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repealed and the following is substituted in  lieu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