The Connecticut legislature has proposed a new bill, SB-763, An Act Concerning the Connecticut Unfair Insurance Practices Act, which could potentially enable Connecticut consumers to sue insurers for unfair claim practices. Click here for a copy of the proposed bill.

The Connecticut Trial Lawyers Association and state Attorney General Richard Blumenthal have been lobbying for SB-763 that would provide broader relief to accident victims or third party claimants by allowing them to sue a wrongdoer’s insurance company under the Connecticut Unfair Insurance Practices Act ("CUIPA"). Currently, only the Connecticut insurance commissioner and attorney general are able to sue under CUIPA.

SB-763 would also remove from the definition of "violation" the requirement that the plaintiff prove that an insurer commits the wrongful act with such frequency as to indicate a general business practice. According to news reports, Robert I. Reardon Jr., president of the Reardon Law Firm in New London, Connecticut and a past president of the trial lawyer’s association posits that the proposed legislation is in response to consumers feeling mistreated by corporations and was quoted as stating that consumers “are very tired of big business treating them poorly. People want to be able to assert their rights.” Likewise, Attorney General Blumenthal supplied support for SB-763 with his statement that current law favors the industry and “raises the cost of seeking redress and discourages anyone from seeking relief.”

Meanwhile, Susan Giacalone, counsel for the Insurance Association of Connecticut, remarked that, “SB-763 is turning the CUIPA statute on its head to the detriment of consumers. It opens up the floodgates to litigation.” With respect to SB-763 allowing of punitive as well as actual damages, Paul Jetrauet, NAMIC’s Northeast state affairs manager stated that, “this [bill] would inevitably result in upward pressure on the cost of insurance, at a time when individuals and businesses are already struggling with existing expenses.”

SB-763 is currently being considered by the state Legislative Insurance and Real Estate Committee.