(a) No agency captive insurance company may transact insurance business in this state unless:
(1) Each agent or producer that owns or controls the agency captive insurance company is, and remains, licensed in good standing in this state under sections 38a-702a to 38a-702r, inclusive, and in all other states in which the insurance agent or insurance producer is licensed;
(2) The agency captive insurance company (A) insures only against the risks of commercial policies that are placed by or through agents or producers described in subdivision (1) of this subsection, (B) does not insure against risks of any health insurance policy or plan, and (C) submits to the 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 agency captive insurance company submit such policies to the commissioner;
(3) The agency captive insurance company discloses, in writing and in a form and manner prescribed by the 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 agency captive insurance 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 by the agency captive insurance company are, if required by the Insurance Commissioner, (A) fronted by an insurance company authorized by any state for the type of insurance that the agency captive insurance company insures, (B) reinsured by a reinsurance company authorized or approved 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 Insurance 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. If the form of security arrangement is a letter of credit, the letter of credit shall be issued or confirmed by a bank approved by the commissioner. A trust or letter of credit described in subdivision (4) of subsection (a) of this section shall be established in a form and upon terms approved by the commissioner.
(P.A. 18-151, S. 2.)
History: P.A. 18-151 effective July 1, 2018.