Bill Text: CT HB05364 | 2014 | General Assembly | Introduced

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Bill Title: An Act Requiring Uninsured And Underinsured Motorist Coverage To Be Optional And Concerning Underinsured Motorist Conversion Coverage.

Spectrum: Committee Bill

Status: (Introduced - Dead) 2014-02-28 - Public Hearing 03/04 [HB05364 Detail]

Download: Connecticut-2014-HB05364-Introduced.html

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General Assembly		Raised Bill No. 5364
February Session, 2014		LCO No. 1557
		*01557_______INS*
Referred to Committee on INSURANCE AND REAL ESTATE
Introduced by:
(INS)

AN ACT REQUIRING UNINSURED AND UNDERINSURED MOTORIST COVERAGE TO BE OPTIONAL AND CONCERNING UNDERINSURED MOTORIST CONVERSION COVERAGE.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 38a-336 of the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2015):

(a) (1) (A) Each insurer licensed to write automobile liability insurance [policy shall provide insurance] in this state shall offer, for each automobile liability insurance policy issued or renewed on or after January 1, 2015, and for an additional premium, insurance, herein called uninsured and underinsured motorist coverage, in accordance with the regulations adopted pursuant to section 38a-334, with limits for bodily injury or death not less than those specified in subsection (a) of section 14-112, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles and underinsured motor vehicles and insured motor vehicles, the insurer of which becomes insolvent prior to payment of such damages, because of bodily injury, including death resulting therefrom. The insurer shall disclose to an insured the availability of, the premium cost and a description of uninsured and underinsured motorist coverage. Each insured who declines uninsured and underinsured motorist coverage shall sign an informed consent form as specified in subparagraph (A) of subdivision (2) of this section.

(B) Each insurer licensed to write automobile liability insurance in this state shall [provide] offer uninsured and underinsured [motorists] motorist coverage with limits requested by any named insured upon payment of the appropriate premium, provided each such insurer shall offer such coverage with limits that are twice the limits of the bodily injury coverage of the policy issued to the named insured. The insured's selection of uninsured and underinsured motorist coverage shall apply to all subsequent renewals of coverage and to all policies or endorsements [which] that extend, change, supersede or replace an existing policy issued to the named insured, unless changed in writing by any named insured. No insurer shall be required to provide uninsured and underinsured motorist coverage to [(A)] (i) a named insured or relatives residing in his household when occupying, or struck as a pedestrian by, an uninsured or underinsured motor vehicle or a motorcycle that is owned by the named insured, or [(B)] (ii) any insured occupying an uninsured or underinsured motor vehicle or motorcycle that is owned by such insured.

(2) [Notwithstanding any provision of this section, each] (A) Each insurer licensed to write automobile liability insurance [policy issued or renewed on and after January 1, 1994, shall provide] in this state shall offer, for each automobile liability insurance policy issued or renewed on or after January 1, 2015, uninsured and underinsured motorist coverage with limits for bodily injury and death equal to those purchased to protect against loss resulting from the liability imposed by law unless any named insured requests in writing a lesser amount, but not less than the limits specified in subsection (a) of section 14-112. Such written request shall apply to all subsequent renewals of coverage and to all policies or endorsements that extend, change, supersede or replace an existing policy issued to the named insured, unless changed in writing by any named insured. No such written request for a lesser amount shall be effective unless any named insured has signed an informed consent form that [shall contain: (A) An explanation of uninsured and underinsured motorist insurance approved by the commissioner; (B)] contains: (i) Explanations, approved by the commissioner, of (I) uninsured and underinsured motorist coverage, and (II) underinsured motorist conversion coverage; (ii) a list of uninsured and underinsured motorist coverage options and underinsured motorist conversion coverage options available from the insurer; and [(C)] (iii) the premium cost for each of the coverage options available from the insurer. Such informed consent form shall contain a heading in twelve-point type and shall state: "WHEN YOU SIGN THIS FORM, YOU ARE CHOOSING A REDUCED PREMIUM, BUT YOU ARE ALSO CHOOSING NOT TO PURCHASE CERTAIN VALUABLE COVERAGE WHICH PROTECTS YOU AND YOUR FAMILY. IF YOU ARE UNCERTAIN ABOUT HOW THIS DECISION WILL AFFECT YOU, YOU SHOULD GET ADVICE FROM YOUR INSURANCE AGENT OR ANOTHER QUALIFIED ADVISER."

(B) Each insured who declines uninsured and underinsured motorist coverage or underinsured motorist conversion coverage or both shall sign an informed consent form as set forth in subparagraph (A) of this subdivision.

(b) An insurance company shall be obligated to make payment to its insured up to the limits of the policy's uninsured and underinsured motorist coverage after the limits of liability under all bodily injury liability bonds or insurance policies applicable at the time of the accident have been exhausted by payment of judgments or settlements, but in no event shall the total amount of recovery from all policies, including any amount recovered under the insured's uninsured and underinsured motorist coverage, exceed the limits of the insured's uninsured and underinsured motorist coverage. In no event shall there be any reduction of uninsured or underinsured motorist coverage limits or benefits payable for amounts received by the insured for Social Security disability benefits paid or payable pursuant to the Social Security Act, 42 USC Section 301, et seq. The limitation on the total amount of recovery from all policies shall not apply to underinsured motorist conversion coverage purchased pursuant to section 38a-336a.

(c) Each automobile liability insurance policy issued on or after October 1, 1971, [which] that contains a provision for binding arbitration shall include a provision for final determination of insurance coverage in such arbitration proceeding. With respect to any claim submitted to arbitration on or after October 1, 1983, the arbitration proceeding shall be conducted by a single arbitrator if the amount in demand is forty thousand dollars or less or by a panel of three arbitrators if the amount in demand is more than forty thousand dollars.

(d) Regardless of the number of policies issued, vehicles or premiums shown on a policy, premiums paid, persons covered, vehicles involved in an accident, or claims made, in no event shall the limit of liability for uninsured and underinsured motorist coverage applicable to two or more motor vehicles covered under the same or separate policies be added together to determine the limit of liability for such coverage available to an injured person or persons for any one accident. If a person insured for uninsured and underinsured motorist coverage is an occupant of a nonowned vehicle covered by a policy also providing uninsured and underinsured motorist coverage, the coverage of the occupied vehicle shall be primary and any coverage for which such person is a named insured shall be secondary. All other applicable policies shall be excess. The total amount of uninsured and underinsured motorist coverage recoverable is limited to the highest amount recoverable under the primary policy, the secondary policy or any one of the excess policies. The amount paid under the excess policies shall be apportioned in accordance with the proportion that the limits of each excess policy bear to the total limits of the excess policies. If any person insured for uninsured and underinsured motorist coverage is an occupant of an owned vehicle, the uninsured and underinsured motorist coverage afforded by the policy covering the vehicle occupied at the time of the accident shall be the only uninsured and underinsured motorist coverage available.

(e) For the purposes of this section, an "underinsured motor vehicle" means a motor vehicle with respect to which the sum of the limits of liability under all bodily injury liability bonds and insurance policies applicable at the time of the accident is less than the applicable limits of liability under the uninsured motorist portion of the policy against which claim is made under subsection (b) of this section.

(f) Notwithstanding subsection (a) of section 31-284, an employee of a named insured injured while occupying a covered motor vehicle in the course of employment shall be covered by such insured's otherwise applicable uninsured and underinsured motorist coverage.

(g) (1) No insurance company doing business in this state may limit the time within which any suit may be brought against it or any demand for arbitration on a claim may be made on the uninsured or underinsured motorist provisions of an automobile liability insurance policy to a period of less than three years from the date of accident, provided, in the case of an underinsured motorist claim the insured may toll any applicable limitation period (A) by notifying such insurer prior to the expiration of the applicable limitation period, in writing, of any claim which the insured may have for underinsured motorist benefits, and (B) by commencing suit or demanding arbitration under the terms of the policy not more than one hundred eighty days from the date of exhaustion of the limits of liability under all automobile bodily injury liability bonds or automobile insurance policies applicable at the time of the accident by settlements or final judgments after any appeals.

(2) Notwithstanding the provisions of subdivision (1) of this subsection, in the case of an uninsured motorist claim, if the motor vehicle of a tortfeasor is an uninsured motor vehicle because the automobile liability insurance company of such tortfeasor becomes insolvent or denies coverage, no insurance company doing business in this state may limit the time within which any suit may be brought against it or any demand for arbitration on a claim may be made on the uninsured motorist provisions of an automobile liability insurance policy to a period of less than one year from the date of receipt by the insured of written notice of such insolvency of, or denial of coverage by, such automobile liability insurance company.

Sec. 2. Section 38a-336b of the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2015):

No insurer providing underinsured motorist coverage [as required under this title] shall have any right of subrogation against the owner or operator of the underinsured motor vehicle for underinsured motorist benefits paid or payable by the insurer.

Sec. 3. Section 38a-336a of the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2015):

(a) (1) Each insurer licensed to write automobile liability insurance in this state shall offer, for an additional premium, underinsured motorist conversion coverage with limits in accordance with section 38a-336, as amended by this act. The purchase of such underinsured motorist conversion coverage shall be in lieu of underinsured motorist coverage pursuant to section 38a-336, as amended by this act. For each new automobile liability insurance policy issued on or after January 1, 2015, the insurer shall disclose to an insured at the time of sale or issuance the availability of, the premium cost and a description of underinsured motorist conversion coverage. [Such description of coverage shall be included in a conspicuous manner with the] Each insured who declines underinsured motorist conversion coverage shall sign an informed consent form as specified in subparagraph (A) of subdivision (2) of subsection (a) of section 38a-336, as amended by this act.

(2) If such insurer fails to offer, or fails to disclose to an insured the availability of, underinsured motorist conversion coverage or fails to procure a signed informed consent form from an insured who has declined such coverage, such insurer shall provide such coverage to such insured at no cost to the insured.

(b) Such underinsured motorist conversion coverage shall provide for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of underinsured motor vehicles.

(c) Each insurer shall be obligated to pay to the insured, up to the limits of the policy's underinsured motorist conversion coverage, after the limits of liability under all bodily injury liability bonds or insurance policies applicable at the time of the accident have been exhausted by payment of judgments or settlements. If the insured purchases such underinsured motorist conversion coverage, then in no event shall the underinsured motorist coverage be reduced on account of any payment by or on behalf of the tortfeasor or by any third party.

(d) The selection of coverage under this section shall apply to all subsequent renewals of coverage and to all policies or endorsements [which] that extend, change, supersede or replace an existing policy issued to the named insured, unless changed in writing by any named insured.

(e) For purposes of this section, an "underinsured motor vehicle" means a motor vehicle with respect to which the sum of all payments received by or on behalf of the covered person from or on behalf of the tortfeasor are less than the fair, just and reasonable damages of the covered person.

Sec. 4. Section 38a-389 of the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2015):

(a) (1) The General Assembly finds and concludes that the system of bodily injury liability, basic and added reparations benefits and uninsured and underinsured motorist insurance, as amended by the provisions of public act 93-297, will generate premium savings for policyholders with such coverages.

[(b)] (2) Each insurer licensed to sell private passenger automobile insurance in this state shall refile, with the Insurance Commissioner, its base rates for such coverages to reflect the elimination of mandatory basic and added reparations benefits pursuant to public act 93-297 and any additional premium savings attributable to said act. Such rates shall be refiled, as soon as practicable, for use with policies effective on or after January 1, 1994.

[(c)] (3) Upon receipt of the initial base rate filing made under this section, the Insurance Commissioner, before permitting such filing to become effective, shall consult with an independent actuary for the purpose of assuring that such rates reflect both [(1)] (A) the insurer's rates on file on May 1, 1993, adjusted for cost trends from the date of filing to January 1, 1994; and [(2)] (B) the elimination of mandatory basic and added reparations benefits pursuant to public act 93-297 and any additional premium savings attributable to said act. Such revised rates shall be applicable to all new and renewal policies effective on or after January 1, 1994.

[(d)] (4) The base rates for bodily injury liability coverage and uninsured and underinsured motorist coverage that are filed subsequent to the initial filing of base rates pursuant to this section shall be subject to prior rate approval in the same manner as in a noncompetitive market pursuant to subdivision (2) of subsection (a) of section 38a-688.

(b) (1) Each insurer licensed to sell private passenger automobile insurance in this state shall refile, with the Insurance Commissioner, its base rates for such coverages to reflect the elimination of mandatory uninsured and underinsured motorist coverage and any additional premium savings attributable to such elimination. Such rates shall be refiled, as soon as practicable, for use with policies effective on or after January 1, 2015.

(2) Upon receipt of the initial base rate filing made under this section, the Insurance Commissioner, before permitting such filing to become effective, shall consult with an independent actuary for the purpose of assuring that such rates reflect both (A) the insurer's rates on file on May 1, 2014, adjusted for cost trends from the date of filing to January 1, 2015; and (B) the elimination of mandatory uninsured and underinsured motorist coverage and any additional premium savings attributable to such elimination. Such revised rates shall be applicable to all new and renewal policies effective on or after January 1, 2015.

(3) The base rates for bodily injury liability coverage and uninsured and underinsured motorist coverage that are filed subsequent to the initial filing of base rates pursuant to this section shall be subject to prior rate approval in the same manner as in a noncompetitive market pursuant to subdivision (2) of subsection (a) of section 38a-688.

This act shall take effect as follows and shall amend the following sections:
Section 1	January 1, 2015	38a-336
Sec. 2	January 1, 2015	38a-336b
Sec. 3	January 1, 2015	38a-336a
Sec. 4	January 1, 2015	38a-389

Statement of Purpose:

To (1) make uninsured and underinsured motorist coverage optional rather than compulsory, and (2) require insurers that write automobile liability insurance policies in this state to provide underinsured motorist conversion coverage to an insured at no cost if such insurer fails to offer, or disclose the availability of, such coverage or fails to procure a signed informed consent form from an insured who declines such coverage.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]