What type of insurance companies are prohibited from referencing CTHLIGA in sales?

Admitted insurance companies are those that have been licensed and authorized by the state of Connecticut to operate. These companies are subject to specific state regulations, including the provisions that govern the Connecticut Health Insurance Guaranty Association (CTHLIGA).

The prohibition on referencing CTHLIGA in sales is important because the purpose of CTHLIGA is to protect policyholders in case an insurance company becomes insolvent. Admitted insurance companies must adhere to guidelines that prevent them from implying that coverage provided by CTHLIGA can serve as a substitute for the financial strength of their own policies. This means they cannot use the backing of CTHLIGA as a marketing tool to enhance their appeal or suggest added security, as it might mislead potential policyholders about the stability or guarantees of their insurance products.

By focusing on this specific type of insurance company, the regulation aims to maintain clarity and integrity in the insurance market, thereby protecting consumers from potential misinformation regarding the safety and security of their insurance policies. Non-admitted companies, unlike admitted companies, often operate without the same level of state oversight and have different implications regarding consumer protection.