Minimum Provisions For Automobile Liability Insurance Policies Covering Motor Vehicles

STATE OF CONNECTICUT

INSURANCE DEPARTMENT

Bulletin PC-48

December 20, 2000

TO:

ALL INSURANCE COMPANIES LICENSED TO WRITE

AUTOMOBILE LIABILITY INSURANCE

SUBJECT:

MINIMUM PROVISIONS FOR AUTOMOBILE LIABILITY

INSURANCE POLICIES COVERING MOTOR VEHICLES

The Regulations of Connecticut State Agencies §38a-334-1 to 38a-334-10 governing the

minimum provisions for automobile liability insurance policies covering motor vehicles

are amended for policies effective on or after November 1, 2000.

In accordance with §38a-334-7 (1 ), effective November 1, 2000, automobile policies that

provide coverage for medical payments shall be primary over any other health insurance,

including coverage provided by plans subject to ERISA.

A copy of the revised·regulations is attached.

www.state.et. us/cid/

Susan F. Cogswell

Insurance Commissioner

P. 0. Box 816 Hartford, CT 06142-0816

An Equal Opportunity Employer

R- 39A REV 1/77

STATE OF CONNECTICUT

Page 1 of 6 pages

REGULATION

IMPORTANT: Read Instructions on bottom of

OF

Certification Page before completing this

Form. Failure to comply with instructions

may cause disapproval of proposed

___________________________________________________________________

Regulations.

NAME OF AGENCY

INSURANCE DEPARTMENT

_______________________________________________________

Concerning

_____________________________________

SUTJECT MATTER OF REGULATION

MINIMUM PROVISIONS FOR AUTOMOBILE LIABILITY

____________________________________

INSURANCE POLICIES COVERING MOTOR VEHICILES

SECTION ______

Section 1. Sections 38a-334-1 and 38a-334-2 inclusive of the Regulations of Connecticut

State Agencies are amended to read as follows:

Sec. 3&-334-l. Required areas of coverage.

ning

_____________________________________

SUTJECT MATTER OF REGULATION

MINIMUM PROVISIONS FOR AUTOMOBILE LIABILITY

____________________________________

INSURANCE POLICIES COVERING MOTOR VEHICILES

SECTION ______

Section 1. Sections 38a-334-1 and 38a-334-2 inclusive of the Regulations of Connecticut

State Agencies are amended to read as follows:

Sec. 3&-334-l. Required areas of coverage.

(a) Policies shall contain at least the following coverages:

(1) Bodily injury liability and property damage liability;

(2) [basic reparations benefits for private passenger motor vehicles as defined in § 38a­

363(g) of the general statutes and as may be from time to time amended, but only with

respect to such vehicles, if the policy provides insurance for such vehicles;

(3)] protection against uninsured AND UNDERINSURED motorists as [hereinafter]

described IN SECTION 38a-334-6.

(b) Any policy which, under a separate coverage, undertakes to pay, irrespective of fault,

medical expense resulting from bodily injury sustained in motor vehicle accidents, shall

provide insurance[ as hereinafter described] for medical payments AS DESCRIBED IN

SECTION 38a-334-7.

Sec. 38a-334-2. Definitions

As used in sections 38a-334-1 to [38a-334-8] 38a-334-9, inclusive:

(a) [“Basic reparations benefits” means the same as basic reparations benefits defined in

section 38a-363(k) of the general statutes;

(b)] “Bodily injury” means bodily injury, sickness or disease, including death resulting

therefrom;

[(c)] (b) “Motor [Vehicle] VEHICLE” means private passenger motor vehicle as defined

in subsection [(g)] (e) of [Section] SECTION 38a-363 of the General Statutes;

commercial motor vehicle as defined in [subdivision (9) of] [Section] SECTION 14-1 of

the General Statutes; motorcycle, as defined in [subdivision (29) of Section] SECTION

14-1 of the General Statutes; [public service motor vehicles, as defined in subdivision

VEHICLE” means private passenger motor vehicle as defined

in subsection [(g)] (e) of [Section] SECTION 38a-363 of the General Statutes;

commercial motor vehicle as defined in [subdivision (9) of] [Section] SECTION 14-1 of

the General Statutes; motorcycle, as defined in [subdivision (29) of Section] SECTION

14-1 of the General Statutes; [public service motor vehicles, as defined in subdivision

(44) of Section 14-1 of the General Statutes] MOTOR VEHICLE USED TO

TRANSPORT PASSENGERS FOR HIRE, motor vehicle in livery service, as defined in

[Section] SECTION 13 b- 101 of the General Statutes; and vanpool vehicle, as defined in

[subdivision (63) of Section] SECTION 14-1 of the General Statutes;

[(d)] (c) “Property damage” means injury to or destruction of tangible property,

including loss of use thereof.

[All references in these regulations to sections of the general statutes of Connecticut

shall mean and include the statutory provision in effect on the date these regulations

become effective and as the statutory provision may be thereafter amended from time to

time.

Sec. 2. Section 38a-334-4 of the Regulations of Connecticut State Agencies is amended

to read as follows:

Sec. 38a-334-4. Exceptions

These regulations do not apply to the insurance afforded under any policy:

(1) to the extent that the insurance afforded exceeds the limits specified in subsection (a)

of [§] SECTION 14-112 of the [general] GENERAL [statutes] STATUTES [and, where

applicable, § 38a-365 of the general statutes] or (2) if the policy contains an underlying

insurance requirement or provides for a retained limit of self-insurance equal to or greater

than the limits specified in said subsection (a) of [§]SECTION 14-112 [and, where

applicable, §38a-365].

pecified in subsection (a)

of [§] SECTION 14-112 of the [general] GENERAL [statutes] STATUTES [and, where

applicable, § 38a-365 of the general statutes] or (2) if the policy contains an underlying

insurance requirement or provides for a retained limit of self-insurance equal to or greater

than the limits specified in said subsection (a) of [§]SECTION 14-112 [and, where

applicable, §38a-365].

R- 39A REV 1/77

STATE OF CONNECTICUT

Page 2 of 6 Pages

REGULATION

OF

INSURANCE DEPARTMENT

________________________________________

NAME OF AGENCY

________________________________________

SECTION ______

Sec. 3. Subsection (f) through (g) inclusive of section 38a-334-5 of the Regulations of

Connecticut State Agencies are amended to read as follows:

(f) Subrogation. The insurer shall be subrogated to any rights of recovery of the insured

against third parties except as restricted by section [38a-3691 38a-336b OF THE

GENERAL STATUTES.

(g) Other insurance. The policy may provide for proration of loss with other insurance

or may provide that insurance for persons or organizations other than the named insured

does not apply if such person or organization has other insurance applicable to the loss

with limits of liability not less than those specified in subsection (a) of section 14-112

[and, where applicable, section 38a-365 ] of the [general] GENERAL [statues]

STATUTES.

Sec. 4. Sections 38a-334-6 through 38a-334-9, inclusive, of the Regulations of

Connecticut State Agencies are amended to read as follows:

Sec. 38a-334-6. Minimum provisions for protection against uninsured OR

UNDERINSURED motorists

iability not less than those specified in subsection (a) of section 14-112

[and, where applicable, section 38a-365 ] of the [general] GENERAL [statues]

STATUTES.

Sec. 4. Sections 38a-334-6 through 38a-334-9, inclusive, of the Regulations of

Connecticut State Agencies are amended to read as follows:

Sec. 38a-334-6. Minimum provisions for protection against uninsured OR

UNDERINSURED motorists

(a) Coverage. The insurer shall undertake to pay on behalf of the insured all sums

which the insured shall be legally entitled to recover as damages from the owner or

operator of an uninsured OR UNDERJNSURED motor vehicle because of bodily injury

sustained by the insured caused by an accident involving the uninsured OR

UNDERINSURED motor vehicle. This coverage shall insure the occupants of every

motor vehicle to which the bodily injury liability coverage applies. “Uninsured motor

vehicle” includes a motor vehicle insured against liability by an insurer that is or becomes

insolvent.

(b) Arbitration. The insurance may provide but not require that the issues of liability as

between the insured and the uninsured OR UNDERINSURED motorist, and the amount

of damages, be arbitrated. The insurer may provide against being bound by any judgment (I

against the uninsured OR UNDERINSURED motorist .

(c) Exclusions. The insurer’s obligations to pay may be made inapplicable:

(1) To any claim which has been settled with the uninsured motorist without the consent

of the insurer;

(2) if the uninsured OR UNDERINSURED motor vehicle is owned by

(A) the named insured or any relative who is a resident of the same household or is

furnished for the regular use of any of the foregoing,

(B) a self insurer under any motor vehicle law, or

(C) any government or agency thereof;

(3) to pay or reimburse for workers’ compensation or disability benefits.

onsent

of the insurer;

(2) if the uninsured OR UNDERINSURED motor vehicle is owned by

(A) the named insured or any relative who is a resident of the same household or is

furnished for the regular use of any of the foregoing,

(B) a self insurer under any motor vehicle law, or

(C) any government or agency thereof;

(3) to pay or reimburse for workers’ compensation or disability benefits.

(d) Limits of liability.

(1) The limit of the insurer’s liability may not be less than the applicable limits for

bodily injury liability specified in subsection (a) of section 14-112 of the general statutes,

except that the policy may provide for the reduction of limits to the extent that damages

have been

[(l)] (A) paid by or on behalf of any person responsible for the injury,

[(2)] (B) paid or are payable under any workers’ compensation [or disability benefits]

law, or

[(3)] (C) paid under the policy in settlement of a liability claim.

R- 39A REV 1/77

STATE OF CONNECTICUT

Page 3 of 6 Pages

REGULATION

OF

INSURANCE DEPARTMENT

________________________________________

NAME OF AGENCY

________________________________________

SECTION ______

(2) The policy may also provide that any direct indemnity for medical expense paid or

payable under the policy [or any amount of any basic reparations benefits paid or payable

under the policy ] will reduce the damages which the insured may recover under this

coverage,[and ]

(3) [a] Any payment under these coverages shall reduce the company’s obligation under

the bodily injury liability coverage to the extent of the payment.

(4) THIS SUBSECTION SHALL NOT APPLY TO UNDERINSURED MOTORIST

CONVERSION COVERAGE EXCEPT THAT NO PAYMENT UNDER A POLICY

PROVIDING UNDERINSURED MOTORIST CONVERSION COVERAGE SHALL

DUPLICATE PAYMENT FROM ANY OTHER SOURCE.

his

coverage,[and ]

(3) [a] Any payment under these coverages shall reduce the company’s obligation under

the bodily injury liability coverage to the extent of the payment.

(4) THIS SUBSECTION SHALL NOT APPLY TO UNDERINSURED MOTORIST

CONVERSION COVERAGE EXCEPT THAT NO PAYMENT UNDER A POLICY

PROVIDING UNDERINSURED MOTORIST CONVERSION COVERAGE SHALL

DUPLICATE PAYMENT FROM ANY OTHER SOURCE.

(e) Recovery over. WITH RESPECT TO UNINSURED MOTORIST COVERAGE,

[The] THE insurer may require the insured to hold in trust all rights against third parties

or to exercise such rights after the insurer has paid any claim, provided that the insurer

shall not acquire by assignment, prior to settlement or judgment, its insured’s right of

action to recover for bodily injury from any third party.

Sec. 38a-334-7. Minimum provisions for medical payments

(a) Coverage. The insurer may undertake to pay reasonable medical expense incurred

within one year from the date of the accident for persons who sustain bodily injury while

occupying a motor vehicle designated as the subject of the coverage by specific

description or appropriate reference.

(b) Exclusions. The insurer’s obligation to pay may be made inapplicable:

(1) To injury to any person while he is employed or otherwise engaged in the business

or occupation of selling, servicing, repairing, parking or storing motor vehicles;

(2) to injury resulting from insurrection, rebellion, revolution or war;

(3) to employees of any insured injured in the course of their employment;

(4) to the use of a motor vehicle as a public or livery conveyance or while located for

use as a residence or premises;

(5) to bodily injury resulting from the radioactive, toxic, explosive or other hazardous

properties of source, special nuclear or byproduct material, each as defined in the Atomic

Energy Act of 1954, as amended;

(6) to injury arising out of the use of

their employment;

(4) to the use of a motor vehicle as a public or livery conveyance or while located for

use as a residence or premises;

(5) to bodily injury resulting from the radioactive, toxic, explosive or other hazardous

properties of source, special nuclear or byproduct material, each as defined in the Atomic

Energy Act of 1954, as amended;

(6) to injury arising out of the use of

(i) a farm-type tractor or other equipment designed for use principally off public roads,

while not upon public roads,

(ii) a vehicle operated on rails or crawler-treads, or

(iii) a vehicle while located for use as a residence or premises.

(c) Non-duplicating provisions.

(1) The insurer may provide for proration of benefits with other motor vehicle medical

payments insurance [and] BUT FOR POLICIES EFFECTIVE ON OR AFTER

NOVEMBER 1,2000, COVERAGE PROVIDED PURSUANT TO THIS SECTION

SHALL BE PRIMARY OVER ANY AMOUNT OF OTHER HEALTH

INSURANCE AS DEFINED IN SECTION 38a-469 OF THE GENERAL

STATUTES, OR ANY OTHER HEALTH COVERAGE, INCLUDING BUT NOT

LIMITED TO EMPLOYEE WELFARE PLANS SUBJECT TO THE FEDERAL

EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,29 U.S.C.

SECTION 1001, ET SEQ., HEALTH CARE PLANS PROVIDED BY

COLLECTIVELY BARGAINED ARRANGEMENTS, HEALTH CARE PLANS

PROVIDED FOR EMPLOYEES OF THE UNITED STATES GOVERNMENT

AND THEIR DEPENDENTS, PART A OR PART B OF TITLE XVIII OF THE

SOCIAL SECURITY ACT, TITLE XIX OF THE SOCIAL SECURITY ACT,

MEDICAL CARE PROGRAMS OF THE INDIAN HEALTH SERVICE OR OF A

TRIBAL ORGANIZATION AND POLICIES ISSUED BY THE HEALTH

REINSURANCE ORGANIZATION;

CARE PLANS PROVIDED BY

COLLECTIVELY BARGAINED ARRANGEMENTS, HEALTH CARE PLANS

PROVIDED FOR EMPLOYEES OF THE UNITED STATES GOVERNMENT

AND THEIR DEPENDENTS, PART A OR PART B OF TITLE XVIII OF THE

SOCIAL SECURITY ACT, TITLE XIX OF THE SOCIAL SECURITY ACT,

MEDICAL CARE PROGRAMS OF THE INDIAN HEALTH SERVICE OR OF A

TRIBAL ORGANIZATION AND POLICIES ISSUED BY THE HEALTH

REINSURANCE ORGANIZATION;

R- 39A REV 1/77

STATE OF CONNECTICUT

Page 4 of 6 Pages

REGULATION

OF

INSURANCE DEPARTMENT

________________________________________

NAME OF AGENCY

________________________________________

SECTION ______

[(l)] (2) a provision offsetting the amount paid for medical expenses against any amount

payable under the bodily injury liability coverage of the policy may be included;

[(2)] (3) a provision for subrogation or a lien upon any recovery from a person legally

responsible for the injury may be included; [and]

[(3)] (4) the insurance may be written subject to a deductible stated as a dollar amount

[or the amount of other applicable insurance, or government or private indemnity paid or

payable on account of the injury;] provided an appropriate reduction in the rate shall be

made in the premium structure[.]; AND

(5)IN NO EVENT SHALL THE TOTAL AMOUNT OF RECOVERY FOR

MEDICAL EXPENSES FROM ALL SOURCES EXCEED THE TOTAL OF THE

INSURED’S MEDICAL EXPENSES FOR BODILY INJURY SUSTAINED WHILE

OCCUPYING A MOTOR VEHICLE.

[(d) Subsections (a) through (c) above shall not apply to private passenger motor

vehicles.]

Sec. 38a-334-8. General provisions

(a) Policy period: Territory. Policies shall provide coverage during the period the policy

is in effect and within the territorial limits of the United States and Canada or, as regards

private passenger automobiles only, between ports thereof.

G A MOTOR VEHICLE.

[(d) Subsections (a) through (c) above shall not apply to private passenger motor

vehicles.]

Sec. 38a-334-8. General provisions

(a) Policy period: Territory. Policies shall provide coverage during the period the policy

is in effect and within the territorial limits of the United States and Canada or, as regards

private passenger automobiles only, between ports thereof.

(b) Conditions. (1) A policy may contain in substance the following conditions:

(A) A provision relating to the computation and payment of premium;

(B) a provision that written notice of accident, claim or suit is required; and that copies

of any demand or legal process against the insured, the insurer or any third party shall be

forwarded immediately to the insurer;

(C) a provision requiring a claimant to benefits under [basic reparations benefits,]

medical payments or protection against uninsured AND UNDERINSURED motorists

coverage to submit to the insurer written proof of claim, and requiring the injured person

to submit to physical examinations and to furnish medical reports and records;

(D) a provision requiring the insured to assist and cooperate with the insurer;

(E) a provision that no action shall lie against the insurer until all the terms of the policy

have been complied with or, under the liability coverages, until the amount of the

insured’s obligation to pay shall have been finally determined either by judgment against

the insured after actual trial or by written agreement of the insured, the claimant and the ’

insurer, and a further provision that the insurer shall not be joined or impleaded in any 1 ’

action against the insured brought to determine his liability;

(F) a provision that the insurer’s consent is necessary to any assignment of interest under

the policy;

(G) a provision that the insurer issues the policy in reliance upon the declarations of the

named insured and that the policy contains all agreements between the named insured and

the insurer and any of its agents r

n any 1 ’

action against the insured brought to determine his liability;

(F) a provision that the insurer’s consent is necessary to any assignment of interest under

the policy;

(G) a provision that the insurer issues the policy in reliance upon the declarations of the

named insured and that the policy contains all agreements between the named insured and

the insurer and any of its agents relating to the insurance;

(H) a provision relating to the insurer’s own method of doing business.

(2) A policy must contain in substance the following conditions:

(A) a provision that bankruptcy or insolvency of the insured shall not relieve the insurer

of its obligations under the policy;

(B) a provision that the terms of the policy may not be waived or changed except as

stated in the policy;

(C) a provision in a policy AS defined in SECTION 38a-341 of the [general]

GENERAL [statutes] STATUTES limiting the company’s rights to terminate insurance

on private passenger motor vehicles as provided under SECTION 38a-323, AND

SECTIONS 38a-341 through 38a-346 of the [general] GENERAL [statutes] STATUTES

[as amended by Public Act 86-156].

R- 39A REV 1/77

STATE OF CONNECTICUT

Page 5 _ of 6 _ Pages

REGULATION

OF

INSURANCE DEPARTMENT

________________________________________

NAME OF AGENCY

________________________________________

SECTION ______

Sec. 38a-334-9. [Effective date]STATUTORY REFERENCES

[Sections 38a-334-1 to 38a-334-8, inclusive, shall take effect as amended on June 1,

1986.] ALL REFERENCES IN SECTIONS 38a-334-1 to 38a-334-8, INCLUSIVE, OF

THE REGULATIONS OF CONNECTICUT STATE AGENCIES TO SECTIONS OF

THE GENERAL STATUTES OF CONNECTICUT SHALL MEAN AND INCLUDE

THE STATUTORY PROVISION IN EFFECT ON THE DATE THESE

REGULATIONS BECOME EFFECTIVE AND AS THE STATUTORY PROVISION

MAY BE THEREAFTER AMENDED FROM TIME TO TIME.

Sec. 5. The Regulations of Connecticut State Agencies are amended by adding a new

section 3 8a-334- 10 as follows:

(NEW) Sec. 38a-334-10. Effective date

AGENCIES TO SECTIONS OF

THE GENERAL STATUTES OF CONNECTICUT SHALL MEAN AND INCLUDE

THE STATUTORY PROVISION IN EFFECT ON THE DATE THESE

REGULATIONS BECOME EFFECTIVE AND AS THE STATUTORY PROVISION

MAY BE THEREAFTER AMENDED FROM TIME TO TIME.

Sec. 5. The Regulations of Connecticut State Agencies are amended by adding a new

section 3 8a-334- 10 as follows:

(NEW) Sec. 38a-334-10. Effective date.

Sections 1 through 5, inclusive, shall take effect November 1,2000.

Statement of Purpose: To amend the current regulations to eliminate the problem where

an insured with both health coverage and medical payments coverage is unable to recover

because both policies claim to be excess; to conform the regulation to changes in state

statutes and to reconfigure certain sections to be more coherent.

Minprovl07.doc

•

~now., th'lt the Foregoing:

IB] R-:gvlations

O Emergency Regulations

Are:

,

□Adopted

{iJ Am:nded as liereinabove s roted

Br th'? -:iforesoid agen:y pursuant to:

0 Section 38a-3""'3""'4i.--_of the General Statute~.

ORepeoled

~

'

0 Sl'ction _______ of thePiGenerol Statutes, os oml'!ndl'!d by Public Act No. _______ of the __ ....-_Public Acts.

□Public Act No. _______ of the Public Acts.

AF,~, publication in the Connecticut Low Journal on December 7,

1922_, of the no•i~~ -== •½e proposal to:

OA.Jopt

OAmend

ORepeol

such regulations

(If applicable):

0

And the holding of on advertised public hearing on _________ day of ________ 19 __

WHEREFORE, the foregoing regulations ore hereby:

□Adopted

D Amended as .~ereinobove slated

_ _,-E'Hective:

OWhen filed with the Secretary of the Stole.

(OR)

0 The __

l_s_t __ doy_ of November

In Witne~s ','(hereof:

..

,y,.J l,y, ,h., Allorney Oene,al as lo legal suHlclenc:y

;;,•acc:o,dan,:11 wilh Sec, -1-16?, OS om.,nded, C.G.S,:

... ...

..

.

-□Approve~

0 Disapproved

QRepeoled

□Disapproved in part, (Indicate Secti~n Numbers disapproved only)

0 Rejl'!cted without prejudice.

3y '

ective:

OWhen filed with the Secretary of the Stole.

(OR)

0 The __

l_s_t __ doy_ of November

In Witne~s ','(hereof:

..

,y,.J l,y, ,h., Allorney Oene,al as lo legal suHlclenc:y

;;,•acc:o,dan,:11 wilh Sec, -1-16?, OS om.,nded, C.G.S,:

... ...

..

.

-□Approve~

0 Disapproved

QRepeoled

□Disapproved in part, (Indicate Secti~n Numbers disapproved only)

0 Rejl'!cted without prejudice.

3y '. th-, L ~gi, lotlve Regulotlon Review CommitleA lri occordonc"

wilh Sec, 4-170, os omende:I, or/the General Statutes,

j'-... o Ct'rii(ied c:opiu rec.,Jv,.J :md rited, ond onil such copy rorwo,ded

O t

;~ oecordonee with Secll~n -1-17~'., .:is omendi!d, or lht- General Statutes.

DATE

SIG'IEO (~-,cr~lary of lhe Stnlll,J

IHSTRUCTIOHS

.,.

BY

Tr-:-:.!!:. =""-Y AUTHoiiiffo·-

nce CommissionP.r

I. -r11e copy or all regulations For l:id9pflon, ·amendment or repe~I/ e,xcept emergency regulations, must=~ ;:·esented 1to the Attorn,.

Gen-:ral for his determinatio_n of'legaf suHlciency. Sectlon14-1169 1or the General Statutes.

2.: Seventeen :?pie's of all regol,:,ti-:>ns for adoption, omr.nclmcnt or repeal, except emergency regulaticns, ,..,.s• !:e presented lo ti,,

, stcnding Legislative Regul-,tior, Review Committee for its approval. Section 4-170 or the G_eneral St::i~·.:•~s.

3. E-:::1, r'!'g·•JloHon must be in the form intenr.led for publication and rnust include t_he appropriate t!!gulati=ri sect:on numbl!r a,,~

section hedi,19. S!.':tion ~-172 of the General Statutes.

I. lnr.lic:,I'! hy "(ME'.'I)" in h,,,:-:1:n·g H new regulr,llon. Amended regulations must cont.din new language in :::iolt:I letters i;,nd

dP.IP.red language in brackets. Section 4-170 o( tl,e General Slolt.Jtes,

,,

I

RECEIVED

AUG 1 8 2000

RECORDS & LEGISLATIVE SERVICES

SECRETARY OF THE STATE