(a) A captive insurance company shall be established by the incorporators described in this subsection, as a not-for-profit entity, in accordance with the provisions of sections 38a-91aa to 38a-91tt, inclusive, for the public purpose of providing assistance to owners of residential buildings with concrete foundations that have deteriorated due to the presence of pyrrhotite, where such assistance ensures that any such foundation will be repaired or replaced and where such assistance is intended to provide any such owner with a structurally sound concrete foundation by arranging and approving a financial package that achieves full repair or replacement of such foundation with the lowest possible amount of borrowed funds. There shall be five incorporators of such captive insurance company, who shall be appointed in the following manner: One by the Governor, one by the speaker, one by the minority leader of the House of Representatives, one by the president pro tempore and one by the Republican president pro tempore of the Senate. The incorporators, in their discretion, may appoint other individuals to form an organizing committee. The speaker, the minority leader of the House of Representatives, the president pro tempore and the Republican president pro tempore of the Senate shall each appoint a member of the General Assembly as a nonvoting, ex-officio member of the organizing committee. Thirty days after October 31, 2017, if no appointments have been made by the speaker and minority leader of the House of Representatives or by the president pro tempore and Republican president pro tempore of the Senate, the Governor shall make such appointments in order to fulfill the obligations of this section.

(b) In addition to any other requirements imposed by law applicable to captive insurance companies, the captive insurance company established pursuant to this section shall:

(1) Upon request of the joint standing committees of the General Assembly having cognizance of matters relating to planning and development, public safety and housing, or the Governor, make recommendations regarding the expansion of eligibility for financial assistance pursuant to this section and modifications to improve the efficiency and operation of the captive insurance company in order to serve its public purpose;

(2) Establish a board of directors who shall serve in a volunteer capacity. The membership of the board shall include, but need not be limited to, a real estate agent or broker, two owners of residential buildings who have concrete foundations that have deteriorated due to the presence of pyrrhotite, a chief executive or such chief executive’s designee of a municipality in which residential buildings with concrete foundations that have deteriorated due to the presence of pyrrhotite are located, an individual with professional investment experience and currently registered as an investment adviser pursuant to title 36b, the executive directors of the Capitol Region Council of Governments and the Eastern Region Council of Governments or such executive directors’ designees and representatives from the insurance and banking industries, who shall not have professional relationships with any bank or insurance company that has a financial interest in residential buildings subject to the provisions of this section and sections 7-374b, 8-441, 8-442, 8-443, 8-444, subparagraph (B) of subdivision (20) of subsection (a) of section 12-701 and section 29-265f. The speaker, the minority leader of the House of Representatives, the president pro tempore of the Senate and the Senate Republican president pro tempore shall each appoint a member of the General Assembly as a nonvoting, ex-officio member of the board of directors;

(3) Develop eligibility requirements and underwriting guidelines for financial assistance for repair or replacement of concrete foundations. Such requirements and guidelines shall, not later than thirty days prior to their adoption, amendment or modification, be published on a public Internet web site maintained by the captive insurance company;

(4) Develop in coordination with the Department of Housing, Connecticut Housing Finance Authority and participating lenders in the Collapsing Foundations Credit Enhancements Program, established pursuant to section 8-442, a single, unified application for owners of residential buildings to apply for all financial assistance available pursuant to this section and sections 8-442 and 8-443;

(5) Provide financial assistance to such owners of residential buildings for the repair or replacement of concrete foundations that have deteriorated due to the presence of pyrrhotite, including, but not limited to, financial reimbursement to homeowners who have had such repair or replacement performed prior to October 31, 2017;

(6) Assist such owners of residential buildings to obtain additional financing necessary to fully fund the repair or replacement of concrete foundations that have deteriorated due to the presence of pyrrhotite;

(7) Approve contractors or other vendors for eligibility to perform foundation repairs or replacements on behalf of claimants;

(8) Disburse such financial assistance to approved contractors or other vendors on behalf of claimants;

(9) Ensure that the financial assistance is used solely for costs of repairing and replacing concrete foundations that have deteriorated due to the presence of pyrrhotite;

(10) Require the disclosure of the amount of all financial compensation received by an owner of such a residential building, if any, arising out of a claim for coverage under the property coverage provisions of the homeowners policy for foundation deterioration due to the presence of pyrrhotite and ensure that such amount is considered when determining the amount of financial assistance offered to such owner;

(11) When appropriate, apply for, qualify for and receive any federal funds made available under any federal act, for assistance to owners of residential buildings and residential condominium units having concrete foundations that have deteriorated due to the presence of pyrrhotite. To the extent permissible under federal law, all such federal funds shall be deposited into the Crumbling Foundations Assistance Fund established pursuant to section 8-441; and

(12) Enter into agreements, as necessary, with the Connecticut Housing Finance Authority and any participating lender, as defined in section 8-442, to develop and implement additional loan programs or financial products to assist such owners to repair or replace concrete foundations that have deteriorated due to the presence of pyrrhotite, while employing terms and conditions that are preferable to the open market.

(c) Such captive insurance company may, subject to the provisions of this section, do all things necessary and desirable in its discretion to accomplish its purposes, including hiring employees and contracting for administrative or operational services, and entering into agreements with the Connecticut Housing Finance Authority created pursuant to section 8-244 and any participating lender, as defined in section 8-442, to develop and implement additional loan programs or financial products that will assist owners of residential buildings to repair or replace concrete foundations that have deteriorated due to the presence of pyrrhotite on terms and conditions that are preferable to the open market. Not more than ten per cent of all moneys allocated or made available to the captive insurance company in any calendar year shall be used for administrative or operational costs.

(d) Employees and agents of the captive insurance company shall not be deemed state employees, except that employees and directors shall be subject to the provisions of sections 1-84, 1-84a, 1-84b, 1-85 and 1-86. Any agent, consultant or contractor of the captive insurance company shall be subject to the provisions of sections 1-86e and 1-101nn. The Office of State Ethics shall have the authority to enforce the provisions of this subsection.

(e) Notwithstanding sections 38a-11 and 38a-91bb, the captive insurance company shall not be required to pay a license fee for the first year of licensure or a renewal fee for any year thereafter, as set forth in said sections.

(f) In addition to any report required to be filed by not-for-profit entities generally under regulations of the Internal Revenue Service, the captive insurance company shall submit quarterly reports to the joint standing committees of the General Assembly having cognizance of matters relating to insurance, finance, planning and development, housing and public safety on its operation and financial condition. Such quarterly reports shall include, but need not be limited to, information concerning: (1) Moneys allocated or made available to it pursuant to this section, (2) total financial assistance and financial assistance, by town, provided to owners of such residential buildings pursuant to this section, (3) administrative and operational expenditures, (4) the total number and number, by town, of applications for assistance received during the quarter and to date, (5) the total number and number, by town, of applications for assistance granted during the quarter and to date, (6) the average time to process applications, and (7) the total number and number, by town, of applications pending and amount of such claims.

(g) The joint standing committees of the General Assembly having cognizance of matters relating to insurance, finance, planning and development, housing and public safety shall, not less than annually, hold a joint public hearing on the operation and financial condition of the captive insurance company.

(h) A decision on an application for assistance pursuant to this section shall be made in writing and provided to the homeowner and shall include the information relied upon and the basis for such decision, including the relevant eligibility and underwriting criteria. An owner of such a residential building may request a review of any decision by the captive insurance company relating to such homeowner not later than thirty days after the decision. A final determination on such a request for review shall be made in writing and provided to the homeowner not later than thirty days after receipt of the homeowner’s request, unless an extension is agreed to by the homeowner. The final determination shall be subject to approval by the board of directors. There shall be no right to appeal such final determination.

(i) The captive insurance company shall continue until June 30, 2022, or until its existence is terminated by law. Upon the termination of the existence of the company, all its right and properties shall pass to and be vested in the state of Connecticut.

(June Sp. Sess. P.A. 17-2, S. 336.)

History: June Sp. Sess. P.A. 17-2 effective October 31, 2017.