HB 06509 Summary

• Establishes comprehensive reforms to Connecticut's insurance guaranty associations for property/casualty and life/health insurance, effective October 1, 2011, including revised definitions, governance structures, and covered claim procedures.

• Increases covered claim limits for property/casualty insurance from $300,000 to $400,000 (for insurers insolvent October 1, 2007 - October 1, 2011) and $500,000 (for insurers insolvent on or after October 1, 2011), with unearned premium limits raised from $500 to $10,000 per policy.

• Revises board governance for both associations to include two public representatives and remaining members representing insurers, with new provisions for removing directors for conflicts of interest, indictment, or failure to attend meetings.

• Modifies premium tax offset provisions so assessments paid after January 1, 2012 receive only 50% offset (versus 100% previously) and allows offset transfers to affiliates with enhanced compliance requirements.

• Adds new exclusions from coverage including punitive damages, attorney fees, claims for interest, and LIHC claims, while requiring member insurers to deliver disclosure documents describing guaranty association limitations and restrictions.