(a) Any person aggrieved under section 38a-880 may apply to the Insurance Department for an order directing payment out of the Brokered Transactions Guaranty Fund subject to the limitations stated in said section and the limitations specified in this section.

(b) The department shall proceed upon such application in a summary manner, after giving reasonable notice to such producer pursuant to section 38a-774, or to an unlicensed person acting as a producer engaged in the business of insurance, alleged to have caused the aggrieved person's loss or damages and, upon the hearing thereof, the aggrieved person shall be required to show: (1) He is not a spouse of the debtor, or the personal representative of such spouse; (2) he is aggrieved by the action of such insurance producer duly licensed in this state under section 38a-769, or that he is aggrieved by the action of such unlicensed person acting as a producer engaged in the business of insurance, by reason of the embezzlement of money or property, or the unlawful obtainment of money or property by false pretenses, artifice, trickery or forgery, or by reason of any fraud, misrepresentation or deceit; and (3) the aggrieved person's loss or damages are equivalent to either the amount of unearned premium or the expense of obtaining duplicate coverage, or the amount of unpaid claims in conformance with the aggrieved person's insurance contract applying any deductibles, copayment requirements or exclusions.

(c) The commissioner shall make an order requiring payment from the Brokered Transactions Guaranty Fund of whatever sum he shall find to be payable upon the claim, pursuant to the provisions of and in accordance with the limitations contained in this section and section 38a-880, if the commissioner is satisfied, upon the hearing, of the truth of all matters required to be shown by the aggrieved person by subsection (b) of this section.

(d) The payment from said fund of any amount in settlement of a claim against a licensed insurance producer or an unlicensed person acting as a producer engaged in the business of insurance pursuant to an order under subsection (c), shall constitute cause for the suspension or revocation of any license issued by the commissioner or for the imposition of a fine pursuant to section 38a-774 and for an order of restitution to the fund in the amount it has paid, and such producer or unlicensed person shall not be eligible to apply for a license until he has repaid in full, plus interest at a rate to be determined by the department and which shall reflect current market rates, the amount paid from said guaranty fund on his account. A discharge in bankruptcy shall not relieve a person from the penalties and disabilities provided in this subsection.

(e) If, at any time, the money deposited in said guaranty fund is insufficient to satisfy any duly authorized claim or portion thereof, the department shall, when sufficient money has been deposited in said guaranty fund, satisfy such unpaid claims or portions thereof, in the order that such claims or portions thereof were originally filed, plus accumulated interest at the rate of four per cent a year.

(P.A. 89-106, S. 5; P.A. 93-236, S. 3; P.A. 96-193, S. 28, 36; P.A. 98-27, S. 5–7.)

History: P.A. 93-236 substantially revised procedure to secure payment from the guaranty fund, deleting Subsecs. (a) and (b), which had required aggrieved person to notify department of commencement of action and had detailed circumstances for payment from fund of amounts unpaid after judgment, substituting new Subsec. (a) re application for payment from fund, rewrote Subsec. (c), relettered as Subsec. (b), to provide notice requirements to the agent or broker or unlicensed agent or broker engaged in the business of insurance and to outline the showing required to state a claim against the guaranty fund, deleted Subsec. (d) re waiver of compliance with certain requirements by aggrieved person, relettered Subsec. (e) as (c), substituting “commissioner” for “department” and making certain technical changes for accuracy, relettered Subsec. (f) as (d) and made provision for suspension or revocation of license or imposition of a fine and relettered Subsec. (g) as (e) (Revisor's note: The word “that” was deleted editorially by the Revisors from the beginning of Subdivs. (2) and (3) of Subsec. (b) for consistency with Subdiv. (1)); P.A. 96-193 substituted “producer” for “agent” and “broker”, effective June 3, 1996; P.A. 98-27 amended Subsec. (a) to substitute “the Brokered Transactions Guaranty Fund” for “such guaranty fund”, amended Subsec. (d) to substitute “said” for “such” and amended Subsec. (e) to substitute “said” for “such” (Revisor's note: A missed reference in Subsec. (e) to “such guaranty fund” was changed editorially by the Revisors to “said guaranty fund”).