(a) A captive insurance company shall be established by the incorporators described in this subsection, as a not-for-profit entity, in accordance with the provisions of sections 38a-91aa to 38a-91tt, inclusive, for the public purpose of providing assistance to owners of residential buildings with concrete foundations that have deteriorated due to the presence of pyrrhotite, where such assistance ensures that any such foundation will be repaired or replaced and where such assistance is intended to provide any such owner with a structurally sound concrete foundation by arranging and approving a financial package that achieves full repair or replacement of such foundation with the lowest possible amount of borrowed funds. There shall be five incorporators of such captive insurance company, who shall be appointed in the following manner: One by the Governor, one by the speaker, one by the minority leader of the House of Representatives, one by the president pro tempore and one by the Republican president pro tempore of the Senate. The incorporators, in their discretion, may appoint other individuals to form an organizing committee. The speaker, the minority leader of the House of Representatives, the president pro tempore and the Republican president pro tempore of the Senate shall each appoint a member of the General Assembly as a nonvoting, ex-officio member of the organizing committee. Thirty days after October 31, 2017, if no appointments have been made by the speaker and minority leader of the House of Representatives or by the president pro tempore and Republican president pro tempore of the Senate, the Governor shall make such appointments in order to fulfill the obligations of this section.
(b) In addition to any other requirements imposed by law applicable to captive insurance companies, the captive insurance company established pursuant to this section shall:
(1) Upon request of the joint standing committees of the General Assembly having cognizance of matters relating to planning and development, public safety and housing, or the Governor, make recommendations regarding the expansion of eligibility for financial assistance pursuant to this section and modifications to improve the efficiency and operation of the captive insurance company in order to serve its public purpose;
(2) Establish a board of directors who shall serve in a volunteer capacity. The membership of the board of directors shall include, but need not be limited to, a real estate agent or broker, two owners of residential buildings who have concrete foundations that have deteriorated due to the presence of pyrrhotite, a chief executive or such chief executive's designee of a municipality in which residential buildings with concrete foundations that have deteriorated due to the presence of pyrrhotite are located, an individual with professional investment experience and currently registered as an investment adviser pursuant to title 36b, the executive directors of the Capitol Region Council of Governments and the Northeastern Connecticut Council of Governments or such executive directors' designees and representatives from the insurance and banking industries, who shall not have professional relationships with any bank or insurance company that has a financial interest in residential buildings subject to the provisions of this section and sections 7-374b, 8-441, 8-442, 8-443, 8-444, subparagraph (B) of subdivision (20) of subsection (a) of section 12-701 and section 29-265f. The speaker, the minority leader of the House of Representatives, the president pro tempore of the Senate and the Senate Republican president pro tempore shall each appoint a member of the General Assembly as a nonvoting, ex-officio member of the board of directors. The Governor shall appoint two members to the board of directors, one of whom shall be appointed as a nonvoting member and considered an ex-officio member under the bylaws adopted by the captive insurance company. It shall not constitute a conflict of interest for a member of the board of directors, who is the owner of a residential building which has a concrete foundation that has deteriorated due to the presence of pyrrhotite, or the spouse or dependent child of such member, to apply for or receive assistance from the captive insurance company established under this section, to repair or replace such concrete foundation, provided such member shall abstain from deliberation, action or vote by the board of directors in specific respect to such member's application or the application of such spouse or dependent child;
(3) Develop eligibility requirements and underwriting guidelines for financial assistance for repair or replacement of concrete foundations. Such requirements and guidelines shall, not later than fifteen days prior to their adoption, amendment or modification, be published on a public Internet web site maintained by the captive insurance company;
(4) Provide financial assistance to such owners of residential buildings for the repair or replacement of concrete foundations that have deteriorated due to the presence of pyrrhotite, including, but not limited to, financial reimbursement to owners who have had such repair or replacement performed prior to October 31, 2017;
(5) Assist such owners of residential buildings to obtain additional financing necessary to fully fund the repair or replacement of concrete foundations that have deteriorated due to the presence of pyrrhotite;
(6) Approve contractors or other vendors for eligibility to perform foundation repairs or replacements on behalf of claimants;
(7) Disburse such financial assistance to approved contractors or other vendors on behalf of claimants;
(8) Ensure that the financial assistance is used solely for costs of repairing and replacing concrete foundations that have deteriorated due to the presence of pyrrhotite;
(9) Require the disclosure of the amount of all financial compensation received by an owner of such a residential building, if any, arising out of a claim for coverage under the property coverage provisions of the personal risk insurance policy, including, but not limited to, a homeowners policy, for foundation deterioration due to the presence of pyrrhotite and ensure that such amount is considered when determining the amount of financial assistance offered to such owner;
(10) When appropriate, apply for, qualify for and receive any federal funds made available under any federal act, for assistance to owners of residential buildings having concrete foundations that have deteriorated due to the presence of pyrrhotite. To the extent permissible under federal law, all such federal funds shall be deposited into the Crumbling Foundations Assistance Fund established pursuant to section 8-441; and
(11) Enter into agreements, as necessary, with the Connecticut Housing Finance Authority and any participating lender, as defined in section 8-442, to develop and implement additional loan programs or financial products to assist such owners to repair or replace concrete foundations that have deteriorated due to the presence of pyrrhotite, while employing terms and conditions that are preferable to the open market.
(c) Except as provided in subsection (d) of this section, such captive insurance company shall not be considered a state agency for purposes of any provision of the general statutes, and shall not be considered to perform a governmental function for purposes of chapter 14. Such captive insurance company may, subject to the provisions of this section, do all things necessary and desirable in its discretion to accomplish its purposes, including hiring employees and contracting for administrative or operational services, and entering into agreements with the Connecticut Housing Finance Authority created pursuant to section 8-244 and any participating lender, as defined in section 8-442, to develop and implement additional loan programs or financial products that will assist owners of residential buildings to repair or replace concrete foundations that have deteriorated due to the presence of pyrrhotite on terms and conditions that are preferable to the open market. Not more than ten per cent of all moneys allocated or made available to the captive insurance company in any calendar year shall be used for administrative or operational costs.
(d) Employees and agents of the captive insurance company shall not be deemed state employees, except that employees and directors shall be subject to the provisions of sections 1-84, 1-84a, 1-84b, 1-85 and 1-86. Any agent, consultant or contractor of the captive insurance company shall be subject to the provisions of sections 1-86e and 1-101nn. The Office of State Ethics shall have the authority to enforce the provisions of this subsection.
(e) Notwithstanding sections 38a-11 and 38a-91bb, the captive insurance company shall not be required to pay a license fee for the first year of licensure or a renewal fee for any year thereafter, as set forth in said sections.
(f) In addition to any report required to be filed by not-for-profit entities generally under regulations of the Internal Revenue Service, the captive insurance company shall submit quarterly reports to the joint standing committees of the General Assembly having cognizance of matters relating to insurance, finance, planning and development, housing and public safety on its operation and financial condition. Such quarterly reports shall include, but need not be limited to, information concerning: (1) Moneys allocated or made available to it pursuant to this section, (2) total financial assistance and financial assistance, by town, provided to owners of such residential buildings pursuant to this section, (3) administrative and operational expenditures, (4) the total number and number, by town, of applications for assistance received during the quarter and to date, (5) the total number and number, by town, of applications for assistance granted during the quarter and to date, (6) the average time to process applications, and (7) the total number and number, by town, of applications pending and amount of such claims.
(g) The joint standing committees of the General Assembly having cognizance of matters relating to insurance, finance, planning and development, housing and public safety shall, not less than annually, hold a joint public hearing on the operation and financial condition of the captive insurance company.
(h) A decision on an application for assistance pursuant to this section shall be made in writing and provided to the owner and shall include the information relied upon and the basis for such decision, including the relevant eligibility and underwriting criteria. An owner of such a residential building may request a review of any decision by the captive insurance company relating to such owner not later than thirty days after the decision. A final determination on such a request for review shall be made in writing and provided to the owner not later than thirty days after receipt of the owner's request, unless an extension is agreed to by the owner. The final determination shall be subject to approval by the board of directors. There shall be no right to appeal such final determination.
(i) The captive insurance company shall continue until its existence is terminated by law. Upon the termination of the existence of the company, all its right and properties shall pass to and be vested in the state of Connecticut.
(June Sp. Sess. P.A. 17-2, S. 336; P.A. 18-179, S. 2, 3; P.A. 19-192, S. 1; P.A. 21-120, S. 2, 3; June Sp. Sess. P.A. 21-2, S. 58.)
History: June Sp. Sess. P.A. 17-2 effective October 31, 2017; P.A. 18-179 amended Subsec. (b)(2) by adding provision re no conflict of interest for board member who is owner of residential building with foundation that has deteriorated due to pyrrhotite to apply for or receive assistance from captive insurance company if certain conditions are met and amended Subsec. (c) by adding provision re captive insurance company not to be considered state agency and not to be considered to perform a governmental function, effective June 13, 2018; P.A. 19-192 amended Subsec. (b) by substituting “board of directors” for “board” and substituting “Northeastern Connecticut Council of Governments” for “Eastern Region Council of Governments” in Subdiv. (2), substituting “fifteen days” for “thirty days” in Subdiv. (3), deleting former Subdiv. (4) re development of single unified application for financial assistance, redesignating existing Subdivs. (5) to (12) as Subdivs. (4) to (11), substituting “owners” for “homeowners” in redesignated Subdiv. (4), substituting “personal risk insurance policy, including, but not limited to, a homeowners policy,” for “homeowners policy” in redesignated Subdiv. (9) and deleting “and residential condominium units” in redesignated Subdiv. (10), and amended Subsec. (h) by substituting “owner” for “homeowner” and “owner's” for “homeowner's”, effective July 1, 2019; P.A. 21-120 amended Subsec. (b)(2) by adding provision requiring Governor to appoint 2 members to board of directors, including 1 nonvoting, ex-officio member and amended Subsec. (i) by removing provision terminating existence of captive insurance company on June 30, 2022, effective July 1, 2021; June Sp. Sess. P.A. 21-2 amended Subsec. (b)(2) by replacing “a nonvoting, ex-officio member” with “a nonvoting member and considered an ex-officio member under the bylaws adopted by the captive insurance company”, effective July 1, 2021.
Structure Connecticut General Statutes
Section 38a-52. (Formerly Sec. 38-54). - Appeal from assessment.
Section 38a-52a. - Insurance Fund established.
Section 38a-54. - Audited reports.
Section 38a-55. - Hypothecation of assets.
Section 38a-56. (Formerly Sec. 38-19). - False returns to commissioner.
Section 38a-57. (Formerly Sec. 38-26a). - Retention of records and assets in state.
Section 38a-58. (Formerly Sec. 38-40). - Change of location of domestic insurance company.
Section 38a-58b. - Definitions.
Section 38a-58c. - Applicability of state laws to alien insurer's United States branch.
Section 38a-58e. - Annual and quarterly statements by United States branch.
Section 38a-58g. - Domestication of alien insurer's United States branch.
Section 38a-60. (Formerly Sec. 38-27a). - Continuity of management during national emergencies.
Section 38a-61. (Formerly Sec. 38-134). - Limitation of use of power of attorney.
Section 38a-63. - Limitation of liability of director of mutual insurance company.
Section 38a-64. (Formerly Sec. 38-41). - Donations by domestic mutual companies.
Section 38a-65. (Formerly Sec. 38-48). - Disposition of unclaimed dividends of insolvent company.
Section 38a-69. - Scope of provisions.
Section 38a-70. - Accounting standards.
Section 38a-71. - Minimum asset requirements. Minimum capital and minimum surplus requirements.
Section 38a-72. (Formerly Sec. 38-93). - Financial requirements to license an insurance company.
Section 38a-72a. - Regulations.
Section 38a-73. (Formerly Sec. 38-110). - Limitation of risks.
Section 38a-76. (Formerly Sec. 38-25). - Reserves.
Section 38a-77. (Formerly Sec. 38-130). - Valuation of reserve.
Section 38a-78a. - NAIC Valuation Manual. Operative date changes. Requirements.
Section 38a-79. (Formerly Sec. 38-26). - Valuation of securities.
Section 38a-79a. - Short title: Standard Valuation Law.
Section 38a-81. (Formerly Sec. 38-132). - Sale of property taken for debts.
Section 38a-82. (Formerly Sec. 38-133). - Improvement of real estate.
Section 38a-84. (Formerly Sec. 38-47). - Securities to be delivered to receiver.
Section 38a-85a. - Certification as a reinsurer. Regulations.
Section 38a-87. - Qualified United States financial institutions.
Section 38a-88. - Regulations.
Section 38a-88b. - Applicability of section 38a-88a.
Section 38a-89. - Reinsurance agreements affected.
Section 38a-90. - Short title: Managing General Agents Act.
Section 38a-90a. - Definitions.
Section 38a-90b. - Licensing of managing general agents.
Section 38a-90d. - Duties of the insurer.
Section 38a-90g. - Regulations.
Section 38a-90h. - Utilization of managing general agent's services. Exceptions.
Section 38a-91. - Definitions.
Section 38a-91a. - Insurers affected.
Section 38a-91aa. - Captive insurance companies. Definitions.
Section 38a-91b. - Controlled insurers. Applicability. Minimum provisions.
Section 38a-91bb. - Captive insurance companies. Licenses. Fees.
Section 38a-91c. - Disclosure to insured by controlling producer. Exception.
Section 38a-91cc. - Same or deceptively similar name prohibited.
Section 38a-91d. - Noncompliance: Remedies allowed.
Section 38a-91dd. - Capital and surplus requirements.
Section 38a-91ee. - Payment of dividends and other distributions.
Section 38a-91ff. - Incorporation and formation. Transfer of domicile.
Section 38a-91gg. - Annual reports.
Section 38a-91k. - Captive insurers: Information to be submitted to commissioner.
Section 38a-91kk. - Reinsurance.
Section 38a-91ll. - Rating organization.
Section 38a-91mm. - Guaranty association and insolvency fund exclusion.
Section 38a-91oo. - Applicability of insurance statutes.
Section 38a-91pp. - Conversions and mergers. Approval by commissioner.
Section 38a-91qq. - Regulations.
Section 38a-91uu. - Dormant captive insurance company. Certificate of dormancy. Capital and surplus.
Section 38a-91ww. - Agency captive insurance companies. Corporate form.
Section 38a-91xx. - Agency captive insurance companies. Authority to do business.
Section 38a-92. - Financial Guaranty Insurance Act, generally.
Section 38a-92a. - Definitions.
Section 38a-92b. - Licensing of financial guaranty insurance corporations. Reinsurance.
Section 38a-92c. - Contingency reserves.
Section 38a-92d. - Reserves against unpaid losses and loss expense.
Section 38a-92e. - Unearned premium reserve.
Section 38a-92f. - Disclosures in prospectus or other offering document.
Section 38a-92g. - Financial guaranty insurance transactions. Exceptions.
Section 38a-92h. - Copies of relevant materials.
Section 38a-92i. - Net liability. Kinds of obligations.
Section 38a-92j. - Limiting of exposure to loss on any one risk.
Section 38a-92m. - Credit for reinsurance as an asset or as a reduction from liability, when.
Section 38a-92n. - Filing of policy forms and amendments with commissioner.
Section 38a-102. - Investments. Derivative financial transactions. Regulations.
Section 38a-102a. - Nonadmitted investment assets. Divestiture order, notice and hearing.
Section 38a-102b. - Definitions.
Section 38a-102c. - Investments of admitted assets. Limitations.
Section 38a-102d. - Affiliate relationships in the investment of admitted assets. Limitations.
Section 38a-102e. - Loan or investment prohibition.
Section 38a-102f. - Prohibition of compensation for negotiating a loan.
Section 38a-102g. - Investments of foreign and alien insurers.
Section 38a-102h. - Policies and procedures re use of special knowledge or information.
Section 38a-102i. - Exceptions.
Section 38a-117. (Formerly Sec. 38-68a). - Insider trading of equity securities. Definitions.
Section 38a-120. (Formerly Sec. 38-68d). - Sales of securities restricted.
Section 38a-121. (Formerly Sec. 38-68e). - Excepted transactions.
Section 38a-122. (Formerly Sec. 38-68f). - Foreign or domestic arbitrage transactions.
Section 38a-123. (Formerly Sec. 38-68g). - Securities of certain companies not covered.
Section 38a-124. (Formerly Sec. 38-68h). - Regulations.
Section 38a-129a. - Presumption of control.
Section 38a-132. (Formerly Sec. 38-39d). - Approval of acquisitions. Hearing. Expenses.
Section 38a-133. (Formerly Sec. 38-39e). - Exemptions.
Section 38a-134. (Formerly Sec. 38-39f). - Nonvotable securities. Injunctive relief.
Section 38a-137. (Formerly Sec. 38-39i). - Confidentiality of information.
Section 38a-138. (Formerly Sec. 38-39j). - Regulations.
Section 38a-139. (Formerly Sec. 38-39k). - Appeals.
Section 38a-140. (Formerly Sec. 38-39l). - Remedial and penal provisions.
Section 38a-147. (Formerly Sec. 38-37a). - Solicitation of proxies.
Section 38a-149. (Formerly Sec. 38-38). - Interlocking directorate.
Section 38a-150. (Formerly Sec. 38-39). - Monopoly. Complaint and hearing. Cease and desist order.
Section 38a-151. (Formerly Sec. 38-34). - Reduction of capital stock.
Section 38a-153. (Formerly Sec. 38-42). - Merger or consolidation of companies.
Section 38a-156. - Definitions.
Section 38a-156b. - Mutual holding company requirements.
Section 38a-156c. - Amendments to articles of incorporation and plan of reorganization.
Section 38a-156e. - Requirements of reorganizing mutual life insurer. Report.
Section 38a-156f. - Voting stock offerings.
Section 38a-156g. - Restrictions on stock offerings and stock ownership.
Section 38a-156k. - Proceedings and actions.
Section 38a-156m. - Regulations.
Section 38a-156n to 38a-156q. - Reserved for future use.
Section 38a-156r. - Definitions.
Section 38a-156s. - Division of domestic insurer. Plan of division. Amendment and abandonment.
Section 38a-156t. - Plan of division. Approval by interest holders and governors.
Section 38a-156v. - Certificate of division.
Section 38a-156w. - Effect of division.
Section 38a-156x. - Responsibility and liability of resulting insurers.
Section 38a-156y. - Appraisal rights.
Section 38a-156z. - Regulations.
Section 38a-160. (Formerly Sec. 38-290). - Exceptions.
Section 38a-161. (Formerly Sec. 38-291). - Definitions.
Section 38a-162. (Formerly Sec. 38-292). - License required. Expiration. Fee. Required information.
Section 38a-165. (Formerly Sec. 38-295). - Records of licensee.
Section 38a-166. (Formerly Sec. 38-296). - Regulations.
Section 38a-167. (Formerly Sec. 38-297). - Insurance premium finance agreement requirements.
Section 38a-168. (Formerly Sec. 38-298). - Service charge.
Section 38a-169. (Formerly Sec. 38-299). - Delinquency charge.
Section 38a-170. (Formerly Sec. 38-300). - Cancellation of insurance contract on default of insured.