Substitute House Bill No. 6527
Substitute House Bill No. 6527
PUBLIC ACT NO. 97-95
AN ACT CONCERNING GENETIC INFORMATION AND
INSURANCE COVERAGE.
Be it enacted by the Senate and House of
Representatives in General Assembly convened:
Section 38a-816 of the general statutes is
repealed and the following is substituted in lieu
thereof:
The following are defined as unfair methods
of competition and unfair and deceptive acts or
practices in the business of insurance:
(1) Misrepresentations and false advertising
of insurance policies. Making, issuing or
circulating, or causing to be made, issued or
circulated, any estimate, illustration, circular
or statement, sales presentation, omission or
comparison which: (a) Misrepresents the benefits,
advantages, conditions or terms of any insurance
policy; (b) misrepresents the dividends or share
of the surplus to be received, on any insurance
policy; (c) makes any false or misleading
statements as to the dividends or share of surplus
previously paid on any insurance policy; (d) is
misleading or is a misrepresentation as to the
financial condition of any person, or as to the
legal reserve system upon which any life insurer
operates; (e) uses any name or title of any
insurance policy or class of insurance policies
misrepresenting the true nature thereof; (f) is a
misrepresentation for the purpose of inducing or
tending to induce to the lapse, forfeiture,
exchange, conversion or surrender of any insurance
policy; (g) is a misrepresentation for the purpose
of effecting a pledge or assignment of or
effecting a loan against any insurance policy; or
(h) misrepresents any insurance policy as being
shares of stock.
(2) False information and advertising
generally. Making, publishing, disseminating,
circulating or placing before the public, or
causing, directly or indirectly, to be made,
published, disseminated, circulated or placed
before the public, in a newspaper, magazine or
other publication, or in the form of a notice,
circular, pamphlet, letter or poster, or over any
radio or television station, or in any other way,
an advertisement, announcement or statement
containing any assertion, representation or
statement with respect to the business of
insurance or with respect to any person in the
conduct of his insurance business, which is
untrue, deceptive or misleading.
(3) Defamation. Making, publishing,
disseminating or circulating, directly or
indirectly, or aiding, abetting or encouraging the
making, publishing, disseminating or circulating
of, any oral or written statement or any pamphlet,
circular, article or literature which is false or
maliciously critical of or derogatory to the
financial condition of an insurer, and which is
calculated to injure any person engaged in the
business of insurance.
(4) Boycott, coercion and intimidation.
Entering into any agreement to commit, or by any
concerted action committing, any act of boycott,
coercion or intimidation resulting in or tending
to result in unreasonable restraint of, or
monopoly in, the business of insurance.
(5) False financial statements. Filing with
any supervisory or other public official, or
making, publishing, disseminating, circulating or
delivering to any person, or placing before the
public, or causing, directly or indirectly, to be
made, published, disseminated, circulated or
delivered to any person, or placed before the
public, any false statement of financial condition
of an insurer with intent to deceive; or making
any false entry in any book, report or statement
of any insurer with intent to deceive any agent or
examiner lawfully appointed to examine into its
condition or into any of its affairs, or any
public official to whom such insurer is required
by law to report, or who has authority by law to
examine into its condition or into any of its
affairs, or, with like intent, wilfully omitting
to make a true entry of any material fact
pertaining to the business of such insurer in any
book, report or statement of such insurer.
(6) Unfair claim settlement practices.
Committing or performing with such frequency as to
indicate a general business practice any of the
following: (a) Misrepresenting pertinent facts or
insurance policy provisions relating to coverages
at issue; (b) failing to acknowledge and act with
reasonable promptness upon communications with
respect to claims arising under insurance
policies; (c) failing to adopt and implement
reasonable standards for the prompt investigation
of claims arising under insurance policies; (d)
refusing to pay claims without conducting a
reasonable investigation based upon all available
information; (e) failing to affirm or deny
coverage of claims within a reasonable time after
proof of loss statements have been completed; (f)
not attempting in good faith to effectuate prompt,
fair and equitable settlements of claims in which
liability has become reasonably clear; (g)
compelling insureds to institute litigation to
recover amounts due under an insurance policy by
offering substantially less than the amounts
ultimately recovered in actions brought by such
insureds; (h) attempting to settle a claim for
less than the amount to which a reasonable man
would have believed he was entitled by reference
to written or printed advertising material
accompanying or made part of an application; (i)
attempting to settle claims on the basis of an
application which was altered without notice to,
or knowledge or consent of the insured; (j) making
claims payments to insureds or beneficiaries not
accompanied by statements setting forth the
coverage under which the payments are being made;
(k) making known to insureds or claimants a policy
of appealing from arbitration awards in favor of
insureds or claimants for the purpose of
compelling them to accept settlements or
compromises less than the amount awarded in
arbitration; (l) delaying the investigation or
payment of claims by requiring an insured,
claimant, or the physician of either to submit a
preliminary claim report and then requiring the
subsequent submission of formal proof of loss
forms, both of which submissions contain
substantially the same information; (m) failing to
promptly settle claims, where liability has become
reasonably clear, under one portion of the
insurance policy coverage in order to influence
settlements under other portions of the insurance
policy coverage; (n) failing to promptly provide a
reasonable explanation of the basis in the
insurance policy in relation to the facts or
applicable law for denial of a claim or for the
offer of a compromise settlement; (o) using as a
basis for cash settlement with a first party
automobile insurance claimant an amount which is
less than the amount which the insurer would pay
if repairs were made unless such amount is agreed
to by the insured or provided for by the insurance
policy.
(7) Failure to maintain complaint handling
procedures. Failure of any person to maintain
complete record of all the complaints which it has
received since the date of its last examination.
This record shall indicate the total number of
complaints, their classification by line of
insurance, the nature of each complaint, the
disposition of these complaints, and the time it
took to process each complaint. For purposes of
this subsection "complaint" shall mean any written
communication primarily expressing a grievance.
(8) Misrepresentation in insurance
applications. Making false or fraudulent
statements or representations on or relative to an
application for an insurance policy for the
purpose of obtaining a fee, commission, money or
other benefit from any insurer, producer or
individual.
(9) Any violation of any one of sections
38a-358, 38a-446, 38a-447, 38a-488, 38a-825,
38a-826, 38a-828 and 38a-829. None of the
following practices shall be considered
discrimination within the meaning of section
38a-446 or 38a-488 or a rebate within the meaning
of section 38a-825: (a) Paying bonuses to
policyholders or otherwise abating their premiums
in whole or in part out of surplus accumulated
from nonparticipating insurance, provided any such
bonuses or abatement of premiums shall be fair and
equitable to policyholders and for the best
interests of the company and its policyholders;
(b) in the case of policies issued on the
industrial debit plan, making allowance to
policyholders who have continuously for a
specified period made premium payments directly to
an office of the insurer in an amount which fairly
represents the saving in collection expense; (c)
readjustment of the rate of premium for a group
insurance policy based on loss or expense
experience, or both, at the end of the first or
any subsequent policy year, which may be made
retroactive for such policy year.
(10) Notwithstanding any provision of any
policy of insurance, certificate or service
contract, whenever such insurance policy or
certificate or service contract provides for
reimbursement for any services which may be
legally performed by any practitioner of the
healing arts licensed to practice in this state,
reimbursement under such insurance policy,
certificate or service contract shall not be
denied because of race, color or creed nor shall
any insurer make or permit any unfair
discrimination against particular individuals or
persons so licensed.
(11) Favored agent or insurer: Coercion of
debtors. (a) No person may (i) require, as a
condition precedent to the lending of money or
extension of credit, or any renewal thereof, that
the person to whom such money or credit is
extended or whose obligation the creditor is to
acquire or finance, negotiate any policy or
contract of insurance through a particular insurer
or group of insurers or producer or group of
producers; (ii) unreasonably disapprove the
insurance policy provided by a borrower for the
protection of the property securing the credit or
lien; or (iii) require directly or indirectly that
any borrower, mortgagor, purchaser, insurer or
producer pay a separate charge, in connection with
the handling of any insurance policy required as
security for a loan on real estate or pay a
separate charge to substitute the insurance policy
of one insurer for that of another; (iv) use or
disclose information resulting from a requirement
that a borrower, mortgagor or purchaser furnish
insurance of any kind on real property being
conveyed or used as collateral security to a loan,
when such information is to the advantage of the
mortgagee, vendor or lender, or is to the
detriment of the borrower, mortgagor, purchaser,
insurer or the producer complying with such a
requirement. (b) (i) Subsection (a) (iii) does not
include the interest which may be charged on
premium loans or premium advancements in
accordance with the security instrument. (ii) For
purposes of subsection (a) (ii), such disapproval
shall be deemed unreasonable if it is not based
solely on reasonable standards uniformly applied,
relating to the extent of coverage required and
the financial soundness and the services of an
insurer. Such standards shall not discriminate
against any particular type of insurer, nor shall
such standards call for the disapproval of an
insurance policy because such policy contains
coverage in addition to that required. (iii) The
commissioner may investigate the affairs of any
person to whom this subsection applies to
determine whether such person has violated this
subsection. If a violation of this subsection is
found, the person in violation shall be subject to
the same procedures and penalties as are
applicable to other provisions of section 38a-815,
subsections (b) and (e) of section 38a-817 and
this section. (iv) For purposes of this section,
"person" includes any individual, corporation,
limited liability company, association,
partnership or other legal entity.
(12) Refusing to insure, refusing to continue
to insure or limiting the amount, extent or kind
of coverage available to an individual or charging
an individual a different rate for the same
coverage because of physical disability or mental
retardation, except where the refusal, limitation
or rate differential is based on sound actuarial
principles or is related to actual or reasonably
anticipated experience.
(13) Refusing to insure, refusing to continue
to insure or limiting the amount, extent or kind
of coverage available to an individual or charging
an individual a different rate for the same
coverage solely because of blindness or partial
blindness. For purposes of this subdivision,
"refusal to insure" includes the denial by an
insurer of disability insurance coverage on the
grounds that the policy defines "disability" as
being presumed in the event that the insured is
blind or partially blind, except that an insurer
may exclude from coverage any disability,
consisting solely of blindness or partial
blindness, when such condition existed at the time
the policy was issued. Any individual who is blind
or partially blind shall be subject to the same
standards of sound actuarial principles or actual
or reasonably anticipated experience as are
sighted persons with respect to all other
conditions, including the underlying cause of the
blindness or partial blindness.
(14) Refusing to insure, refusing to continue
to insure or limiting the amount, extent or kind
of coverage available to an individual or charging
an individual a different rate for the same
coverage because of exposure to diethylstilbestrol
through the female parent.
(15) Failure to pay accident and health
claims within forty-five days of receipt by an
insurer of the claimant's proof of loss form
unless the Insurance Commissioner determines that
a legitimate dispute exists as to coverage,
liability or damages or that the claimant has
fraudulently caused or contributed to the loss.
Any insurer who fails to pay such a claim within
the forty-five-day period shall pay the claimant
the amount of such claim plus interest at the rate
of fifteen per cent per annum, in addition to any
other penalties which may be imposed pursuant to
sections 38a-11, 38a-25, 38a-41 to 38a-53,
inclusive, 38a-57 to 38a-60, inclusive, 38a-62 to
38a-65, inclusive, 38a-76, 38a-83, 38a-84, 38a-117
to 38a-124, inclusive, 38a-129 to 38a-140,
inclusive, 38a-146 to 38a-155, inclusive, 38a-283,
38a-288 to 38a-290, inclusive, 38a-319, 38a-320,
38a-459, 38a-464, 38a-815 to 38a-819, inclusive,
38a-824 to 38a-826, inclusive, and 38a-828 to
38a-831, inclusive. Whenever the interest due a
claimant pursuant to this section is less than one
dollar, the insurer shall deposit such amount in a
separate interest-bearing account in which all
such amounts shall be deposited. At the end of
each calendar year each such insurer shall donate
one-half of such amount to The University of
Connecticut Health Center and one-half of such
amount to Uncas-on-Thames Hospital.
(16) Failure to pay, as part of any claim for
a damaged motor vehicle under any automobile
insurance policy where the vehicle has been
declared to be a constructive total loss, an
amount equal to the sum of (A) the settlement
amount on such vehicle plus, whenever the insurer
takes title to such vehicle, (B) an amount
determined by multiplying such settlement amount
by a percentage equivalent to the current sales
tax rate established in section 12-408. For
purposes of this subdivision, "constructive total
loss" means the cost to repair or salvage damaged
property, or the cost to both repair and salvage
such property, equals or exceeds the total value
of the property at the time of the loss.
(17) Any violation of section 42-260, by an
extended warranty provider subject to the
provisions of said section, including, but not
limited to: (A) Failure to include all statements
required in subsections (c) and (f) of section
42-260 in an issued extended warranty; (B)
offering an extended warranty without being (i)
insured under an adequate extended warranty
reimbursement insurance policy or (ii) able to
demonstrate that reserves for claims contained in
the provider's financial statements are not in
excess of one-half the provider's audited net
worth; (C) failure to submit a copy of an issued
extended warranty form or a copy of such
provider's extended warranty reimbursement policy
form to the Insurance Commissioner.
(18) With respect to an insurance company,
hospital service corporation, health care center
or fraternal benefit society providing individual
or group health insurance coverage of the types
specified in subdivisions (1), (2), (4), (6), (11)
and (12) of section 38a-469, refusing to insure,
refusing to continue to insure or limiting the
amount, extent or kind of coverage available to an
individual or charging an individual a different
rate for the same coverage because such individual
has been a victim of family violence.
(19) WITH RESPECT TO AN INSURANCE COMPANY,
HOSPITAL SERVICE CORPORATION, HEALTH CARE CENTER
OR FRATERNAL BENEFIT SOCIETY PROVIDING INDIVIDUAL
OR GROUP HEALTH INSURANCE COVERAGE OF THE TYPES
SPECIFIED IN SUBDIVISIONS (1), (2), (3), (4), (6),
(9), (10), (11) AND (12) OF SECTION 38a-469,
REFUSING TO INSURE, REFUSING TO CONTINUE TO INSURE
OR LIMITING THE AMOUNT, EXTENT OR KIND OF COVERAGE
AVAILABLE TO AN INDIVIDUAL OR CHARGING AN
INDIVIDUAL A DIFFERENT RATE FOR THE SAME COVERAGE
BECAUSE OF GENETIC INFORMATION. GENETIC
INFORMATION INDICATING A PREDISPOSITION TO A
DISEASE OR CONDITION SHALL NOT BE DEEMED A
PREEXISTING CONDITION IN THE ABSENCE OF A
DIAGNOSIS OF SUCH DISEASE OR CONDITION THAT IS
BASED ON OTHER MEDICAL INFORMATION. AN INSURANCE
COMPANY, HOSPITAL SERVICE CORPORATION, HEALTH CARE
CENTER OR FRATERNAL BENEFIT SOCIETY PROVIDING
INDIVIDUAL HEALTH COVERAGE OF THE TYPES SPECIFIED
IN SUBDIVISIONS (1), (2), (3), (4), (6), (9),
(10), (11) AND (12) OF SECTION 38a-469, SHALL NOT
BE PROHIBITED FROM REFUSING TO INSURE OR APPLYING
A PREEXISTING CONDITION LIMITATION, TO THE EXTENT
PERMITTED BY LAW, TO AN INDIVIDUAL WHO HAS BEEN
DIAGNOSED WITH A DISEASE OR CONDITION BASED ON
MEDICAL INFORMATION OTHER THAN GENETIC INFORMATION
AND HAS EXHIBITED SYMPTOMS OF SUCH DISEASE OR
CONDITION. FOR THE PURPOSES OF THIS SUBSECTION,
"GENETIC INFORMATION" MEANS THE INFORMATION ABOUT
GENES, GENE PRODUCTS OR INHERITED CHARACTERISTICS
THAT MAY DERIVE FROM AN INDIVIDUAL OR FAMILY
MEMBER.
Approved June 6, 1997