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PIACT 2015 legislative wrap-up
Resource kit 06006
By Matthew F. Guilbault, Esq.
The 2015 Connecticut legislative session came to a close on June 3 at 11:59 p.m. The end of the session was marked by marathon budget negotiations. That morning, the House passed, by a 73-70 vote, a $40 billion dollar, two-year budget, a draft of which was first proposed by Gov. Dannel Malloy. With less than an hour before the session ended, the Senate passed the budget by a 19-17 vote. The budget contains provisions to raise an additional $1.5 billion in taxes to restore funding to a number of programs cut in the original proposal. Supporters defended the package saying it would provide relief by amending the state’s car tax and property tax structure and other means. This last-minute scramble to approve the budget occupied the attention of the Legislature, although a number of insurance- and small-business-related bills watched by PIACT were passed by both houses. PIA monitored and lobbied on behalf of a number of bills, which are detailed below:
Ride hailing
H.B.6683 passed the House on May 31, but died on the Senate calendar. The insurance requirements in the bill were as follows: a driver must be covered under an insurance policy, which recognizes that drivers are participating in ride hailing, at all times they are connected to a Transportation Network Company. Period 1 coverage (i.e., when application, or “app” is on, but driver has not responded to a hail), must have at least $50,000 coverage for personal injury or death of one person; $100,000 coverage for personal injury or death of more than one person; and $30,000 property damage coverage. The bill mandates that when the driver responds to a hail to the passenger’s departure from the car, the driver must be covered by the TNC’s policy, which provides at least $1 million for death, bodily injury and property damage on account of any accident and uninsured and legally required underinsured motorist coverage. This version of the bill reinstates a concept from a prior version, which requires the TNC policy to provide first-dollar coverage should the driver’s first-party coverage lapse or otherwise neglects to fully satisfy the insurance requirements.
While the bill did not pass this session, it is almost certain that regulating TNC businesses will be revisited next year, and the structure and details of this year’s bill are likely to carry into next year’s version.
Uninsured motorist coverage
H.B.5195, which has been covered extensively in PIACT publications, was intended to repeal the state’s mandated uninsured and underinsured motorist coverage requirement. PIACT, at the direction of its Legislative Committee, prepared and presented testimony in Hartford this winter to share the association’s concerns about this measure. The bill advanced from the Insurance Committee, and in early May was re-referred to the Judiciary Committee, effectively ending its chances of becoming law this year.
Domestic surplus-lines insurers
A bill (H.B.6771) passed the Senate on June 2 giving it two-house passage. The bill would have Connecticut join Arkansas, New Jersey, Illinois, Oklahoma, North Dakota and Delaware in allowing domestic surplus-lines insurers. Under the typical licensing regime, a company operating as a surplus-lines insurer must operate as an admitted carrier in at least one state, in order to operate as a surplus-lines carrier in the remaining states.
This bill will allow a company to be domiciled as a surplus-lines carrier in Connecticut, and also sell surplus-lines policies in the state.
Prohibition on nonadmitted commercial coinsurance
Following House passage of H.B.6865 on May 14, it passed the Senate on June 1. The bill prohibits a nonadmitted fire insurance policy that defines depreciation differently than the standard fire policy, from also containing a coinsurance clause. The bill allows the use of a differing definition of depreciation, but if such alternate language is used, renders a coinsurance clause void and unenforceable.
A number of other bills received two-house passage including S.B.907, which implements a number of technical and procedural changes sought by the Connecticut Insurance Department and analyzed online at: http://1.usa.gov/1KcN6pY. Also passing both houses was H.B.6868, which made certain changes to the state’s Guaranty Fund, as analyzed online at: http://1.usa.gov/1H561SQ.
Among the bills tracked by PIACT that did not pass one or both houses this legislative session are H.B.5361, which sought to impose dog-related underwriting restrictions; S.B.8, which would have imposed certain fee-related disclosure requirements; H.B.5064, which dealt with windstorm deductibles; and S.678, which would have clarified the manner in which a flood zone map amended by a local engineering report would be interpreted and implemented by state mortgage lenders. PIACT met with the bill’s sponsor, Senate Minority Leader Len Fasano, R-34, to discuss the measure and gain an understanding of the local issues that drove the bill.
Over the course of the session, the Connecticut Legislature also addressed a number of bills (e.g., employee protections, pay secrecy and social-media issues), of interest to the state’s business community. Below is an overview of those bills:
Data-breach protections
Gov. Dannel P. Malloy signed Public Act No. 15-142 into law. The new law, which goes into effect Oct. 1, 2015, amends Connecticut’s current breach notification mandate and requires businesses to offer free identity-theft protection service for a year to the state’s residents who are affected by a data breach when certain information (e.g., resident’s name or Social Security number), has been affected by a security breach.
To protect against the ever-increasing threat confronting agencies, PIACT offers options for coverage of cyber liability. Agents can choose from two products available through PIA. Agents interested in this coverage are encouraged to call PIA at (800) 424-4244, ext. 800, or log on to the PIACT website (pia.org) and click “Cyber liability” under “Products.”
Social-media privacy
S.B.426 was signed into law by Malloy on May 19. The law will “protect employee privacy by barring employers or potential employers from:
- requesting or requiring employees or potential employees to provide passwords or usernames to their personal online accounts as a condition of employment; and
- requesting or requiring employees or potential employees to invite the employer or potential employer to join their personal online account network.”
The bill’s online summary offers a detailed synopsis of the provisions. Of particular note are the exemptions, one of which allows an employer to demand access to a device when the employer provides or pays for the device.
Intern protections
S.B.428 protects unpaid interns from workplace harassment and discrimination. The bill, signed into law on June 19, 2015, as Public Act 15-56 defines interns as a person working for an employer who 1. does not pay and has not committed to hiring him or her and is not paid by the employer; 2. who the employer has not committed to hiring; and 3. where the internship is designed to supplement training that may enhance the intern’s employability.
The act extends employee-style protections to interns, by explicitly prohibiting sexual harassment; discrimination based on certain characteristics including race and gender; and retaliation against an intern who files a complaint alleging such discrimination.
The law also allows interns who allege such discrimination to pursue claims with the Commission on Human Rights and Opportunities and the Superior Court.
Pay secrecy
Public Act 15-196 was transmitted to the governor for his signature on June 16. The provisions of the law prohibit employers from engaging in certain activities aimed at restricting discussion of wages. Its summary states:
“Under the bill, such sharing consists of employees under the same employer:
- disclosing or discussing the amount of their own wages or other employees’ voluntarily disclosed wages; or
- asking about other employees’ wages.
Specifically, the bill bans employers from
- prohibiting their employees from such sharing;
- requiring employees to sign a waiver or document that denies their right to such sharing; and
- discharging, disciplining, discriminating or retaliating against, or otherwise penalizing employees for such sharing.”
Double damages
S.B.914 imposes tough penalties on businesses that willfully fail to pay an employee his or her wages, benefits or other compensation. The bill allows an employer to escape this penalty if it can show a good-faith understanding that the underpayment was legal.
Demolition certificates
H.B.6914 relates to the issuance of permits required for certain demolition work. This bill is noteworthy as it now requires “an applicant for a demolition permit to furnish a separate written declaration, instead of attesting on the required demolition insurance certificate, that the town where the demolition is taking place will be held harmless from claims arising out of the negligence of the applicant or his or her agents or employees during the demolition.”
This change was driven by last year’s passage of Public Act 14-74, PIACT-driven legislation, which regulated certificates of insurance and barred their use as a method to represent that the underlying policy would respond to the specific needs of a construction job, as embodied in the contract. The bill’s statement explains it succinctly: “Under current law, the certificate must hold the town harmless from any claim arising out of the negligence of the applicant or the applicant’s agents or employees during the demolition. This conflicts with Public Act 14-74, which prohibits an insurance certificate from including any warranty that the underlying policy complies with the insurance or indemnification requirements of a contract.
The bill resolves this conflict by instead, requiring that the applicant make a separate written declaration to this effect.” 7/15
