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2012 PIACT legislative wrap-up
Resource kit 06006
By Campbell H. Wallace, Esq.
Connecticut 2012 legislative wrap-up
The Connecticut Legislature’s 2012 regular session adjourned on May 9, 2012. Being an even-numbered year, this was a “short session.” Despite the compressed time period and the limitations imposed by the short session, a large number of bills saw action. PIACT tracked, analyzed and commented on legislation and pursued its legislative agenda.
Surplus-lines affidavit
One of PIACT’s major initiatives this session involved removing the notarization burden placed on producers forced to place a risk in the surplus-lines market. Form SL-8, the current surplus-lines affidavit frequently is the only form handled by an agency that requires notarization. This requirement is an annoyance, and a roadblock and does not offer a benefit or a protection to any party in the transaction.
PIACT met with the state’s regulators and legislators alike, and coordinated with the New England Surplus Lines Association to advance the idea that the form should be a signed statement and not an affidavit.
These efforts bore fruit, as H.B. 5386, a bill that contains language to make this change, was introduced and moved through the legislative process. In support of the bill, PIACT contacted individual House and Senate members, urging passage of the legislation. The bill passed the House, and was placed on the Senate calendar. Unfortunately, the bill was not acted on before the session adjourned. PIACT and the New England Surplus Lines Association stand ready to continue their efforts to modernize and improve the process for retail producers and surplus-lines brokers alike.
Hurricane deductible triggers. Another bill closely watched and reported on by PIACT was H.B. 5230, which would make the state’s current deductible trigger bulletin law. According to the Office of Legislative Research, the bill also would broaden the applicability of standard fire insurance policy provisions regarding the:
- period when a loss is payable after proof of loss;
- period when a suit or action for the recovery of a claim must be commenced; and
- definitions of actual cash value and depreciation.
This law requires people mitigating losses incurred on or after July 1, 2012, covered by a personal risk or commercial risk policy, to give the insured written notice of the work to be completed and the estimated total price, before doing any work, or else any contract for the mitigation between that person and the insured is void. The bill was signed into law as Public Act 12-162 and took effect on Oct. 1, 2012, and applies retroactively to policies written or renewed on or after July 1, 2012.
Auto bills. S.B. 101 was another interesting bill that received limited attention. This bill sought to provide uninsured motorist coverage to a named insured or a household member of the named insured for damages arising from being struck as a pedestrian during the theft of an insured vehicle, and was, on April 9, referred to the Office of Legislative Research of Fiscal Analysis. The bill was never released from the House or Senate Finance, Revenue and Bonding committees.
S.B. 318 which sought to prohibit the sale of single-limit auto policies in the state was introduced early in the session and worked its way through the committee structure. The bill was placed on the Senate calendar March 26. PIACT and numerous other associations weighed in opposing this bill. The bill did not become law.
Employment-related bills
Other bills related to small business concerns received attention in the Legislature.
H.B. 5235 sought to amend Connecticut’s law on personnel files. Currently, an employee may inspect a copy of their personnel file; this bill would have decreased the time an employer has to provide access to the file, required employers to provide employees with copies of documentation of any disciplinary action or termination and it would have required employers to notify employees that they may add a written statement disagreeing with the contents of the file. The bill did not pass the House.
S.B. 79, in the words of the Office of Legislative Analysis “makes it a discriminatory employment practice to advertise employment opportunities in a way that discriminates against anyone because he or she is unemployed, unless there is a bona fide occupational qualification or need. The bill applies to people, employers, employment agencies and labor organizations advertising such opportunities.”
Essentially, the bill sought to ban employers and employment agencies from discriminating against the unemployed in job advertisements. This was a contentious item of legislation, and was heavily debated. Despite passing the Senate on May 1, 2012, it didn’t pass the House and never became law.
H.B. 5291 sought to raise the minimum wage, by a dollar, to $9.25, an additional $.50 in January and eventually tie the minimum wage to the cost of living via the consumer price index. An original version of the bill would have removed the state’s tip credit, however, the credit was reinstated in the version that was passed. The bill was considered in a public hearing on Feb. 28, but at adjournment remained on the Senate calendar.
Health-related bills
H.B. 5011, according to the Office of Legislative Research, expands the circumstances under which certain health insurance mandates apply—specifically, it requires entities that issue Medicare supplement policies to file a rate increase approval request for amended policies. It also corrects statutory references and makes other minor and technical changes to the insurance laws. The bill was signed into law as Public Act 12-145 on June 15, 2012.
Legislation regarding the state’s ongoing progress toward establishing a health insurance exchange is being considered. The bill, H.B. 5013, would increase the number of board members of the Connecticut Insurance Exchange from 14 to 16, as well as making the health-care advocate, currently an ex-officio nonvoting board member, a voting board member. The bill did not advance out of committee.
A bill tracked in the session, S.B. 20, which would broaden the base of insurer funding the Connecticut Insurance Department and the Office of the Health Care Advocate was amended to study the issue in greater depth. As of the session’s adjournment, the bill was on the Senate calendar.
Other insurance bills
S.B. 411, a bill that augments the ability of the Connecticut Insurance Department to review a proposed acquisition or other change of control of a Connecticut insurance company, gives the insurance commissioner the authority to initiate, be a member of, or participate in “supervisory colleges,” which are composed of regulators who conduct financial examinations of internationally active holding companies which control an insurer. The CID will be able to analyze the whole group and the impact of specific financial activities on a domestic insurer, a measure crafted in response to the financial crisis of 2008. The bill was signed into law on June 4, 2012, as Public Act 12-103.
H.B. 5484 is a bill that allows the CID to analyze the financial strength of a foreign seller of reinsurance, as well as its U.S. insurance company purchasers. According to the Office of Legislative Research, this act modifies and expands the options under which a U.S.-ceding insurer may take credit for reinsurance on its financial statements. The act gives the commissioner additional oversight power, and allows the suspension or revocation of a reinsurer’s certification or accreditation if it is determined that the reinsurer no longer meets the applicable requirements. The bill was signed into law on June 4, 2012, as Public Act 12-139.
H.B. 5231 is a measure to amend the law relating to auto glass work. Specifically, the bill sought to require an insurance company or its agent to provide additional disclosures to an insured regarding the insured’s right to choose a repair or glass shop. The original version of the bill included cumbersome requirements such as mandating that the agent maintain a list of glass shops in a 30-mile radius. PIACT submitted testimony opposing that version of the bill and it did not advance beyond the public hearing.
PIACT also tracked S.B. 20, which sought to authorize a study on the expansion of the assessment base that supports the Connecticut Insurance Department. The bill passed the Senate, but didn’t pass the House.
Miscellaneous
S.B. 27, which would increase the transparency and accessibility of government. The bill requires state agency regulations to be posted online. Currently, they are posted in the Connecticut Law Journal. The bill was signed into law on June 8, 2012, as Public Act 12-92 and took effect July 1, 2013. 3/13
