Connecticut Seal

General Assembly

File No. 152

    February Session, 2016

House Bill No. 5444

House of Representatives, March 23, 2016

The Committee on Insurance and Real Estate reported through REP. MEGNA of the 97th Dist., Chairperson of the Committee on the part of the House, that the bill ought to pass.

AN ACT CONCERNING THE EXECUTION OF SURETY BONDS BY THE CONNECTICUT HEALTH INSURANCE EXCHANGE.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Subsection (c) of section 38a-1081 of the 2016 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2016):

(c) (1) All initial appointments shall be made not later than July 1, 2011. Following the expiration of such initial terms, subsequent board member terms shall be for four years. Any vacancy shall be filled by the appointing authority for the balance of the unexpired term. If an appointing authority fails to make an initial appointment, or an appointment to fill a vacancy within ninety days of the date of such vacancy, the appointed board members may make such appointment by a majority vote. Any board member previously appointed to the board or appointed to fill a vacancy may be reappointed in accordance with this section. Any board member may be removed for misfeasance, malfeasance or wilful neglect of duty at the sole direction of the appointing authority.

(2) As a condition of qualifying as a member of the board of directors, each appointee shall, before entering upon such member's duties, take and subscribe the oath or affirmation required under section 1 of article eleventh of the Constitution of the state. A record of each such oath shall be filed in the office of the Secretary of the State.

(3) Appointed board members may not designate a representative to perform in their absence their respective duties under sections 38a-1080 to 38a-1092, inclusive. The Governor shall select a chairperson from among the board members and the board members shall annually elect a vice-chairperson. Meetings of the board of directors shall be held at such times as shall be specified in the bylaws adopted by the board and at such other time or times as the chairperson deems necessary. Any board member who fails to attend more than fifty per cent of all meetings held during any calendar year shall be deemed to have resigned from the board.

(4) Six board members shall constitute a quorum for the transaction of any business or the exercise of any power of the exchange. For the transaction of any business or the exercise of any power of the exchange, the exchange may act by a majority of the board members present at any meeting at which a quorum is in attendance. No vacancy in the membership of the board of directors shall impair the right of such board members to exercise all the rights and perform all the duties of the board. Except as otherwise provided in sections 38a-1080 to 38a-1092, inclusive, any action taken by the board under the provisions of sections 38a-1080 to 38a-1092, inclusive, may be authorized by resolution approved by a majority of the board members present at any regular or special meeting, which resolution shall take effect immediately unless otherwise provided in the resolution.

(5) Board members shall receive no compensation for their services but shall receive actual and necessary expenses incurred in the performance of their official duties.

(6) Subject to the provisions of subdivision (2) of subsection (b) of this section, board members may engage in private employment or in a profession or business, subject to any applicable laws, rules and regulations of the state or federal government regarding official ethics or conflicts of interest.

(7) Notwithstanding any provision of the general statutes, it shall not constitute a conflict of interest for a trustee, director, partner or officer of any person, firm or corporation, or any individual having a financial interest in a person, firm or corporation, to serve as a board member of the exchange, provided such trustee, director, partner, officer or individual shall abstain from deliberation, action or vote by the exchange in specific request to such person, firm or corporation.

(8) Each board member shall execute a surety bond in the penal sum of fifty thousand dollars, or, in lieu thereof, the chairperson of the board shall execute a blanket position bond or procure an equivalent insurance product covering each board member, the chief executive officer and the employees of the exchange, each surety bond or equivalent insurance product to be conditioned upon the faithful performance of the duties of the office or offices covered, to be executed by a surety company or issued by an insurance company authorized to transact business in this state as surety [and to be approved by the Attorney General and filed in the office of the Secretary of the State] or an insurance company, respectively. The cost of each such bond or insurance product shall be paid by the exchange.

(9) No board member of the exchange shall, for one year after the end of such member's service on the board, accept employment with any health carrier that offers a qualified health benefit plan through the exchange.

This act shall take effect as follows and shall amend the following sections:

Section 1

October 1, 2016

38a-1081(c)

INS

Joint Favorable

 

The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of informational sources, including the analyst's professional knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note

State Impact: None

Municipal Impact: None

Explanation

The bill does not result in a cost to the state or municipalities as the state health insurance exchange is a quasi-public state agency which is supported by assessments on Connecticut health insurance carriers. There is no impact to the state health exchange as it conforms state statute to reflect policies already procured by the exchange.

The Out Years

State Impact: None

Municipal Impact: None

OLR Bill Analysis

HB 5444

AN ACT CONCERNING THE EXECUTION OF SURETY BONDS BY THE CONNECTICUT HEALTH INSURANCE EXCHANGE.

SUMMARY:

This bill allows the Connecticut Health Insurance Exchange (Access Health CT) to obtain an equivalent insurance product covering board members, the chief executive officer, and exchange employees in lieu of existing bond requirements. Existing law requires (1) each board member to execute a $50,000 surety bond or (2) the exchange chairperson to execute a blanket position bond covering each board member, the chief executive officer, and exchange employees.

The bill requires the equivalent insurance product to be conditioned on the faithful performance of duties, issued by an insurer authorized to transact business in Connecticut, and paid for by the exchange. The law requires each bond to be similarly conditioned, written by a surety company authorized to transact business here, and paid for by the exchange.

The bill eliminates a requirement that bonds be approved by the attorney general and filed with the secretary of the state.

EFFECTIVE DATE: October 1, 2016

COMMITTEE ACTION

Insurance and Real Estate Committee

Joint Favorable

Yea

18

Nay

0

(03/08/2016)

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