2015 Connecticut General Statutes
Title 38a - Insurance
Chapter 698 - Insurers
Section 38a-41 - (Formerly Sec. 38-20). Authority to do business. Licensure. Revocation or refusal to renew license. Fines. Company owned by a state or foreign nation or company controlled by insureds not to be issued license. Appeals. Plan of operations. Type of business to be conducted.

(a) No insurance company or health care center shall do any insurance business or health care center business within this state until and except while it is permitted to do so under the terms of a license issued by the commissioner. Any such company desiring to obtain such a license shall make application to the commissioner, setting forth the line or lines of business that it is seeking authorization to write. It shall file with the commissioner a certified copy of its charter or articles of association and evidence satisfactory to the commissioner that it has complied with the laws of the jurisdiction under which it is organized, a statement of its financial condition in such form as is required by the commissioner, together with such evidence of its correctness as the commissioner requires and evidence of good management in such form as is required by the commissioner. Applicant companies licensed in and operated from administrative offices in one state but domiciled in another state, as permitted by the applicable state law, shall provide justification of such arrangement, satisfactory to the commissioner, which shall demonstrate that regulatory influence of the domiciliary supervisory official has not been diminished as a result of such arrangement. An applicant shall demonstrate an orderly pattern of growth in its marketing territories in the geographic region, with the exception of a newly formed health care center, and an expertise in marketing and servicing the lines of insurance or the health care center business it desires to write. It shall submit evidence of its ability to provide continuous and timely claims settlement. If the information furnished is satisfactory to the commissioner and if all other requirements of law have been complied with, he may issue to such company a license permitting it to do business in this state. Each such license shall expire on the first day of May succeeding the date of its issuance, but may be renewed without any formalities except as required by the commissioner. Failure of a licensed company to exercise its authority to write a particular line or lines of business in this state for two consecutive calendar years may constitute sufficient cause for revocation of the company’s authority to write those lines of business.

(b) The commissioner shall adopt regulations in accordance with the provisions of chapter 54 specifying the information and evidence that an insurance company or health care center desiring to obtain or renew a license to do an insurance business or health care center business shall submit and the requirements with which it shall comply.

(c) The commissioner may, at any time, for cause, suspend, revoke or refuse to renew any such license or in lieu of or in addition to suspension or revocation of such license the commissioner, after reasonable notice to and hearing of any holder of such license, may impose a fine not to exceed fifty thousand dollars. Such hearings may be held by the commissioner or any person designated by the commissioner. Whenever a person other than the commissioner acts as the hearing officer, the person shall submit to the commissioner a memorandum of the person’s findings and recommendations upon which the commissioner may base a decision. The commissioner may, if the commissioner deems it in the interest of the public, publish in one or more newspapers of the state a statement that, under the provisions of this section, the commissioner has suspended or revoked the license of any insurance company or health care center to do business in this state.

(d) No license to do an insurance business within this state shall be issued to a foreign insurance company owned or financially controlled by another state of the United States or to an alien insurance company owned or financially controlled by a foreign nation or any state or province thereof.

(e) No license to do an insurance business within this state shall be issued to any company which insures or plans to insure the separate risks of the employees of an employer that directly or indirectly controls the insurer by stock ownership or otherwise or exercises control of the operations of the insurer where the premiums written annually by the insurer on the separate risks of such employees exceed or will exceed ten per cent of the total premiums which the insurer writes or will write annually or where the commissions payable, if any, on premiums covering the risks of such employees written by the insurer annually exceed or will exceed ten per cent of the total commissions to agents which are or will be paid annually by the insurer.

(f) Any company aggrieved by the action of the commissioner in revoking, suspending or refusing to renew a license or in imposing a fine may appeal therefrom, in accordance with the provisions of section 4-183, except venue for such appeal shall be in the judicial district of New Britain. Appeals under this section shall be privileged in respect to the order of trial assignment.

(g) Except as provided in section 38a-92l an insurer shall be required to be licensed to transact financial guaranty insurance in this state, as defined in subdivision (1) of section 38a-92a. Prior to the issuance of a license to transact financial guaranty insurance business, an insurer shall submit for the approval of the commissioner a plan of operation detailing the types and projected diversification of guaranties that will be issued, the underwriting procedures that will be followed, managerial oversight methods, investment policies and other matters as may be prescribed by the commissioner. An insurer licensed to transact the business of financial guaranty insurance may also be licensed to transact the business of surety, credit and residual value insurance, but may not be licensed to transact any other lines of insurance in this state.

(1949 Rev., S. 6045, 6175; 1955, S. 2786d; 1967, P.A. 159; 1969, P.A. 480, S. 1; 1971, P.A. 870, S. 95; P.A. 76-436, S. 628, 681; P.A. 77-603, S. 25, 125; P.A. 78-280, S. 5, 6, 127; P.A. 81-101, S. 7; P.A. 88-230, S. 1, 12; P.A. 90-98, S. 1, 2; 90-243, S. 6; P.A. 93-136, S. 16; 93-142, S. 4, 7, 8; P.A. 95-220, S. 4–6; P.A. 99-9, S. 2, 6; 99-215, S. 24, 29; P.A. 04-174, S. 1, 2; P.A. 08-178, S. 2; P.A. 14-235, S. 11.)

History: 1967 act authorized imposition of fine, added hearing provisions and provisions re petitions to court; 1969 act added provision prohibiting issuance of license to company which insures or plans to insure employees of employer which directly or indirectly controls insurer by stock ownership, etc.; 1971 act replaced superior court with court of common pleas, effective September 1, 1971, except that courts with cases pending retain jurisdiction unless pending matters deemed transferable; P.A. 76-436 replaced court of common pleas with superior court, effective July 1, 1978; P.A. 77-603 replaced previous provisions re petitions to court with provision re appeals in accordance with Sec. 4-183; P.A. 78-280 substituted “judicial district of Hartford-New Britain” for “Hartford county”; P.A. 81-101 divided section into Subsecs., required that insurance companies desiring to obtain a license submit evidence of good management to the commissioner, specified requirements for applicant companies licensed in one state and domiciled in another and provided that commissioner adopt regulations concerning requirements for licensure; P.A. 88-230 replaced “judicial district of Hartford-New Britain” with “judicial district of Hartford”, effective September 1, 1991; P.A. 90-98 changed the effective date of P.A. 88-230 from September 1, 1991, to September 1, 1993; P.A. 90-243 added a provision re revocation of an insurance company’s authority and inserted references to “foreign” and “alien” insurance companies; Sec. 38-20 transferred to Sec. 38a-41 in 1991; P.A. 93-136 added new Subsec. (g) re transaction of financial guaranty insurance business; P.A. 93-142 changed the effective date of P.A. 88-230 from September 1, 1993, to September 1, 1996, effective June 14, 1993; P.A. 95-220 changed the effective date of P.A. 88-230 from September 1, 1996, to September 1, 1998, effective July 1, 1995; P.A. 99-9 amended section to add references to “health care centers” and “health care center business”, amended Subsec. (a) to substitute “line or lines of business which it is seeking authorization to write” for “lines of insurance which it desires to write”, to add “as permitted by the applicable state law” re justification provided by applicant companies domiciled in another state, to except newly formed health care centers from required demonstration of orderly pattern of growth, and to substitute “business” for “insurance”, and amended Subsec. (c) to substitute “the commissioner” for “he” and to make a technical change, effective May 12, 1999; P.A. 99-215 replaced “judicial district of Hartford” with “judicial district of New Britain” in Subsec. (f), effective June 29, 1999; P.A. 04-174 amended Subsec. (c) to substitute “refuse to renew” for “reissue” and make technical changes for the purposes of gender neutrality and amended Subsec. (f) to substitute “renew” for “reissue”; P.A. 08-178 increased maximum fine from $10,000 to $50,000 in Subsec. (c); P.A. 14-235 made technical changes in Subsec. (a).

Annotations to former section 38-20:

Powers of Insurance Commissioner are discretionary or quasi-judicial, rather than ministerial; courts will not interfere with the exercise of commissioner’s discretion; mandamus will not lie to control action of commissioner under section. 60 C. 448. Cited. 122 C. 295; 188 C. 152.