Connecticut Property Study Guide

Connecticut’s property law has one structural idea running through it: the market is presumed to work, and the regulator has to prove otherwise before it takes control of rates. Learn that presumption and the machinery hanging off it — what triggers prior approval, what never escapes it, and where a risk goes when nobody will write it — and the Connecticut-specific half of the Property exam largely falls out.

The residual market, and its real name

Connecticut’s insurer of last resort for property is the Connecticut Property Insurance Placement Facility, which trades as the CT FAIR Plan. Its statutory basis is CGS § 38a-328.

The naming is worth being precise about, because the exam outline names the entity and the statute does not. Section 38a-328 directs the Commissioner to adopt a “fire, liability and allied lines underwriting facility” — it never uses the words “FAIR Plan” or “Placement Facility.” Both names come from the Facility’s own materials. A candidate who learned “the Connecticut FAIR Plan” as the formal title has the trade name, not the legal one.

The Facility writes basic property insurance for applicants who cannot obtain it through the normal market, where the property meets reasonable underwriting standards. Its liability coverage is limited to forms available in the voluntary market as of 1 October 1978 for one-, two-, three- family and seasonal dwellings.

Rate regulation — a presumption, not a category

Most states get described flatly as “file-and-use” or “prior approval.” Connecticut is neither, and the exam tests the mechanism.

CGS § 38a-687 sets the default: “A competitive market is presumed to exist unless the commissioner, after hearing, determines that a reasonable degree of competition does not exist.” Note the two conditions — it takes a hearing, and the resulting finding expires no later than three years after issuance unless renewed after another hearing.

While the presumption holds, CGS § 38a-676 runs a file-and-use system: rates go to the Commissioner for information before their effective date. And § 38a-686 supplies the standard — rates may not be excessive, inadequate or unfairly discriminatory, with the pointed addition that a rate in a competitive market is not excessive.

When the presumption is rebutted, § 38a-688 takes over: rates must sit on file for a 30-day waiting period, extendable by 30 more on written notice.

Catastrophe exposure and hurricane deductibles

Connecticut’s Long Island Sound shoreline is the driver. Hurricane and coastal windstorm are the dominant catastrophe perils, with nor’easters and winter storms behind them, and the exposure is what gives Connecticut its hurricane-deductible rules under CGS § 38a-316a.

The exam outline also names the Standard Fire Policy, flood insurance and inland marine as property-only Connecticut subjects — a reminder that only about seven of your scored Connecticut-Specific questions are property-specific. The other eighteen come from the all-lines statutory block shared with the Life and Casualty exams.

Surplus lines — the door out of the admitted market

When no admitted insurer will write the risk, the surplus lines market is the alternative — and Connecticut gates it two ways.

First, the prerequisite: a surplus lines broker must hold an active Connecticut property and casualty producer license (CGS § 38a-741 et seq.). You cannot arrive at surplus lines without the producer license underneath it. There is no separate pre-licensing requirement for the credential, but there is a short exam.

Second, the diligent effort: § 38a-741 conditions a placement on a genuine effort to place the risk in the admitted market first. This is the legal predicate for the placement being lawful, not a file note added afterwards.

And the consequence the exam cares about: a surplus lines insurer is not admitted, so its policyholders have no guaranty association protection. That single fact is the reason the diligent effort exists.