SB 377 — AN ACT AUTHORIZING AGENCY CAPTIVE INSURANCE COMPANIES.

General Assembly   RaisedSubstitute Bill No.

377 February Session, 2018   LCO*_____SB00377INS___032118____* No.AN ACT AUTHORIZING AGENCY CAPTIVE INSURANCE COMPANIES.

1860   *01860_______INS* Referred to Committee on INSURANCE AND REAL ESTATE   Introduced by:

  (INS)   AN ACT AUTHORIZING AGENCY CAPTIVE INSURANCE COMPANIES.

(NEW) (Effective July 1, 2018) An agency captive insurance company may be incorporated as (1) a stock insurer with its capital divided into shares and held by the stockholders, as(2) a nonprofit corporation with one or more members, or as(3) a manager-managed limited liability company.

(1) Each insurance agent or insurance producer licensed in accordance with sections 38a-702a to 38a-702r, inclusive, of the general statutes that owns or controls the company is, and remains, licensed in good standing in this state under sections 38a-702a to 38a-702r, inclusive, of the general statutes, and in all other states in which the insurance agent or insurance producer is licensed;

(2) The company (A) insures only against the risks of commercial policies that are placed by or through an insurance agent or producer described in subdivision (1) of this subsection, (B) does not insure against risks of any health insurance policy or plan, and (B)(C) submits to the commissioner,Insurance Commissioner, in a manner specified by the commissioner, the form of commercial policies described in subparagraph (A) of this subdivision if the commissioner, in the commissioner's discretion, requires that the company submit such policies to the commissioner;

(3) The company discloses, in writing and in a form and manner prescribed by the commissioner,Insurance Commissioner, to each policy holder under a policy described in subparagraph (A) of subdivision (2) of this subsection any limitations, rights and obligations that such company holds, or is subject to, as a result of its affiliation with an insurance agent or insurance producer described in subdivision (1) of this subsection;

and (4) All risks insured or reinsured by the company are, if required by the commissioner,Insurance Commissioner, (A) fronted by an insurance company or reinsurance company authorized by the commissioner to conduct the type of insurance business or reinsurance business in this state that the agency captive insurance company insures or reinsures, (B) reinsured by a reinsurance company licensed to conduct reinsurance business in this state, or (C) secured by a trust established in the United States for the benefit of policy holders and claimants, or funded by an irrevocable letter of credit or other arrangement approved by the commissioner.

(b) The commissionerInsurance Commissioner may require an agency captive insurance company to increase the funding of any security arrangement described in subdivision (4) of subsection (a) of this section.

and (B) Only insures against risks covered by insurance policies sold, solicited or negotiated through the insurance agents or insurance producers that own or control such captive insurance company.company;

and (C) Does not insure against risks covered by any health insurance policy or plan.

5 July 1, 2018 38a-91ss(g)(2)(A) StatementINS ofJoint Purpose:Favorable Subst.

To authorize agency captive insurance companies.

[Proposed deletions are enclosed in brackets.

Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]