Substitute Senate Bill No. 409
          Substitute Senate Bill No. 409

               PUBLIC ACT NO. 98-79


AN ACT CONCERNING  THE  FINANCIAL REQUIREMENTS FOR
LICENSING INSURANCE COMPANIES.


    Be  it  enacted  by  the  Senate  and House of
Representatives in General Assembly convened:
    Section  1.  Subsection  (a) of section 38a-72
of  the  general  statutes  is  repealed  and  the
following is substituted in lieu thereof:
    (a)  No property or casualty insurance company
and no life insurance company  shall  be  licensed
initially  to do business in this state unless the
company  complies  with  the   following   minimum
capital  and minimum surplus requirements to write
these specified lines of insurance:

            Stock Insurance Companies


                            Capital        Surplus

Health                $     500,000  $     500,000
Life                      1,000,000      2,000,000
Liability                   500,000        500,000
Fidelity and Surety         500,000        500,000
Financial Guaranty       15,000,000     60,000,000
Marine                      500,000        250,000
Mortgage Guaranty         2,000,000      2,000,000
Property                    500,000        250,000
Workers' Compensation       500,000        500,000
Title                       500,000        500,000
RESIDUAL VALUE            2,000,000      1,000,000
REINSURANCE
(PROPERTY AND CASUALTY)   2,000,000      2,000,000
REINSURANCE (LIFE)        1,000,000      2,000,000

            Mutual Insurance Companies

                            Surplus

Health                $   1,000,000
Life                      3,000,000
Liability                 1,000,000
Fidelity and Surety       1,000,000
Financial Guaranty       75,000,000
Marine                      750,000
Mortgage Guaranty         4,000,000
Property                    750,000
Workers' Compensation     1,000,000
Title                     1,000,000
RESIDUAL VALUE            3,000,000
REINSURANCE
(PROPERTY AND CASUALTY)   4,000,000
REINSURANCE (LIFE)        3,000,000

    Sec. 2. Section 38a-76 of the general statutes
is repealed and  the  following  is substituted in
lieu thereof:
    (a)   Each   insurance   company   transacting
business  in  this  state  shall,  at  all  times,
maintain reserves equal in amount to its liability
under all its  policy  contracts,  as the same are
computed in accordance  with the provisions of the
statutes  or  with   the   requirements   of   the
commissioner adopted upon reasonable consideration
of  ascertained  experience  for  the  purpose  of
adequately protecting the  insured or securing the
solvency of such company.
    (b) A DOMESTIC  INSURER  TRANSACTING INSURANCE
ONLY  IN  A  FOREIGN  COUNTRY  MAY  CALCULATE  ITS
RESERVES  ON INSURANCE  WRITTEN  IN  THAT  FOREIGN
COUNTRY IN ACCORDANCE  WITH  THE RESERVE STANDARDS
REQUIRED OR OTHERWISE  APPROVED  BY  SUCH  FOREIGN
COUNTRY. FOR PURPOSES  OF THIS SECTION AND SECTION
38a-77, AS AMENDED  BY  THIS  ACT,  (1) A DOMESTIC
INSURER SHALL BE DEEMED TO "TRANSACT INSURANCE" OR
"DO BUSINESS" IN A STATE, DISTRICT OR TERRITORY OF
THE UNITED STATES  IF,  WITHIN ANY STATE, DISTRICT
OR TERRITORY OF  THE  UNITED  STATES, THAT INSURER
SELLS OR ISSUES  ANY  POLICY CONTRACT OR OTHERWISE
MAKES ANY SOLICITATION OR INDUCEMENT OR ENGAGES IN
ANY NEGOTIATIONS WITH RESPECT TO THE SAME; BUT (2)
AN  INSURER  SHALL   NOT  BE  DEEMED  TO  TRANSACT
INSURANCE OR DO  BUSINESS  IN A STATE, DISTRICT OR
TERRITORY OF THE  UNITED  STATES  BY REASON OF THE
FACT THAT SUCH  INSURER  (A)  HOLDS  A  LICENSE TO
TRANSACT  INSURANCE  IN   A   STATE,  DISTRICT  OR
TERRITORY OF THE  UNITED  STATES;  (B)  HAS ISSUED
INSURANCE POLICIES OR  CONTRACTS TO RESIDENTS OF A
FOREIGN  COUNTRY  WHO  SUBSEQUENTLY  RESIDE  IN  A
STATE, DISTRICT OR TERRITORY OF THE UNITED STATES;
OR  (C)  PERFORMS   ADMINISTRATIVE   OR  OVERSIGHT
FUNCTIONS IN A STATE, DISTRICT OR TERRITORY OF THE
UNITED  STATES.  A  DOMESTIC  INSURER  TRANSACTING
INSURANCE ONLY IN A FOREIGN COUNTRY MAY INVEST ITS
FUNDS  IN  A  MANNER  CONSISTENT  WITH  THE  LAWS,
REGULATIONS AND ADMINISTRATIVE  PRACTICES  OF  THE
FOREIGN COUNTRY IN  WHICH  IT  TRANSACTS INSURANCE
WITHOUT  LIMITATIONS  UNDER  SECTIONS  38a-102  TO
38a-102h, INCLUSIVE, AS AMENDED BY THIS ACT.
    Sec.  3.  Subsection  (a) of section 38a-77 of
the general statutes is repealed and the following
is substituted in lieu thereof:
    (a)  The  commissioner,  upon  receipt  of the
annual report of each domestic, foreign and  alien
life  insurance  company  doing  business  in this
state,  AS  DETERMINED  UNDER  SUBSECTION  (b)  OF
SECTION 38a-76, AS AMENDED BY THIS ACT, shall make
a  valuation  of  all  its  outstanding  policies,
additions  thereto,  unpaid  dividends  and  other
obligations. The provisions of this section  shall
not apply to policies or certificates in which the
amount of insurance or benefit is determined by an
assessment   collected   from  the  surviving  and
associated   holders   of   like    policies    or
certificates,  and  not by a guaranty or pledge of
insurance  irrespective   of   the   amount   thus
collected; provided any amount collected upon such
assessments, until expended for  the  purpose  for
which  it  was  collected,  shall  be charged as a
liability  against  the  company  or   association
holding the same.

Approved May 22, 1998