OLR Bill Analysis

HB 6771

AN ACT AUTHORIZING NONADMITTED INSURERS TO OPEN AN OFFICE IN THIS STATE.

SUMMARY:

This bill explicitly specifies that the Unauthorized Insurers Act allows a nonadmitted insurer to open an office in Connecticut to transact surplus lines insurance.

EFFECTIVE DATE: October 1, 2015

BACKGROUND

Nonadmitted Insurers

A nonadmitted insurer (or unauthorized insurer) is an insurer that has not been granted a certificate of authority by the insurance commissioner to transact insurance business in Connecticut (CGS 38a-1(11)(E)).

Unauthorized Insurers Act

The Unauthorized Insurers Act defines what it means to transact insurance business in the state and sets out penalties for unauthorized insurers who do so. It exempts from its provisions “the lawful transaction of surplus lines insurance,” thus allowing nonadmitted insurers to transact surplus lines insurance (CGS 38a-271 et seq.).

Surplus Lines Insurance

Surplus lines insurance is property and casualty insurance coverage that is unavailable from Connecticut-licensed insurers (i.e., admitted insurers) and must therefore be purchased from a nonadmitted insurer. Surplus lines insurers register with the Insurance Department, but are not domiciled in the state. They work through licensed surplus lines brokers who must maintain an office here (CGS 38a-794).

COMMITTEE ACTION

Insurance and Real Estate Committee

Joint Favorable

Yea

15

Nay

1

(03/05/2015)