What's Happening?
The Connecticut Insurance Department (CID) is actively seeking a consultant to explore solutions for improving the liability insurance market for nonprofit organizations within the state. This initiative follows a report from a working group comprising
legislators, brokers, insurers, regulators, and nonprofit leaders, which highlighted the increasing costs and decreasing availability of liability and property/casualty insurance for nonprofits. The working group suggested several strategies, including the potential establishment of a state-run captive or pooling mechanism, and the possibility for well-funded nonprofits to self-insure for motor vehicle risks. The Connecticut General Assembly has allocated $200,000 for this consultancy, with proposals due by July 28, 2026. The selected consultant is expected to deliver a final report by February 1, 2027.
Why It's Important?
This initiative is crucial as it addresses the growing insurance challenges faced by nonprofit organizations, particularly those serving high-risk populations such as social services, behavioral health, and foster care. Rising claim severity and reduced insurer capacity have made it increasingly difficult for these organizations to secure affordable and adequate coverage. The study aims to provide data-driven insights to inform policymakers, potentially leading to structural changes that could stabilize the insurance market for nonprofits. This could ensure that these organizations continue to provide essential services to communities across Connecticut without the financial burden of prohibitive insurance costs.
What's Next?
The next steps involve the submission and evaluation of proposals from potential consultants, with the deadline set for July 28, 2026. Once a consultant is selected, they will conduct a comprehensive study and present their findings by February 1, 2027. The outcomes of this study could lead to significant policy changes, including the establishment of new insurance mechanisms or reforms in existing practices to better support the nonprofit sector. Stakeholders, including nonprofit leaders and insurance providers, will likely be involved in discussions to implement the recommended solutions.
