Connecticut Insurance Law and Regulations
Domain 4: Connecticut Insurance Law and Regulations
This domain tests Connecticut-specific licensing and market-conduct rules. The Connecticut Insurance Department (CID) licenses public adjusters under Conn. Gen. Stat. § 38a-702 et seq. and regulates claim practices under the Unfair Insurance Practices Act. Expect questions on license requirements, contracts, fiduciary duties, and prohibited conduct.
Licensing
A person may not act as a public adjuster for compensation without a Connecticut public adjuster license. The license is personal: unlicensed assistants may perform clerical work but may not negotiate, solicit, or settle claims. Applicants must meet the Department's qualification and examination requirements, submit to a background check, and renew on the Department's cycle with the required continuing education, including ethics. Licensees must keep the Department informed of address changes, administrative actions, and criminal convictions.
Contract and compensation
Connecticut requires a written contract between the public adjuster and the insured. The contract should identify the parties, the loss, the adjuster's license number, the compensation method (often a percentage of the recovery), and the insured's right to cancel within the statutory period. The insured must sign it. The adjuster may not collect compensation not disclosed in the contract and may not commingle claim funds with personal or business operating funds.
Claim conduct and prohibited practices
Public adjusters owe the insured loyalty and confidentiality. They may not misrepresent policy terms, promise a specific settlement, share compensation with an unlicensed person, pay unlawful rebates or referral fees, or acquire an ownership interest in the claim. The Unfair Insurance Practices Act, Conn. Gen. Stat. §§ 38a-815 and 38a-816, prohibits misrepresentation, unfair claim settlement practices, and unreasonable delay. The Commissioner may examine records, issue orders, suspend or revoke licenses, and impose fines.
Worked example
An adjuster signs a written contract, then lets an unlicensed assistant negotiate the final settlement with the insurer and sign the proof of loss for the insured. Two problems arise: negotiating without a license and signing a sworn document without authority. The adjuster's own license does not cover the assistant's activity. The adjuster should have the assistant handle scheduling and document collection only; any negotiation must be by the licensed adjuster, and the insured must sign the proof of loss unless a valid power of attorney authorizes otherwise. Discipline can follow for both the unlicensed activity and the unauthorized signature.
Traps
- Assuming a local business license permits public adjusting.
- Using an unlicensed solicitor or contractor to close claims.
- Charging a fee without a signed, compliant contract.
- Depositing claim proceeds into an operating account.
- Ignoring continuing-education or reporting deadlines.