CT| Connecticut Public Act 26-69 (Sustitute HB 5373) consists of the CT Insurance Department’s recommendations for revisions to the insureance statutes. It is a mix of modernization (electronic service of process, e-mail notices, electronic premium billing), guaranty fund expansion (adds cybersecurity insurance and raises property caps), a brand-new assumption reinsurance/novation framework, third-party administrator (TPA) tightening, surplus lines reporting overhaul, and several smaller cleanups.
Key Items:
- Going paperless. The Insurance Department can now email you — for service of process, for license suspension/revocation notices, and for renewal premium notices (with consumer agreement). Make sure your email on file is current — once it’s sent, you’re presumed to have received it within a week.
- If your premium goes up, you can ask why. Starting January 1, 2027, personal insurance customers (auto, home, etc.) can ask their insurer for a plain-English explanation of a premium increase and must get one within 20 business days. The renewal notice has to tell you how to ask.
- Drug formularies become more transparent. Health insurers must publish, every year before open enrollment, both the new covered-drug list and any drugs they’re dropping.
- Totaled cars get valued using J.D. Power. The old “NADA guide” reference is gone; J.D. Power is now the named source.
- Cyber insurance gets a safety net — with a ceiling. If your cyber insurer goes bankrupt, Connecticut’s guaranty association will now step in, but it will only pay up to $500,000 total per cyber event, no matter how many people file claims.
- Bigger safety net for property insurance. If your homeowner’s or commercial property insurer goes bust, the guaranty fund can now pay up to $1 million per disaster (instead of the much lower old cap), and refund up to $50,000 in unearned premiums (up from $2,000).
- A new rulebook when an insurer hands your policy to another company. Insurers can permanently transfer your policy to another insurer (“assumption reinsurance”), but they need state approval first and they have to mail you a detailed notice with a response card. If you do nothing, after two years plus a second notice, you’re treated as having agreed. If you keep paying premium to the new insurer, that’s also treated as agreement.
- Less paperwork for surplus lines brokers — but a new annual report. Brokers no longer need to document, policy by policy, that they shopped admitted insurers first. Instead, the Commissioner can require an annual report listing the policies written, real-property locations and premiums, and renewals.
- TPAs have to keep working if the insurer fails. Third-party administrator contracts must now require the TPA to keep servicing policies even if the insurer goes into receivership. TPAs also can’t renew their license unless they’ve paid their Health & Welfare fee.
- Casualty claims adjusters can expect mandatory continuing education — regulations are coming.
- A few things go away: the annual motor-vehicle-fraud report from insurers, the annual life settlement provider statement, the on-site-audit requirement for TPA oversight, the diligent-search documentation rule for surplus lines, and the old prohibition on terrorism exclusions in condo master fire policies.
- The Insurance Department’s domestic-insurer assessment schedule shifts later in the year, and the June estimated payment gets bigger (35% instead of 25%).
Net effect for a Connecticut-licensed business: Update your email of record, refresh your renewal-notice and total-loss claims templates, build the new formulary-publication or premium-explanation workflows if you’re a health or P&C carrier, update TPA contracts, prepare for surplus lines annual reporting, and — if you’re contemplating moving blocks of business — build a Section 23 notice/consent process before doing any novation involving Connecticut policyholders.
Click here to see CT Substitute House Bill No. 5373 / Public Act No. 26-69