage claims, relettering existing Subsecs. as necessary, effective July 1, 1989; Sec. 38-4b transferred to Sec. 38a-9 in 1991; (Revisor's note: In 1997 a reference in Subsec. (b)(2) to "Department of Insurance" was changed editorially by the Revisors to "Insurance Department" for consistency with customary statutory usage); P.A. 96-227 amended Subsec. (c) to delete the requirement that the division director be a member of the American Academy of Actuaries; P.A. 99-145 amended Subsec. (b) to substitute "subsection (e) of section 38a-363" for "subsection (g) of section 38a-363", effective June 8, 1999; P.A. 01-174 deleted Subsec. (c)(3) re reports to the General Assembly concerning filed rates found to be a suspected violation of statutory requirements and standards, substituted references to Sec. 38a-696 for references to Sec. 38a-697, and made technical changes for purposes of gender neutrality; P.A. 09-74 made technical changes in Subsecs. (a) and (c), effective May 27, 2009.

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      Sec. 38a-11. (Formerly Sec. 38-50). Fees to be paid commissioner. (a) The commissioner shall demand and receive the following fees: (1) For the annual fee for each license issued to a domestic insurance company, two hundred dollars; (2) for receiving and filing annual reports of domestic insurance companies, fifty dollars; (3) for filing all documents prerequisite to the issuance of a license to an insurance company, two hundred twenty dollars, except that the fee for such filings by any health care center, as defined in section 38a-175, shall be one thousand three hundred fifty dollars; (4) for filing any additional paper required by law, thirty dollars; (5) for each certificate of valuation, organization, reciprocity or compliance, forty dollars; (6) for each certified copy of a license to a company, forty dollars; (7) for each certified copy of a report or certificate of condition of a company to be filed in any other state, forty dollars; (8) for amending a certificate of authority, two hundred dollars; (9) for each license issued to a rating organization, two hundred dollars. In addition, insurance companies shall pay any fees imposed under section 12-211; (10) a filing fee of fifty dollars for each initial application for a license made pursuant to section 38a-769; (11) with respect to insurance agents' appointments: (A) A filing fee of fifty dollars for each request for any agent appointment, except that no filing fee shall be payable for a request for agent appointment by an insurance company domiciled in a state or foreign country which does not require any filing fee for a request for agent appointment for a Connecticut insurance company; (B) a fee of one hundred dollars for each appointment issued to an agent of a domestic insurance company or for each appointment continued; and (C) a fee of eighty dollars for each appointment issued to an agent of any other insurance company or for each appointment continued, except that (i) no fee shall be payable for an appointment issued to an agent of an insurance company domiciled in a state or foreign country which does not require any fee for an appointment issued to an agent of a Connecticut insurance company, and (ii) the fee shall be twenty dollars for each appointment issued or continued to an agent of an insurance company domiciled in a state or foreign country with a premium tax rate below Connecticut's premium tax rate; (12) with respect to insurance producers: (A) An examination fee of fifteen dollars for each examination taken, except when a testing service is used, the testing service shall pay a fee of fifteen dollars to the commissioner for each examination taken by an applicant; (B) a fee of eighty dollars for each license issued; (C) a fee of eighty dollars per year, or any portion thereof, for each license renewed; and (D) a fee of eighty dollars for any license renewed under the transitional process established in section 38a-784; (13) with respect to public adjusters: (A) An examination fee of fifteen dollars for each examination taken, except when a testing service is used, the testing service shall pay a fee of fifteen dollars to the commissioner for each examination taken by an applicant; and (B) a fee of two hundred fifty dollars for each license issued or renewed; (14) with respect to casualty adjusters: (A) An examination fee of twenty dollars for each examination taken, except when a testing service is used, the testing service shall pay a fee of twenty dollars to the commissioner for each examination taken by an applicant; (B) a fee of eighty dollars for each license issued or renewed; and (C) the expense of any examination administered outside the state shall be the responsibility of the entity making the request and such entity shall pay to the commissioner two hundred dollars for such examination and the actual traveling expenses of the examination administrator to administer such examination; (15) with respect to motor vehicle physical damage appraisers: (A) An examination fee of eighty dollars for each examination taken, except when a testing service is used, the testing service shall pay a fee of eighty dollars to the commissioner for each examination taken by an applicant; (B) a fee of eighty dollars for each license issued or renewed; and (C) the expense of any examination administered outside the state shall be the responsibility of the entity making the request and such entity shall pay to the commissioner two hundred dollars for such examination and the actual traveling expenses of the examination administrator to administer such examination; (16) with respect to certified insurance consultants: (A) An examination fee of twenty-six dollars for each examination taken, except when a testing service is used, the testing service shall pay a fee of twenty-six dollars to the commissioner for each examination taken by an applicant; (B) a fee of two hundred fifty dollars for each license issued; and (C) a fee of two hundred fifty dollars for each license renewed; (17) with respect to surplus lines brokers: (A) An examination fee of twenty dollars for each examination taken, except when a testing service is used, the testing service shall pay a fee of twenty dollars to the commissioner for each examination taken by an applicant; and (B) a fee of six hundred twenty-five dollars for each license issued or renewed; (18) with respect to fraternal agents, a fee of eighty dollars for each license issued or renewed; (19) a fee of twenty-six dollars for each license certificate requested, whether or not a license has been issued; (20) with respect to domestic and foreign benefit societies shall pay: (A) For service of process, fifty dollars for each person or insurer to be served; (B) for filing a certified copy of its charter or articles of association, fifteen dollars; (C) for filing the annual report, twenty dollars; and (D) for filing any additional paper required by law, fifteen dollars; (21) with respect to foreign benefit societies: (A) For each certificate of organization or compliance, fifteen dollars; (B) for each certified copy of permit, fifteen dollars; and (C) for each copy of a report or certificate of condition of a society to be filed in any other state, fifteen dollars; (22) with respect to reinsurance intermediaries: A fee of six hundred twenty-five dollars for each license issued or renewed; (23) with respect to life settlement providers: (A) A filing fee of twenty-six dollars for each initial application for a license made pursuant to section 38a-465a; and (B) a fee of forty dollars for each license issued or renewed; (24) with respect to life settlement brokers: (A) A filing fee of twenty-six dollars for each initial application for a license made pursuant to section 38a-465a; and (B) a fee of forty dollars for each license issued or renewed; (25) with respect to preferred provider networks, a fee of two thousand seven hundred fifty dollars for each license issued or renewed; (26) with respect to rental companies, as defined in section 38a-799, a fee of eighty dollars for each permit issued or renewed; (27) with respect to medical discount plan organizations licensed under section 38a-479rr, a fee of six hundred twenty-five dollars for each license issued or renewed; (28) with respect to pharmacy benefits managers, an application fee of one hundred dollars for each registration issued or renewed; (29) with respect to captive insurance companies, as defined in section 38a-91aa, a fee of three hundred seventy-five dollars for each license issued or renewed; and (30) with respect to each duplicate license issued a fee of fifty dollars for each license issued.

      (b) If any state imposes fees upon domestic fraternal benefit societies greater than are fixed by this section or sections 38a-595 to 38a-626, inclusive, 38a-631 to 38a-640, inclusive, or 38a-800, the commissioner shall collect from each fraternal benefit society incorporated by or organized under the laws of such other state and admitted to transact business in this state, the same fees as are imposed upon similar domestic societies and organizations by such other state. The expense of any examination or inquiry made outside the state shall be borne by the society so examined.

      (c) Each unauthorized insurer declared to be an eligible surplus lines insurer shall pay to the Insurance Commissioner, on or before May first of each year, an annual fee of one hundred twenty-six dollars in order to remain on the list of eligible surplus lines insurers.

      (d) For service of process on the commissioner, the commissioner shall demand and receive a fee of fifty dollars for each person or insurer to be served. The commissioner shall also collect, for each hospital or ambulance lien filed, fifty dollars, and for each small claims notice filed, fifteen dollars, each of which shall be paid by the plaintiff at the time of service, the same to be recovered by him as part of the taxable costs if he prevails in the suit.

      (e) Each insurance company depositing any security with the Treasurer pursuant to section 38a-83 shall pay to the commissioner three hundred fifteen dollars, annually. In case of an examination or appraisal made outside the office of the Treasurer, and in such case the company in whose behalf such examination or appraisal has been made shall pay to the commissioner two hundred dollars for such examination and the actual traveling expenses of the officer making such examination or appraisal.

      (1949 Rev., S. 6062, 6071, 6088; 1959, P.A. 514, S. 2; 1961, P.A. 18, S. 1; February, 1965, P.A. 196, S. 1; 1969, P.A. 497; P.A. 81-314, S. 3, 4; P.A. 82-96, S. 7, 8; P.A. 84-253; P.A. 87-221; P.A. 89-251, S. 179, 203; P.A. 90-243, S. 17; P.A. 91-29, S. 1, 8; 91-68, S. 1; P.A. 93-239, S. 1, 30; P.A. 94-160, S. 1, 24; P.A. 95-136, S. 2, 3, 8; P.A. 97-202, S. 3, 18; P.A. 99-127, S. 2, 3; P.A. 03-152, S. 10; 03-169, S. 9; P.A. 05-25, S. 1; 05-237, S. 3; 05-266, S. 2; P.A. 07-200, S. 9; P.A. 08-127, S. 18; 08-175, S. 19; June Sp. Sess. P.A. 09-3, S. 384; Sept. Sp. Sess. P.A. 09-8, S. 30.)

      History: 1959 act increased fees; 1961 act added provision re amending certificate of authority; 1965 act imposed $2 fee for agents of nondomestic insurance companies except where other state or country requires no fee for issuing license to agent of Connecticut company; 1969 act raised fee for agents of domestic companies from $3 to $5, raised fee for insurance brokers from $20 to $35, for public adjusters from $20 to $50 and for certificate from $2 to $10; P.A. 81-314 doubled the fees for insurance agents' licenses, effective May 1, 1982; P.A. 82-96 doubled license fees for an insurance broker and public adjuster to reflect change from annual to biennial renewals for such licensees; P.A. 84-253 provided that the commissioner shall charge a fee of $10 for each license certification requested, whether issued or not; P.A. 87-221 increased the fee for the filing by health care centers of all documents prerequisite to the issuance of a license from $35 to $1,000; P.A. 89-251 increased the fees; P.A. 90-243 divided the section into Subsecs. (a) to (e), inclusive, and revised fee schedule for agents of a domestic insurance company, insurance agents and public adjusters, added fee schedule for casualty adjusters, motor vehicle physical damage appraisers, certified insurance consultants, surplus lines brokers, insurance administrators, fraternal agents and domestic and foreign benefit societies and added provisions re service of process; Sec. 38-50 transferred to Sec. 38a-11 in 1991; P.A. 91-29 deleted former Subsec. (a)(18) re the examination fee and license fee for insurance administrators, renumbering remaining Subdivs. accordingly; P.A. 91-68 amended Subsec. (e) to increase the deposit payment from $150 annually to $250 annually and to increase the examination and appraisal payment from $10 to $100; P.A. 93-239 added Subsec. (a)(22) re license for reinsurance intermediary, effective June 28, 1993; P.A. 94-160 amended Subsec. (a)(11) by substituting "appointments" for "license", substituting provision re $25 filing fee for provision re examination fee and increasing the fee to $20 from $5 for each appointment issued to an agent of any other insurance company or for each appointment continued, replaced Subsec. (a)(12) re fees for insurance brokers with new provision re insurance producers, added a new Subpara. (C) in Subdivs. (14) and (15) re the expense of any examination administered outside the state, and added Subsec. (a)(23) re fee for duplicate licensing, effective January 1, 1996; P.A. 95-136 amended Subsec. (a)(18) to require a fee of $40 for each fraternal agent license issued and Subsec. (a)(19) to lower fee from $30 to $13 for each license certificate request and added Subsec.(a)(23) re fee for duplicate licensing, (in effect changing its effective date from January 1, 1996) effective June 7, 1995, and further amended Subsec. (a) to make technical changes, effective January 1, 1996; P.A. 97-202 inserted new Subdivs. (23) and (24) re viatical settlement providers and viatical settlement brokers, respectively, renumbering former Subdiv. (23) as Subdiv. (25), effective January 1, 1998; P.A. 99-127 amended Subsec. (a) to insert new Subdiv. (25) re rental companies, and to redesignate former Subdiv. (25) as (26), effective June 8, 1999; P.A. 03-152 amended Subsec. (a)(1) to substitute "For the annual fee" for "For annual fee", inserted new Subdiv. (25) re fees for viatical settlement investment agents, and redesignated existing Subdivs. (25) and (26) as Subdivs. (26) and (27); P.A. 03-169 amended Subsec. (a)(1) to substitute "For the annual fee" for "For annual fee", inserted new Subdiv. (25) re preferred provider networks, redesignated by the Revisors as Subdiv. (26) pursuant to P.A. 03-152, and redesignated existing Subdivs. (25) and (26) as Subdivs. (27) and (28); P.A. 05-25 amended Subsec. (a)(11)(A) to provide that no filing fee shall be payable for a request for agent appointment by an insurer domiciled in a state or foreign country with no such filing fee for a Connecticut company; P.A. 05-237 inserted new Subsec. (a)(28) re medical discount plan organizations and redesignated existing Subsec. (a)(28) as Subsec. (a)(29), effective January 1, 2006; P.A. 05-266 amended Subsec. (a)(12)(C) to insert "per year, or any portion thereof" and added Subsec. (a)(12)(D) re transitional licenses under Sec. 38a-784, effective January 1, 2006; P.A. 07-200 inserted new Subsec. (a)(29) re pharmacy benefits managers and redesignated existing Subsec. (a)(29) as Subsec. (a)(30), effective January 1, 2008; P.A. 08-127 amended Subsec. (a) by adding provision, codified by the Revisors as new Subdiv. (29), re captive insurance companies and making conforming changes, effective January 1, 2009; P.A. 08-175 amended Subsec. (a) by substituting "life settlement" for "viatical settlement" in Subdivs. (23) and (24), deleting former Subdiv. (25) re viatical settlement investment agents, and making conforming changes; June Sp. Sess. P.A. 09-3 increased fees; Sept. Sp. Sess. P.A. 09-8 amended Subsec. (a)(11) by increasing fee in Subpara. (B) from $80 to $100 and, in Subpara. (C), designating existing exception as clause (i) and adding clause (ii) re fee for agents from states with lower premium tax rates, effective October 5, 2009, and applicable to appointments issued or continued on or after October 1, 2009.

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      Sec. 38a-12. (Formerly Sec. 38-5). Annual reports. (a) The commissioner shall, annually, submit to the Governor a report of the commissioner's official acts and of the condition of all insurance companies doing business in this state, with a condensed statement of their reports made to the commissioner or accepted by the commissioner, together with an abstract of all accounts rendered to any court by any receiver of a domestic insurance company, a statement of the fees received by the commissioner and paid by the commissioner to the Treasurer and such other facts as are required by law.

      (b) On or before January 15, 2001, and annually thereafter, the commissioner shall submit to the joint standing committee of the General Assembly having cognizance of matters relating to insurance a report, in accordance with the provisions of section 11-4a, detailing all the information the commissioner received during the past year pursuant to sections 29-311, 31-290d, 38a-356 and 53-445.

      (1949 Rev., S. 6030; P.A. 00-211, S. 3; P.A. 09-74, S. 3.)

      History: Sec. 38-5 transferred to Sec. 38a-12 in 1991; P.A. 00-211 designated existing provisions as Subsec. (a) and made provisions gender neutral, and added new Subsec. (b) re annual reports to the insurance committee of the General Assembly re information received pursuant to Secs. 29-311, 31-290d, 38a-356 and 53-445; P.A. 09-74 made a technical change in Subsec. (b), effective May 27, 2009.

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      Sec. 38a-14. (Formerly Sec. 38-7). Examination of affairs of insurance companies, corporations, associations or health care centers collecting underwriting data. Costs. (a) The commissioner shall, as often as he deems it expedient, examine into the affairs of any insurance company or health care center doing business in this state, any corporation or association collecting data utilized by any such insurance company in the underwriting of insurance policies and any corporation organized under any law of this state or having an office in this state, which corporation is engaged in, or claiming or advertising that it is engaged in, organizing or receiving subscriptions for or disposing of stock of, or in any manner aiding or taking part in the formation or business of, an insurance company or companies, or which is holding the capital stock of one or more insurance corporations for the purpose of controlling the management thereof, as voting trustees or otherwise.

      (b) In scheduling and determining the nature, scope and frequency of the examinations, the commissioner shall consider such matters as the results of financial statement analyses and ratios, changes in management or ownership, actuarial opinions, reports of independent certified public accountants and such other criteria as set forth in the examiners' handbook adopted by the National Association of Insurance Commissioners and in effect at the time the commissioner exercises discretion under this section.

      (c) (1) To carry out examinations under this section, the commissioner may appoint, as examiners, one or more competent persons, not officers of or connected with or interested in any insurance company, other than as a policyholder. The commissioner may engage the services of attorneys, appraisers, independent actuaries, independent certified public accountants or other professionals and specialists to assist him in conducting the examinations under this section as examiners, the cost of which shall be borne by the company which is the subject of the examination. (2) In conducting the examination, the commissioner, his actuary or any examiner authorized by the commissioner may examine, under oath, the officers and agents of such a company, health care center, corporation or association and all persons deemed to have material information regarding the company's, health care center's, corporation's or association's property or business. Each such company, health care center, corporation or association, its officers and agents, shall produce the books and papers, in its or their possession, relating to its business or affairs, and any other person may be required to produce any book or paper, in his custody, deemed to be relevant to such examination, for the inspection of the commissioner, his actuary or examiners, when required. The officers and agents of the company, health care center, corporation or association shall facilitate the examination and aid the examiners in making the same so far as it is in their power to do so. The refusal of any company, by its officers, directors, employees or agents, to submit to examination or to comply with any reasonable written request of the examiners shall be grounds for suspension of, or refusal of or nonrenewal of any license or authority held by the company to engage in an insurance or other business subject to the commissioner's jurisdiction. Any such proceedings for suspension, revocation or refusal of any license or authority shall be conducted pursuant to subsection (c) of section 38a-41. (3) In conducting the examination, the examiner shall observe those guidelines and procedures set forth in the examiners' handbook adopted by the National Association of Insurance Commissioners. The commissioner may also adopt such other guidelines or procedures as the commissioner may deem appropriate.

      (d) In lieu of an examination under this section of any foreign or alien insurer licensed in this state, the commissioner may accept until January 1, 1994, an examination report on the company prepared by the insurance department for the company's state of domicile or port-of-entry state. Thereafter, such reports may only be accepted if (1) such state's insurance department was, at the time of the examination, accredited under the National Association of Insurance Commissioners' financial regulation standards and accreditation program or (2) the examination is performed under the supervision of an accredited insurance department or with the participation of one or more examiners who are employed by such an accredited state insurance department and who, after a review of the examination workpapers and report, state under oath that the examination was performed in a manner consistent with the standards and procedures required by their insurance department.

      (e) (1) Nothing contained in this section shall be construed to limit the commissioner's authority to terminate or suspend any examination in order to pursue legal or regulatory action pursuant to the insurance laws of this state. Findings of fact and conclusions made pursuant to any examination shall be prima facie evidence in any legal or regulatory action.

      (2) Nothing contained in this section shall be construed to limit the commissioner's authority in such legal or regulatory action to use and, if appropriate, to make public any final or preliminary examination report, any examiner or company workpapers or other documents, or any other information discovered or developed during the course of any examination.

      (3) Not later than sixty days following completion of the examination, the examiner in charge shall file, under oath, with the Insurance Department a verified written report of examination. Upon receipt of the verified report, the Insurance Department shall transmit the report to the company examined, together with a notice which shall afford the company examined a reasonable opportunity, not to exceed thirty days, to make a written submission or rebuttal with respect to any matters contained in the examination report. Not later than thirty days after the period allowed for the receipt of written submissions or rebuttals, the commissioner shall fully consider and review the report, together with any written submissions or rebuttals and any relevant portions of the examiner's workpapers and enter an order: (A) Adopting the examination report as filed or with modification or corrections. If the examination report reveals that the company is operating in violation of any law, regulation or prior order of the commissioner, the commissioner may order the company to take any action the commissioner considers necessary and appropriate to cure such violation; (B) rejecting the examination report with directions to the examiners to reopen the examination for purposes of obtaining additional data, documentation or information, and refiling pursuant to subparagraph (A) of this subdivision; or (C) calling for an investigatory hearing with not less than twenty days' notice to the company for purposes of obtaining additional documentation, data, information and testimony.

      (f) (1) All orders entered pursuant to subdivision (3) of subsection (e) of this section shall be accompanied by findings and conclusions resulting from the commissioner's consideration and review of the examination report, relevant examiner workpapers and any written submissions or rebuttals. The findings and conclusions, which form the basis of any such order of the commissioner, shall be subject to review as provided in section 38a-19. (2) Any investigatory hearing conducted under subparagraph (C) of subdivision (3) of subsection (e) of this section by the commissioner or authorized representative, shall be conducted as a nonadversarial confidential investigatory proceeding as necessary for the resolution of any inconsistencies, discrepancies or disputed issues apparent (A) upon the filed examination report, (B) raised by or as a result of the commissioner's review of relevant workpapers, or (C) by the written submission or rebuttal of the company. Not later than twenty days after the conclusions of any such hearing, the commissioner shall enter an order pursuant to subparagraph (A) of subdivision (3) of subsection (e) of this section. The commissioner shall not appoint an examiner as an authorized representative to conduct the hearing. The hearing shall proceed expeditiously with discovery by the company limited to the examiner's workpapers that tend to substantiate any assertions set forth in any written submission or rebuttal. The commissioner or his authorized representative may issue subpoenas for the attendance of any witnesses or the production of any documents deemed relevant to the investigation, whether under the control of the department, the company or other persons. The documents produced shall be included in the record and testimony taken by the commissioner or his authorized representative shall be under oath and preserved for the record. Nothing contained in this section shall require the department to disclose any information or records that would indicate or show the existence or content of any investigation or activity of a criminal justice agency. The hearing shall proceed with the commissioner or his authorized representative posing questions to the persons subpoenaed. Thereafter the company and the Insurance Department may present testimony relevant to the investigation. Cross-examination shall be conducted only by the commissioner or his authorized representative. The company and the Insurance Department shall be permitted to make closing statements and may be represented by counsel of their choice.

      (g) The commissioner may, if he deems it in the public interest, publish any such report, or the result of any such examination contained therein, in one or more newspapers of the state.

      (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. 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.

      (i) Nothing contained in this section shall prevent or be construed as prohibiting the commissioner from disclosing the content of an examination report, preliminary examination report or results, or any matter relating thereto, to the Insurance Department of this or any other state or country, or to law enforcement officials of this or any other state or to any agency of the federal government at any time, so long as such agency or office receiving the report or matters relating thereto agrees in writing to hold it confidential.

      (j) All working papers, recorded information, documents and copies thereof produced by, obtained by or disclosed to the commissioner or any other person in the course of an examination made under this section shall be given confidential treatment, shall not be subject to subpoena and shall not be made public by the commissioner or any other person, except to the extent provided in subsection (i) of this section. Access to such information may be granted by the commissioner to the National Association of Insurance Commissioners so long as it agrees, in writing, to hold it confidential.

      (k) (1) The commissioner may engage the services of, from time to time, on an individual basis, qualified actuaries, certified public accountants, or other similar individuals who are independently practicing their professions, even though said persons may from time to time be similarly employed or retained by persons subject to examination under this section. (2) No cause of action shall arise nor shall any liability be imposed against the commissioner, the commissioner's authorized representatives or any examiner appointed by the commissioner for any statements made or conduct performed in good faith while carrying out the provisions of this section. (3) No cause of action shall arise, nor shall any liability be imposed against any person for the act of communicating or delivering information or data to the commissioner or the commissioner's authorized representative examiner pursuant to an examination made under this section, if such act of communication or delivery was performed in good faith and without fraudulent intent or the intent to deceive. (4) This section does not abrogate or modify in any way any common law or statutory privilege or immunity heretofore enjoyed by any person identified in subdivision (2) of this subsection. (5) A person identified in subdivision (2) of this subsection shall be entitled to an award of attorney's fees and costs if such person is the prevailing party in a civil cause of action for libel, slander or any other relevant tort arising out of activities in carrying out the provisions of this section and the party bringing the action was not substantially justified in doing so. For purposes of this section, a proceeding is "substantially justified" if it had a reasonable basis in law or fact at the time that it was initiated.

      (1949 Rev., S. 6032; 1953, S. 2784d; P.A. 77-215; P.A. 81-101, S. 6; P.A. 90-243, S. 3; P.A. 92-112, S. 2; P.A. 93-239, S. 16; P.A. 96-227, S. 2; P.A. 09-74, S. 4-6.)

      History: P.A. 77-215 authorized examination of affairs of corporations and associations "collecting data utilized by any such insurance company in the underwriting of insurance policies" and amended provisions accordingly; P.A. 81-101 deleted exception to five-year examinations for domestic fraternal benefit societies which formerly were examined once every three years; P.A. 90-243 applied provisions to health care centers, divided sections into Subsecs. and added Subsec. (e) re commissioner's power to hire independent actuaries and repayment of examination expenses; Sec. 38-7 transferred to Sec. 38a-14 in 1991; P.A. 92-112 deleted former Subsecs. (c) and (e) re examiner's report and re use of independent contractors and payment of costs by entity being examined, added new Subsec. (b) re the scheduling, nature, scope and frequency of examinations, relettered old Subsec. (b) as (c) and divided it into Subdiv. (1) allowing the commissioner to engage the services of various professionals to assist him in conducting the examinations and requiring insurers to bear the expense of such services and Subdiv. (2) re sanctions of nonrenewal or suspension of license for refusal to submit to examination or to comply with reasonable requests of the examiners within the commissioner's discretion, added new Subsec. (d) re acceptable substitutes for an examination report for any foreign or alien insurers, added new Subsec. (e) re the commissioner's authority to review, accept or reject any examination or to terminate or suspend the examination of an insurer to pursue legal or regulatory action and to use any facts or conclusions made from the examination as prima facie evidence in a legal or regulatory action, added new Subsec. (f) re hearings and orders of the commissioner concerning his evaluations, conclusions and findings in assessing the examination report, created new Subsec. (g), with language taken from the former Subsec. (c) re publication of report of examination of an insurer, relettered former Subsec. (d) as (h), added new Subsec. (i), allowing the commissioner to disclose to any local, state, or federal government or to any law enforcement officials the contents of any examination report or preliminary examination report provided the agency agrees in writing to hold it confidential, added new Subsec. (j) making all workpapers and recorded information confidential, not subject to subpoena and not accessible to the public and added Subsec. (k) allowing the employment of various professionals who may independently practice their profession by being employed by an organization subject to examination, providing that no liability or cause of action may arise against the commissioner or his representatives if conduct or statements made were in good faith and without fraudulent intent and allowing any party found to be harmed by the disclosure of the commissioner or his representatives an award of attorney's fees and cost, if he is the prevailing party in a civil cause of action for libel, slander or relevant tort; P.A. 93-239 added Subsec. (c)(3) re procedures followed when conducting an examination, added new Subsec. (e)(2) re commissioner's authority to make the results of an examination public, renumbering the existing Subdiv. (2) accordingly, made technical corrections to internal references in Subsec. (f) and amended Subsec. (h) to delete the commissioner's option to accept the official report of an alien or foreign insurer in lieu of an examination of his own; P.A. 96-227 amended Subsec. (h) to revise provisions re domestic insurers' examination costs; P.A. 09-74 made technical changes in Subsecs. (e)(3), (f)(2) and (k)(5), effective May 27, 2009.

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      Sec. 38a-16. (Formerly Sec. 38-7a). Investigations and hearings by Insurance Commissioner. Subpoenas. Injunctive relief. (a) The Insurance Commissioner or the commissioner's authorized representative may, as often as the commissioner deems necessary, conduct investigations and hearings in aid of any investigation on any matter under the provisions of this title. Pursuant to any such investigation or hearing, the commissioner or the commissioner's authorized representative may issue subpoenas, administer oaths, compel testimony, order the production of books, records, papers and documents, and examine books and records. If any person refuses to allow the examination of books and records, to appear, to testify or to produce any book, record, paper or document when so ordered, a judge of the Superior Court, upon application of the commissioner or the commissioner's authorized representative, may make such order as may be appropriate to aid in the enforcement of this section.

      (b) The Attorney General, at the request of the commissioner, is authorized to apply in the name of the state of Connecticut to the Superior Court for an order temporarily or permanently restraining and enjoining any person from violating any provision of this title.

      (P.A. 86-95, S. 2, 3; P.A. 09-74, S. 7.)

      History: Sec. 38-7a transferred to Sec. 38a-16 in 1991; P.A. 09-74 made technical changes in Subsec. (a), effective May 27, 2009.

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      Sec. 38a-17. (Formerly Sec. 38-8). Authority of commissioner when business is being conducted improperly. If, in the opinion of the commissioner, any insurance company, fraternal benefit society, health care center or residual market mechanism is doing business in an illegal or improper manner or is failing to adjust and pay losses and obligations when they become due, except claims to which, in the judgment of the commissioner there is a substantial defense, the commissioner may order it to discontinue such illegal or improper method of doing business and may order it to adjust and pay its losses and obligations as they become due.

      (1949 Rev., S. 6031; P.A. 92-60 S. 1; P.A. 09-74, S. 8.)

      History: Sec. 38-8 transferred to Sec. 38a-17 in 1991; P.A. 92-60 applied provisions of section to fraternal benefit societies, health care centers and residual market mechanisms; P.A. 09-74 made technical changes, effective May 27, 2009.

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      Sec. 38a-18. (Formerly Sec. 38-9). Application by commissioner to act as receiver. (a) Whenever any domestic insurance company or corporation under the supervision of the commissioner: (1) Is insolvent; (2) has refused to submit its books, papers, accounts or affairs to the reasonable inspection of the commissioner, his actuary or examiner; (3) has permitted its capital to fall below the limits specified in either section 38a-72 or its charter, has failed to restore any deficiency within the time prescribed by subsection (d) of section 38a-71, or has failed to observe any other order of the commissioner authorized by statute; (4) has, by contract of reinsurance or otherwise, transferred or attempted to transfer substantially its entire property or business, or entered into any transaction the effect of which is to merge substantially its entire property or business in the property or business of any other company, corporation or association, without having first obtained the written approval of the commissioner; (5) is found, after an examination, to be in such condition that its further transaction of business will be hazardous to its policyholders or to its creditors or to the public; (6) has wilfully violated its charter or any law of the state; (7) whenever any officer or director of such company has refused to be examined under oath concerning its affairs; or (8) if such company is organized under the laws relating to assessment companies, its condition is found, after examination, to be such that it could not meet the lawful requirements for incorporation and authorization, the commissioner may, the Attorney General representing him, apply to the superior court or any judge thereof for the judicial district in which the principal office of such company is located, for an order directing such company to show cause why the commissioner should not take possession of its property and conduct its business, and for such other relief as the nature of the case and the interests of its policyholders, creditors and stockholders or the public may require.

      (b) Whenever it appears to the commissioner that any of the conditions set forth in subsection (a) of this section exists or that irreparable loss and injury to the property or business of any insurance company has occurred or may occur unless the commissioner so acts immediately, the commissioner, without notice and before applying to the court for any order, forthwith shall take possession of the property, business, books, records and accounts of such company, and of the offices and premises occupied by it for the transaction of its business, and retain possession subject to the order of the court. Any person having possession of, and refusing to deliver, any of the books, records or assets of a company against whom a seizure order has been issued by the commissioner shall be fined not more than one thousand dollars, or imprisoned not more than one year, or both.

      (c) Whenever the commissioner makes any seizure as provided in subsection (b) of this section, the chief of police for the town or municipality in which the principal office of the company is located, and the Commissioner of Public Safety, shall, on demand of the commissioner, furnish him with such patrolmen, troopers or officers as may be necessary in enforcing or effecting any such seizure. Not more than fifteen days after making any seizure, the commissioner shall institute a proceeding under subsection (a) of this section, returnable not less than twelve or more than thirty days after the service thereof.

      (1949 Rev., S. 6035; 1957, P.A. 448, S. 44; 1967, P.A. 518; 1971, P.A. 179, S. 24; P.A. 77-614, S. 486, 610; P.A. 78-280, S. 2, 127; P.A. 90-243, S. 5; P.A. 00-99, S. 83, 154; P.A. 09-74, S. 9.)

      History: 1967 act made previous provisions Subsec. (a), replacing former alphabetic Subdiv. indicators with numeric indicators and rephrasing provision re failure to observe commissioner's orders to make good deficiencies, etc., and added Subsecs. (b) to (f); 1971 act amended Subsec. (c) to require institution of proceeding within 15 days after seizure rather than "immediately" and "returnable not less than twelve or more than thirty days after the service thereof" rather than "in no case more than thirty days after such seizure, or the next return day but one, whichever shall be sooner"; P.A. 77-614 replaced commissioner of state police with commissioner of public safety in Subsec. (c), effective January 1, 1979; P.A. 78-280 substituted "judicial district" for "county" in Subsec. (a); P.A. 90-243 deleted Subsecs. (d) to (f), inclusive, re the surplus and deficiency of a company in receivership but See Sec. 38a-71 for replacement provisions; Sec. 38-9 transferred to Sec. 38a-18 in 1991; P.A. 00-99 deleted reference to sheriff of the county and deputy sheriffs in Subsec. (c), effective December 1, 2000; P.A. 09-74 made technical changes in Subsec. (a), effective May 27, 2009.

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      Sec. 38a-21. Review and evaluation of mandated health benefits. Costs and assessments. Commissioner to contract with The University of Connecticut Center for Public Health and Health Policy. Report. (a) As used in this section:

      (1) "Commissioner" means the Insurance Commissioner.

      (2) "Mandated health benefit" means an existing statutory obligation of, or proposed legislation that would require, an insurer, health care center, hospital service corporation, medical service corporation, fraternal benefit society or other entity that offers individual or group health insurance or medical or health care benefits plan in this state to: (A) Permit an insured or enrollee to obtain health care treatment or services from a particular type of health care provider; (B) offer or provide coverage for the screening, diagnosis or treatment of a particular disease or condition; or (C) offer or provide coverage for a particular type of health care treatment or service, or for medical equipment, medical supplies or drugs used in connection with a health care treatment or service. "Mandated health benefit" includes any proposed legislation to expand or repeal an existing statutory obligation relating to health insurance coverage or medical benefits.

      (b) (1) There is established within the Insurance Department a health benefit review program for the review and evaluation of any mandated health benefit that is requested by the joint standing committee of the General Assembly having cognizance of matters relating to insurance. Such program shall be funded by the Insurance Fund established under section 38a-52a. The commissioner shall be authorized to make assessments in a manner consistent with the provisions of chapter 698 for the costs of carrying out the requirements of this section. Such assessments shall be in addition to any other taxes, fees and moneys otherwise payable to the state. The commissioner shall deposit all payments made under this section with the State Treasurer. The moneys deposited shall be credited to the Insurance Fund and shall be accounted for as expenses recovered from insurance companies. Such moneys shall be expended by the commissioner to carry out the provisions of this section and section 2 of public act 09-179*.

      (2) The commissioner shall contract with The University of Connecticut Center for Public Health and Health Policy to conduct any mandated health benefit review requested pursuant to subsection (c) of this section. The director of said center may engage the services of an actuary, quality improvement clearinghouse, health policy research organization or any other independent expert, and may engage or consult with any dean, faculty or other personnel said director deems appropriate within The University of Connecticut schools and colleges, including, but not limited to, The University of Connecticut (A) School of Business, (B) School of Dental Medicine, (C) School of Law, (D) School of Medicine, and (E) School of Pharmacy.

      (c) Not later than August first of each year, the joint standing committee of the General Assembly having cognizance of matters relating to insurance shall submit to the commissioner a list of any mandated health benefits for which said committee is requesting a review. Not later than January first of the succeeding year, the commissioner shall submit a report, in accordance with section 11-4a, of the findings of such review and the information set forth in subsection (d) of this section.

      (d) The review report shall include at least the following, to the extent information is available:

      (1) The social impact of mandating the benefit, including:

      (A) The extent to which the treatment, service or equipment, supplies or drugs, as applicable, is utilized by a significant portion of the population;

      (B) The extent to which the treatment, service or equipment, supplies or drugs, as applicable, is currently available to the population, including, but not limited to, coverage under Medicare, or through public programs administered by charities, public schools, the Department of Public Health, municipal health departments or health districts or the Department of Social Services;

      (C) The extent to which insurance coverage is already available for the treatment, service or equipment, supplies or drugs, as applicable;

      (D) If the coverage is not generally available, the extent to which such lack of coverage results in persons being unable to obtain necessary health care treatment;

      (E) If the coverage is not generally available, the extent to which such lack of coverage results in unreasonable financial hardships on those persons needing treatment;

      (F) The level of public demand and the level of demand from providers for the treatment, service or equipment, supplies or drugs, as applicable;

      (G) The level of public demand and the level of demand from providers for insurance coverage for the treatment, service or equipment, supplies or drugs, as applicable;

      (H) The likelihood of achieving the objectives of meeting a consumer need as evidenced by the experience of other states;

      (I) The relevant findings of state agencies or other appropriate public organizations relating to the social impact of the mandated health benefit;

      (J) The alternatives to meeting the identified need, including, but not limited to, other treatments, methods or procedures;

      (K) Whether the benefit is a medical or a broader social need and whether it is consistent with the role of health insurance and the concept of managed care;

      (L) The potential social implications of the coverage with respect to the direct or specific creation of a comparable mandated benefit for similar diseases, illnesses or conditions;

      (M) The impact of the benefit on the availability of other benefits currently offered;

      (N) The impact of the benefit as it relates to employers shifting to self-insured plans and the extent to which the benefit is currently being offered by employers with self-insured plans;

      (O) The impact of making the benefit applicable to the state employee health insurance or health benefits plan; and

      (P) The extent to which credible scientific evidence published in peer-reviewed medical literature generally recognized by the relevant medical community determines the treatment, service or equipment, supplies or drugs, as applicable, to be safe and effective; and

      (2) The financial impact of mandating the benefit, including:

      (A) The extent to which the mandated health benefit may increase or decrease the cost of the treatment, service or equipment, supplies or drugs, as applicable, over the next five years;

      (B) The extent to which the mandated health benefit may increase the appropriate or inappropriate use of the treatment, service or equipment, supplies or drugs, as applicable, over the next five years;

      (C) The extent to which the mandated health benefit may serve as an alternative for more expensive or less expensive treatment, service or equipment, supplies or drugs, as applicable;

      (D) The methods that will be implemented to manage the utilization and costs of the mandated health benefit;

      (E) The extent to which insurance coverage for the treatment, service or equipment, supplies or drugs, as applicable, may be reasonably expected to increase or decrease the insurance premiums and administrative expenses for policyholders;

      (F) The extent to which the treatment, service or equipment, supplies or drugs, as applicable, is more or less expensive than an existing treatment, service or equipment, supplies or drugs, as applicable, that is determined to be equally safe and effective by credible scientific evidence published in peer-reviewed medical literature generally recognized by the relevant medical community;

      (G) The impact of insurance coverage for the treatment, service or equipment, supplies or drugs, as applicable, on the total cost of health care, including potential benefits or savings to insurers and employers resulting from prevention or early detection of disease or illness related to such coverage;

      (H) The impact of the mandated health care benefit on the cost of health care for small employers, as defined in section 38a-564, and for employers other than small employers; and

      (I) The impact of the mandated health benefit on cost-shifting between private and public payors of health care coverage and on the overall cost of the health care delivery system in the state.

      (P.A. 09-179, S. 1.)

      *Note: Section 2 of public act 09-179 is special in nature and therefore has not been codified but remains in full force and effect according to its terms.


      History: P.A. 09-179 effective July 1, 2009.

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