Sec. 38a-678. (Formerly Sec. 38-201p). Complaint and hearing. Practices prohibited. Suspension and revocation of certificate of authority or license. Appeals.
Sec. 38a-678. (Formerly Sec. 38-201p). Complaint and hearing. Practices prohibited. Suspension and revocation of certificate of authority or license. Appeals.
(a) Any person aggrieved by any rate charged, rating plan, rating system, or underwriting
rule followed or adopted by an insurer or rating organization may request the insurer
or rating organization to review the manner in which the rate, plan, system or rule has
been applied with respect to insurance afforded him. Such request may be made by his
authorized representative, and shall be in writing. If the request is not granted within
thirty days after it is made, the requester may treat it as rejected. Any person aggrieved
by the action of an insurer or rating organization in refusing the review requested, or in
failing or refusing to grant all or part of the relief requested, may file a written complaint
and request for hearing with the Insurance Commissioner, specifying the grounds relied
upon. If said commissioner has information concerning a similar complaint he may deny
the hearing. If he believes that probable cause for the complaint does not exist or that
the complaint is not made in good faith he shall deny the hearing. Otherwise, and if he
finds that the complaint charges a violation of sections 38a-663 to 38a-681, inclusive,
and that the complainant would be aggrieved if the violation is proven, he shall proceed
as provided in subsection (b) of this section.
(b) If after examination of an insurer, rating organization, advisory organization,
or group, association or other organization of insurers which engages in joint underwriting or joint reinsurance, or upon the basis of other information, or upon sufficient complaint as provided in subsection (a) of this section, the Insurance Commissioner has
good cause to believe that such insurer, organization, group or association or any rate,
rating plan or rating system made or used by any such insurer or rating organization,
does not comply with the requirements and standards of said sections applicable to it,
he shall, unless he has good cause to believe such noncompliance is wilful, give notice
in writing to such insurer, organization, group or association stating therein what manner
and to what extent such noncompliance is alleged to exist and specifying therein a
reasonable time, not less than ten days thereafter, in which such noncompliance may
be corrected. Notices under this section shall be confidential as between said commissioner and the parties unless a hearing is held in accordance with the provisions of
subsection (c) of this section.
(c) If the Insurance Commissioner has good cause to believe such noncompliance
to be wilful, or if within the period prescribed by said commissioner in the notice required
by subsection (b) of this section the insurer, organization, group or association does not
make such changes as may be necessary to correct the noncompliance specified by said
commissioner or establish to the satisfaction of said commissioner that such specified
noncompliance does not exist, then said commissioner may hold a public hearing in
connection therewith, provided within a reasonable period of time, which shall be not
less than ten days before the date of such hearing, he shall mail a written notice specifying
the matters to be considered at such hearings to such insurer, organization, group or
association. If no notice has been given as provided in subsection (b) of this section
such notice shall state therein in what manner and to what extent noncompliance is
alleged to exist. The hearing shall not include any additional subjects not specified in
the notices required by said subsection (b).
(d) If after a hearing pursuant to subsection (c) of this section, the Insurance Commissioner finds (1) that any rate, rating plan or rating system violates the provisions of
sections 38a-663 to 38a-681, inclusive, applicable to it, he may issue an order to the
insurer or rating organization which has been the subject of the hearing specifying in
what respects such violation exists and stating when, within a reasonable period of time,
the further use of such rate or rating system by such insurer or rating organization in
contracts of insurance made thereafter shall be prohibited; (2) that an insurer, rating
organization, advisory organization, or a group, association or other organization of
insurers which engages in joint underwriting or joint reinsurance, is in violation of the
provisions of said sections applicable to it other than the provisions dealing with rates,
rating plans or rating systems, he may issue an order to such insurer, organization, group
or association which has been the subject of the hearing specifying in what respects
such violation exists and requiring compliance within a reasonable time thereafter; (3)
that the violation of any of the provisions of said sections applicable to it by any insurer
or rating organization which has been the subject of hearing was wilful, he may suspend
or revoke, in whole or in part, the certificate of authority of such insurer or the license
of such rating organization with respect to the class of insurance which has been the
subject matter of the hearing; (4) that any rating organization has wilfully engaged in
any fraudulent or dishonest act or practices, he may suspend or revoke, in whole or in
part, the license of such organization in addition to any other penalty provided in said
sections; (5) in addition to other penalties provided by law the Insurance Commissioner
may suspend or revoke, in whole or in part, the license of any rating organization or the
certificate of authority of any insurer with respect to the class or classes of insurance
specified in such order, which fails to comply within the time limited by such order
or any extension thereof which said commissioner may grant, with an order of said
commissioner lawfully made by him pursuant to this subsection and effective pursuant
to subdivision (7) of this subsection; (6) except as otherwise provided in sections 38a-663 to 38a-681, inclusive, all proceedings in connection with the denial, suspension or
revocation of a license or certificate of authority under said sections shall be conducted
in accordance with the provisions of section 38a-41 and the Insurance Commissioner
shall have all the powers granted to him therein; (7) any findings, determination, rule,
ruling or order made by the Insurance Commissioner, in accordance with the provisions
of said sections, shall be subject to review by appeal in accordance with the provisions
of section 4-183. No such finding, determination, rule, ruling or order shall become
effective before the expiration of twenty days after notice and a copy thereof are mailed
or delivered to the person affected, and any finding, determination, rule, ruling or order
of said commissioner so submitted for review shall not become effective for a further
period of fifteen days after the petition for review is filed with the court. The court may
stay the effectiveness thereof for a longer period.
(1969, P.A. 665, S. 16; P.A. 76-436, S. 633, 681; P.A. 77-603, S. 118, 125; 77-614, S. 163, 610; P.A. 78-331, S. 35,
58; P.A. 80-482, S. 314, 348; P.A. 88-317, S. 38, 107.)
History: P.A. 76-436 replaced court of common pleas with superior court in Subsec. (d), effective July 1, 1978; P.A.
77-603 replaced previous detailed appeal provisions with statement requiring that appeals be made in accordance with
Sec. 4-183; P.A. 77-614 placed insurance commissioner within the department of business regulation and made insurance
department a division within that department, effective January 1, 1979; P.A. 78-331 made technical correction in Subsec.
(d); P.A. 80-482 restored insurance commissioner and division to prior independent status and abolished the department
of business regulation; P.A. 88-317 amended Subsec. (d)(7) by repealing sentence after "4-183" which stated: "Such appeal
may be filed at any time before the effective date of such finding, determination, rule, ruling or order", effective July 1,
1989, and applicable to all agency proceedings commencing on or after that date; Sec. 38-201p transferred to sec. 38a-678 in 1991.
Annotations to former sections 38-192 and 38-201:
On appeal from order of insurance commissioner involving the rejection of a proposal for a change in the filings by a
workmen's compensation rating organization, the court determines, on the basis of the record before the commissioner,
whether the appellants have sustained the burden of proving that the action of the commissioner was either contrary to
some statute or rule of law or so arbitrary and unreasonable as to amount to an abuse of his discretion. 152 C. 617, 618.
Power of commissioner to approve a filing and to order a workmen's compensation rating organization, which had rejected
the proposal for such filing, to add it to its filings, was conditioned on conformity to section 38-187. Id., 620, 621.
Commissioner's approval of a wrap-up plan and order to National Council on Compensation Insurance to add it to its
filings upheld as in his power under this section. 26 CS 419.
Annotation to former section 38-201p:
Cited. 169 C. 267, 303.