OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

http: //www. cga. ct. gov/ofa

sSB-1212

AN ACT CONCERNING COVERAGE BY THE CONNECTICUT INSURANCE GUARANTY ASSOCIATION.

OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 08 $

FY 09 $

Department of Revenue Services

GF - Revenue Impact

See Below

See Below

Note: GF=General Fund

Municipal Impact: None

Explanation

Insurers that are assessed by the Connecticut Insurance Guaranty Association (CIGA)1 can claim an offset to their insurance premium tax obligation for any assessments. The bill increases the coverage limit for the CIGA to $400,000 from $300,000, which potentially increases the amount CIGA assess insurers. Therefore if the bill results in greater assessments then there would be a General Fund Revenue loss to the insurance premium tax. 2

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation.

1 CIGA, which is funded by assessments against insurers licensed to write property and casualty insurance in the state, is required by law to process and pay qualifying claims filed by state residents against an insolvent insurance company. CIGA will attempt to refund those insurers they assess over time with funds they recover from the insolvent insurer.

2 To the extent insurers are refunded by CIGA they are required to reimburse Connecticut for their previously claimed offset to the insurance premiums tax.