Chapter 12 Connecticut Insurance Law

Unfair Claim settlement practices

1. attemped to a settle a claim for less than the loss amount 2. failing to provide claims in a timely manner 3.compelling an insurer to institute suits in order to recover amounts due. 4. failing to affirm or deny coverage of claims within a reasonsable time after proof of loss statement 5. delaying investigation or payments of claims

Disciplinary Actions

Commissioner of insurance possess the power to suspend or revoke an insurance license after a hearing for a violation of State Insurance laws. the commissioner will determine the length of time for a which a license will be suspended. a. when a license has been suspended or revoked by the commissioner notice of such action must be provided in writing to the license holder and the sponsoring insurer if any. b. a monetary fine up to $5,000 may also be imposed by the comissioner. c. any suspense or revocation of a license may be appealed by the holder.

Maintenance and Duration of Casualty Adjuster License

No person must act as casualty claim adjuster unless licensed by commissioner. a. appropiate license fee must be paid includes a $50 filing fee and a $80 license fee. b. license expires June 30th of every odd numbered year. (every two years) c. license will remian in effect for another two years upon payment of the license fee unless suspended or revoked due to an unfair insurance practice. d. license exam may be waived by commission if the applicant holds a like license in his state, or if applicant had same license within preceding two years. e. anyone violating the regulation or acting as an adjuster without preoper license may be fined up to $2,000, receive a prison sentence no more than 1 year or both.

Reporting of Actions

a producer must report to the commissioner of any administrative action against him by another state or gov. agency within 30 days of the final depostition matter ( within 30 days of the pre-trial hearing) a. report shall include a copy of the order,consent to order and any other relevant documents as required by the commissioner.

Public Adjuster

a public adjuster is any person, legal entity, business trade name who practices as business adjusting of loss or damage by fire or other hazard under polices of insurance on behalf of an insured, or who advertises or solicits business as public adjuster

Stock Company

a stock company is owned by its stock holders. policies issued by a stock company are called nonparticipating and do no paid dividends to policyholders. a stock company and a mutual company differ according to ownership. stockholders (not policy holders) appoint or elect its directors and officers.

Mutual Company

a. A mutual company is owned by its policy holders and issues participating policies. if the mutal insurer realizes profits, it will mutually share these with its policy holders in the form of a dividend. a stock company and a mutual company differ according to ownership. stockholders (not policy holders) appoint or elect its directors and officers

Commissioner's Power's/Duties part 2

a. commissioner doesn't prosecute licensees who break the insurance laws whereas the Attorney General does. b. any examination or audit expenses incurred shall be paid by insurer once every 5 years to make sure they are solvent.

CT insurance information and privacy protection act

act is designed to protect the public against the publishing or making public personal inforation of an individual. a. whenever app is completed and policy is delivered or renewed and personal info is collected, written notice must be provided to them. b. provides an individual with ability to access the personal info complied by an ins compan. once request is made, the insurance company must provide the information within 30 days c. any untrue information must be corrected within 30 days

Penalties

after a hearing is held and the commissioner finds that a licensee has engaged in any unfair acts, he may FINE the guility party not more than $5,000 for each violation but no more than an agreement of $50,000 a. if the responsible party was knowingly aware that CT insurance laws were broken, the monetary penalty will be no more than $25,000 per violation and aggregate of not more than $250,000 for each 6 month period. B. any person corportation firm or partnership violating any other insurance law for which no other penailty is provided shall be fined not less than $7,500.

legal action against an insurer

an insured may not legal action against an insurer unless all policy provisions and conditions have been complied and such legal action must be started against the insurer within one year of the loss.

Risk Retention Group

any corporation or other limited liability association whose primary activity consits of assuming and spreading all, or any portion of the liability of its group members.

Impersonation

anyone impersonating another person in taking, state exam has engaged in an unfair act. and will be fined no more than $4,000, prison for up to 6 months or both.

CT MV Financial Responsibility Law

anyone who is required to comply with the financial responsbility of CT law must be able to respond in damages,required liability due to accidents arising out of the ownership of a vehicle. CT law auto minimums that are required for auto liability are 20/40/10 $20,000 per person, $40,000 per accident, and $10,000 in property damage`

Certificare of Authority (COA)

describes that this is the name of an insurer license to trasact insurance business in this state. a. certificates expire May 1st each year after their issuance, renewal paid by fee. b. comission can suspend or revoke and a monetary fine not to exceed $10,000, for violation. c. an insurer may not use its certificate to write controlled business. an insurer whose annual premiums produced on its own risks exceeds 10% of the total annual premium it collects will be deemed to be writing controlled business

Home and Fire Insurance Policy Cancellation

insurer must provide 30 days written notice when cancelling. the reason for cancellation must also be included in the notice. a. cancelled for nonpayment of premium must provide 10 days written notice. b. whenever a policy is cancelled all excess or unearned premium must be returned to the insurer

Renewal and Nonrenewal

insurer must provide 60 days written notice when non-renewing a homeowners or fire policy. notice of renewal of these policies is also provided within 60 days of the expiration date of the policy. no insurer may cancel or non-renew a property insurance policy once it has been in effect for 60 days or more unless the insured has: a. engaged in material misrepresentation or fraud b. failed to pay required premium c. substantially altered or increase the risk without notifying insurer (install wood burning stove,pitbull etc,)

Commissioner's Power's/Duties

1. power to issure insurance licenses to insurers, producers and adjusters and consultants. 2. power to suspende their license after a hearing for just cause 3. power to examine and investigate an insurer for solvency to make sure they are financiall able to fullful their fiduciary responsibilites. 4. power to approve and regulate insurance premium rates 5. duty to collect license fees 6. power to appoint examiners or delegate examining duties to deputies. 7. power to issue cease and desist order for cause shown. 8. duty to conduct hearings to detemine whether insurance laws have been broken 9. power to regular and oversee insurance advertising in this states. 10. duty to report the breaking of insurance laws to the attorney general. 11. power to investigate and examine the books and records of an insurer or licensee at anytime

Reciprocal

is a type of cooperative insurer. the reciprocal is managed by an attorney in fact. also referred to as a reciporal exchange or an inter-insurance assocication

Casualty Adjuster

is any person, legal entity or business trade name who investigates claims and negotiates settlement of claims airsing under any of the policies of insurance on behalf of the insurers under such policies, who advertises or solicits business from insurers is an adjuster.

Domestic Insurer

is incorparted or charted in the State of CT, and may be exmained or audited at least once every 5 years

Foreign Insurer

is one that is authorized to conduct business in CT, but its charter and principal office is located in another state.

Alien Insurer

is one that is chartered in another country, but is authorized to conduct business in state of CT

Admitted Insurer (authorized or license insurer)

is one who is authorized to conduct insurance business in this state. a. issued a certificare of authority will allows it to sell insurance. b. failure of a licensed insurer to exercise its authority to write a particular line or lines of insurance business in this state for 2 consecutive calender years may constitute sufficant cause for revocation of the insurer's authoirty to write those lines of business

Ct Auto Insurance Assigned Risk Plan

makes auto insurance available to individuals who can't secure it in the normal market. a. must certify he attempted with 60 days of application to obtain auto insurance in state. Availanbe coverages available include minimum bodily injury and property damage limits of 20/40/10. an applicant for commercial assignment may a purchase a minimum combined single limit of $50,000 can purchase up to 250,000 per person,500,000 per accident, and 50,000 for property damages. commercial combined single limit of 500,000

Hearings

may be conducted by comission when it is determined a licensee has engaged in any unfair sales practice. a.the commissioner will send a notice of hearing to the aggrieved licensee and the notice shall list the charges of accusations again the licensee. b. once the notice is served to the licensee, the hearing will be held in not less than 30 days. c. during the hearing the commissioner posses the power and duty to question and cross-examine witnesses.

Assumed Names

no individual or business entity is permitted to advertise or conduct insurance transactions under name that is not on file with the department of insurance. any party must notify the department of any assumed name under he is doing business prior to using it.

Fraud (motor vehicle insurance policy)

on or or before March 31st of each year, an insurer shall provide the commsioner with an annual report detailing all information recieved or investigations conducted by such insurer during the past year concerning insurance fraud in any claim under a motor vehicle insurance policy.

Insurance Guaranty Fund

purpose is to provide funds in order to protect policy owners, those insured,claimaint and others against failure in the performance of contractual obiligations due to the impairment of the insurer issuing the policies. A. three classes of assessments that may be levied when insolvency arises. 1. class a assessment to pay admisinstrative cost and general expenses 2. class b assessment for expenses incurred in connection with impaird or insolvent domestic insurers 3. class c assesment for expenses incurred by insolvent foreign and alien insures

Auto Insurance Policy Cancellation

requires 10 days written notice for non payment and 45 days for all other valid reasons.

Commercial Package Policy CPP Cancellation

requries 10 days written notice for non payment and 30 days for all other vaild reasons.

Commissioner

the comissioner of insurance is entrusted with enforcing insurance laws in the state. a. the commissioner is appointed by the governor and by law may not be an officer,director or agent of an insurer. b. is responsible for submitting an annual report of the condition of the insurerance business to the state governor. c. possesses regulation making authority, policy approval and authority and also approves rates and forms.

Suspension and Revocation of a License

the commissioner of insurance has the power to suspend, revoke, refuse to issue or refuse to renew an insurance license after a hearing for a violation of state insurance laws. a. monertary fine up to $5,000 may also be imposed by the commissioner. b. a license may be suspended, revoked, or nonrenewed by the comissioner for the flowing reasons: 1. providing incorrect, misleading, incomplete or materially untrue information in a license application 2. violating any insurance laws. 3. obatining or attempting to obtain a license through misrepresentation or fraud 4. improperly withholding, missapproating or converting any monies or properties recieved in the course of doing insurance business 5. intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance business. 6. Having been convicted of a felony 7. commited or been found of unfair trade practice 8. using fraudulent coercive or dishonest practices, or demonstracting incompetence or financial irresponsibility in the conduct of insurance business 9. having an insurance license or its equilvalent denied, suspended or revoked in any state. 10. forging anothers name to an application for insurance 11. knowingly accepting insurance business from an individual who is not lot licensed. 12. failing to pay child support. 13. failing to pay state income tax or comply with court order direction payment of state income tax 14. cheating on exam

Misreprentation

the unfair practice involves a licensee who misrepresents, the terms, benefits, conditions or coverages, provided by a policy in order to mislead an insured or claimant. a. any person engaging in mispresenation in the sale of insurance policy will be subject up to a $5,000 fine, imprisonment up to 30 days or both

Non Admitted Insurer

unauthorized insurer, has not been issued a COA and cannot connduct insurance business. a form of non-admitted carrier known as surplus lines insurer may receieve business placed by a surplus lines broker.

Cease and Desist Order

when an individual is sent a notice of hearing, he will also recieve a "cease and desist order" this order states the the licensees or individual must cease all insurance related activities until hearing is held. anyone who ignores violation may be fined up to $50,000 or recieve a license suspensin or revocation

Changes in license status

when insurer cancels an agent appointment it must notfiy the commissoner ASAP. a. whenever a lincensee changes his business or home address (email address) must notify Insurance Department within 30 days of the change. b. licensee must notify commissioner, if change of employer, name, or change in the licensed members of a firm, partnership assoc or corp. c. licenssee must notify the commissioner if convicted of a crime such as a felony in this state or any other state. d. notice of any changes must be provided within 30 days of the status. violation of this regulation subject to the licensee to a monetary fine of $100.