Summary — HB 6981 (Public Act 25-87)
AN ACT CONCERNING ELECTRONIC POSTING OF CERTAIN DOCUMENTS BY INSURERS, NONRENEWAL OR CANCELLATION OF PROPERTY AND CASUALTY INSURANCE POLICIES, FEDERAL HOME LOAN BANKS AND THE INSURERS REHABILITATION AND LIQUIDATION ACT, HYPOTHECATION OF ASSETS AND SURPLUS LINES INSURANCE
Status & procedural timeline
- Introduced: February 18, 2025; referred to the Joint Committee on Insurance and Real Estate.
- Passed both chambers with amendments; Governor signed the bill on June 23, 2025.
- Enrolled as Public Act No. 25-87. Consult the enrolled act for full statutory language and effective dates.
Purpose and intent
- To modernize and clarify several aspects of Connecticut insurance law, principally by (1) permitting or regulating electronic posting/ delivery of certain insurer documents and notices, (2) updating rules governing cancellation and nonrenewal of property-and-casualty policies (including homeowners and motor vehicle insurance), (3) addressing interactions between Federal Home Loan Banks and state insurer receivership/ liquidation law, (4) clarifying rules on hypothecation of insurer assets, and (5) making changes to surplus lines insurance requirements.
Key provisions (high-level)
- Electronic posting/delivery
- Authorizes or prescribes conditions under which insurers may post certain documents, notices, or disclosures electronically (internet/website or other electronic means) instead of or in addition to mailed notices. Likely includes requirements for consumer notice, consent, access, and retention; exact documents covered are specified in the enrolled text.
- Cancellation and nonrenewal of P&C policies
- Revises procedural requirements for canceling or nonrenewing property-and-casualty policies (explicitly references homeowners and motor vehicle insurance). Changes may affect notice periods, permissible reasons for nonrenewal/cancellation, and required consumer disclosures.
- Federal Home Loan Banks & Insurers Rehabilitation and Liquidation Act
- Clarifies treatment or priority of Federal Home Loan Banks (FHLBanks) in the context of insurer rehabilitation, liquidation, or receivership; may address recognition of FHLBank security interests or claim priorities in insolvency proceedings.
- Hypothecation of assets
- Establishes or clarifies when and how insurers may hypothecate (pledge) assets as collateral for obligations, and any filing, approval, or reporting requirements to the insurance regulator or receivership authorities.
- Surplus lines insurance
- Alters requirements related to surplus lines placement, reporting, taxation, or broker responsibilities; impacts how nonadmitted coverages are procured and regulated.
Who is affected
- Insurers doing business in Connecticut (admitted and surplus lines carriers) — operational and compliance practices (notice systems, asset pledging, reporting).
- Insurance agents/brokers, especially surplus lines brokers — placement, reporting, and notification duties.
- Policyholders of homeowners, auto, and other P&C lines — methods of receiving notices, and possibly notice timing or grounds for nonrenewal/cancellation.
- Federal Home Loan Banks — treatment in insurer receivership situations.
- Connecticut Insurance Department/receivers/creditors — administrative and enforcement responsibilities.
Practical impact and next steps
- Insurers and brokers should review the enrolled Public Act 25-87 for specific requirements (which documents may be posted electronically, any consumer consent rules, exact notice periods, and procedural steps for hypothecation).
- The Insurance Department may issue guidance or regulations to implement statutory changes; affected parties should monitor agency publications.
- Policyholders should review communications from their insurers about any shift to electronic notices and their rights regarding receipt of physical notices.
For authoritative details, consult the enrolled bill (Public Act No. 25-87) and any implementing regulations or guidance issued by the Connecticut Insurance Department.
