Insights

Bill Goddard wrote an article, "Connecticut Offers More Options for Insurers Exiting Lines of Business," for Business Insurance. The article discusses the new Connecticut law which allows domestic insurers to divide into two or more insurers. Public Act 17-2, An Act Authorizing Domestic Insurers to Divide, establishes an entirely new procedure, effectively a demerger, which creates multiple distinct legal successors to the originating insurer. Goddard writes, "The act is modeled after similar statutes in Pennsylvania and Arizona. However, statutes in the other states apply to general corporate matters, whereas the new Connecticut law is dedicated to insurance." When these transactions are proposed, it will be up to the courts to weigh-in if there are objectors, Goddard adds. "But for now, a powerful new tool for corporate efficiency may be added to the insurance tool kit."