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Yes: 0 • No: 0
ConnecticutHB 053732026 Regular SessionHouseWALLET
AN ACT CONCERNING THE INSURANCE DEPARTMENT'S RECOMMENDATIONS FOR REVISIONS TO THE INSURANCE STATUTES.
Sponsored By: Insurance and Real Estate Committee
Signed by Governor
Summary
To implement the Insurance Department's recommendations for revisions to the insurance statutes.
insurance and real estate
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Bill Overview
Analyzed Economic Effects
18 provisions identified: 8 benefits, 2 costs, 8 mixed.
Higher payouts when insurance companies fail
Beginning October 1, 2026, Connecticut's Insurance Guaranty Association raises covered refunds for unused premiums from $2,000 to $50,000 per policy. It removes the former limit of half the unused premium and the requirement that other covered claims exceed $100. General claim caps are $300,000 for insolvencies before October 1, 2007, and $400,000 for October 1, 2007–September 30, 2015. The cap is $500,000 for final liquidation orders finding insolvency entered on or after October 1, 2015. Separate rules cap covered first-party real-property claims at $1 million total per occurrence under residential or commercial policies, for insurers found insolvent on or after June 1, 2026.
Cyber insurance protection has payout limits
Beginning October 1, 2026, qualifying cyber insurance gains Connecticut Insurance Guaranty Association protection when an insurer fails. Coverage must be written directly by an insurer admitted to do business in Connecticut. Covered risks include data breaches, ransomware, cyber extortion, and identity theft. The association need not pay more than $500,000 total for one insured cyber event under a policy or endorsement. That cap combines first- and third-party claims, regardless of how many people file claims.
Some nonresidents gain insurance failure protection
Beginning October 1, 2026, some nonresident policy owners, certificate holders, and enrollees gain Connecticut guaranty association coverage. The issuing member insurer must be based in Connecticut. The exception covers obligations assumed through the process specified in subsection (g) of section 23. It applies even when the person's home state has a similar guaranty association, subject to the remaining nonresident coverage requirements.
Totaled cars get two-source value checks
For an insured car declared a constructive total loss, the insurer must use at least the average of two retail values. One comes from the J.D. Power used car guide, its successor, or another approved, publicly available industry source. The second must come from a separate industry source approved by the Insurance Commissioner. This sets a minimum valuation method, not a fixed settlement amount.
Transferred policies gain insurer failure protection
Beginning October 1, 2026, transferred policy claims can qualify for Connecticut Insurance Guaranty Association protection. The original member insurer must have no remaining policy duties. A court in the receiving insurer's home state must enter a final liquidation order finding insolvency. The claim must qualify as though the original insurer still owed it, using the same filing and liquidation dates. Transfers to insurers outside the association also need prior regulatory or court approval.
Insurer failure eligibility rules become narrower
Beginning October 1, 2026, the law revises which failed insurers qualify for Connecticut Insurance Guaranty Association protection. The insurer must have been licensed in Connecticut when the policy was issued or the insured event occurred. A court in its home state must enter a final liquidation order finding insolvency. The definition no longer separately lists successor insurers created through mergers or divisions.
Policy transfers require notices and oversight
Beginning October 1, 2026, covered transfers require policyholder and agent notices, including financial information, response procedures, and a written rejection option. Connecticut-based insurers need prior approval; licensing rules generally bar transferring Connecticut residents' policies to insurers not licensed here. Premium payment within 24 months counts as acceptance only with clear notice and a way to preserve rejection rights. Otherwise, after at least 24 months, silence for one month after a second, final notice counts as consent. Consent releases the original insurer and makes the receiving insurer solely liable; an approved financial-distress exception also permits this result.
Drug coverage notices and midyear changes
For plans offered on or after January 1, 2027, carriers using covered-drug lists must publish next-year coverage and removed drugs before open enrollment. Beginning January 1, 2027, plans may remove a drug after at least 90 days' notice when FDA information raises safety concerns. Safety-based removal is blocked when the prescriber states in writing that the drug remains medically necessary. Plans may also remove a drug that becomes available without a prescription, with 90 days' notice to the member and prescriber. A brand-name drug may move to a higher-cost tier only after an FDA-approved generic enters a lower-cost tier.
Policyholders get premium explanations and e-notices
Beginning January 1, 2027, covered renewal billing notices are due at least 30 days before renewal. The rule covers specified policies with prior annual premiums below $50,000, excluding workers' compensation and commercial renewals with increases below 10%. Insurers or their managing general agents may deliver notices electronically when the insurer and named insured agree. Personal-risk notices must prominently list contact information and explain the right to ask why premiums increased. After a request, the insurer must provide an understandable explanation within 20 business days.
Health appeals get clearer review clocks
Beginning July 1, 2026, health carriers must send the independent reviewer written notice of their initial appeal-screening decision. When a request is accepted, they must notify the reviewer, Insurance Commissioner, member, and any authorized representative. The decision clock starts when the reviewer receives notice that the request is complete and eligible. Deadlines remain 45 days for standard reviews and 20 days for experimental or investigational reviews. Expedited reviews retain their applicable 48-hour, 24-hour, or five-day deadlines.
Insurance backstop gains claim recovery powers
Beginning October 1, 2026, Connecticut's Insurance Guaranty Association can pursue and keep recoveries tied to covered claims it paid. Its recovery right extends only to the amount it paid. The association can also appoint and direct lawyers defending covered liability claims and providers delivering covered services. These powers do not create a new direct payment to policyholders.
Life settlement providers lose filing penalties
Beginning October 1, 2026, life settlement providers no longer owe annual statements under the repealed filing requirement. The law removes the related penalty for willfully failing to file or answer an inquiry. That penalty was up to $250 per day, capped at $25,000.
Insurance professionals face new oversight duties
Beginning October 1, 2026, insurers must report an agent's termination for cause to the Insurance Commissioner within 30 calendar days. The reporting duty belongs to the insurer, not the agent. The commissioner may also set continuing education rules for licensed casualty claims adjusters. The law itself sets no coursework or education cost.
Terrorism exclusions trade coverage for savings
Effective upon passage, commercial risk policies may exclude losses caused directly or indirectly by terrorism. Premiums must reflect the expected savings from excluding those losses. The law also removes the former terrorism-coverage requirement for condominium association master policies. These rules apply while the federal Terrorism Insurance Program remains in effect.
Insurance statute repeal has unclear effects
Effective October 1, 2026, the law repeals Connecticut General Statutes section 38a-66. The supplied provision does not identify the section's subject or explain which requirements end. Its effect on household costs or rights cannot be determined from this text.
Insurers pay assessments on revised schedules
Beginning October 1, 2026, covered insurers' assessments include Insurance Fund appropriations for the Office of the Behavioral Health Advocate. Those amounts also count toward the 25% assessment cap. The June 30 estimated payment rises from 25% to 35%. Another 25% is due October 31 instead of September 30, followed by 20% each on December 31 and March 31. The law sets no direct household charge.
Specialty insurance brokers get revised duties
Beginning October 1, 2026, the commissioner may require annual surplus-lines reports covering policy counts, types, property locations, premiums, and renewals. The commissioner may also request more information; annual reporting applies only when required. The law replaces the stated coverage-search documentation duties and exempts specified placements from diligent-effort rules. Exceptions cover National Flood Insurance Program coverage, exempt commercial purchasers, and placements through unaffiliated wholesale brokers—not other flood insurance. The exempt-commercial-purchaser exception no longer requires the former disclosures and written request.
Benefit administrators face revised oversight rules
Beginning October 1, 2026, written contracts must require third-party administrators to continue agreed services during insurer insolvency or receivership. Administrators cannot renew their licenses without complying with the amended requirements of section 19a-7j. Insurers and other service users must review administrator operations at least twice yearly when benefits cover more than 100 certificate holders. The law removes the requirement that one review be an on-site audit.
Sponsors & Cosponsors
Sponsor
Insurance and Real Estate Committee
Affiliation unavailable
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
Senate vote • 3/12/2026
Senate Roll Call Vote 346
Yes: 0 • No: 0
House vote • 3/12/2026
House Roll Call Vote 186 AS AMENDED
Yes: 0 • No: 0
House vote • 3/12/2026
INS Vote Tally Sheet (Joint Favorable Substitute)
Yes: 0 • No: 0
Bill Text
Public Act No. 26-69
5/19/2026
File No. 241
3/30/2026
INS Joint Favorable Substitute
3/12/2026
Raised Bill
2/26/2026
Bill Analysis For File Copy 241
Bill Analysis for HB-5373, as amended by House "A"
Fiscal Note For File Copy 241
Fiscal Note for Amendment LCO 4884 (No Fiscal Impact)
Fiscal Note for Amendment LCO 5109 (No Fiscal Impact)
Fiscal Note for HB-5373, As Amended by House "A" (LCO 5109)
House LCO Amendment #4884 (D)
House Roll Call Vote 186 AS AMENDED
House Schedule A LCO# 5109 (J)
INS Joint Fav. Rpt
INS Vote Tally Sheet (Joint Favorable Substitute)
Senate Roll Call Vote 346
Summary for Public Act No. 26-69
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