ConnecticutHB 069812025 Regular SessionHouse

AN ACT CONCERNING ELECTRONIC POSTING OF CERTAIN DOCUMENTS BY INSURERS, NONRENEWAL OR CANCELLATION OF PROPERTY AND CASUALTY INSURANCE POLICIES, FEDERAL HOME LOAN BANKS AND THE INSURERS REHABILITATION AND LIQUIDATION ACT, HYPOTHECATION OF ASSETS AND SURPLUS LINES INSURANCE.

Sponsored By: Insurance and Real Estate Committee

Signed by Governor

Summary

To: (1) Allow insurers to post certain insurance policies and endorsements on such insurers' Internet web sites; (2) allow property and casualty insurers to provide policy nonrenewal or cancellation notices by United States Postal Service intelligent mail barcode tracking; (3) extend certain protections to a Federal Home Loan Bank for any pledge, security, credit, collateral, loan, advance, reimbursement or guarantee agreement or arrangement or any similar agreement or arrangement or other credit enhancement to which such bank is a party with an insurance company that is under conservation, rehabilitation, liquidation or administrative supervision by the Insurance Department; (4) allow any domestic insurer, health care center or fraternal benefit society to pledge, hypothecate or encumber such insurer's, center's or society's assets in connection with participation in the Federal Home Loan Bank System; and (5) exempt insurance policies that are procured through unaffiliated wholesale surplus lines insurance brokers from the requirement that insurers and surplus lines insurers sign a statement that diligent efforts were made to obtain insurance from a licensed insurer.

insurance and real estate

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Bill Overview

Analyzed Economic Effects

8 provisions identified: 5 benefits, 0 costs, 3 mixed.

Backup cancellation notices for home and auto

Beginning July 1, 2025, home and auto insurers must clearly offer a way to name a backup notice recipient. The offer applies when Connecticut policies are issued, renewed, amended, or endorsed. Insurers must include a designation form and mailing and email addresses for submitting it. The recipient must accept in writing, and the designation takes effect within 10 business days. The designated person receives cancellation and nonrenewal notices.

Home and auto policy cancellation protections

Beginning July 1, 2025, cancellation protections cover qualifying Connecticut homeowners policies delivered, issued, renewed, amended, or endorsed from that date. Home and auto policies generally require 10 days' cancellation notice for nonpayment and 30 days for other reasons. After 60 days of coverage, or for renewals, cancellation grounds are limited, including nonpayment, fraud, misrepresentation, or increased physical risk. Policyholders can prevent nonpayment cancellation by paying and can demand a refund of excess premiums. Nonrenewal generally requires 60 days' written notice, with exceptions for nonpayment, fraud or misrepresentation, and physical changes increasing risk. Renewals with reduced coverage or higher deductibles require 60 days' notice clearly identifying those changes. Transfers to affiliated insurers need no renewal notice when terms stay substantially the same, but the receiving insurer can apply its rates at renewal.

Online insurance policies with free paper copies

Beginning October 1, 2025, insurers can post policies and endorsements online with your consent, without personal identifying information. Documents must stay accessible throughout coverage and be free to save or print. At issuance and each renewal, insurers must describe purchased documents, give their web address, and offer free paper copies. Insurers must notify you of policy changes and keep expired policies and endorsements available on request for five years. You can opt out anytime; insurers must mail or deliver paper copies if you decline online access.

Health plan members keep paper delivery choices

Beginning January 1, 2026, sponsors of covered health plans can consent to electronic delivery of all policy communications for members. Each member must receive notice at enrollment or a reasonable time before electronic delivery starts. Members must have a chance to choose mail delivery and can opt out of electronic delivery anytime.

Commercial cancellation limits and tracked insurance notices

Beginning July 1, 2025, commercial policies in effect over 60 days, or renewed policies, have eight allowed cancellation grounds. These include nonpayment, fraud, materially increased hazards, and substantial loss of reinsurance. Nonpayment requires at least 10 days' notice and a chance to keep coverage by paying; other grounds require 60 days. Professional-liability cancellation requires at least 90 days' notice. For covered cancellation and nonrenewal notices, insurers can use certified mail or qualifying postal tracking to prove notice. Electronic delivery is allowed where the applicable rule permits agreement with the named insured, with a delivery receipt where required.

Surplus insurance searches with broker exceptions

Beginning October 1, 2025, surplus-lines licensees and insureds must first make a diligent effort to find coverage from authorized insurers. The Insurance Commissioner defines that effort; brokers must retain approved records and make them available for examination. Coverage from unauthorized insurers can be treated as excess over coverage available from authorized insurers, including at renewal. Exceptions cover specified flood coverage, qualifying commercial purchasers who request surplus coverage in writing after disclosure, and placements through unaffiliated wholesale surplus-lines brokers. The law sets no premium change.

Insurer asset protections with bank exceptions

Beginning October 1, 2025, broader court-ordered freezes protect insurer assets during conservation, rehabilitation, and liquidation. Relief requires clear and convincing proof, and injunctions under this rule require no bond. Qualifying Federal Home Loan Bank agreements remain enforceable for up to 10 business days after a delinquency order. Receivers cannot undo related transfers or obligations made before or after a successful rehabilitation or liquidation petition, except for intentional hindrance, delay, or fraud. Liquidators also cannot undo qualifying preferences—transfers favoring one creditor over others. When a bank exercises rights over a member insurer's collateral, it must repurchase excess stock within seven business days. Repurchase depends on the bank's good-faith finding that law, regulations, its capital plan, and membership-wide stock practices allow it. Within 10 business days of a receiver's request, the bank must provide a process and timeline for specified collateral, account, fee, and stock matters. On request, it must also provide available loan-renewal or restructuring options, subject to market conditions, loan terms, bank policies, and federal law.

Insurers gain room to pledge assets

Beginning October 1, 2025, qualifying Federal Home Loan Bank System asset pledges are excluded from statutory asset-pledging limits. This includes pledges tied to funding transactions. The exception covers Connecticut domestic insurers, domestic health care centers, and domestic fraternal benefit societies. It gives these entities more financing flexibility while allowing more assets to be committed to bank-related obligations.

Sponsors & Cosponsors

Sponsor

Insurance and Real Estate Committee
Affiliation unavailable

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 178 • No: 15

House vote • 3/11/2025

INS Vote Tally Sheet (Joint Favorable Substitute)

Yes: 11 • No: 2

Senate vote • 3/11/2025

Senate Roll Call Vote 381

Yes: 36 • No: 0