(a) Before any unauthorized person or insurer files or causes to be filed any pleading in any court action or proceeding or in any administrative proceeding before the commissioner instituted against the person or insurer by service made in accordance with the provisions of section 38a-25, section 38a-26 or section 38a-273, the person or insurer shall either: (1) Deposit with the clerk of the court in which the action or proceeding is pending, or with the commissioner in administrative proceedings before the commissioner, cash or securities or a bond with good and sufficient sureties to be approved by the court or the commissioner, in an amount to be fixed by the court or the commissioner sufficient to secure the payment of any final judgment which may be rendered in the action or proceeding, provided the court or the commissioner in administrative proceedings may in its or his discretion make an order dispensing with the deposit or bond where the insurer shows to the satisfaction of the court or the commissioner that it maintains in this state funds or securities, in trust or otherwise, sufficient and available to satisfy any final judgment which may be entered in the action or proceeding; or (2) procure proper authorization to do an insurance business in this state.

(b) The court in any action or proceeding in which service is made as provided in section 38a-25, section 38a-26 and section 38a-273, or the commissioner in any administrative proceeding in which service is made as provided in section 38a-273, may, in its or his discretion, order such postponement as may be necessary to afford the defendant reasonable opportunity to comply with subsection (a) of this section and defend the action or proceeding.

(c) Nothing in subsection (a) of this section shall be construed to prevent an unauthorized person or insurer from filing a motion to quash a writ or to set aside service thereof made as provided in section 38a-25, section 38a-26 or section 38a-273 on the ground that the person or insurer served has not done any of the acts enumerated in subsection (a) of section 38a-271.

(1969, P.A. 561, S. 5; P.A. 90-243, S. 150; P.A. 96-78, S. 1.)

History: P.A. 90-243 made technical changes for statutory consistency; Sec. 38-267 transferred to Sec. 38a-27 in 1991; P.A. 96-78 amended Subsec. (a)(1) re funds or securities to substitute “maintains in this state” for “maintains in a state”.

Service made on the unauthorized insurers' contractually designated agents, rather than on Insurance Commissioner or Secretary of the State, is sufficient to obtain prepleading security, since both forms of service are allowed pursuant to Sec. 38a-25; where an industrial insured is also a reinsurer, such reinsurer is not exempt from section by virtue of Sec. 38a-271(c), since Sec. 38a-271(b) states that reinsurers are not subject to that section; because there are cognizable property rights with respect to the security that the statute requires, defendants are entitled to a hearing on the amount of security to be determined by the court. 103 CA 319.