Sec. 38a-712. (Formerly Sec. 38-92a). Report of failure of producer to remit premiums and of checks returned for insufficient funds or otherwise dishonored.
Sec. 38a-712. (Formerly Sec. 38-92a). Report of failure of producer to remit
premiums and of checks returned for insufficient funds or otherwise dishonored.
(a) Each insurance company authorized or permitted to do business in this state and
each residual market mechanism established pursuant to section 38a-329 shall report
to the Insurance Commissioner (1) any failure on the part of an insurance producer or
excess line broker to remit premiums for policies or endorsements issued to insureds
directly or through the producer within thirty days following the due date of the account
of the producer with the company, its state agent or managing general agent or (2)
whenever a check issued by such producer to the company or residual market mechanism
is returned for insufficient funds or otherwise dishonored and remains outstanding fifteen days following receipt of such return.
(b) If, upon investigation of a report concerning a failure to remit premiums, the
commissioner determines that a producer has received premiums directly or indirectly
from insureds and has failed to remit them to the proper company, its state agent or
managing general agent, he may, following a hearing as specified in section 38a-774,
suspend or revoke the license of the producer. Upon receipt of a report concerning a
dishonored check or upon dishonor of a check issued by a producer to the Insurance
Department of the state of Connecticut, the commissioner shall notify the producer
issuing such check of the report. If an arrangement for payment of such funds is not
made to the satisfaction of the commissioner by the producer within fifteen days of
receipt of such notice, the license of the producer shall be automatically suspended.
Within sixty days of receipt of such notice the producer may make written demand upon
the commissioner for a hearing to show cause why the suspension should be terminated.
Such hearing shall be held within thirty days from the date of receipt of the written
demand. If by the end of the sixty-day demand period no hearing has been demanded,
the license of the producer shall be revoked. The commissioner may institute procedures
for the restoration of the licensee's insurance accounts to best protect the interests of
all parties concerned.
(c) The commissioner may adopt such reasonable regulations as he deems necessary
for the implementation of this section and specifically to provide procedures for continuing, terminating or restoring the licenses affected.
(1967, P.A. 250; P.A. 77-614, S. 163, 610; P.A. 80-482, S. 289, 348; P.A. 86-36; P.A. 89-63; P.A. 90-243, S. 39; P.A.
94-39, S. 7; 94-160, S. 8, 24; P.A. 95-136, S. 4, 8.)
History: 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. 80-482 restored insurance commissioner
and division to prior independent status and abolished the department of business regulation; P.A. 86-36 provided that the
insurance company and the agent or broker shall each conduct upon the request of the commissioner, an audit of the
disputed accounts, the results of which shall be sent to the commissioner, who may then conduct further investigations;
P.A. 89-63 required residual market mechanisms to report failure of agent or broker to remit premiums, required a report
be made when a check issued by an agent or broker to a company or residual market mechanism is returned for insufficient
funds and remains outstanding 15 days, provided for automatic suspension of license if no arrangement for payment of
outstanding sum is made to the satisfaction of the commissioner and deleted provisions requiring companies, agents and
brokers to conduct audits upon the commissioner's request; P.A. 90-243 made technical changes and divided section into
Subsecs.; Sec. 38-92a transferred to Sec. 38a-712 in 1991; P.A. 94-39 added the phrase "or otherwise dishonored" to
trigger the reporting requirement when a check issued by an agent or broker to a company or residual market mechanism
is dishonored for any reason; P.A. 94-160 substituted "producer" for "agent or broker" to accurately reflect the modernization and nomenclature of the industry and added "or otherwise dishonored" as a criteria to report when a check issued by
a producer is returned for insufficient funds or otherwise dishonored, effective January 1, 1996; P.A. 95-136 added provision
in Subsec. (b) to require the Insurance Commissioner to notify a producer of a dishonored check when such check is
presented to the state Insurance Department and added provision regarding the suspension of a producer and the subsequent
revocation of license, if a producer fails to make arrangements for the payment of funds related to a dishonored check or
fails to demand a hearing to show cause why such suspension should be terminated, effective January 1, 1996; (Revisor's
note: In 1999 a repetition of "suspended." in Subsec. (b) before the phrase "Within sixty days of ..." was deleted editorially
by the Revisors to correct a clerical error).