CHAPTER 703
MASS MARKETING OF PERSONAL LINES
OF PROPERTY AND CASUALTY INSURANCE

      Sec. 38a-802. (Formerly Sec. 38-185m). Mass marketing of personal lines of property and casualty insurance: Definitions. The following terms as used in sections 38a-802 to 38a-810, inclusive, unless the context otherwise requires or a different meaning is specifically prescribed, shall have the following meanings:

      (1) "Eligible members" means all natural persons who are (A) employees of particular employers or persons who, immediately prior to retirement, were actively employed by the same employer, (B) members of particular associations or organizations, or (C) members of a labor union or members of a credit union; provided the employer, person, association, organization, labor union or credit union has agreed to or has otherwise affiliated itself with the sale of insurance to its employees or members. The term "eligible members" shall also include the officers and directors of a corporate employer, the partners in an employer firm and the individual employer;

      (2) "Mass marketing plan" means a plan for the issuance of personal risk insurance as defined in section 38a-663 including, but not limited to, franchise marketing plans, group marketing plans, collective marketing plans, or any plans of similar designation, whereby eligible members are insured under individual policies.

      (1971, P.A. 464, S. 1; P.A. 90-243, S. 130; P.A. 99-257, S. 1.)

      History: P.A. 90-243 added a reference to "automobile casualty insurance" and made technical corrections; Sec. 38-185m transferred to Sec. 38a-802 in 1991; P.A. 99-257 deleted definitions of "policy", "automobile casualty insurance", "automobile", "property insurance" and "guaranteed issue basis", redesignated former Subdiv. (2) as (1) re definition of "eligible members" and redefined term, and redesignated former Subdiv. (3) as (2) re "mass marketing plan" and redefined term.

      Sec. 38a-803. (Formerly Sec. 38-185n). Issuance of insurance policy pursuant to mass marketing plan; conditions. An insurance policy may be issued in this state to eligible members pursuant to a mass marketing plan provided the following conditions are complied with: (1) Mandatory participation in the plan shall not be required as a condition of employment or as a condition of membership in an association, organization or other group, nor shall any member not participating therein be coerced, intimidated or discriminated against because he is not participating; (2) the insurer shall issue an individual policy or certificate of insurance to all members who qualify for coverage without discrimination as to form or coverage; (3) eligible members shall have the option of deciding which coverages offered by the insurer under the mass marketing plan they desire to purchase; (4) premium rates under a plan shall comply with the standards of this title, including the standards that rates not be excessive, inadequate or unfairly discriminatory. Rates shall not be deemed to be unfairly discriminatory because different premiums result for policyholders with like loss exposures but different expense factors, or like expense factors but different loss exposures, so long as the rates reflect the differences with reasonable accuracy. Rates shall not be deemed to be unfairly discriminatory if they are averaged broadly among persons insured under a plan; (5) no insurer shall, without the prior written approval of the commissioner, sell insurance pursuant to a mass marketing plan to members of an association or organization formed principally for the purpose of obtaining such insurance; (6) no person shall act as an insurance producer in connection with a mass marketing plan for any kind of insurance unless such person is duly licensed under section 38a-769; and (7) an insurer or producer selling insurance pursuant to a mass marketing plan shall, with respect to any employees or members who apply for but are denied insurance under such plan, inform such persons about the availability of the fire, liability and allied lines underwriting facility established pursuant to section 38a-328 and the residual market plan established pursuant to sections 38a-329 and 38a-670.

      (1971, P.A. 464, S. 2; P.A. 76-135; P.A. 99-257, S. 2.)

      History: P.A. 76-135 clarified Subdiv. (4) rewording to make clear distinction between cancellation and nonrenewal; Sec. 38-185n transferred to Sec. 38a-803 in 1991; P.A. 99-257 amended Subdiv. (1) to prohibit mandatory participation in the plan "as a condition of membership in an association, organization or other group", amended Subdiv. (2) to substitute "members who qualify for coverage" for "members applying for coverage", deleted former Subdivs. (3) and (4) and redesignated former Subdivs. (5) and (6) as (3) and (4), respectively, and added new Subdivs. (5) to (7), inclusive, re prohibitions on sale to association or organization formed principally for purpose of obtaining insurance, licensure, and notice of availability of insurance from other sources.

      Sec. 38a-804. (Formerly Sec. 38-185o). Maintenance of policy on termination of employment, membership or plan. Continuation during temporary interruption. (a) Upon termination of his employment, other than by retirement, or his membership or upon the termination of the mass marketing plan, the insured member may maintain his policy in full force and effect for one year from the date of such termination with the same coverage, provided he shall notify the insurer of his intention to do so within thirty days of the date of such termination and shall have paid the premium applicable to the class of risk to which he belongs.

      (b) The commissioner may promulgate regulations concerning the continuation of policies during temporary interruption of employment including but not limited to strikes, layoffs and other such absences.

      (1971, P.A. 464, S. 3, 4.)

      History: Sec. 38-185o transferred to Sec. 38a-804 in 1991.

      Sec. 38a-805. (Formerly Sec. 38-185p). Insurer to maintain statistics. Inspection by commissioner. An insurer issuing policies under a mass marketing plan shall maintain separate statistics as to loss and expense experience pertinent thereto. Such data shall be available for inspection by the Insurance Commissioner upon request.

      (1971, P.A. 464, S. 5; P.A. 75-227, S. 1, 2; P.A. 99-257, S. 3.)

      History: P.A. 75-227 required maintenance of separate experience data "on an annual basis" and added provisions re annual filing and commissioner's review of experience data; Sec. 38-185p transferred to Sec. 38a-805 in 1991; P.A. 99-257 substituted requirement that insurer maintain statistics as to loss and expense experience and authority of commissioner to inspect the data for prior requirement that insurer maintain enumerated experience data and requirement for annual filing and mandatory review by commissioner.

      Sec. 38a-806. (Formerly Sec. 38-185q). Underwriting standards. Conditions on sale. Guaranteed issue required for limited time. (a) No insurer shall use underwriting standards for individual risk selection in a mass marketing plan which are significantly more restrictive than the standards used by such insurer for individual risk selection in the sale of the same kind of insurance in this state other than pursuant to mass marketing plans. In the event the insurer does not sell such kind of insurance in this state other than pursuant to a mass marketing plan, its underwriting standards for individual risk selection in such plans shall not be significantly more restrictive than the standards used by its principal affiliate, if any, for individual risk selection in the sale of such kind of insurance in this state other than pursuant to mass marketing plans. The principal affiliate shall be considered the affiliate with the largest premium volume for such kind of insurance in this state.

      (b) No insurer shall sell insurance pursuant to a mass marketing plan if (1) the purchase of insurance available under such plan is contingent upon the purchase of any other insurance, product or service, or (2) the purchase or price of any other insurance, product or service is contingent upon the purchase of insurance available under such plan. The provisions of this subsection shall not be construed to prohibit a requirement that a person purchase underlying liability insurance as a condition to the purchase of personal umbrella or excess liability insurance. The provisions of this subsection shall not be construed to prohibit the reasonable requirement of safety devices, including, but not limited to, fire or heat detectors, lightning rods or theft prevention equipment.

      (c) Each policy in force under a mass marketing plan on or before October 1, 1999, shall be eligible for issue on a guaranteed issue basis for one year after October 1, 1999, except if the applicant has been convicted of violating any provision of subsection (d) of section 14-12, section 14-43, 14-222 or 14-222a, or subsection (a) of section 14-224 or 14-227a within three years of the applicant's application, or convicted within three years of the applicant's application of operating a motor vehicle while the applicant's operator's license was suspended or revoked.

      (1971, P.A. 464, S. 6; P.A. 84-429, S. 72; 84-546, S. 97, 173; P.A. 99-257, S. 4.)

      History: P.A. 84-429 added reference to Sec. 14-12(d) and P.A. 84-546 deleted reference to Sec. 14-218 and added reference to Sec. 14-222a; Sec. 38-185q transferred to Sec. 38a-806 in 1991; P.A. 99-257 deleted existing provisions in their entirety and replaced with Subsec. (a) re underwriting standards, Subsec. (b) re contingencies on purchase of insurance, and Subsec. (c) re guaranteed issue for certain policies subject to enumerated conditions.

      Sec. 38a-807. (Formerly Sec. 38-185r). Disclosure of conditions and terms of policy. Disclosure of sponsor's financial interest in plan. An insurer or producer issuing a policy under a mass marketing plan shall, prior to the issuance of such policy, make a full and fair disclosure to the prospective insured of all the conditions and other terms of the policy to be issued, including, but not limited to, such items as rates, type and extent of coverage, benefits, duration of coverage and services to the insured. The sponsoring employer, association, organization or group shall make a full and fair disclosure to the eligible members of its financial interests in the plan, if any.

      (1971, P.A. 464, S. 7; P.A. 96-193, S. 17, 36; P.A. 99-257, S. 5.)

      History: Sec. 38-185r transferred to Sec. 38a-807 in 1991; P.A. 96-193 substituted "producer" for "agent or broker", effective June 3, 1996; P.A. 99-257 added requirement that sponsoring employer, association, organization or group make full and fair disclosure to eligible members of its financial interests in the plan, if any.

      Sec. 38a-808. (Formerly Sec. 38-185s). Applicability of statutes. On and after July 1, 1971, no insurer shall issue a policy to an eligible member under a mass marketing plan unless such plan complies with the provisions of sections 38a-802 to 38a-810, inclusive, provided said sections shall not apply to a premium remittance plan administered by an employer who collects premiums for insured employees by means of a payroll deduction system or administered by some other collection system which offers no inducement other than the convenience of collection of premiums. The requirements of sections 38a-802 to 38a-810, inclusive, are in addition to, and not in substitution for, other applicable requirements of this title.

      (1971, P.A. 464, S. 8; P.A. 99-257, S. 6.)

      History: Sec. 38-185s transferred to Sec. 38a-808 in 1991; P.A. 99-257 added provision that the requirements of Secs. 38a-802 to 38a-810, inclusive, are in addition to, and not in substitution for, other applicable requirements of title 38a.

      Sec. 38a-809. (Formerly Sec. 38-185t). Regulations. The commissioner may promulgate such regulations as he deems necessary to carry out the purposes of sections 38a-802 to 38a-810, inclusive.

      (1971, P.A. 464, S. 9.)

      History: Sec. 38-185t transferred to Sec. 38a-809 in 1991.

      Sec. 38a-810. (Formerly Sec. 38-185u). Mass marketing plans for other lines of insurance. Nothing in sections 38a-802 to 38a-810, inclusive, shall be deemed to prohibit the establishment of mass marketing plans for other lines of insurance in addition to those specifically mentioned in said sections.

      (1971, P.A. 464, S. 10.)

      History: Sec. 38-185u transferred to Sec. 38a-810 in 1991.

      Secs. 38a-811 to 38a-814. Reserved for future use.