Senate Senator Tim Larson (D-East Hartford) applauded final passage of a bill in the Senate that will authorize domestic insurance businesses to divide into two or more entities.
House Bill 7025, An Act Authorizing Domestic Insurers to Divide, passed the Senate in a unanimous, bipartisan vote Wednesday.
“I fully support this bill and think it will be great for our state’s insurance sector,” said Sen. Larson, Democratic Senate co-chair of the Insurance and Real Estate Committee where the bill originated. “It allows insurance companies the flexibility they need to stay profitable in Connecticut. This law will allow these companies to tighten up their offerings without impacting rates for policy holders and without impacting revenues to the state. I’m pleased that this bill saw overwhelming bipartisan support, because allowing businesses to thrive is the best way to keep this type of industry one of our state’s strongest business sectors and assets.”
The bill provides a mechanism for domestic insurance businesses to divide their organization into two or more entities with the approval of the state Insurance Department. In simplest terms, it grants the domestic insurer a means to be able to sell segments of their business that best fit their business strategy; currently, this option does not exist in state law. All policies, rates and terms would not be impacted from a division and the bill does not have a fiscal implication nor does it lose revenues for the state.
Additionally, the Insurance Commissioner may, by request of the domestic insurance company, waive requirements that the party acquiring the divided insurer business segment be licensed to sell insurance in the state prior to the acquisition.
Connecticut’s bill was based upon existing laws in Pennsylvania and Arizona.
It earlier passed unanimously in the House of Representatives. It goes next to the desk of Governor Dannel P. Malloy for his signature.