INSURANCE GUARANTY ASSOCIATION ACT
PART I.
§
38a-836. Short
title
Sections 38a-836 to
38a-853, inclusive, shall be known and may be cited as the Connecticut Insurance
Guaranty Association Act.
(1958
Rev., § 38-273; 1971, P.A. 466, § 1.)
§
38a-837. Application of
chapter
Sections
38a-836 to 38a-853, inclusive, as amended by this act, shall apply to all kinds
of direct insurance, except:
(1) Life, annuity, health or disability
insurance;
(2) Mortgage guaranty, financial guaranty or other forms of insurance offering protection against investment risks;
(3) Fidelity or surety or any bonding
obligations;
(4) Credit insurance, vendors’ single interest insurance, or collateral protection insurance or any similar insurance protecting the interests of a creditor arising out of a creditor-debtor transaction.
(5) Insurance of warranties or service contracts, including insurance that provides for the repair, replacement or service of goods or property, or indemnification for repair, replacement or service, for the operational or structural failure of the goods or property due to a defect in materials, workmanship or normal wear and tear, or that provides reimbursement for the liability incurred by the issuer of agreements or service contracts that provide such benefits;
(6) Title insurance;
(7) Ocean marine insurance
(8) Any transaction or combination of transactions between a person, including affiliates of such person, and an insurer, including affiliates of such insurer, which involves the transfer of investment or credit risk unaccompanied by transfer of insurance risk;
(9) Any insurance provided by or guaranteed by government; or
(10) Flood insurance
pursuant to the federal flood disaster protection act of 1973, as amended, 42
USC section 4001, et seq.
.
(1958
Rev., §38-274; 1971, P.A. 466, § 2; 1986, P.A. 86-63; 1988, P.A. 88-76, §§ 1, 10
eff.
§
38a-838.
Definitions
The following terms as used in sections 38a-836 to 38a-853, inclusive, unless the context otherwise requires or a different meaning is specifically prescribed, shall have the following meanings:
(1) "Account" means any one of the three accounts created by section
38a-839;
(2) "Affiliate" means any affiliate, as defined in section 38a-1, of an
insolvent insurer;
(3) "Association" means the Connecticut Insurance Guaranty Association
created under section 38a-839;
(4) "Commissioner" means the insurance
commissioner;
(5) "Covered claim" means an unpaid claim, including, but not limited to,
one for unearned premiums, which arises out of and is within the coverage and
subject to the applicable limits of an insurance policy to which sections
38a-836 to 38a-853, inclusive, apply issued by an insurer, if such insurer
becomes an insolvent insurer after October 1, 1971, and (A) the claimant or
insured is a resident of this state at the time of the insured event; or (B) the
claim is a first party claim for damage to property with a permanent location in
this state, provided the term "covered claim" shall not include (i) any claim by
or for the benefit of any reinsurer, insurer, insurance pool, or underwriting
association, as subrogation recoveries or otherwise; provided that a claim for
any such amount, asserted against a person insured under a policy issued by an
insurer which has become an insolvent insurer, which, if it were not a claim by
or for the benefit of a reinsurer, insurer, insurance pool or underwriting
association, would be a "covered claim" may be filed directly with the receiver
of the insolvent insurer but in no event shall any such claim be asserted
against the insured of such insolvent insurer, (ii) any claim by or on behalf of
an individual who is neither a citizen of the United States nor an alien legally
resident in the United States at the time of the insured event, or an entity
other than an individual whose principal place of business is not in the United
States at the time of the insured event, and it arises out of an accident,
occurrence, offense, act, error or omission that takes place outside of the
United States, or a loss to property normally located outside of the United
States or, if a workers' compensation claim, it arises out of employment outside
of the United States, (iii) any claim by or on behalf of a person who is not a
resident of this state, other than a claim for compensation or any other benefit
which arises out of and is within the coverage of a workers’ compensation
policy, against an insured whose net worth at the time the policy was issued or
at any time thereafter exceeded twenty-five million dollars, provided that an
insured’s net worth for purposes of this section and section 38a-844 shall be
deemed to include the aggregate net worth of the insured and all of its
subsidiaries as calculated on a consolidated basis; or (iv) any claim by or on
behalf of an affiliate of the insolvent insurer at the time the policy was
issued or at the time of the insured event.
(6) "Insolvent insurer" means an insurer (A) licensed to transact
insurance in this state either at the time the policy was issued or when the
insured event occurred and (B) determined to be insolvent by a court of
competent jurisdiction, provided the term "insolvent insurer" shall not be
construed to mean any insurer with respect to which an order, decree, judgment
or finding of insolvency, whether permanent or temporary in nature, or order of
rehabilitation or conservation has been issued by a court of competent
jurisdiction prior to October 1, 1971;
(7) "Member insurer" means any person who (A) writes any kind of
insurance to which sections 38a-836 to 38a-853, inclusive, apply under section
38a-837, including, but not limited to, the exchange of reciprocal or
interinsurance contracts, and (B) is licensed to transact insurance in this
state. An insurer shall cease to be
a member insurer effective on the day following the termination or expiration of
its license to transact the kinds of insurance to which said sections 38a-836 to
38a-853, inclusive, apply, however such insurer shall remain liable as a member
insurer for any obligations, including obligations for assessments levied prior
to the termination or expiration of the insurer’s license and for assessments
levied after the termination or expiration which relate to any insurer which
became an insolvent insurer prior to the termination or expiration of such
insurer’s license. In the case of such insurer, the average of its net direct
written premium for the five calendar years prior to expiration or termination
of its license, whether or not the insurer has net direct written premium in the
year preceding such expiration or termination, shall be used as its assessment
base for any year following such expiration or termination in which the insurer
has no direct written premiums;
(8) "Net direct written premiums" means direct gross premiums written in
this state on insurance policies to which sections 38a-836 to 38a-853,
inclusive, apply, less return premiums thereon and dividends paid or credited to
policyholders on such direct business, provided the term "net direct written
premiums' shall not include premiums on any contract between insurers or
reinsurers;
(9)
"Person" means an individual, corporation, partnership, association, joint stock
company, business trust, limited liability company, unincorporated organization,
voluntary organization, governmental entity or other legal
entity;
(10)
"Residence" means, when used in reference to a corporation, its principal place
of business;
(11) "
(1958
Rev., § 38-275; 1971, P.A. 466, § 3; 1977, P.A. 77-614, §§ 163, 610 eff. Jan. 1,
1979; 1980, P.A. 80-482, §§ 321, 345, 348 eff. July 1, 1980; 1981, P.A. 81-83, §
1; 1987, P.A. 87-290, §§ 1,8 eff. June 10, 1987; 1988, P.A. 88-76, §§ 2, 10 eff.
Apr. 20, 1988; 1990, P.A. 90-243, § 151, eff. Oct. 1, 1990; Amended by P.A.
97-125, § 2, eff. July 1, 1997; Amended 2003, P.A. 03-49, § 1, eff. May 23,
2003.)
§
38a-839.
There is created a nonprofit unincorporated legal entity to be known as
the Connecticut Insurance Guaranty Association. All insurers defined as member insurers
in subdivision (8) of section 38a-838 shall be members of said association as a
condition of their authority to transact insurance in this state. Said association shall perform its
functions under a plan of operation established and approved under section
38a-842 and shall exercise its powers through a board of directors established
under section 38a-840. For the
purposes of administration and assessment, said association shall be divided
into three separate accounts; (a) The workers' compensation insurance account;
(b) the automobile insurance account; and (c) an account for all other insurance
to which sections 38a-836 to 38a-853, inclusive, apply.
(1958
Rev., § 38-276; 1971, P.A. 466, § 4; 1979, P.A. 79-376, § 63; 1987, P.A. 87-290,
§§ 2, 8 eff.
§
38a-840. Board of directors.
Selection. Reimbursement for expenses
(1) The board of directors of said association shall consist of not less
than five nor more than nine persons serving terms as established in the plan of
operation under section 38a-842.
The members of the board of directors shall be selected by member
insurers subject to the approval of the commissioner. Vacancies on the board shall be filled
for the remaining period of the term by a majority vote of the remaining
members, subject to the approval of the commissioner. If no members are selected within sixty
days after
(2) In approving selections to said board, the commissioner shall
consider among other things whether all member insurers are fairly
represented.
(3) Members of the said board shall receive no compensation as such but
shall be reimbursed from the assets of said association for actual and necessary
expenses incurred by them in carrying out their official duties as members of
the board of directors.
(1958
Rev., § 38-277; 1971, P.A. 466, § 5; 1981, P.A. 81-83, §
2.)
§
38a-841. Obligations of association.
Limitations. Assessments.
Investigation of
claims
(1) Said association shall:
(a) Be obligated to the extent of the covered claims existing prior to
the determination of insolvency and arising within thirty days after the
determination of insolvency, or before the policy expiration date if less than
thirty days after the determination, or before the insured replaces the policy
or causes its cancellation, if he does so within thirty days of such
determination, provided such obligation shall be limited as follows: (i) With respect to covered claims for
unearned premiums, to one-half of the unearned premium on any policy, subject to
a maximum of two thousand dollars per policy; (ii) with respect to covered claims
other than for unearned premiums, such obligation shall include only that amount
of each such claim which is in excess of one hundred dollars and is less than
three hundred thousand dollars, except that said association shall pay the full
amount of any such claim arising out of a workers' compensation policy, provided
in no event shall (A) said association be obligated to any claimant in an amount
in excess of the obligation of the insolvent insurer under the policy form or
coverage from which the claim arises, or (B) said association be obligated for
any claim filed with the association after the expiration of two years from the
date of the declaration of insolvency unless such claim arose out of a workers’
compensation policy and was timely filed in accordance with section
31-294c; (b) be deemed the insurer
to the extent of its obligations on the covered claims and to such extent shall
have all rights, duties, and obligations of the insolvent insurer as if the
insurer had not become insolvent; (c) allocate claims paid and expenses incurred
among the three accounts, created by section 38a-839, separately, and assess
member insurers separately (i) in respect of each such account for such amounts
as shall be necessary to pay the obligations of said association under
subdivision (a) of subsection (1) of this section subsequent to an
insolvency (ii) the expenses of
handling covered claims subsequent to an insolvency; (iii) the cost of
examinations under section 38a-846 and (iv) such other expenses as are
authorized by sections 38a-836 to 38a-853, inclusive. The assessments of each member insurer
shall be in the proportion that the net direct written premiums of such member
insurer for the calendar year preceding the assessment on the kinds of insurance
in such account bears to the net direct written premiums of all member insurers
for the calendar year preceding the assessment on the kinds of insurance in such
account. Each member insurer shall
be notified of its assessment not later than thirty days before it is due. No member insurer may be assessed in any
year on any account an amount greater than two per cent of that member insurer's
net direct written premiums for the calendar year preceding the assessment on
the kinds of insurance in said account, provided if, at the time an assessment
is levied on the "all other insurance" account, as defined in subdivision (c) of
section 38a-839, the board of directors finds that at least fifty per cent of
the total net direct written premiums of a member insurer and all its
affiliates, for the year on which such assessment is based, were from policies
issued or delivered in Connecticut, on risks located in this state, such member
insurer shall be assessed only on such member insurer's net direct written
premium that is attributable to the kind of insurance that gives rise to each
covered claim. If the maximum
assessment, together with the other assets of said association in any account,
does not provide in any one year in any account an amount sufficient to make all
necessary payments from that account, the funds available may be prorated and
the unpaid portion shall be paid as soon thereafter as funds become
available. Said association may
defer, in whole or in part, the assessment of any member insurer, if the
assessment would cause the member insurer's financial statement to reflect
amounts of capital or surplus less than the minimum amounts required for a
certificate of authority by any jurisdiction in which the member insurer is
authorized to transact insurance provided that during the period of deferment,
no dividends shall be paid to shareholders or policyholders. Deferred assessments shall be paid when
such payment will not reduce capital or surplus below the minimum amounts
required for a certificate of authority.
Such payments shall be refunded to those insurers receiving greater
assessments because of such deferment or, at the election of the insurer, be
credited against future assessments.
Each member insurer serving as a servicing facility may set off against
any assessment, authorized payments made on covered claims and expenses incurred
in the payment of such claims by such member insurer if they are chargeable to
the account in respect of which the assessment is made; (d) investigate claims brought against
said association and adjust, compromise, settle, and pay covered claims to the
extent of said association's obligations, and deny all other claims. The association shall pay claims in any
order it deems reasonable, including but not limited to, payment in the order of
receipt or by classification. It
may review settlements, releases and judgments to which the insolvent insurer or
its insureds were parties to determine the extent to which such settlements,
releases and judgments may be properly contested: (e) notify such persons as the
commissioner may direct under subdivision (a) of subsection (2) of section
38a-843; (f) handle claims through
its employees or through one or more insurers or other persons designated by
said association as servicing facilities, provided such designation of a
servicing facility shall be subject to the approval of the commissioner, and may
be declined by a member insurer;
(g) reimburse each such servicing facility for obligations of said
association paid by such facility and for expenses incurred by such facility
while handling claims on behalf of said association and shall pay such other
expenses of said association as are authorized by sections 38a-836 to 38a-853,
inclusive.
(2) Said association may:
(a) Employ or retain such persons as are necessary to handle claims and
perform other duties of said association;
(b) borrow such funds as may be necessary from time to time to effect the
purposes of sections 38a-836 to 38a-853 , inclusive, in accord with the plan of
operation under section 38a-842;
(c) sue or be sued; (d) intervene as a matter of right as a party in any
proceeding before any court in this state that has jurisdiction over an
insolvent insurer, as defined in section 38a-838; (e) negotiate and become a party
to such contracts as are necessary to carry out the purpose of said
sections; (f) perform such other
acts as are necessary or proper to effectuate the purpose of said sections; (g) refund to the member insurers in
proportion to the contribution of each such member insurer to that account, that
amount by which the assets of the account exceed the liabilities, if, at the end
of any calendar year, the board of directors finds that the assets of said
association in any account exceed the liabilities of that account as estimated
by the board of directors for the coming year.
(3) (A) Each insurer paying an assessment under sections 38a-836 to
38a-853, inclusive, may offset one hundred per cent of the amount of such
assessment against its premium tax liability to this state under chapter 207.
Such offset shall be taken over a period of the five successive tax years
following the year of payment of the assessment at the rate of twenty per cent
per year of the assessment paid to the association. Each insurer to which has been refunded
by the association, pursuant to subdivision (2) of this section, all or a
portion of an assessment previously paid to the association by the insurer shall
be required to pay to the Department of Revenue Services an amount equal to the
total amount that has been claimed as an offset against the premiums tax
liability on the premiums tax return or returns, as the case may be, filed by
such insurer and that is attributable to such refunded assessment, provided the
amount required to be paid to said department shall not exceed the amount of the
refunded assessment. If the amount
of the refunded assessment exceeds the total amount that has been claimed as an
offset against the premiums tax liability on the premiums tax return or returns
filed by such insurer and that is attributable to such refunded assessment, such
excess may not be claimed as an offset against the premiums tax liability on a
premiums tax return or returns filed by such insurer, or, if the offset has been
transferred to another person pursuant to subparagraph (B) of this subdivision,
by such other person. For purposes
of this subparagraph, if the offset has been transferred to another person
pursuant to subparagraph (B) of this subdivision, the total amount that has been
claimed as an offset against the premiums tax liability on the premiums tax
return or returns filed by such insurer includes the total amount that has been
claimed as an offset against the premiums tax liability on the premiums tax
return or returns filed by such other person. The association shall promptly notify
the Commissioner of Revenue Services of the name and address of the insurers to
which such refunds have been made, the amount of such refunds and the date on
which such refunds were mailed to such insurer. If the amount that an insurer is
required to pay to the Department of Revenue Services has not been so paid on or
before the forty-fifth day after the date of mailing of such refunds, the
insurer shall be liable for interest on such amounts at the rate of one per cent
per month or fraction thereof from such forty-fifth date to the date of
payment.
(B) An insurer, in this subparagraph called “the transferor”, may
transfer any offset provided under subparagraph (A) of this subdivision to an
affiliate, as defined in section 38a-1, of the transferor. Any such transfer of the offset by the
transferor and any subsequent transfer or transfers of the same offset shall not
affect the obligation of the transferor to pay to the Department of Revenue
Services any sums which are acquired by refund from the association pursuant to
subdivision (2) of this section (A) of this subdivision. Such offset may be taken by
any transferee only against the transferee’s premium tax liability to this state
under chapter 207. The Commissioner
of Revenue Services shall not allow such offset to a transferee against its
premium tax liability unless the transferor, the affiliate to which the offset
was originally transferred, each subsequent transferor and each subsequent
transferee have filed such information as may be required on forms provided by
said commissioner with respect to any such transfer or transfers on or before
the due date of the premium tax return on which such offset would have been
taken by the transferor if no transfer had been made by the
transferor.
(1958
Rev., § 38-278; 1971, P.A. 466, § 6; 1979, P.A. 79-376, § 64; 1981, P.A. 81-83,
§ 3; 1987, P.A. 87-290, §§ 3, 8 eff.
[FN1]
C.G.S.A. § 12-201 et seq.
§
38a-842. Plan of operation
(1)(a) Said association shall submit to the commissioner a plan of
operation and any amendments thereto necessary or suitable to assure the fair,
reasonable, and equitable administration of said association. The plan of operation and any amendments
thereto shall become effective upon approval in writing by the
commissioner. (b) If said
association fails to submit a suitable plan of operation within ninety days
following October 1, 1971, or if at any time thereafter said association fails
to submit suitable amendments to the plan, the commissioner shall, after notice
and hearing, adopt and promulgate such reasonable regulations as are necessary
or advisable to effectuate the provisions of sections 38a-836 to 38a-853,
inclusive. Such regulations shall
continue in force until modified by the commissioner or superseded by a plan
submitted by said association and approved by the
commissioner.
(2) All member insurers shall comply with the plan of
operation.
(3) The plan of operation shall:
(a) Establish the procedures whereby all the powers and duties of said
association under section 38a-841 shall be performed; (b) establish procedures for handling
the assets of said association; (c)
establish the number, the terms of office and the amount and method of
reimbursing members of the board of directors under section 38a-840; (d) establish procedures by which claims
may be filed with said association and establish acceptable forms of proof of
covered claims. Notice of claims to
the receiver or liquidator of the insolvent insurer shall be deemed notice to
said association or its agent and a list of such claims shall be periodically
submitted to said association or similar organization having a like function to
that of said association in another state by the receiver or liquidator; (e) establish regular places and times
for meetings of the board of directors;
(f) establish procedures for records to be kept of all financial
transactions of said association, its agents, and the board of directors; (g) provide that any member insurer
aggrieved by any final action or decision of said association may appeal to the
commissioner within thirty days after such action or decision ; (h) establish the procedures whereby
selections for the board of directors shall be submitted to the
commissioner; (i) contain such
additional provisions as may be necessary or proper for the execution of the
powers and duties of said association under sections 38a-836 to 38a-853,
inclusive.
(4) The plan of operation may delegate any or all powers and duties of
said association, except those under subdivision (c) of subsection (1) of
section 38a-841 and subdivision (b) of subsection (2) of section 38a-841 to a
corporation, association, or other organization which performs or will perform
functions similar to those of said association, or its equivalent having a like
function to that of said association, in two or more states. Such a corporation, association or
organization shall be reimbursed by said association as a servicing facility
would be reimbursed and shall be paid by said association for its performance of
any other functions of said association.
Any delegation under this subsection shall take effect only with the
approval of both the board of directors and the commissioner, and may be made
only to a corporation, association, or organization which extends protection not
substantially less favorable and effective than that provided by sections
38a-836 to 38a-853, inclusive.
(1958
Rev., § 38-279; 1971, P.A. 466, § 7.)
§
38-843. Insolvent insurers
(1) The commissioner shall:
(a) Notify said association of the existence of an insolvent insurer, and
notify the chairman of the workers' compensation commission and the state
treasurer of the existence of an insolvent workers' compensation insurer, not
later than three days after he receives notice of the determination of any such
insolvency; (b) upon request of the
board of directors, provide said association with a statement of the net direct
written premiums of each member insurer.
(2) The commissioner may:
(a) Require that said association notify those persons insured by the
insolvent insurer, and any other interested parties, of the determination of
insolvency and of their rights under sections 38a-836 to 38a-853,
inclusive. Such notification shall
be by mail sent to their last known address, where available, provided if
sufficient information for such notification by mail is not available, notice by
publication in a newspaper of general circulation shall be sufficient to satisfy
the requirements of this subsection;
(b) suspend or revoke, after notice and hearing, the certificate of
authority to transact insurance in this state of any member insurer which fails
to pay an assessment when due or which fails to comply with said plan of
operation. In lieu of any such
suspension or revocation, the commissioner may levy a fine on any member insurer
which fails to pay an assessment when due, provided no such fine shall exceed
five per cent of the unpaid assessment per month, and provided no fine shall be
less than one hundred dollars per month; (c) revoke the designation of any
servicing facility if he finds claims are being handled
unsatisfactorily.
(3) Any person aggrieved by any final action or order of the commissioner
under sections 38a-836 to 38a-853, inclusive, may within thirty days from the
date of such action or order petition the superior court for the judicial
district of Hartford-New Britain[1]
to require the commissioner to show cause why said action or order should not be
reversed or eliminated, and, if said court finds that the action or order of the
commissioner was arbitrary and unjustified it shall take such action in the
premises as may seem equitable. The
pendency of any such petitions to show cause shall act as a stay of execution of
any such order. Petitions under
this section shall be privileged in respect of trial
assignment.
(1958
Rev., § 38-280; 1971, P.A. 466, § 8; 1978, P.A. 78-280, §§ 6, 127 eff.
§
38a-844. Assignment of rights under
policy. Receiver or liquidator
bound by settlements. Preservation
of rights of association. Right of
recovery.
(1) Any person recovering any moneys under section 38a-836 to 38a-853,
inclusive, shall be deemed to have assigned his rights under the policy, to said
association to the extent of his recovery from said association. Every insured or claimant seeking the
protection of said sections shall cooperate with said association to the same
extent as such person would have been required to cooperate with the insolvent
insurer. Said association shall
have no cause of action against any insured of the insolvent insurer for any
sums it has paid out to such insured except such causes of action as the
insolvent insurer would have had if such sums had been paid by the insolvent
insurer. In the case of an
insolvent insurer operating on a plan with assessment liability, payments of
claims of said association shall not operate to reduce the liability of insureds
to the receiver, liquidator, or statutory successor for unpaid
assessments.
(2) The receiver, liquidator, or statutory successor of an insolvent
insurer shall be bound by determinations of covered claim eligibility under
sections 38a-836 to 38a-853, inclusive, and by settlements of claims made by
said association or any similar organization having a like function to that of
said association in another state.
The court having jurisdiction shall grant such claims priority equal to
that to which the claimant would have been entitled in the absence of sections
38a-836 to 38a-853, inclusive, against the assets of the insolvent insurer. The expenses of said association or any
similar organization having a like function to that of said association in
handling claims shall be accorded the same priority as the receiver's or
liquidator's expenses.
(3) Said association shall periodically file with the receiver or
liquidator of the insolvent insurer statements of the covered claims paid by
said association, the expenses paid for the processing of covered claims paid or
contested and estimates of anticipated claims on said association, and expenses
of processing such claims which shall preserve the rights of said association
against the assets of the insolvent insurer.
(4) The association shall have the right to recover from the following
persons the amount of any covered claim paid on behalf of such person pursuant
to sections 38a-836 to 38a-853, inclusive:
(A) any person who is an affiliate of the insolvent insurer and whose
liability obligations to other persons are satisfied in whole or in part by
payments made under this chapter; and (B) any insured whose net worth on
December thirty-first of the year next preceding the date the insurer becomes an
insolvent insurer exceeds fifty million dollars and whose liability obligations
to other persons are satisfied in whole or in part by payments made under said
sections. For purposes of this
subdivision, “insured” does not include a municipality, as defined in section
7-148.
(1958
Rev., § 38-281; 1971, P.A. 466, § 9; 1981, P.A. 81-83, § 4; 1987, P.A. 87-290,
§§ 4, 8, eff.
§
38a-845. Exhaustion of rights under policy prior to claim against association.
Claims recoverable from more then one association
(1) Any person having a claim against an insurer under any provision in
an insurance policy, other than a policy of an insolvent insurer, which is also
a covered claim under sections 38a-836 to 38a-853, inclusive, as amended by this
act, shall exhaust first his rights
under such policy. Any amount
payable on a covered claim under said sections shall be reduced by the amount
recoverable under the claimant's insurance policy or chapter 568.[2]
(2) Any person having a claim which may be recovered under more than one
insurance guaranty association or its equivalent having a like function to that
of said association shall seek recovery first from the association operating in
the area of the residence of the insured except that (A) if it is a first party
claim for damage to property with a permanent location, such person shall seek
recovery first from the association operating in the location of the property,
and (B) if it is a workers’ compensation claim, such person shall seek recovery
first from the association operating in the area of residence of the
claimant. Any recovery under
sections 38a-836 to 38a-853, inclusive, shall be reduced by the amount
recoverable from any other insurance guaranty association or its equivalent
having a like function to that of said association.
(3) Any person having a
claim under any governmental insurance or guaranty program which such claim is
also a covered claim shall be required to first exhaust his rights under such
program. Any amount payable on a
covered claim under sections 38a-836 to 38a-853, inclusive, shall be reduced by
any amount recoverable under such program.
(1958
Rev., § 38-282; 1971, P.A. 466, § 10; 1979, P.A. 79-376, § 65; 1987, P.A.
87-290, §§ 5, 8 eff.
§
38a-846. Detection and prevention of insurer insolvencies
To aid in the detection and prevention of insurer
insolvencies:
(1) The board of directors, upon majority vote, shall notify the
commissioner of any information which it may have indicating any member insurer
may be insolvent or in a financial condition hazardous to its policyholders or
the public.
(2) The board of directors may, upon majority vote, request that the
commissioner order an examination of any member insurer which the board in good
faith believes may be in a financial condition hazardous to its policyholders or
the public. Within thirty days of
the receipt of such request, the commissioner shall begin such examination. The examination may be conducted as a
National Association of Insurance Commissioners examination or may be conducted
by the commissioner or by such persons as the commissioner may designate. The cost of such examination shall be
paid by said association. In no
event shall such examination report be released to the board of directors prior
to its release to the public, provided this shall not preclude the commissioner
from complying with subdivision (3) of this section. The commissioner shall notify the board
of directors when the examination is completed. The request for an examination shall be
kept on file by the commissioner but it shall not be open to public inspection
prior to the release of the examination report to the
public.
(3) The commissioner shall report to the board of directors when he has
reasonable cause to believe that any member insurer examined or being examined
at the request of the board of directors may be insolvent or in a financial
condition hazardous to its policyholders or the public.
(4) The board of directors may, upon majority vote, make reports and
recommendations to the commissioner and the chief insurance regulatory official
in any jurisdiction upon any matter germane to the solvency, liquidation,
rehabilitation or conservation of any member insurer. Such reports and recommendations shall
not be considered public documents.
(5) The board of directors may, upon majority vote, make recommendations
to the commissioner and any other public official in any jurisdiction for the
detection and prevention of insurer insolvencies.
(6) At the request of the commissioner, the board of directors shall at
the conclusion of any insurer insolvency in which said association was obligated
to pay any covered claim, prepare a report on the history and causes of such
insolvency, based on the information available to said association, and submit
such report to the commissioner.
(1958
Rev., § 38-283; 1971, P.A. 466, § 11; 1981, P.A. 81-83, § 5; Amended by P.A.
97-125, § 6, eff. July 1, 1997, Amended by P.A. 98-27, §
18.)
§
38a-847. Association subject to examination and regulation by commissioner.
Annual financial report
Said association shall be subject to examination and regulation by the
commissioner. The board of
directors shall submit, not later than March thirtieth of each year, a financial
report for the preceding calendar year in a form approved by the
commissioner.
(1958
Rev., § 38-284; 1971, P.A. 466, § 12.)
§
38a-848. Exemption from fees and taxes.
Exception
Said association shall be exempt from payment of all fees and all taxes
levied by the state or any of its subdivisions provided it shall not be exempt
from the payment of real or personal property taxes.
(1958
Rev., § 38-285; 1971, P.A. 466, § 13.)
§
38a-849. Repealed. (2000, P.A. 00-174 § 82, eff.
§
38a-850. No liability for action taken in performance of powers and
duties
There shall be no liability on the part of and no cause of action of any
nature shall arise against any member insurer, said association or its agents or
employees, the board of directors, or any person serving as an alternate or
substitute representative of any director
or the commissioner or his representatives for any action taken or any
failure to act by them in the performance of their powers and duties under
sections 38a-836 to 38a-853, inclusive, as amended by this
act.
(1958
Rev., § 38-287; 1971, P.A. 466, § 15; Amended by P.A. 97-125, § 7, eff.
§
38a-851. Association rights in proceedings to which insolvent insurer is
party
(a)
All
proceedings in which an insolvent insurer is a party or is obligated to defend
an insured as a party in any court in this state shall be stayed for up to six
months and for such additional time thereafter as may be determined by the court
from the date of declaration of insolvency or from the time an ancillary
proceeding is instituted in the state, whichever is later, to permit proper
defense by said association of all pending causes of action in the case. Whenever any covered claims arise from a
judgment under any decision, verdict or finding based on the default of an
insolvent insurer or based on such insolvent insurer's failure to defend an
insured, said association, either on its own behalf or on behalf of such
insured, may apply to have such judgment, order, decision, verdict or finding
set aside by the same court or administrator that made such judgment, order,
decision, verdict or finding and said association may defend against any such
claim on the merits of the case.
(b)
The
liquidator, receiver or statutory successor of an insolvent insurer covered by
sections 38a-836 to 38a-853, inclusive, as amended by this act, shall permit
access by the board or its authorized representative to such insolvent insurer’s
records which the board determines are necessary for the board to carry out its
functions under said sections 38a-836 to 38a-853, inclusive, with regard to
covered claims. The liquidator,
receiver or statutory successor shall provide the board or its representative
with copies of such records upon the request of the board.
(1958
Rev., § 38-288; 1971, P.A. 466, § 16; 1981, P.A. 81-83, § 6; 1986, P.A. 86-403,
§§ 80, 132 Eff. June 11, 1986; Amended by P.A. 97-125, § 8, eff. July 1,
1997.)
§
38a-852. Prohibited unfair trade practice
It shall be prohibited unfair trade practice and a violation of section
38a-815 for any person to make use in any manner of the protection afforded by
sections 38a-836 to 38a-853, inclusive, in the solicitation, negotiation,
procurement or effectuation of insurance provided, this section shall not apply
to the distribution of any publication approved by the commissioner and
describing the general purposes and current limitations of sections 38a-836 to
38a-853 inclusive.
Violations
of this section shall be subject to the provisions of section
38a-817.
(1958
Rev., § 38-288a; 1985, P.A. 85-105, § 1; 1992, P.A. 92-60,
§22.)
§
38a-853. Regulations
The commissioner may promulgate such reasonable regulations as he deems
necessary to carry out the intent of sections 38a-836 to 38a-853,
inclusive. Such regulations may
include definitions of the kinds of insurance specified in section
38a-837.
(1958
Rev., § 38-289; 1971, P.A. 466, § 17; 1988, P.A. 88-76, §§ 4, 10 eff.