PA 15-187—SB 907
Insurance and Real Estate Committee
AN ACT CONCERNING CHANGES TO THE INSURANCE STATUTES
SUMMARY: This act makes several unrelated changes in insurance statutes. It:
1. makes a portable electronics insurance license valid until January 31 of even-numbered years;
2. extends the insurance commissioner's authority to suspend or revoke an insurance producer's license if the producer submits any form of payment, instead of just checks, to the Insurance Department that is dishonored;
3. allows the commissioner to share an insurer's Own Risk and Solvency Assessment (ORSA) summary report and related documents with other regulatory officials and the National Association of Insurance Commissioners (NAIC) without the insurer's written consent; and
4. incorporates the third-party administrator (TPA) annual reporting requirement into the annual TPA license renewal process.
EFFECTIVE DATE: October 1, 2015
§ 1 – PORTABLE ELECTRONICS INSURANCE LICENSE
The act specifies that a portable electronics insurance license expires on January 31 of each even-numbered year, unless the commissioner suspends or revokes it sooner.
By law, a person who (1) leases or sells portable electronics and (2) offers or sells portable electronics insurance in Connecticut must obtain an insurance license from the commissioner. Licenses are valid for two years and may be renewed.
§ 2 – DISHONORED PAYMENT BY LICENSED PRODUCER
The act requires the commissioner, under certain circumstances, to suspend an insurance producer's license when the producer makes a payment to the Insurance Department that is dishonored, whether the payment is by check, draft, or other form (e. g. , electronic payment). Prior law allowed the commissioner to take this action with respect to checks only.
For these other forms of payment, the act requires the commissioner to follow procedures in existing law for suspending a license for a dishonored check. Thus, the commissioner must notify the producer that the payment was dishonored. If the producer does not make good on the payment within 15 days after receiving notice, the commissioner must suspend the producer's license.
Within 60 days after receiving notice, the producer may request in writing that the commissioner hold a hearing on why she should end the suspension. The commissioner must hold the hearing within 30 days after receiving the request. If the producer does not request a hearing by the end of the 60-day period, the commissioner must revoke the producer's license.
§ 3 – ORSA REPORT SHARING
The act allows the commissioner to share an insurer's ORSA summary report and related documents with other regulatory officials and NAIC without the insurer's written consent. It still requires the insurer's consent for the commissioner to share information with third-party consultants, as under existing law.
An ORSA is a risk assessment domestic insurers must complete annually under a risk management framework they must establish. Insurers must provide the commissioner, on request, with an ORSA summary report. By law, the ORSA summary report and related documents are generally confidential. But the law allows the commissioner to share them with other regulatory officials, NAIC, and third-party consultants if the recipient agrees in writing to maintain the report's confidentiality.
§§ 4 - 6 – TPA LICENSE AND ANNUAL REPORT
The act combines a TPA's annual report requirement with its annual license renewal process. In doing so, it pushes back the annual report due date and combines the annual report filing and license renewal fees.
Under the act, a TPA seeking to renew its license must submit a $450 fee and its annual report to the commissioner in one filing. By law, licenses expire annually on September 30 and may be renewed at the commissioner's discretion. Prior law required a TPA to (1) file its annual report and a $100 fee by July 1 and (2) renew its license before it expires by submitting a $350 fee.
The annual report contents remain unchanged under the act. It must include (1) the complete names and addresses of all insurers with which the TPA had agreements during the previous fiscal year, (2) evidence that the required surety bonds remain in force, and (3) verification by at least two of the TPA's officers.
The act eliminates requirements that the commissioner (1) review the annual report by September 1 and (2) issue a certification to the TPA, or update an NAIC database, indicating (a) the TPA is licensed in good standing or (b) any deficiencies.
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