2015 Connecticut General Statutes
Title 38a - Insurance
Chapter 698 - Insurers
Section 38a-72 - (Formerly Sec. 38-93). Financial requirements to license an insurance company.

(a) No property or casualty insurance company and no life insurance company shall be licensed initially to do business in this state unless the company complies with the following minimum capital and minimum surplus requirements to write these specified lines of insurance:

Stock Insurance Companies
	Capital	Surplus
Health	$  500,000	$  500,000
Life	1,000,000	2,000,000
Liability	500,000	500,000
Fidelity and Surety	500,000	500,000
Financial Guaranty	15,000,000	60,000,000
Marine	500,000	250,000
Mortgage Guaranty	2,000,000	2,000,000
Property	500,000	250,000
Workers’ Compensation	500,000	500,000
Title	500,000	500,000
Residual Value	2,000,000	1,000,000
Reinsurance
(Property and Casualty)	2,000,000	2,000,000
Reinsurance (Life)	1,000,000	2,000,000

Mutual Insurance Companies
	Surplus
Health	$  1,000,000
Life	3,000,000
Liability	1,000,000
Fidelity and Surety	1,000,000
Financial Guaranty	75,000,000
Marine	750,000
Mortgage Guaranty	4,000,000
Property	750,000
Workers’ Compensation	1,000,000
Title	1,000,000
Residual Value	3,000,000
Reinsurance
(Property and Casualty)	4,000,000
Reinsurance (Life)	3,000,000

(b) Except with respect to the transaction of life and health insurance, companies desiring to transact more than one of the above forms of insurance shall meet the total minimum requirements, as to capital and surplus, of all forms to be transacted except that a company transacting all lines permitted to be combined need have no more than two million dollars capital and two million dollars surplus in the aggregate. Companies that transact both life and health insurance need have no more than one million dollars capital and two million dollars surplus in the aggregate. The commissioner may license any such company to write additional forms of insurance when the amount of capital and surplus of such company is sufficient by recognized insurance standards to protect the public interest. The commissioner may also license any mutual insurance company to write any or all forms of insurance when the surplus of such company is at least as great as the capital and surplus requirements for companies with capital stock.

(c) No alien property, marine or casualty insurance company shall be licensed to transact business in this state unless it furnishes a certificate showing that it has, for the protection of all policyholders, a cash deposit with the Treasurer of this state, or with the proper officer of some other state, of not less than the minimum capital and surplus requirements for similar foreign insurance companies or seven hundred and fifty thousand dollars, whichever amount is less; nor unless it has a trusteed surplus, as defined in section 38a-58b, at least as great as the minimum capital and surplus requirements for similar foreign insurance companies.

(d) No insurance company shall be licensed to transact business in this state or remain so licensed unless (1) its surplus funds bear a reasonable relationship to its liabilities based upon the type, volume and nature of insurance business transacted, and (2) risk-based capital related to its total adjusted capital is adequate for the types of business transacted. As used in this section, “total adjusted capital” means the sum of capital and surplus of an insurer, its asset valuation reserves, and any other item in the nature of capital as deemed appropriate by the commissioner. “Risk-based capital” means the capital and surplus adjusted to recognize the level of risk inherent in its business, including (A) risk with respect to the insurer’s assets, (B) the risk of adverse insurance experience with respect to the insurer’s liabilities and obligations, (C) the interest rate risk with respect to the insurer’s business, and (D) all other business risks and such other relevant risks as the commissioner may determine. The commissioner shall adopt such reasonable regulations, in accordance with the provisions of chapter 54, as are deemed proper to implement the purposes of this section, including but not limited to, provisions concerning: The preparation and filing of reports by insurers of risk-based capital levels and the calculation thereof; the preparation and filing of comprehensive financial plans when such capital levels are reduced below minimum threshold levels; the confidentiality of such reports and plans; and the regulatory corrective actions the commissioner may take in the event minimum risk-based capital levels are not maintained, or the insurer’s financial plans filed with the commissioner are deficient, or the insurer fails to otherwise comply with the provisions of the regulations promulgated.

(e) An insurer licensed in this state and issuing or reinsuring in this state policies of financial guaranty insurance, as defined in subdivision (1) of section 38a-92a shall fully comply with the requirements of subsection (a) of this section.

(1949 Rev., S. 6097–6100; 1951, 1953, 1955, S. 2824d; 1967, P.A. 382; P.A. 76-110; P.A. 79-376, S. 57; P.A. 90-243, S. 46; P.A. 92-112, S. 6, 35; P.A. 93-57, S. 5; 93-136, S. 17; 93-239, S. 17; P.A. 94-39, S. 1; P.A. 96-227, S. 3; P.A. 98-79, S. 1; P.A. 00-30, S. 3, 4, 14; P.A. 14-123, S. 22; 14-235, S. 53.)

History: 1967 act divided section into Subsecs., raised capital requirement for transacting fire or marine insurance or accident and health insurance from $250,000 to $5090,000, for liability insurance from $300,000 to $500,000 and for fidelity and surety business from $400,000 to $500,000 and required paid-in surplus of $250,000 for fire and marine insurance and $500,000 for other lines where previously surplus must equal 50% or more of minimum required capital in Subsec. (a) and added exception to requirements for companies transacting all lines in Subsec. (b); P.A. 76-110 imposed capital requirements for transacting workmen’s compensation insurance, title insurance and mortgage guaranty insurance and required surplus of $2,000,000 for mortgage guaranty insurance in Subsec. (a) and raised required capital and surplus for companies transacting all lines in Subsec. (b) from $1,500,000 to $2,000,000 each; P.A. 79-376 replaced “workmen’s compensation” with “workers’ compensation”; P.A. 90-243 changed the minimum financial requirements for licensing new property, casualty and life insurance companies, specified exceptions with respect to life and health insurance re total combined financial capital and surplus and added Subsec. (d) requiring that company’s surplus funds must bear a reasonable relationship to its liabilities in order to obtain or retain its license; Sec. 38-93 transferred to Sec. 38a-72 in 1991; P.A. 92-112 amended Subsec. (d) to require insurers to have sufficient surplus funds based upon the type, volume and nature of the insurance business transacted in order to secure or retain licensing; P.A. 93-57 amended Subsec. (d) to require that risk-based capital of an insurer be related to the total adjusted capital adequate for the type of business the insurer transacts and defined “risk-based capital” and “total adjusted capital”; P.A. 93-136 amended tables in Subsec. (a) to include the minimum required capital and surplus for companies transacting financial guaranty insurance and added a new Subsec. (e) re the minimum required combined capital and surplus requirements for financial guaranty insurance insurers for the period between October 1, 1993, and July 1, 1995; P.A. 93-239 amended Subsec. (b) to eliminate the reduction of certain capital and surplus requirements; P.A. 94-39 made technical revisions to correct a grammatical error; P.A. 96-227 amended Subsec. (a) to correct the minimum surplus for stock financial guaranty companies from $600,000,000 to $60,000,000; P.A. 98-79 added capital and minimum surplus requirements for residual value insurance, property casualty reinsurance and life reinsurance; P.A. 00-30 amended Subsec. (b) to delete “paid-in” and “net” re surplus, and made technical changes for purposes of gender neutrality and amended Subsec. (d) to delete “statutory” re “capital and surplus”, effective January 1, 2001; P.A. 14-123 amended Subsec. (c) to replace reference to Sec. 38a-74 with reference to Sec. 38a-58b, effective June 6, 2014; P.A. 14-235 amended Subsec. (e) to delete provision re capital and surplus requirements between October 1, 1993, and July 1, 1995.