Connecticut lawmakers recently passed a new measure, proposing to pass on the cost of arbitration hearings for auto insurance claims to insurance companies. Currently, the state’s insurance department bears the cost of approximately $3,075 for each arbitration. However, the new bill stipulates that if the claimant wins the case and the arbitration award amount is higher than the insurance company’s previous settlement offer, the insurance company must fully compensate the state government for this expense. State insurance Commissioner Andrew Mais said that this move is aimed at encouraging insurance companies to settle early and reduce the need for arbitration, thereby saving time for both consumers and insurance companies.
According to the state government’s analysis, after the implementation of this measure, it is expected to recover approximately 35,000 US dollars for the state’s finances in the fiscal year 2026, and no more than 50,000 US dollars in subsequent years. Although the amount is only a fraction of the insurance department’s annual budget of 35 million US dollars, the insurance company group still raised objections, pointing out that they have paid the department’s operating costs through assessment fees and arguing that arbitration fees should be included in the existing budget system. Institutions such as the Property and Casualty Insurance Association of the United States have emphasized that it is not yet clear whether similar separate charging models exist in other states.
The bill has been submitted to Governor Ned Lamont for review. If it is not rejected within 15 days, it will automatically come into effect on October 1, 2025. The current arbitration fee includes a non-refundable management fee of $925 and an arbitrator fee of $1,350. An additional $800 is required when the case enters the final stage, bringing the total cost to $3,075. Supporters believe that the new regulations will optimize the claim process, while opponents question its necessity and suggest covering the relevant expenditures through budget adjustments.
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