OLR Bill Analysis

HB 6278

AN ACT CONCERNING INSURANCE GUARANTY FUND CREDITS.

SUMMARY:

This bill reduces, from 100% to 50%, the amount of assessments an insurer pays to a state insurance guaranty association that it can use to offset (reduce) its premium tax liability. By law, the tax offset must be taken over a five-year period and may be transferred to an affiliate.

EFFECTIVE DATE: July 1, 2009, and applicable to income years beginning on or after that date.

BACKGROUND

Insurance Guaranty Associations

Connecticut has two insurance guaranty associations, the Connecticut Insurance Guaranty Association (property and casualty) and the Connecticut Life and Health Insurance Guaranty Association. By law, insurers must participate in and pay assessments to the associations. If an insurance company defaults, the appropriate guaranty association pays valid claims of policyholders and other claimants, up to the dollar limits of the applicable policy, subject to ceilings fixed by state law.

COMMITTEE ACTION

Insurance and Real Estate Committee

Joint Favorable