Substitute House Bill No. 6643
Substitute House Bill No. 6643
PUBLIC ACT NO. 97-43
AN ACT CONCERNING CLAIMS DEADLINES FOR THE
CONNECTICUT INSURANCE GUARANTY ASSOCIATION.
Be it enacted by the Senate and House of
Representatives in General Assembly convened:
Subsection (1) of section 38a-841 of the
general statutes is repealed and the following is
substituted in lieu thereof:
(1) Said association shall: (a) Be obligated
to the extent of the covered claims existing prior
to the determination of insolvency and arising
within thirty days after the determination of
insolvency, or before the policy expiration date
if less than thirty days after the determination,
or before the insured replaces the policy or
causes its cancellation, if he does so within
thirty days of such determination, provided such
obligation shall be limited as follows: (i) With
respect to covered claims for unearned premiums,
to one-half of the unearned premium on any policy,
subject to a maximum of two thousand dollars per
policy; (ii) with respect to covered claims other
than for unearned premiums, such obligation shall
include only that amount of each such claim which
is in excess of one hundred dollars and is less
than three hundred thousand dollars, except that
said association shall pay the full amount of any
such claim arising out of a workers' compensation
policy, provided in no event shall (A) said
association be obligated to any claimant in an
amount in excess of the obligation of the
insolvent insurer under the policy form or
coverage from which the claim arises, or (B) said
association be obligated for any claim filed with
the association after the expiration of two years
from the date of the declaration of insolvency
UNLESS SUCH CLAIM AROSE OUT OF A WORKERS'
COMPENSATION POLICY AND WAS TIMELY FILED IN
ACCORDANCE WITH SECTION 31-294c; (b) be deemed the
insurer to the extent of its obligations on the
covered claims and to such extent shall have all
rights, duties, and obligations of the insolvent
insurer as if the insurer had not become
insolvent; (c) allocate claims paid and expenses
incurred among the three accounts, created by
section 38a-839, separately, and assess member
insurers separately (i) in respect of each such
account for such amounts as shall be necessary to
pay the obligations of said association under
subdivision (a) of subsection (1) of this section
subsequent to an insolvency; (ii) the expenses of
handling covered claims subsequent to an
insolvency; (iii) the cost of examinations under
section 38a-846 and (iv) such other expenses as
are authorized by sections 38a-836 to 38a-853,
inclusive. The assessments of each member insurer
shall be in the proportion that the net direct
written premiums of such member insurer for the
calendar year preceding the assessment on the
kinds of insurance in such account bears to the
net direct written premiums of all member insurers
for the calendar year preceding the assessment on
the kinds of insurance in such account. Each
member insurer shall be notified of its assessment
not later than thirty days before it is due. No
member insurer may be assessed in any year on any
account an amount greater than two per cent of
that member insurer's net direct written premiums
for the calendar year preceding the assessment on
the kinds of insurance in said account, provided
if, at the time an assessment is levied on the
"all other insurance" account, as defined in
subdivision (c) of section 38a-839, the board of
directors finds that at least fifty per cent of
the total net direct written premiums of a member
insurer and all its affiliates, for the year on
which such assessment is based, were from policies
issued or delivered in Connecticut, on risks
located in this state, such member insurer shall
be assessed only on such member insurer's net
direct written premium that is attributable to the
kind of insurance that gives rise to each covered
claim. If the maximum assessment, together with
the other assets of said association in any
account, does not provide in any one year in any
account an amount sufficient to make all necessary
payments from that account, the funds available
may be prorated and the unpaid portion shall be
paid as soon thereafter as funds become available.
Said association may defer, in whole or in part,
the assessment of any member insurer, if the
assessment would cause the member insurer's
financial statement to reflect amounts of capital
or surplus less than the minimum amounts required
for a certificate of authority by any jurisdiction
in which the member insurer is authorized to
transact insurance provided that during the period
of deferment, no dividends shall be paid to
shareholders or policyholders. Deferred
assessments shall be paid when such payment will
not reduce capital or surplus below the minimum
amounts required for a certificate of authority.
Such payments shall be refunded to those insurers
receiving greater assessments because of such
deferment or, at the election of the insurer, be
credited against future assessments. Each member
insurer serving as a servicing facility may set
off against any assessment, authorized payments
made on covered claims and expenses incurred in
the payment of such claims by such member insurer
if they are chargeable to the account in respect
of which the assessment is made; (d) investigate
claims brought against said association and
adjust, compromise, settle, and pay covered claims
to the extent of said association's obligations,
and deny all other claims. The association shall
pay claims in any order it deems reasonable,
including but not limited to, payment in the order
of receipt or by classification. It may review
settlements, releases and judgments to which the
insolvent insurer or its insureds were parties to
determine the extent to which such settlements,
releases and judgments may be properly contested;
(e) notify such persons as the commissioner may
direct under subdivision (a) of subsection (2) of
section 38a-843; (f) handle claims through its
employees or through one or more insurers or other
persons designated by said association as
servicing facilities, provided such designation of
a servicing facility shall be subject to the
approval of the commissioner, and may be declined
by a member insurer; (g) reimburse each such
servicing facility for obligations of said
association paid by such facility and for expenses
incurred by such facility while handling claims on
behalf of said association and shall pay such
other expenses of said association as are
authorized by sections 38a-836 to 38a-853,
inclusive.
Approved May 14, 1997