Connecticut State Regulations & NAIC Insurance Law

Licensing

Any individual applying for a Connecticut resident producer’s license must:

Be at least 18 years old
Be a resident of Connecticut before submitting an application

Pre-licensing course and exam

Connecticut requires a prelicensing course approved by the Commissioner of at least 20 hours for each line of insurance applied for (Conn. Gen. Stat. § 38a-702e).

The passing score on Connecticut’s producer examinations is 70% (Pearson VUE, State of Connecticut Insurance Candidate Handbook).

Fingerprints/background check

The Connecticut Insurance Department does not require fingerprints or a background check for most licenses, including the producer license; the exception is a surety bail bond license (Connecticut Insurance Department).

Controlled business

Controlled business is insurance written on the producer’s own life, property or interests, or on those of the producer’s family, employer or a business the producer controls. A producer may insure themselves and their family, but a license exists to sell insurance to the public, so states generally restrict obtaining or using a license principally to write controlled business.

Non-resident license

A producer licensed in another state can obtain a Connecticut nonresident license without taking Connecticut’s examination. Under the NAIC’s Producer Licensing Model Act, which most states have adopted in some form, a nonresident receives the license if the person:

Is currently licensed as a resident, and in good standing, in the home state
Has applied (the home-state application or the Uniform Application) and paid the fees
Lives in a home state that grants nonresident licenses to residents of this state on the same basis (reciprocity)

Under the same model, a producer who moves to another state files a change of address, with certification from the new home state, within 30 days. A licensed producer who moves into a state applies for a resident license there within 90 days and does not repeat prelicensing education or the examination for lines already held.

Temporary license

Most states allow the insurance regulator to issue a temporary license, without an examination, when one is needed to keep an insurance business serviced. Typical cases are:

The surviving spouse or personal representative of a producer who dies or becomes disabled, to allow time to sell the business or train new people
A member or employee of a business entity producer, on the death or disability of its designated producer
The designee of a producer entering active military service

The regulator may limit what a temporary licensee may do and may require a licensed sponsor who takes responsibility for the temporary licensee’s acts.

Connecticut may issue a temporary producer license for up to 180 days without an examination, in cases such as the death or disability of a producer (Conn. Gen. Stat. § 38a-702j).

Military service

A Connecticut producer who cannot comply with license renewal procedures because of military service or another extenuating circumstance, such as a long-term medical disability, may request a waiver of those procedures (Conn. Gen. Stat. § 38a-702f(d)).

Renewal and reinstatement

A producer license stays in effect only while the producer renews it on schedule: paying the renewal fee and completing continuing education by the due date.

An initial Connecticut producer license expires two years after the producer’s birthday that preceded its issue (Conn. Gen. Stat. § 38a-784).

A producer who misses the deadline and lets the license lapse may be able to reinstate it without retaking the examination.

A producer who lets a license lapse may reinstate it without a new examination within 12 months after the renewal fee’s due date, but a penalty of double the unpaid renewal fee applies (Conn. Gen. Stat. § 38a-702f©).

Continuing education

All states, including Connecticut, have continuing education (CE) requirements that must be met to renew major lines (life, health, property, liability) insurance licenses.

Individuals licensed in Connecticut must complete continuing education before renewing their license. The number of hours required is set by state law and published by the state insurance department.

Notice of change of name or address

A Connecticut licensee must notify the Insurance Commissioner in writing within 30 days of a change of business, residence or e-mail address (Conn. Gen. Stat. § 38a-771(a)).

The model also requires a producer to report to the regulator within 30 days any administrative action taken against the producer in another state or by another government agency, counted from the final disposition, and any criminal prosecution in any jurisdiction, counted from the initial pretrial hearing date. A producer who does business under any name other than their legal name must notify the regulator before using it.

Company regulations

An insurance company must be authorized by the Connecticut Insurance Department to conduct business in Connecticut.

To receive a license, the company applies to the Commissioner, naming the lines of business it seeks to write, and files a certified copy of its charter or articles of association, evidence that it has complied with the laws of the jurisdiction where it is organized, and a statement of its financial condition, together with whatever evidence of its correctness the Commissioner requires (Conn. Gen. Stat. § 38a-41(a)).

Capital and surplus requirement

An insurer authorized to conduct insurance business in Connecticut must maintain minimum corporate standards.

The certificate of authority allows the insurer to conduct business in the state only if it maintains the minimum capital or permanent surplus required.

Duties of the Insurance Commissioner

The Connecticut Insurance Commissioner is an executive officer in Connecticut state government.

The Commissioner heads the Connecticut Insurance Department, which regulates the state’s insurance industry.
Insurance commissioners are appointed by the Governor, subject to confirmation by the legislature.
The Commissioner serves at the Governor’s pleasure for four-year terms beginning on the first day of March in the year of the appointment.

The Commissioner establishes and enforces regulations in the Connecticut insurance market in a manner that protects consumers and encourages economic development.

Those duties include:

Investigate all claims and complaints of legal violations relating to insurance.
If the Commissioner finds that laws have been violated, the findings and supporting documents may be referred for criminal prosecution.
Monitor transactions of all companies including domestic, foreign, and alien insurance companies.
The Commissioner must examine each domestic insurer at least once every five years (Conn. Gen. Stat. § 38a-14(h)).
Audit the books and records of any resident producer as frequently as necessary.
Collect all fees associated with producers and insurers.
Determine and administer fines associated with violations for insurers and producers.
Issue reports pertaining to the suspension and revocation of licenses of producers and certificates of authority for insurers.
Approve documentation used by insurance companies such as forms and rates.

The Commissioner also supervises the financial condition of insurance companies to ensure solvency, monitors market conduct, and handles complaints involving illegal conduct or regulatory noncompliance.

Sidenote

Know this...

The Commissioner does not have the authority to arrest, issue injunctions, or sentence jail time. The Commissioner can start the process, but it takes a law officer to arrest and a judge or court of law to issue injunctions or sentence jail time.

Suspend, revoke or non-renew

The Commissioner has the authority to suspend, revoke, or refuse to renew a license for:

Providing false information on the application for an insurance license.
Omitting any relevant information on an application that would have disqualified the individual from being eligible to receive a license.
Being found guilty of a violation or the noncompliance of insurance regulations and laws…
Committing fraud while attempting to obtain an insurance license.
Improperly withholding, misappropriating or converting any money or property received in the course of doing insurance business.
Providing false information in reference to the terms and conditions of an insurance contract.
Having been convicted of a felony.
Having admitted or been found to have committed any insurance unfair trade practice or fraud.
Having engaged in activities of a fraudulent nature which allowed the person to involve themselves in dishonest, coercive, untrustworthy, and financially irresponsible practices.
Having had a prior insurance license revoked or suspended in a state other than Connecticut.
Using another person’s identity and forging their name on an insurance application.
Being found guilty of using unethical practices or cheating on an examination for an insurance license.

Cease and desist

If, after a hearing, the Commissioner finds that a person has engaged in an unfair method of competition or an unfair or deceptive act or practice in the business of insurance, the Commissioner issues an order requiring the person to cease and desist (Conn. Gen. Stat. § 38a-817).

A cease and desist order does not, by itself, mean the producer’s registration has been suspended or revoked.
The producer must stop or limit the activity addressed in the order.

Hearing and penalties

A person facing action by the Commissioner is entitled to notice and an opportunity for a hearing, within time limits set by Connecticut law, and may ask a court to review the final order.

A producer may demand a hearing in writing within 30 days after notice that the Commissioner denied or refused to renew a license, and the hearing must be held within 20 days of the request (Conn. Gen. Stat. § 38a-702k(b)).

A violation of the insurance laws can bring a civil penalty in addition to action against a license. State law sets the maximum, usually per violation and often with a cap on the total, and a higher tier commonly applies to a violation that was knowing or flagrant. Some violations are also crimes.

In addition to or instead of suspending or revoking a license, the Commissioner may impose a fine of up to $5,000 (Conn. Gen. Stat. § 38a-774).

Unfair claims settlement practices

Under the NAIC’s model act, these practices are violations when committed flagrantly and in conscious disregard of the law, or often enough to indicate a general business practice.

The intentional obstruction and delay of claims payment or the delay of a claims investigation is a violation of regulation.
Neglecting to provide a prompt response and written explanation of insurance policy terms, conditions, and laws related to the contract are examples of unfair claims settlement practices.
Failure to provide claims without launching a thorough investigation is a violation of regulation.
Making settlement claims based on information contained on an application that has been altered without the insured’s consent is a violation of regulation.
Denying a claim without conducting a thorough investigation.
Attempting to settle a claim for less than fair market value.

Policy forms

Insurers file their policy forms with the Commissioner.

A life insurance or annuity policy form may not be used in Connecticut until it has been filed with and approved by the Commissioner (Conn. Gen. Stat. § 38a-430(a)).

If a policy provision conflicts with Connecticut law, the policy is read as amended to conform to the law.

Record maintenance

A producer keeps records of each transaction (the policies placed, the insureds, the premiums received and any changes) and makes them available for the Commissioner’s inspection.

Fraudulent producer representation

An insurance producer who represents to the public that they are licensed to conduct insurance business in Connecticut, but has not passed the appropriate licensing examination, is in violation of regulation.

Any means of public communication is included, such as:

Advertisements
Letterheads
Circulars
Business cards
Other methods of representation

A producer found guilty of conducting business in Connecticut in any line of insurance for which they are not properly licensed may have any other insurance license suspended or revoked.

Misrepresentation

Misrepresentation involving the creation or distribution of policies, quotes, and illustrations designed to provide inaccurate information about the terms and conditions of a policy is prohibited.
Providing inaccurate or incomplete information or comparisons regarding the benefits of a policy is an example of misrepresentation.
Providing inaccurate or incomplete information for the purpose of inducing, or tending to induce, the lapse, exchange, conversion, forfeiture, or surrender of a policy is a violation as well (twisting).

False advertising

Making, publishing or circulating an advertisement, announcement or statement about the business of insurance that is untrue, deceptive or misleading is an unfair trade practice under state law, based on the NAIC’s model act. The medium does not matter: the rule reaches newspapers, magazines, radio and television, and also notices, circulars, pamphlets, letters, posters and any other way of placing the statement before the public. The model act’s test is whether the statement is untrue, deceptive or misleading, not whether the person meant to deceive.

Defamation

Defamation of an insurer is an unfair trade practice under state law, based on the NAIC’s model act: making, publishing or circulating an oral or written statement that is false, or maliciously critical of or derogatory to the financial condition of an insurer, and that is calculated to injure that insurer or any other person engaged in the business of insurance. Spreading an untrue rumor that a competing insurer is about to fail is the classic example.

Boycott, coercion and intimidation

Entering into an agreement to commit, or by concerted action committing, any act of boycott, coercion or intimidation that results or tends to result in unreasonable restraint of, or monopoly in, the business of insurance is prohibited.

False financial statements

Any licensed producer who makes false statements containing inaccurate material facts, or makes false statements on an application for insurance, is in violation of the state’s unfair trade practices law.

Illegal inducements

Offering anything of value not specified in the policy (money, a service, a favor or a gift) as an inducement to buy insurance is prohibited unless state law expressly allows it, and any agreement made as part of the sale must be written into the policy.

Connecticut prohibits an insurer, producer or anyone else from giving or offering any rebate of premium, or any other valuable consideration not specified in the policy, as an inducement to insurance, apart from exceptions the statute lists (Conn. Gen. Stat. § 38a-825(b)).

A producer may give a customer a noncash gift, item or service whose cost does not exceed an amount the Commissioner considers reasonable per policy year (Conn. Gen. Stat. § 38a-825(d)).

Unfair discrimination

Unfair discrimination is treating people or risks that present the same hazard differently. The NAIC’s model act, on which state unfair trade practices laws are based, prohibits:

Unfair discrimination between individuals of the same class and equal expectation of life in life insurance and annuity rates, dividends, benefits or terms
Unfair discrimination between individuals of the same class and essentially the same hazard in health insurance premiums, benefits or terms
Refusing, limiting or canceling coverage because of a person’s sex, marital status, race, religion or national origin
In property and casualty insurance, refusing or limiting coverage solely because of a risk’s geographic location, unless sound underwriting and actuarial principles justify it, or solely because the applicant or insured is physically or mentally impaired

Many states also expressly forbid refusing or limiting coverage solely because a person is blind or partially blind.

Errors & Omissions

Errors & Omissions (E&O) insurance is a type of professional liability insurance that protects insurance agents if they are sued for negligent performance of their duties.

E&O covers honest mistakes that result in (financial) damage to customers/prospects.
E&O does not cover violations of insurance regulation.

Rebating

Connecticut licensed producers are prohibited from directly or indirectly giving any refund, discount, favor, or credit to reduce premiums to induce the purchase of insurance.

Sidenote

Know this...

To “solicit” or “negotiate” insurance implies that the person is licensed.

Sharing commission

The splitting or sharing of commissions with a licensed producer is allowed.

Both parties must be licensed in the line of business in which the proposed commission is to be split. Under the NAIC’s model act, a commission may also be paid to an insurance agency, or to a person who does not sell, solicit or negotiate insurance.

Twisting

Providing false information or expressing derogatory ideas about the financial conditions of a competitor company with the intent to lapse or surrender an existing policy is a violation of the law.

Under the NAIC’s model act, twisting is a misrepresentation made to induce a policyholder to lapse, forfeit, surrender, exchange or convert a policy. A false or maliciously critical statement about a competing insurer’s finances, made to injure it, is defamation.

Any written or oral statements used to induce the lapse, termination, exchange, or surrender of an insurance contract based on inaccurate information are prohibited.

Unfair marketing practices

The Insurance Department establishes minimum standards for full and fair disclosure of policy content.

The Department also requires standardization and simplification of the terms used to describe insurance coverage.

Advertising may not involve the following:

Any statement or implication that policies are approved, or that the financial condition of a company is endorsed, by any government agency or by any independent group, individual, organization or society, unless that is the fact.
Any statements regarding advertising that are false or untrue in reference to the time frame in which claims are paid.

Gramm-Leach Bliley Act (GLBA)

This law repealed the Glass-Steagall Act of 1933, allowing consolidation of commercial banks, investment institutions, and insurance companies.

GLBA established a framework of responsibilities for federal and state regulators across these financial industries.
It permits financial services companies to merge and engage in a variety of new business activities, including insurance, while attempting to address the regulatory issues raised by such combinations.

McCarran-Ferguson Act

Federal law signed in 1945 in which Congress declared that the insurance industry would be regulated at the state level.

Grants insurers a limited exemption from federal antitrust legislation. Since 2021 the exemption does not cover the business of health insurance, apart from narrow activities such as sharing historical loss data (15 U.S.C. § 1013©).

National Association of Insurance Commissioners (NAIC)

The NAIC is the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia, and five U.S. territories.

Through the NAIC, state insurance regulators:

Establish standards and best practices
Conduct peer review
Coordinate regulatory oversight

NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally.

NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S.

Fair Credit Reporting Act

The Fair Credit Reporting Act (FCRA, 15 U.S.C. 1681) regulates consumer reporting agencies and the use of consumer reports, such as credit reports, MIB records and investigative reports, including in insurance underwriting.

When an insurer requests an investigative consumer report, it must disclose that to the consumer within 3 days of the request
When an insurer takes adverse action based on a consumer report, it must notify the consumer and identify the reporting agency. The consumer then has 60 days to request a free copy of the report and may dispute inaccurate information

Privacy Act of 1974

The federal Privacy Act of 1974 governs how federal agencies handle personal information. It does not apply to private insurers. An insurer’s use of an applicant’s personal information is governed by the FCRA, the Gramm-Leach-Bliley Act and state insurance privacy law.

Under Connecticut’s insurance privacy law, an authorization signed with an application, a reinstatement or a request to change benefits is valid for no longer than 30 months for life, health or disability insurance, or one year for property or casualty insurance (Conn. Gen. Stat. § 38a-981).

Telemarketing

The National Do Not Call Registry is a list of telephone numbers whose owners do not want to receive telemarketing calls. Telemarketers may not call registered numbers without the person’s permission or an established business relationship, and unsolicited sales calls:

May be made only between 8 a.m. and 9 p.m. in the recipient’s local time under federal rules; Connecticut’s own law is narrower, limiting sales calls to consumers in Connecticut to between 9 a.m. and 8 p.m. local time (Conn. Gen. Stat. § 42-288a©)
Must disclose the caller’s identity, the company the caller represents and that the purpose is a sale

CAN-SPAM

A commercial email must:

Be identified clearly as an advertisement
Carry accurate header information and a subject line that is not deceptive
Include the sender’s valid physical postal address
Offer a way to opt out, and the sender must honor an opt-out within 10 business days

Insurance guaranty association

Every state has a property and casualty insurance guaranty association that pays covered claims when a member insurer becomes insolvent. Insurers licensed to write the covered lines in the state must belong to it, and it is funded by assessments on its members.

The Connecticut Insurance Guaranty Association pays no more than $500,000 on a covered claim against an insurer ordered into liquidation on or after October 1, 2015 (Conn. Gen. Stat. § 38a-841).

Licensing

Minimum age: 18
Must be Connecticut resident before applying

Pre-licensing course and exam

Course: at least 20 hours per line of insurance
Passing score: 70%

Fingerprints/background check

Not required for most licenses
Exception: surety bail bond license

Controlled business

Insurance on producer’s own life/property/interests, family, employer, or controlled business
License meant to serve public; states restrict using license mainly for controlled business

Non-resident license

No CT exam needed if licensed elsewhere and in good standing
Requires reciprocity, application, fees
Change of address: file within 30 days
Moving to new state: apply for resident license within 90 days; no repeat of prelicensing/exam

Temporary license

Issued without exam to keep business serviced
Typical cases: death/disability of producer, business entity designee, military service designee
Regulator may require a licensed sponsor
CT: up to 180 days

Military service

Waiver available for renewal procedures due to military service or long-term disability

Renewal and reinstatement

Initial CT license expires 2 years after preceding birthday
Lapsed license reinstatement: within 12 months, no new exam, but penalty = double unpaid fee

Continuing education

Required for renewal of major lines (life, health, property, liability)
Hours set by state law

Notice of change of name or address

Must notify Commissioner within 30 days of change (business, residence, email)
Must report administrative actions/criminal prosecutions within 30 days
Must notify before using a different business name

Company regulations

Insurer must be authorized by CT Insurance Department
Application requires: charter/articles, compliance evidence, financial statement

Capital and surplus requirement

Certificate of authority requires maintaining minimum capital/surplus

Duties of the Insurance Commissioner

Appointed by Governor, 4-year term, confirmed by legislature
Investigates complaints, enforces laws, may refer for prosecution
Examines each domestic insurer at least every 5 years
Audits producers as needed, collects fees, issues fines, approves forms/rates
Cannot arrest, issue injunctions, or sentence jail time

Suspend, revoke or non-renew

Grounds include: false application info, fraud, felony conviction, unfair trade practices, misappropriation of funds, prior license revocation elsewhere, exam cheating

Cease and desist

Issued after hearing for unfair/deceptive practices
Does not equal suspension/revocation itself

Hearing and penalties

Hearing must be requested within 30 days of denial/non-renewal notice
Hearing held within 20 days of request
Civil penalty up to $5,000 in CT

Unfair claims settlement practices

Includes: delaying claims, failing to investigate, denying without investigation, altering application info, underpaying claims
Violation if flagrant/frequent (business practice)

Policy forms

Life/annuity forms must be filed and approved by Commissioner before use
Conflicting provisions read as amended to match law

Record maintenance

Producers must keep transaction records available for Commissioner’s inspection

Fraudulent producer representation

Illegal to represent as licensed without passing exam
Applies to any public communication (ads, cards, letterhead)

Misrepresentation

Creating inaccurate policies/quotes/illustrations
Inaccurate comparisons of benefits
Inducing lapse/surrender via false info (twisting)

False advertising

Untrue, deceptive, or misleading statements about insurance business
Applies regardless of medium or intent to deceive

Defamation

False or maliciously critical statements about insurer’s financial condition
Must be calculated to injure

Boycott, coercion and intimidation

Prohibited if resulting in unreasonable restraint or monopoly

False financial statements

Prohibits false material statements on applications or financial statements

Illegal inducements

Prohibited to offer value not in policy to induce purchase
CT allows noncash gifts within Commissioner’s reasonable cost limit

Unfair discrimination

Prohibits differing treatment of same-class/same-risk individuals
Protected categories: sex, marital status, race, religion, national origin
P&C: cannot discriminate solely by geographic location or impairment (unless justified)

Errors & Omissions

Professional liability insurance for agents
Covers honest mistakes/negligence, not regulatory violations

Rebating

Prohibits giving refunds/discounts/favors to induce purchase
Soliciting/negotiating implies licensure

Sharing commission

Allowed between licensed producers in same line
May pay agencies or non-selling persons per NAIC model

Twisting

Misrepresentation to induce lapse/surrender/exchange of policy
Distinct from defamation (which targets insurer’s finances)

Unfair marketing practices

Requires full/fair disclosure, standardized terms
Prohibits false claims of government/organization endorsement
Prohibits false claims about claims payment timing

Gramm-Leach Bliley Act (GLBA)

Repealed Glass-Steagall; allows bank/insurance/investment consolidation
Establishes regulatory framework across financial industries

McCarran-Ferguson Act

1945 law: insurance regulated at state level
Limited antitrust exemption (excludes health insurance since 2021)

National Association of Insurance Commissioners (NAIC)

Standard-setting body of state insurance regulators
Establishes standards, conducts peer review, coordinates oversight

Fair Credit Reporting Act

Regulates consumer reports used in underwriting
Investigative report: disclose within 3 days
Adverse action: consumer has 60 days to request free report/dispute

Privacy Act of 1974

Applies only to federal agencies, not private insurers
CT authorization validity: 30 months (life/health/disability), 1 year (property/casualty)

Telemarketing

Do Not Call Registry protects against unwanted calls
Federal calling hours: 8am–9pm; CT hours: 9am–8pm
Must disclose caller identity, company, and sales purpose

CAN-SPAM

Commercial email must be labeled as ad, have accurate headers
Must include physical address and opt-out option
Opt-out honored within 10 business days

Insurance guaranty association

Pays covered claims when member insurer becomes insolvent
Funded by member assessments
CT cap: $500,000 per covered claim (insolvency on/after Oct 1, 2015)

Connecticut State Regulations & NAIC Insurance Law

Licensing

Any individual applying for a Connecticut resident producer’s license must:

Be at least 18 years old
Be a resident of Connecticut before submitting an application

Pre-licensing course and exam

Connecticut requires a prelicensing course approved by the Commissioner of at least 20 hours for each line of insurance applied for (Conn. Gen. Stat. § 38a-702e).

The passing score on Connecticut’s producer examinations is 70% (Pearson VUE, State of Connecticut Insurance Candidate Handbook).

Fingerprints/background check

Controlled business

Non-resident license

Is currently licensed as a resident, and in good standing, in the home state
Has applied (the home-state application or the Uniform Application) and paid the fees
Lives in a home state that grants nonresident licenses to residents of this state on the same basis (reciprocity)

Temporary license

Most states allow the insurance regulator to issue a temporary license, without an examination, when one is needed to keep an insurance business serviced. Typical cases are:

The surviving spouse or personal representative of a producer who dies or becomes disabled, to allow time to sell the business or train new people
A member or employee of a business entity producer, on the death or disability of its designated producer
The designee of a producer entering active military service

The regulator may limit what a temporary licensee may do and may require a licensed sponsor who takes responsibility for the temporary licensee’s acts.

Connecticut may issue a temporary producer license for up to 180 days without an examination, in cases such as the death or disability of a producer (Conn. Gen. Stat. § 38a-702j).

Military service

Renewal and reinstatement

A producer license stays in effect only while the producer renews it on schedule: paying the renewal fee and completing continuing education by the due date.

An initial Connecticut producer license expires two years after the producer’s birthday that preceded its issue (Conn. Gen. Stat. § 38a-784).

A producer who misses the deadline and lets the license lapse may be able to reinstate it without retaking the examination.

Continuing education

All states, including Connecticut, have continuing education (CE) requirements that must be met to renew major lines (life, health, property, liability) insurance licenses.

Individuals licensed in Connecticut must complete continuing education before renewing their license. The number of hours required is set by state law and published by the state insurance department.

Notice of change of name or address

A Connecticut licensee must notify the Insurance Commissioner in writing within 30 days of a change of business, residence or e-mail address (Conn. Gen. Stat. § 38a-771(a)).

Company regulations

An insurance company must be authorized by the Connecticut Insurance Department to conduct business in Connecticut.

Capital and surplus requirement

An insurer authorized to conduct insurance business in Connecticut must maintain minimum corporate standards.

The certificate of authority allows the insurer to conduct business in the state only if it maintains the minimum capital or permanent surplus required.

Duties of the Insurance Commissioner

The Connecticut Insurance Commissioner is an executive officer in Connecticut state government.

The Commissioner heads the Connecticut Insurance Department, which regulates the state’s insurance industry.
Insurance commissioners are appointed by the Governor, subject to confirmation by the legislature.
The Commissioner serves at the Governor’s pleasure for four-year terms beginning on the first day of March in the year of the appointment.

The Commissioner establishes and enforces regulations in the Connecticut insurance market in a manner that protects consumers and encourages economic development.

Those duties include:

Investigate all claims and complaints of legal violations relating to insurance.
If the Commissioner finds that laws have been violated, the findings and supporting documents may be referred for criminal prosecution.
Monitor transactions of all companies including domestic, foreign, and alien insurance companies.
The Commissioner must examine each domestic insurer at least once every five years (Conn. Gen. Stat. § 38a-14(h)).
Audit the books and records of any resident producer as frequently as necessary.
Collect all fees associated with producers and insurers.
Determine and administer fines associated with violations for insurers and producers.
Issue reports pertaining to the suspension and revocation of licenses of producers and certificates of authority for insurers.
Approve documentation used by insurance companies such as forms and rates.

Sidenote

Know this...

Suspend, revoke or non-renew

The Commissioner has the authority to suspend, revoke, or refuse to renew a license for:

Providing false information on the application for an insurance license.
Omitting any relevant information on an application that would have disqualified the individual from being eligible to receive a license.
Being found guilty of a violation or the noncompliance of insurance regulations and laws…
Committing fraud while attempting to obtain an insurance license.
Improperly withholding, misappropriating or converting any money or property received in the course of doing insurance business.
Providing false information in reference to the terms and conditions of an insurance contract.
Having been convicted of a felony.
Having admitted or been found to have committed any insurance unfair trade practice or fraud.
Having engaged in activities of a fraudulent nature which allowed the person to involve themselves in dishonest, coercive, untrustworthy, and financially irresponsible practices.
Having had a prior insurance license revoked or suspended in a state other than Connecticut.
Using another person’s identity and forging their name on an insurance application.
Being found guilty of using unethical practices or cheating on an examination for an insurance license.

Cease and desist

A cease and desist order does not, by itself, mean the producer’s registration has been suspended or revoked.
The producer must stop or limit the activity addressed in the order.

Hearing and penalties

A person facing action by the Commissioner is entitled to notice and an opportunity for a hearing, within time limits set by Connecticut law, and may ask a court to review the final order.

In addition to or instead of suspending or revoking a license, the Commissioner may impose a fine of up to $5,000 (Conn. Gen. Stat. § 38a-774).

Unfair claims settlement practices

Under the NAIC’s model act, these practices are violations when committed flagrantly and in conscious disregard of the law, or often enough to indicate a general business practice.

The intentional obstruction and delay of claims payment or the delay of a claims investigation is a violation of regulation.
Neglecting to provide a prompt response and written explanation of insurance policy terms, conditions, and laws related to the contract are examples of unfair claims settlement practices.
Failure to provide claims without launching a thorough investigation is a violation of regulation.
Making settlement claims based on information contained on an application that has been altered without the insured’s consent is a violation of regulation.
Denying a claim without conducting a thorough investigation.
Attempting to settle a claim for less than fair market value.

Policy forms

Insurers file their policy forms with the Commissioner.

A life insurance or annuity policy form may not be used in Connecticut until it has been filed with and approved by the Commissioner (Conn. Gen. Stat. § 38a-430(a)).

If a policy provision conflicts with Connecticut law, the policy is read as amended to conform to the law.

Record maintenance

A producer keeps records of each transaction (the policies placed, the insureds, the premiums received and any changes) and makes them available for the Commissioner’s inspection.

Fraudulent producer representation

Any means of public communication is included, such as:

Advertisements
Letterheads
Circulars
Business cards
Other methods of representation

A producer found guilty of conducting business in Connecticut in any line of insurance for which they are not properly licensed may have any other insurance license suspended or revoked.

Misrepresentation

Misrepresentation involving the creation or distribution of policies, quotes, and illustrations designed to provide inaccurate information about the terms and conditions of a policy is prohibited.
Providing inaccurate or incomplete information or comparisons regarding the benefits of a policy is an example of misrepresentation.
Providing inaccurate or incomplete information for the purpose of inducing, or tending to induce, the lapse, exchange, conversion, forfeiture, or surrender of a policy is a violation as well (twisting).

False advertising

Defamation

Boycott, coercion and intimidation

False financial statements

Illegal inducements

A producer may give a customer a noncash gift, item or service whose cost does not exceed an amount the Commissioner considers reasonable per policy year (Conn. Gen. Stat. § 38a-825(d)).

Unfair discrimination

Unfair discrimination is treating people or risks that present the same hazard differently. The NAIC’s model act, on which state unfair trade practices laws are based, prohibits:

Unfair discrimination between individuals of the same class and equal expectation of life in life insurance and annuity rates, dividends, benefits or terms
Unfair discrimination between individuals of the same class and essentially the same hazard in health insurance premiums, benefits or terms
Refusing, limiting or canceling coverage because of a person’s sex, marital status, race, religion or national origin
In property and casualty insurance, refusing or limiting coverage solely because of a risk’s geographic location, unless sound underwriting and actuarial principles justify it, or solely because the applicant or insured is physically or mentally impaired

Many states also expressly forbid refusing or limiting coverage solely because a person is blind or partially blind.

Errors & Omissions

Errors & Omissions (E&O) insurance is a type of professional liability insurance that protects insurance agents if they are sued for negligent performance of their duties.

E&O covers honest mistakes that result in (financial) damage to customers/prospects.
E&O does not cover violations of insurance regulation.

Rebating

Connecticut licensed producers are prohibited from directly or indirectly giving any refund, discount, favor, or credit to reduce premiums to induce the purchase of insurance.

Sidenote

Know this...

To “solicit” or “negotiate” insurance implies that the person is licensed.

Sharing commission

The splitting or sharing of commissions with a licensed producer is allowed.

Both parties must be licensed in the line of business in which the proposed commission is to be split. Under the NAIC’s model act, a commission may also be paid to an insurance agency, or to a person who does not sell, solicit or negotiate insurance.

Twisting

Providing false information or expressing derogatory ideas about the financial conditions of a competitor company with the intent to lapse or surrender an existing policy is a violation of the law.

Any written or oral statements used to induce the lapse, termination, exchange, or surrender of an insurance contract based on inaccurate information are prohibited.

Unfair marketing practices

The Insurance Department establishes minimum standards for full and fair disclosure of policy content.

The Department also requires standardization and simplification of the terms used to describe insurance coverage.

Advertising may not involve the following:

Any statement or implication that policies are approved, or that the financial condition of a company is endorsed, by any government agency or by any independent group, individual, organization or society, unless that is the fact.
Any statements regarding advertising that are false or untrue in reference to the time frame in which claims are paid.

Gramm-Leach Bliley Act (GLBA)

This law repealed the Glass-Steagall Act of 1933, allowing consolidation of commercial banks, investment institutions, and insurance companies.

GLBA established a framework of responsibilities for federal and state regulators across these financial industries.
It permits financial services companies to merge and engage in a variety of new business activities, including insurance, while attempting to address the regulatory issues raised by such combinations.

McCarran-Ferguson Act

Federal law signed in 1945 in which Congress declared that the insurance industry would be regulated at the state level.

Grants insurers a limited exemption from federal antitrust legislation. Since 2021 the exemption does not cover the business of health insurance, apart from narrow activities such as sharing historical loss data (15 U.S.C. § 1013©).

National Association of Insurance Commissioners (NAIC)

Through the NAIC, state insurance regulators:

Establish standards and best practices
Conduct peer review
Coordinate regulatory oversight

NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally.

NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S.

Fair Credit Reporting Act

When an insurer requests an investigative consumer report, it must disclose that to the consumer within 3 days of the request
When an insurer takes adverse action based on a consumer report, it must notify the consumer and identify the reporting agency. The consumer then has 60 days to request a free copy of the report and may dispute inaccurate information

Privacy Act of 1974

Telemarketing

May be made only between 8 a.m. and 9 p.m. in the recipient’s local time under federal rules; Connecticut’s own law is narrower, limiting sales calls to consumers in Connecticut to between 9 a.m. and 8 p.m. local time (Conn. Gen. Stat. § 42-288a©)
Must disclose the caller’s identity, the company the caller represents and that the purpose is a sale

CAN-SPAM

A commercial email must:

Be identified clearly as an advertisement
Carry accurate header information and a subject line that is not deceptive
Include the sender’s valid physical postal address
Offer a way to opt out, and the sender must honor an opt-out within 10 business days

Insurance guaranty association

The Connecticut Insurance Guaranty Association pays no more than $500,000 on a covered claim against an insurer ordered into liquidation on or after October 1, 2015 (Conn. Gen. Stat. § 38a-841).

Connecticut State Regulations & NAIC Insurance Law

Licensing

Any individual applying for a Connecticut resident producer’s license must:

Be at least 18 years old
Be a resident of Connecticut before submitting an application

Pre-licensing course and exam

Connecticut requires a prelicensing course approved by the Commissioner of at least 20 hours for each line of insurance applied for (Conn. Gen. Stat. § 38a-702e).

The passing score on Connecticut’s producer examinations is 70% (Pearson VUE, State of Connecticut Insurance Candidate Handbook).

Fingerprints/background check

Controlled business

Non-resident license

Is currently licensed as a resident, and in good standing, in the home state
Has applied (the home-state application or the Uniform Application) and paid the fees
Lives in a home state that grants nonresident licenses to residents of this state on the same basis (reciprocity)

Temporary license

Most states allow the insurance regulator to issue a temporary license, without an examination, when one is needed to keep an insurance business serviced. Typical cases are:

The surviving spouse or personal representative of a producer who dies or becomes disabled, to allow time to sell the business or train new people
A member or employee of a business entity producer, on the death or disability of its designated producer
The designee of a producer entering active military service

The regulator may limit what a temporary licensee may do and may require a licensed sponsor who takes responsibility for the temporary licensee’s acts.

Connecticut may issue a temporary producer license for up to 180 days without an examination, in cases such as the death or disability of a producer (Conn. Gen. Stat. § 38a-702j).

Military service

Renewal and reinstatement

A producer license stays in effect only while the producer renews it on schedule: paying the renewal fee and completing continuing education by the due date.

An initial Connecticut producer license expires two years after the producer’s birthday that preceded its issue (Conn. Gen. Stat. § 38a-784).

A producer who misses the deadline and lets the license lapse may be able to reinstate it without retaking the examination.

Continuing education

All states, including Connecticut, have continuing education (CE) requirements that must be met to renew major lines (life, health, property, liability) insurance licenses.

Individuals licensed in Connecticut must complete continuing education before renewing their license. The number of hours required is set by state law and published by the state insurance department.

Notice of change of name or address

A Connecticut licensee must notify the Insurance Commissioner in writing within 30 days of a change of business, residence or e-mail address (Conn. Gen. Stat. § 38a-771(a)).

Company regulations

An insurance company must be authorized by the Connecticut Insurance Department to conduct business in Connecticut.

Capital and surplus requirement

An insurer authorized to conduct insurance business in Connecticut must maintain minimum corporate standards.

The certificate of authority allows the insurer to conduct business in the state only if it maintains the minimum capital or permanent surplus required.

Duties of the Insurance Commissioner

The Connecticut Insurance Commissioner is an executive officer in Connecticut state government.

The Commissioner heads the Connecticut Insurance Department, which regulates the state’s insurance industry.
Insurance commissioners are appointed by the Governor, subject to confirmation by the legislature.
The Commissioner serves at the Governor’s pleasure for four-year terms beginning on the first day of March in the year of the appointment.

The Commissioner establishes and enforces regulations in the Connecticut insurance market in a manner that protects consumers and encourages economic development.

Those duties include:

Investigate all claims and complaints of legal violations relating to insurance.
If the Commissioner finds that laws have been violated, the findings and supporting documents may be referred for criminal prosecution.
Monitor transactions of all companies including domestic, foreign, and alien insurance companies.
The Commissioner must examine each domestic insurer at least once every five years (Conn. Gen. Stat. § 38a-14(h)).
Audit the books and records of any resident producer as frequently as necessary.
Collect all fees associated with producers and insurers.
Determine and administer fines associated with violations for insurers and producers.
Issue reports pertaining to the suspension and revocation of licenses of producers and certificates of authority for insurers.
Approve documentation used by insurance companies such as forms and rates.

Sidenote

Know this...

Suspend, revoke or non-renew

The Commissioner has the authority to suspend, revoke, or refuse to renew a license for:

Providing false information on the application for an insurance license.
Omitting any relevant information on an application that would have disqualified the individual from being eligible to receive a license.
Being found guilty of a violation or the noncompliance of insurance regulations and laws…
Committing fraud while attempting to obtain an insurance license.
Improperly withholding, misappropriating or converting any money or property received in the course of doing insurance business.
Providing false information in reference to the terms and conditions of an insurance contract.
Having been convicted of a felony.
Having admitted or been found to have committed any insurance unfair trade practice or fraud.
Having engaged in activities of a fraudulent nature which allowed the person to involve themselves in dishonest, coercive, untrustworthy, and financially irresponsible practices.
Having had a prior insurance license revoked or suspended in a state other than Connecticut.
Using another person’s identity and forging their name on an insurance application.
Being found guilty of using unethical practices or cheating on an examination for an insurance license.

Cease and desist

A cease and desist order does not, by itself, mean the producer’s registration has been suspended or revoked.
The producer must stop or limit the activity addressed in the order.

Hearing and penalties

A person facing action by the Commissioner is entitled to notice and an opportunity for a hearing, within time limits set by Connecticut law, and may ask a court to review the final order.

In addition to or instead of suspending or revoking a license, the Commissioner may impose a fine of up to $5,000 (Conn. Gen. Stat. § 38a-774).

Unfair claims settlement practices

Under the NAIC’s model act, these practices are violations when committed flagrantly and in conscious disregard of the law, or often enough to indicate a general business practice.

The intentional obstruction and delay of claims payment or the delay of a claims investigation is a violation of regulation.
Neglecting to provide a prompt response and written explanation of insurance policy terms, conditions, and laws related to the contract are examples of unfair claims settlement practices.
Failure to provide claims without launching a thorough investigation is a violation of regulation.
Making settlement claims based on information contained on an application that has been altered without the insured’s consent is a violation of regulation.
Denying a claim without conducting a thorough investigation.
Attempting to settle a claim for less than fair market value.

Policy forms

Insurers file their policy forms with the Commissioner.

A life insurance or annuity policy form may not be used in Connecticut until it has been filed with and approved by the Commissioner (Conn. Gen. Stat. § 38a-430(a)).

If a policy provision conflicts with Connecticut law, the policy is read as amended to conform to the law.

Record maintenance

A producer keeps records of each transaction (the policies placed, the insureds, the premiums received and any changes) and makes them available for the Commissioner’s inspection.

Fraudulent producer representation

Any means of public communication is included, such as:

Advertisements
Letterheads
Circulars
Business cards
Other methods of representation

A producer found guilty of conducting business in Connecticut in any line of insurance for which they are not properly licensed may have any other insurance license suspended or revoked.

Misrepresentation

Misrepresentation involving the creation or distribution of policies, quotes, and illustrations designed to provide inaccurate information about the terms and conditions of a policy is prohibited.
Providing inaccurate or incomplete information or comparisons regarding the benefits of a policy is an example of misrepresentation.
Providing inaccurate or incomplete information for the purpose of inducing, or tending to induce, the lapse, exchange, conversion, forfeiture, or surrender of a policy is a violation as well (twisting).

False advertising

Defamation

Boycott, coercion and intimidation

False financial statements

Illegal inducements

A producer may give a customer a noncash gift, item or service whose cost does not exceed an amount the Commissioner considers reasonable per policy year (Conn. Gen. Stat. § 38a-825(d)).

Unfair discrimination

Unfair discrimination is treating people or risks that present the same hazard differently. The NAIC’s model act, on which state unfair trade practices laws are based, prohibits:

Unfair discrimination between individuals of the same class and equal expectation of life in life insurance and annuity rates, dividends, benefits or terms
Unfair discrimination between individuals of the same class and essentially the same hazard in health insurance premiums, benefits or terms
Refusing, limiting or canceling coverage because of a person’s sex, marital status, race, religion or national origin
In property and casualty insurance, refusing or limiting coverage solely because of a risk’s geographic location, unless sound underwriting and actuarial principles justify it, or solely because the applicant or insured is physically or mentally impaired

Many states also expressly forbid refusing or limiting coverage solely because a person is blind or partially blind.

Errors & Omissions

Errors & Omissions (E&O) insurance is a type of professional liability insurance that protects insurance agents if they are sued for negligent performance of their duties.

E&O covers honest mistakes that result in (financial) damage to customers/prospects.
E&O does not cover violations of insurance regulation.

Rebating

Connecticut licensed producers are prohibited from directly or indirectly giving any refund, discount, favor, or credit to reduce premiums to induce the purchase of insurance.

Sidenote

Know this...

To “solicit” or “negotiate” insurance implies that the person is licensed.

Sharing commission

The splitting or sharing of commissions with a licensed producer is allowed.

Both parties must be licensed in the line of business in which the proposed commission is to be split. Under the NAIC’s model act, a commission may also be paid to an insurance agency, or to a person who does not sell, solicit or negotiate insurance.

Twisting

Providing false information or expressing derogatory ideas about the financial conditions of a competitor company with the intent to lapse or surrender an existing policy is a violation of the law.

Any written or oral statements used to induce the lapse, termination, exchange, or surrender of an insurance contract based on inaccurate information are prohibited.

Unfair marketing practices

The Insurance Department establishes minimum standards for full and fair disclosure of policy content.

The Department also requires standardization and simplification of the terms used to describe insurance coverage.

Advertising may not involve the following:

Any statement or implication that policies are approved, or that the financial condition of a company is endorsed, by any government agency or by any independent group, individual, organization or society, unless that is the fact.
Any statements regarding advertising that are false or untrue in reference to the time frame in which claims are paid.

Gramm-Leach Bliley Act (GLBA)

This law repealed the Glass-Steagall Act of 1933, allowing consolidation of commercial banks, investment institutions, and insurance companies.

GLBA established a framework of responsibilities for federal and state regulators across these financial industries.
It permits financial services companies to merge and engage in a variety of new business activities, including insurance, while attempting to address the regulatory issues raised by such combinations.

McCarran-Ferguson Act

Federal law signed in 1945 in which Congress declared that the insurance industry would be regulated at the state level.

Grants insurers a limited exemption from federal antitrust legislation. Since 2021 the exemption does not cover the business of health insurance, apart from narrow activities such as sharing historical loss data (15 U.S.C. § 1013©).

National Association of Insurance Commissioners (NAIC)

Through the NAIC, state insurance regulators:

Establish standards and best practices
Conduct peer review
Coordinate regulatory oversight

NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally.

NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S.

Fair Credit Reporting Act

When an insurer requests an investigative consumer report, it must disclose that to the consumer within 3 days of the request
When an insurer takes adverse action based on a consumer report, it must notify the consumer and identify the reporting agency. The consumer then has 60 days to request a free copy of the report and may dispute inaccurate information

Privacy Act of 1974

Telemarketing

May be made only between 8 a.m. and 9 p.m. in the recipient’s local time under federal rules; Connecticut’s own law is narrower, limiting sales calls to consumers in Connecticut to between 9 a.m. and 8 p.m. local time (Conn. Gen. Stat. § 42-288a©)
Must disclose the caller’s identity, the company the caller represents and that the purpose is a sale

CAN-SPAM

A commercial email must:

Be identified clearly as an advertisement
Carry accurate header information and a subject line that is not deceptive
Include the sender’s valid physical postal address
Offer a way to opt out, and the sender must honor an opt-out within 10 business days

Insurance guaranty association

The Connecticut Insurance Guaranty Association pays no more than $500,000 on a covered claim against an insurer ordered into liquidation on or after October 1, 2015 (Conn. Gen. Stat. § 38a-841).

Licensing

Minimum age: 18
Must be Connecticut resident before applying

Pre-licensing course and exam

Course: at least 20 hours per line of insurance
Passing score: 70%

Fingerprints/background check

Not required for most licenses
Exception: surety bail bond license

Controlled business

Insurance on producer’s own life/property/interests, family, employer, or controlled business
License meant to serve public; states restrict using license mainly for controlled business

Non-resident license

No CT exam needed if licensed elsewhere and in good standing
Requires reciprocity, application, fees
Change of address: file within 30 days
Moving to new state: apply for resident license within 90 days; no repeat of prelicensing/exam

Temporary license

Issued without exam to keep business serviced
Typical cases: death/disability of producer, business entity designee, military service designee
Regulator may require a licensed sponsor
CT: up to 180 days

Military service

Waiver available for renewal procedures due to military service or long-term disability

Renewal and reinstatement

Initial CT license expires 2 years after preceding birthday
Lapsed license reinstatement: within 12 months, no new exam, but penalty = double unpaid fee

Continuing education

Required for renewal of major lines (life, health, property, liability)
Hours set by state law

Notice of change of name or address

Must notify Commissioner within 30 days of change (business, residence, email)
Must report administrative actions/criminal prosecutions within 30 days
Must notify before using a different business name

Company regulations

Insurer must be authorized by CT Insurance Department
Application requires: charter/articles, compliance evidence, financial statement

Capital and surplus requirement

Certificate of authority requires maintaining minimum capital/surplus

Duties of the Insurance Commissioner

Appointed by Governor, 4-year term, confirmed by legislature
Investigates complaints, enforces laws, may refer for prosecution
Examines each domestic insurer at least every 5 years
Audits producers as needed, collects fees, issues fines, approves forms/rates
Cannot arrest, issue injunctions, or sentence jail time

Suspend, revoke or non-renew

Grounds include: false application info, fraud, felony conviction, unfair trade practices, misappropriation of funds, prior license revocation elsewhere, exam cheating

Cease and desist

Issued after hearing for unfair/deceptive practices
Does not equal suspension/revocation itself

Hearing and penalties

Hearing must be requested within 30 days of denial/non-renewal notice
Hearing held within 20 days of request
Civil penalty up to $5,000 in CT

Unfair claims settlement practices

Includes: delaying claims, failing to investigate, denying without investigation, altering application info, underpaying claims
Violation if flagrant/frequent (business practice)

Policy forms

Life/annuity forms must be filed and approved by Commissioner before use
Conflicting provisions read as amended to match law

Record maintenance

Producers must keep transaction records available for Commissioner’s inspection

Fraudulent producer representation

Illegal to represent as licensed without passing exam
Applies to any public communication (ads, cards, letterhead)

Misrepresentation

Creating inaccurate policies/quotes/illustrations
Inaccurate comparisons of benefits
Inducing lapse/surrender via false info (twisting)

False advertising

Untrue, deceptive, or misleading statements about insurance business
Applies regardless of medium or intent to deceive

Defamation

False or maliciously critical statements about insurer’s financial condition
Must be calculated to injure

Boycott, coercion and intimidation

Prohibited if resulting in unreasonable restraint or monopoly

False financial statements

Prohibits false material statements on applications or financial statements

Illegal inducements

Prohibited to offer value not in policy to induce purchase
CT allows noncash gifts within Commissioner’s reasonable cost limit

Unfair discrimination

Prohibits differing treatment of same-class/same-risk individuals
Protected categories: sex, marital status, race, religion, national origin
P&C: cannot discriminate solely by geographic location or impairment (unless justified)

Errors & Omissions

Professional liability insurance for agents
Covers honest mistakes/negligence, not regulatory violations

Rebating

Prohibits giving refunds/discounts/favors to induce purchase
Soliciting/negotiating implies licensure

Sharing commission

Allowed between licensed producers in same line
May pay agencies or non-selling persons per NAIC model

Twisting

Misrepresentation to induce lapse/surrender/exchange of policy
Distinct from defamation (which targets insurer’s finances)

Unfair marketing practices

Requires full/fair disclosure, standardized terms
Prohibits false claims of government/organization endorsement
Prohibits false claims about claims payment timing

Gramm-Leach Bliley Act (GLBA)

Repealed Glass-Steagall; allows bank/insurance/investment consolidation
Establishes regulatory framework across financial industries

McCarran-Ferguson Act

1945 law: insurance regulated at state level
Limited antitrust exemption (excludes health insurance since 2021)

National Association of Insurance Commissioners (NAIC)

Standard-setting body of state insurance regulators
Establishes standards, conducts peer review, coordinates oversight

Fair Credit Reporting Act

Regulates consumer reports used in underwriting
Investigative report: disclose within 3 days
Adverse action: consumer has 60 days to request free report/dispute

Privacy Act of 1974

Applies only to federal agencies, not private insurers
CT authorization validity: 30 months (life/health/disability), 1 year (property/casualty)

Telemarketing

Do Not Call Registry protects against unwanted calls
Federal calling hours: 8am–9pm; CT hours: 9am–8pm
Must disclose caller identity, company, and sales purpose

CAN-SPAM

Commercial email must be labeled as ad, have accurate headers
Must include physical address and opt-out option
Opt-out honored within 10 business days

Insurance guaranty association

Pays covered claims when member insurer becomes insolvent
Funded by member assessments
CT cap: $500,000 per covered claim (insolvency on/after Oct 1, 2015)

Connecticut State Regulations & NAIC Insurance Law

Licensing

Any individual applying for a Connecticut resident producer’s license must:

Be at least 18 years old
Be a resident of Connecticut before submitting an application

Pre-licensing course and exam

Connecticut requires a prelicensing course approved by the Commissioner of at least 20 hours for each line of insurance applied for (Conn. Gen. Stat. § 38a-702e).

The passing score on Connecticut’s producer examinations is 70% (Pearson VUE, State of Connecticut Insurance Candidate Handbook).

Fingerprints/background check

Controlled business

Non-resident license

Is currently licensed as a resident, and in good standing, in the home state
Has applied (the home-state application or the Uniform Application) and paid the fees
Lives in a home state that grants nonresident licenses to residents of this state on the same basis (reciprocity)

Temporary license

Most states allow the insurance regulator to issue a temporary license, without an examination, when one is needed to keep an insurance business serviced. Typical cases are:

The surviving spouse or personal representative of a producer who dies or becomes disabled, to allow time to sell the business or train new people
A member or employee of a business entity producer, on the death or disability of its designated producer
The designee of a producer entering active military service

The regulator may limit what a temporary licensee may do and may require a licensed sponsor who takes responsibility for the temporary licensee’s acts.

Connecticut may issue a temporary producer license for up to 180 days without an examination, in cases such as the death or disability of a producer (Conn. Gen. Stat. § 38a-702j).

Military service

Renewal and reinstatement

A producer license stays in effect only while the producer renews it on schedule: paying the renewal fee and completing continuing education by the due date.

An initial Connecticut producer license expires two years after the producer’s birthday that preceded its issue (Conn. Gen. Stat. § 38a-784).

A producer who misses the deadline and lets the license lapse may be able to reinstate it without retaking the examination.

Continuing education

All states, including Connecticut, have continuing education (CE) requirements that must be met to renew major lines (life, health, property, liability) insurance licenses.

Individuals licensed in Connecticut must complete continuing education before renewing their license. The number of hours required is set by state law and published by the state insurance department.

Notice of change of name or address

A Connecticut licensee must notify the Insurance Commissioner in writing within 30 days of a change of business, residence or e-mail address (Conn. Gen. Stat. § 38a-771(a)).

Company regulations

An insurance company must be authorized by the Connecticut Insurance Department to conduct business in Connecticut.

Capital and surplus requirement

An insurer authorized to conduct insurance business in Connecticut must maintain minimum corporate standards.

The certificate of authority allows the insurer to conduct business in the state only if it maintains the minimum capital or permanent surplus required.

Duties of the Insurance Commissioner

The Connecticut Insurance Commissioner is an executive officer in Connecticut state government.

The Commissioner heads the Connecticut Insurance Department, which regulates the state’s insurance industry.
Insurance commissioners are appointed by the Governor, subject to confirmation by the legislature.
The Commissioner serves at the Governor’s pleasure for four-year terms beginning on the first day of March in the year of the appointment.

The Commissioner establishes and enforces regulations in the Connecticut insurance market in a manner that protects consumers and encourages economic development.

Those duties include:

Investigate all claims and complaints of legal violations relating to insurance.
If the Commissioner finds that laws have been violated, the findings and supporting documents may be referred for criminal prosecution.
Monitor transactions of all companies including domestic, foreign, and alien insurance companies.
The Commissioner must examine each domestic insurer at least once every five years (Conn. Gen. Stat. § 38a-14(h)).
Audit the books and records of any resident producer as frequently as necessary.
Collect all fees associated with producers and insurers.
Determine and administer fines associated with violations for insurers and producers.
Issue reports pertaining to the suspension and revocation of licenses of producers and certificates of authority for insurers.
Approve documentation used by insurance companies such as forms and rates.

Sidenote

Know this...

Suspend, revoke or non-renew

The Commissioner has the authority to suspend, revoke, or refuse to renew a license for:

Providing false information on the application for an insurance license.
Omitting any relevant information on an application that would have disqualified the individual from being eligible to receive a license.
Being found guilty of a violation or the noncompliance of insurance regulations and laws…
Committing fraud while attempting to obtain an insurance license.
Improperly withholding, misappropriating or converting any money or property received in the course of doing insurance business.
Providing false information in reference to the terms and conditions of an insurance contract.
Having been convicted of a felony.
Having admitted or been found to have committed any insurance unfair trade practice or fraud.
Having engaged in activities of a fraudulent nature which allowed the person to involve themselves in dishonest, coercive, untrustworthy, and financially irresponsible practices.
Having had a prior insurance license revoked or suspended in a state other than Connecticut.
Using another person’s identity and forging their name on an insurance application.
Being found guilty of using unethical practices or cheating on an examination for an insurance license.

Cease and desist

A cease and desist order does not, by itself, mean the producer’s registration has been suspended or revoked.
The producer must stop or limit the activity addressed in the order.

Hearing and penalties

A person facing action by the Commissioner is entitled to notice and an opportunity for a hearing, within time limits set by Connecticut law, and may ask a court to review the final order.

In addition to or instead of suspending or revoking a license, the Commissioner may impose a fine of up to $5,000 (Conn. Gen. Stat. § 38a-774).

Unfair claims settlement practices

Under the NAIC’s model act, these practices are violations when committed flagrantly and in conscious disregard of the law, or often enough to indicate a general business practice.

The intentional obstruction and delay of claims payment or the delay of a claims investigation is a violation of regulation.
Neglecting to provide a prompt response and written explanation of insurance policy terms, conditions, and laws related to the contract are examples of unfair claims settlement practices.
Failure to provide claims without launching a thorough investigation is a violation of regulation.
Making settlement claims based on information contained on an application that has been altered without the insured’s consent is a violation of regulation.
Denying a claim without conducting a thorough investigation.
Attempting to settle a claim for less than fair market value.

Policy forms

Insurers file their policy forms with the Commissioner.

A life insurance or annuity policy form may not be used in Connecticut until it has been filed with and approved by the Commissioner (Conn. Gen. Stat. § 38a-430(a)).

If a policy provision conflicts with Connecticut law, the policy is read as amended to conform to the law.

Record maintenance

A producer keeps records of each transaction (the policies placed, the insureds, the premiums received and any changes) and makes them available for the Commissioner’s inspection.

Fraudulent producer representation

Any means of public communication is included, such as:

Advertisements
Letterheads
Circulars
Business cards
Other methods of representation

A producer found guilty of conducting business in Connecticut in any line of insurance for which they are not properly licensed may have any other insurance license suspended or revoked.

Misrepresentation

Misrepresentation involving the creation or distribution of policies, quotes, and illustrations designed to provide inaccurate information about the terms and conditions of a policy is prohibited.
Providing inaccurate or incomplete information or comparisons regarding the benefits of a policy is an example of misrepresentation.
Providing inaccurate or incomplete information for the purpose of inducing, or tending to induce, the lapse, exchange, conversion, forfeiture, or surrender of a policy is a violation as well (twisting).

False advertising

Defamation

Boycott, coercion and intimidation

False financial statements

Illegal inducements

A producer may give a customer a noncash gift, item or service whose cost does not exceed an amount the Commissioner considers reasonable per policy year (Conn. Gen. Stat. § 38a-825(d)).

Unfair discrimination

Unfair discrimination is treating people or risks that present the same hazard differently. The NAIC’s model act, on which state unfair trade practices laws are based, prohibits:

Unfair discrimination between individuals of the same class and equal expectation of life in life insurance and annuity rates, dividends, benefits or terms
Unfair discrimination between individuals of the same class and essentially the same hazard in health insurance premiums, benefits or terms
Refusing, limiting or canceling coverage because of a person’s sex, marital status, race, religion or national origin
In property and casualty insurance, refusing or limiting coverage solely because of a risk’s geographic location, unless sound underwriting and actuarial principles justify it, or solely because the applicant or insured is physically or mentally impaired

Many states also expressly forbid refusing or limiting coverage solely because a person is blind or partially blind.

Errors & Omissions

Errors & Omissions (E&O) insurance is a type of professional liability insurance that protects insurance agents if they are sued for negligent performance of their duties.

E&O covers honest mistakes that result in (financial) damage to customers/prospects.
E&O does not cover violations of insurance regulation.

Rebating

Connecticut licensed producers are prohibited from directly or indirectly giving any refund, discount, favor, or credit to reduce premiums to induce the purchase of insurance.

Sidenote

Know this...

To “solicit” or “negotiate” insurance implies that the person is licensed.

Sharing commission

The splitting or sharing of commissions with a licensed producer is allowed.

Both parties must be licensed in the line of business in which the proposed commission is to be split. Under the NAIC’s model act, a commission may also be paid to an insurance agency, or to a person who does not sell, solicit or negotiate insurance.

Twisting

Providing false information or expressing derogatory ideas about the financial conditions of a competitor company with the intent to lapse or surrender an existing policy is a violation of the law.

Any written or oral statements used to induce the lapse, termination, exchange, or surrender of an insurance contract based on inaccurate information are prohibited.

Unfair marketing practices

The Insurance Department establishes minimum standards for full and fair disclosure of policy content.

The Department also requires standardization and simplification of the terms used to describe insurance coverage.

Advertising may not involve the following:

Any statement or implication that policies are approved, or that the financial condition of a company is endorsed, by any government agency or by any independent group, individual, organization or society, unless that is the fact.
Any statements regarding advertising that are false or untrue in reference to the time frame in which claims are paid.

Gramm-Leach Bliley Act (GLBA)

This law repealed the Glass-Steagall Act of 1933, allowing consolidation of commercial banks, investment institutions, and insurance companies.

GLBA established a framework of responsibilities for federal and state regulators across these financial industries.
It permits financial services companies to merge and engage in a variety of new business activities, including insurance, while attempting to address the regulatory issues raised by such combinations.

McCarran-Ferguson Act

Federal law signed in 1945 in which Congress declared that the insurance industry would be regulated at the state level.

Grants insurers a limited exemption from federal antitrust legislation. Since 2021 the exemption does not cover the business of health insurance, apart from narrow activities such as sharing historical loss data (15 U.S.C. § 1013©).

National Association of Insurance Commissioners (NAIC)

Through the NAIC, state insurance regulators:

Establish standards and best practices
Conduct peer review
Coordinate regulatory oversight

NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally.

NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S.

Fair Credit Reporting Act

When an insurer requests an investigative consumer report, it must disclose that to the consumer within 3 days of the request
When an insurer takes adverse action based on a consumer report, it must notify the consumer and identify the reporting agency. The consumer then has 60 days to request a free copy of the report and may dispute inaccurate information

Privacy Act of 1974

Telemarketing

May be made only between 8 a.m. and 9 p.m. in the recipient’s local time under federal rules; Connecticut’s own law is narrower, limiting sales calls to consumers in Connecticut to between 9 a.m. and 8 p.m. local time (Conn. Gen. Stat. § 42-288a©)
Must disclose the caller’s identity, the company the caller represents and that the purpose is a sale

CAN-SPAM

A commercial email must:

Be identified clearly as an advertisement
Carry accurate header information and a subject line that is not deceptive
Include the sender’s valid physical postal address
Offer a way to opt out, and the sender must honor an opt-out within 10 business days

Insurance guaranty association

The Connecticut Insurance Guaranty Association pays no more than $500,000 on a covered claim against an insurer ordered into liquidation on or after October 1, 2015 (Conn. Gen. Stat. § 38a-841).

Licensing

Minimum age: 18
Must be Connecticut resident before applying

Pre-licensing course and exam

Course: at least 20 hours per line of insurance
Passing score: 70%

Fingerprints/background check

Not required for most licenses
Exception: surety bail bond license

Controlled business

Insurance on producer’s own life/property/interests, family, employer, or controlled business
License meant to serve public; states restrict using license mainly for controlled business

Non-resident license

No CT exam needed if licensed elsewhere and in good standing
Requires reciprocity, application, fees
Change of address: file within 30 days
Moving to new state: apply for resident license within 90 days; no repeat of prelicensing/exam

Temporary license

Issued without exam to keep business serviced
Typical cases: death/disability of producer, business entity designee, military service designee
Regulator may require a licensed sponsor
CT: up to 180 days

Military service

Waiver available for renewal procedures due to military service or long-term disability

Renewal and reinstatement

Initial CT license expires 2 years after preceding birthday
Lapsed license reinstatement: within 12 months, no new exam, but penalty = double unpaid fee

Continuing education

Required for renewal of major lines (life, health, property, liability)
Hours set by state law

Notice of change of name or address

Must notify Commissioner within 30 days of change (business, residence, email)
Must report administrative actions/criminal prosecutions within 30 days
Must notify before using a different business name

Company regulations

Insurer must be authorized by CT Insurance Department
Application requires: charter/articles, compliance evidence, financial statement

Capital and surplus requirement

Certificate of authority requires maintaining minimum capital/surplus

Duties of the Insurance Commissioner

Appointed by Governor, 4-year term, confirmed by legislature
Investigates complaints, enforces laws, may refer for prosecution
Examines each domestic insurer at least every 5 years
Audits producers as needed, collects fees, issues fines, approves forms/rates
Cannot arrest, issue injunctions, or sentence jail time

Suspend, revoke or non-renew

Grounds include: false application info, fraud, felony conviction, unfair trade practices, misappropriation of funds, prior license revocation elsewhere, exam cheating

Cease and desist

Issued after hearing for unfair/deceptive practices
Does not equal suspension/revocation itself

Hearing and penalties

Hearing must be requested within 30 days of denial/non-renewal notice
Hearing held within 20 days of request
Civil penalty up to $5,000 in CT

Unfair claims settlement practices

Includes: delaying claims, failing to investigate, denying without investigation, altering application info, underpaying claims
Violation if flagrant/frequent (business practice)

Policy forms

Life/annuity forms must be filed and approved by Commissioner before use
Conflicting provisions read as amended to match law

Record maintenance

Producers must keep transaction records available for Commissioner’s inspection

Fraudulent producer representation

Illegal to represent as licensed without passing exam
Applies to any public communication (ads, cards, letterhead)

Misrepresentation

Creating inaccurate policies/quotes/illustrations
Inaccurate comparisons of benefits
Inducing lapse/surrender via false info (twisting)

False advertising

Untrue, deceptive, or misleading statements about insurance business
Applies regardless of medium or intent to deceive

Defamation

False or maliciously critical statements about insurer’s financial condition
Must be calculated to injure

Boycott, coercion and intimidation

Prohibited if resulting in unreasonable restraint or monopoly

False financial statements

Prohibits false material statements on applications or financial statements

Illegal inducements

Prohibited to offer value not in policy to induce purchase
CT allows noncash gifts within Commissioner’s reasonable cost limit

Unfair discrimination

Prohibits differing treatment of same-class/same-risk individuals
Protected categories: sex, marital status, race, religion, national origin
P&C: cannot discriminate solely by geographic location or impairment (unless justified)

Errors & Omissions

Professional liability insurance for agents
Covers honest mistakes/negligence, not regulatory violations

Rebating

Prohibits giving refunds/discounts/favors to induce purchase
Soliciting/negotiating implies licensure

Sharing commission

Allowed between licensed producers in same line
May pay agencies or non-selling persons per NAIC model

Twisting

Misrepresentation to induce lapse/surrender/exchange of policy
Distinct from defamation (which targets insurer’s finances)

Unfair marketing practices

Requires full/fair disclosure, standardized terms
Prohibits false claims of government/organization endorsement
Prohibits false claims about claims payment timing

Gramm-Leach Bliley Act (GLBA)

Repealed Glass-Steagall; allows bank/insurance/investment consolidation
Establishes regulatory framework across financial industries

McCarran-Ferguson Act

1945 law: insurance regulated at state level
Limited antitrust exemption (excludes health insurance since 2021)

National Association of Insurance Commissioners (NAIC)

Standard-setting body of state insurance regulators
Establishes standards, conducts peer review, coordinates oversight

Fair Credit Reporting Act

Regulates consumer reports used in underwriting
Investigative report: disclose within 3 days
Adverse action: consumer has 60 days to request free report/dispute

Privacy Act of 1974

Applies only to federal agencies, not private insurers
CT authorization validity: 30 months (life/health/disability), 1 year (property/casualty)

Telemarketing

Do Not Call Registry protects against unwanted calls
Federal calling hours: 8am–9pm; CT hours: 9am–8pm
Must disclose caller identity, company, and sales purpose

CAN-SPAM

Commercial email must be labeled as ad, have accurate headers
Must include physical address and opt-out option
Opt-out honored within 10 business days

Insurance guaranty association

Pays covered claims when member insurer becomes insolvent
Funded by member assessments
CT cap: $500,000 per covered claim (insolvency on/after Oct 1, 2015)