The Connecticut Insurance Department (CID) assessed $855,670 in penalties against surplus lines brokers in fiscal year 2026, up from $567,209 the prior year, as part of a broader enforcement effort that also saw 25 producer licenses revoked and 26 individual fines issued against licensed professionals, according to the department's annual results.
The penalty jump of roughly 51% in the surplus lines category comes as the excess and surplus (E&S) lines market continues its multiyear expansion. Surplus lines premium reached $143.3 billion in 2025, a 10.4% increase that outpaced the broader US property and casualty market's 5.1% growth, according to the Wholesale & Specialty Insurance Association (WSIA).
Admitted carriers have been tightening underwriting appetite on property, commercial auto, and high-hazard casualty, pushing more business into E&S channels. The CID's enforcement numbers suggest that regulatory scrutiny of surplus lines conduct is keeping pace with that growth.
Beyond the surplus lines figures, the CID's Investigations Unit, which handles allegations of misconduct involving individual licensees, issued 26 fines totaling $51,250, placed six producer licenses on probation, and accepted the administrative surrender or suspension of two additional licenses during the fiscal year. The Market Conduct Unit separately completed 67 examinations of insurance companies and collected approximately $1.65 million in fines from regulated entities, compared with 69 examinations and $1.7 million in fines in FY2025.
In total, the department generated more than $138.6 million for Connecticut's General Fund during the fiscal year, including approximately $41 million from biennial producer appointment fees and $2.6 million in fines and penalties from regulated entities. The CID's overall revenue figure represents a substantial rise from the $95 million collected in FY2025. The department is funded through the Connecticut Insurance Fund, which supports CID operations through assessments on domestic insurance companies and allows it to operate independently of the state's General Fund.
"Strong regulatory oversight protects consumers and helps maintain a fair and competitive insurance marketplace," said Kurt Swan, director of the market conduct, fraud, and licensing division. "These results reflect the Department's work to ensure companies and professionals meet their obligations under Connecticut law."
The department's Consumer Affairs Division handled 7,301 consumer complaints and inquiries during the year, up from 4,784 complaint investigations and 2,074 assistance requests in FY2025. The division also helped recover more than $6.4 million for Connecticut policyholders through dispute resolution.
The increase in complaint volume is itself a data point the department uses to inform market conduct exam priorities. Trends in consumer complaints routinely trigger further investigation by the market conduct unit, and a pattern of complaints in a given line or against a given carrier can prompt a targeted examination.
The Life Insurance Policy Locator, a free tool developed by the National Association of Insurance Commissioners (NAIC) and administered through the CID, matched more than $35 million in reported life insurance coverage to 1,556 Connecticut consumers during the year, up from $21.4 million matched to consumers in FY2025.
Since its launch in 2017, the tool has helped nearly 8,000 Connecticut consumers find lost life insurance policies and annuity contracts, with more than $140 million in benefits identified cumulatively. The sharp increase in matched coverage this year reflects both growing consumer awareness of the tool and the volume of unclaimed life insurance benefits that continue to go undetected without it.
As of the close of fiscal 2026, the CID had 328,249 resident and non-resident insurance professionals licensed in Connecticut, up from 318,229 at the end of FY2025. Commissioner Josh Hershman, who was confirmed as Connecticut's 34th insurance commissioner earlier this year, framed the results in terms of the department's core consumer mandate.
"These results show the impact of that work, from resolving individual consumer issues to holding insurers and licensed professionals accountable and supporting a stable marketplace for Connecticut," Hershman said.
