Claims Made Commercial Lines Filings Now Subject to Scrutiny in Connecticut

In a change in regulatory practice, Connecticut has decided that all commercial lines claims made insurance forms and rates are now subject to full regulatory review.

Citing compliance issues, Insurance Commissioner Andrew Mais issued a new bulletin (PC-63-24) on July 3 that immediately rescinded a 2012 bulletin (PC-71) that had added claims made filings to the extensive listing of commercial lines filings that are exempt from review.

The department said it reviewed a sampling of claims made insurance policy form filings and found “various compliance issues.” As a result, the department determined that immediately “all claims made policy filings will require a complete filing review and are removed from the exempted commercial lines of insurance.”

The department told Insurance Journal that some of the compliance issues relate to failure to include certain language required under Connecticut regulations. For example, insurers have sometimes failed to include automatic and extended reporting period language per the regulations; required language related to cancellation of the insurance policy; and language related to retroactive and prior acts language.

This is a concern to the department because, for example, while claims-made insurance policies generally require liability claims to be reported to the insurer during the policy period, Connecticut requires policy language that gives the insured the right to file claims after the policy period ends.

The latest bulletin added a warning that the department has in the past taken market conduct action against insurers over claims made policy forms that do not comply with Connecticut laws and regulations and “will do so in the future especially in the case of repeated failures to comply with form filing requirements.”

The last page of the new bulletin includes Appendix A with its listing of all the commercial lines that are still exempt from the filing review requirements.

The department also reminded insurers that they are still required to file all commercial forms, rates and rule filings, as well as any amendments or endorsements, for exempted lines even though they are exempt from review. An officer of the insurer must certify that form filings comply with applicable Connecticut insurance laws and regulations and that the filing has not been previously disapproved by the department.

All Connecticut property/casualty regulations may be found here.

Topics Claims Commercial Lines Business Insurance Connecticut