Edible Arrangements, Subway Take Steps Forward and Back in Roller-Coaster Economy

Two of Connecticut’s leading food franchise success stories - Edible Arrangements and Subway – have both been in the news in recent days, seemingly moving in opposite directions.  Subway, for the first time in memory, is reducing the number of franchises across the country, while Edible Arrangements is in the midst of extending its brand, as its founder has taken back control of the equity in the business. Subway dropped 359 U.S. locations in 2016, the first time that Subway has had a net reduction. The store count dropped 1.3 percent to 26,744 from 27,103, but Subway remains the nation’s most ubiquitous eatery. (Behind only McDonald’s in sales.) Sales at Subway franchises fell 1.7 percent last year to about $11.3 billion, according to published reports. Subway is still growing internationally, with sales outside the U.S. increasing 3.7 percent to $5.8 billion last year, as the company continued to open locations.

Subway was founded about 52 years ago by Fred DeLuca and Peter Buck in Bridgeport. DeLuca died in 2015, leaving the company in the hands of his younger sister, Suzanne Greco, who became chief executive officer. The chain’s restaurants are entirely owned by franchisees.

Since its founding in 1999 in East Haven, Edible Arrangements has grown to more than 1,300 locations worldwide. Tariq Farid developed a "healthy obsession with fruit," and used his experience in the floral industry insight to develop a new business concept: fruit bouquets. Edible Arrangements began franchising in 2001, according to the company website.

Farid has completed a buyback of equity of the company which had been held by Greenwich private equity firm L Catterton.  The company has entered into a strategic partnership with L Catterton in June of 2012. Farid said the relationship provided assistance during a key growth phase for the brand, a time in which Edible Arrangements expanded into offering fresh fruit smoothies, froyo fruit blends, chocolates and more.

“The timing was right to take back full ownership so that I could be more fully engaged in building the future of the brand with our franchisees," Farid said, adding that "Edible Arrangements finds itself well-positioned for a future that includes exciting new opportunities for our franchises and the brand.”

Edible Arrangements has launched a system-wide conversion of traditional stores to a "whole-store" experience in the Edible To Go platform, featuring fresh fruit smoothies, froyo fruit blends and other fresh fruit treats. The company is coming off a year in which it registered a 27 percent increase over the previous year in both the number of new store openings and signings of new franchise agreements. It was named in Entrepreneur's Top 40 of "Fastest Growing Franchises" and "America's Top Global Franchises" as well as being included among the "Inc. 5000" list of the fastest growing privately-held companies.

"This is an exciting time to be a part of Edible Arrangements," Farid said. "At heart we are really a family of small businesses that have enjoyed incredible growth through a shared passion and willingness to work together towards common goals. Now we can focus all our energy on working together on the next evolution of the Edible Arrangements brand."

Edible Arrangements is headquartered in Wallingford; Subway is headquartered in Milford.

Some of Most Valuable Global Brands Are Connecticut-Based Businesses

Connecticut remains ranked among the top 10 states for corporate brands, according to a new study.  London-based Brand Finance has calculated Connecticut as being home to 20 of the 500 most valuable brands in the nation.  Connecticut ranked seventh. The state also was strongly represented among the 500 most valuable brands in the world, with a half-dozen earning a slot in the global rankings.

The Spectrum brand of Stamford-based Charter Communications is now the most valuable among Connecticut-based companies, at number 83 in the rankings of most valuable global brands, and number 43 among U.S. companies.

Health insurance giant Aetna, which has flirted with merger and departure in the past year but remains headquartered in Hartford, is number 166 on the list of most valuable global brands, moving up from number 188 on last year’s list.  Among U.S.-based brands, Aetna ranked at number 70.

Booking.com, part of The Priceline Group, came in at number 274 on the global rankings, down from number 201 a year ago.

Bloomfield-based CIGNA, which also had a merger thwarted in recent months, was ranked number 305, jumping more than 100 positions on the list, from number 439 last year.

ESPN, with world headquarters in Bristol, is at number 381 on the global list, down from 356 a year ago.

Norwalk-based Priceline was ranked number 386, down from 357 last year.  Xerox, also based in Norwalk, was just behind at number 389, up from number 396 a year ago.

Subway, which recently announced the closure of more than 300 U.S. restaurants in 2016, was ranked number 464 on the list, down from number 417 in the previous annual ranking.

The top ranked global brands were Google, Apple (which switched places from a year ago), Amazon.com, AT&T, Microsoft, Verizon, Walmart, Facebook, Wells Fargo, McDonalds, IBM and Boston-based GE. Six years after it last held the title in 2011, Google is now the world’s most valuable brand with a value of US $109 billion, according to Brand Finance.

NBC, which is not headquartered in Connecticut but has operations in Stamford, was ranked number 93 on the list of the top global brands.  Xfinity, also part of the Philadelphia-based Comcast corporate family, is ranked number 37.

Also earning a spot on the U.S.-based top 500 list are Sheraton (part of Stamford-based Starwood), Carrier (United Technologies), Frontier, United Technologies, Otis (United Technologies), The Hartford, Pratt & Whitney, Praxair, Harman International, and Pitney Bowes.

On the industry-specific list of the most valuable global toy brands, topping the list is Lego.  The company, based in Denmark, has operations in Connecticut.  Lego was also named the world’s most powerful brand, along with google, Nike, VISA, Disney, NBC, PWC, Johnson & Johnson and McKinsey & Company. Lego scores highly on a wide variety of metrics including familiarity, loyalty, promotion, marketing investment, staff satisfaction and corporate reputation.

Financial accounting and reporting standards requires a clear definition of what intellectual property is included in the definition of ‘brand’, Brand Finance points out.  The website defines brand as the “Trademark and associated IP including the word mark and trademark iconography”.

Most Valuable Brands of Connecticut Based Companies (Ranking on list of US Companies) – Spectrum (43), Aetna (70), Booking.com (108), CIGNA (126), ESPN (162), priceline.com (164), Xerox (166), Sheraton (189), Subway (196), Carrier (203), Frontier (208), United Technologies (232), Otis (292), The Hartford (332), Pratt & Whitney (340), Praxair (351), Harman International (372), Pitney Bowes (471), and United Rentals (475).

CT's Economic Performance Ranks 49th in US; Economic Outlook Ranks 46th

Connecticut ranks 49^th in economic performance during the past decade and the state’s economic outlook ranks 46^th among the nation’s 50 states in the latest “Rich States, Poor States” analysis by the American Legislative Exchange Council. The look-back at the decade 2005-2015 shows Connecticut ranking near the bottom in the three components that make up the ALEC-Laffer State Economic Competitiveness Index performance numbers.  The state ranked 47^th in state gross domestic product and 44^th in non-farm payroll employment, both below the national average, and 43rd in absolute domestic migration, which increased for the third consecutive year.

Connecticut’s overall economic outlook ranking, 49^th in the nation, represents a drop from 47^th in each of the past two years, and 44^th and 34rd in the two previous years.  Back in 20120, Connecticut ranked 36^th.  The economic outlook includes more than a dozen categories.  Among them, Connecticut ranks highest in sales tax burden (12^th), remaining tax burden (16^th), and debt service as a share of tax revenue (20^th).

“Each of these factors is influenced directly by state lawmakers through the legislative process,” the report points out. The policy variables “have a proven impact on the migration of capital—both investment and human—into and out of states.”

In the 10^th annual edition of the competitive outlook index, the lead states in the ranking are Utah, Indiana, North Carolina, North Dakota, Tennessee, Florida, Wyoming, Arizona, Texas and Idaho.  The highest ranking New England states are New Hampshire (number 18) and Massachusetts (number 25).  Joining Connecticut towards the bottom of the list are Rhode Island (number 36) and Vermont (number 49).

The Economic Performance Rankings (2005-2015) placed Texas, North Dakota and Washington State atop the list, followed by Utah, Colorado, Oklahoma, Oregon, South Dakota, North Carolina, and Montana.  Massachusetts was the highest ranked New England state, at number 18.

“Generally speaking,” the report indicated, “states that spend less—especially on income transfer programs, and states that tax less—particularly on productive activities such as working or investing—experience higher growth rates than states that tax and spend more.”

Home Ownership in CT: Not Best, But Not Worst

When it comes to home ownership, Connecticut is in the middle of the pack among the nation’s 50 states.  A new report ranks the state at number 30, in the lower echelons of the states.  And when the report, by financial website ValuePenguin, identified optimal factors when considering homeownership, Connecticut faired more poorly in some key factors. Connecticut ranked 48th in affordability, followed only by California (49) and Florida (50).  New Jersey and Massachusetts were just ahead of Connecticut.  The best states for affordability were South Dakota, Wyoming and Idaho.

Ten factors, organized into three key categories were used to measure and rank the states. The three key categories of focus were: Housing Market Strength, Residual Costs, and Living Factors.

Factors that weakened a state’s position included propensity for crime, weak housing markets, and heavy burdens of costs to maintain a home – for instance the likelihood of property damage caused by storms and other calamities. Attributes that strengthened a state’s position included homeownership affordability, low mortgage rates, and low risk of calamities.

The 10 worst states to be a homeowner, according to the report, are Louisiana, Mississippi, Tennessee, New Mexico, and Alabama.  The best states, according to the analysis, are Iowa, South Dakota, Wyoming, Nebraska, Maine and Minnesota.

In terms of livability, the top states in the nation are the New England states of New Hampshire, Maine, and Vermont.

Best Small Cities to Start A Business? CT Has Only One - Danbury - Among Top 700 in USA

Only one Connecticut community is ranked in the top 700 “best small cities to start a business” in a new survey of 1,260 cities across the nation.  Danbury, ranked at number 170, was the sole Connecticut city to earn a slot among the nation’s business-friendly small cities.  The next Connecticut municipalities on the list were Torrington, ranked at number 749, and East Hartford, at number 775. To determine the best small cities in which to start a business, the financial website WalletHub’s analysts compared across three key dimensions: 1) business environment, 2) access to resources and 3) business costs. Included were cities with a population of between 25,000 and 100,000 residents.

Among Connecticut municipalities, also reaching the top 1,000 nationwide were East Hartford (775), Bristol (836), Westport (861), West Hartford (876), and Shelton (919).

The Danbury city website highlights that “assets and resources include a pro-business climate, a creative, educated and talented workforce, an excellent education system, transportation advantages, a superior quality of life and much more.”  The website highlights a Danbury business each week.

"We analyzed 21 Connecticut cities and out of these, Danbury ranked the highest at 170," said WalletHub analyst Jill Gonzalez. "Although it offers a strong business environment, the city has high business costs overall. Most of the cities (14 of them) ranked below the 1,000 rank because these fail to offer a thriving business environment, with little access to the resources needed to start a business as well as restrictive labor costs."

The analysis evaluated each of the three key dimensions using 16 relevant metrics. Each metric was graded on a 100-point scale, with a score of 100 representing the most favorable conditions for launching a business. “ A city with a smaller population can offer a greater chance of success, depending on an entrepreneur’s type of business and personal preferences,” WalletHub points out.

The business environment category (50 points) includes average length of work week, average growth in number of small businesses, number of startups per capita, average revenue per business, average growth of business revenues and industry variety.  The access to resources category (25 points) includes financing accessibility, human resource availability, higher education assets, working age population growth and workforce educational attainment.  The business costs category includes office space affordability, labor costs, corporate taxes, and cost of living.

Also earning a slot on the “Best Small Cities to Start a Business” list were East Haven (1,004), Norwich (1,014), New London (1,015), New Britain (1,022), West Haven (1,026), Wethersfield (1,028), Newington (1,032), Milford (1,053), Stratford (1,060), Norwalk (1,063), Meriden (1,079), Middletown (1,117), Naugatuck (1,185) and Trumbull (1,239).

Data used to create the ranking were collected from the U.S. Census Bureau, Bureau of Labor Statistics, Federal Deposit Insurance Corporation, AreaVibes, Yelp, Indeed, U.S. News & World Report, Tax Foundation and LoopNet, according to WalletHub.

The top small cities for business in the U.S., according to the analysis, were Holland, MI; Carbondale, IL; Springville, UT; East Chicago, IN; Jefferson City, MO; Wilson, NC; Enid, OK, Rio Rancho, NM; Clearfield, UT and Cheyenne, WY.  The top ranked city in New England was East Providence, RI, ranked at number 38.

Accent on Exports in Connecticut; State Supports Business Outreach Overseas

If Connecticut were a country, it would be the sixth-most productive in the world, according to the state’s annual report by the department of Economic and Community Development. A critical building block for economic productivity is exports, and a look at the data reveals some surprisingly positive statistics. The backdrop is offered by more than 700 global companies that have subsidiaries here, employing more than 100,000 people, the Organization for International Investment points out.  The state’s convenient access to a variety of transportation options all provides access; there were 4.6 million tons of cargo carried on Connecticut rails in 2015, for example, and 11.4 million tons of freight shipped through Connecticut ports in 2013.

The U.S. Commercial Service and the Connecticut District Export Council have teamed up to create a series of events throughout Connecticut marking the annual Connecticut Export Week. These events will take place during  April 24-28. Connecticut Export Week 2017 will educate businesses on initiating and or expanding their global market. Officials describe Connecticut  Export Week 2017 as the only free event of it’s kind in the nation.  A series of free events and webinars will be offered at locations around the state.  Topics include exporting to China, expanding to new markets, initial market research, how to develop and maintain an export network, and export logistics.

“The ease of global travel and freight movement by rail and highway makes Connecticut a prime location for domestic and international trade,” the report points out.  Leading exports include: Aerospace/Transportation Equipment, Non-Electrical Machinery, Computers and Electronics, Chemicals, Electrical Equipment, Fabricated Metals Production, and Primary Metal Manufacturing.

The top three trading partners for the state are Germany (10.8% of state exports), Canada (10.7%), France 12.7%, United Arab Emirates (10.4%) and Mexico (8.7%).

The Connecticut Department of Economic and Community Development (DECD) recently called on companies to apply for grants of up to $7,000 for a wide range of export-related activities. Funding is from the Small Business Administration (SBA), which awarded Connecticut a $244,000 grant to help increase state exports and the number of small businesses that export. The Department has provided more than 350 grant awards allowing Connecticut companies to participate in Medica, the leading international medical device trade show in Dusseldorf, Germany; Hannover Messe, the world’s largest industrial technology trade show in Hannover, Germany; and the international air shows in Farnborough, U.K. and Paris. Additionally, companies can request reimbursement for trade shows, trade missions and other export activities specific to their industry.

“These investments are helping Connecticut’s small businesses compete in the global economy,” said DECD commissioner Catherine Smith. “For example, grants have been provided to companies to help offset the costs of attending the Farnborough Air Show, one of the most important air shows in the world. Without these grants many of the suppliers and component manufacturers in Connecticut’s supply chain could not attend, missing a key opportunity to establish important contacts and build relationships with the leading aerospace contractors across the globe.”

Hartford Baseball Being Broadcast in Spanish, English

The Hartford Yard Goats minor league baseball team has played the first of 70 home games at Dunkin' Donuts Park. The broadcasts, like the season, have begun with new homes. All 140 games will be broadcast on the Yard Goats Radio Network, which can also be heard on-line at yardgoats.com and on smart phone devices through the iheartradio app.  The Yard Goats will also have all home games broadcast in Spanish through a partnership with iHeartMedia and WPRX 1120AM. At part of the team’s outreach to the region’s Spanish-speaking population, pocket schedules in Spanish that will be distributed throughout the Greater Hartford area.  According to the 200 U.S. Census, 43 percent of Hartford's population is Hispanic.  

Jeff Dooley is set to begin his first season as the "Voice of the Yard Goats" after calling New Britain Rock Cats broadcasts for the past 18 years. He is the lead play-by-play announcer for all games on radio and television and hosts complete coverage of the Pre-game and Post Game shows for all games, home and road. His broadcasts can be heard on i-Heart Media Hartford affiliate, News Radio 1410 AM (WPOP), AM 1150 (WMRD), AM 1420 (WLIS). Home games are streamed on MiLB.TV.

Dan Lovallo also returns to the Yard Goats broadcast booth. He broadcast the team’s games on radio from 2000 through 2008 and worked on select broadcasts the last two seasons. He has an extensive background in broadcasting professional baseball and sports in general.  In 1983, Lovallo began broadcasting games for the Kinston, NC Blue Jays, then affiliated with the Toronto Blue Jays. Lovallo moved on to the Richmond, VA Braves in 1985, then the top farm club of the Atlanta Braves.

Dooley was behind the microphone for some of the most memorable moments in Rock Cats history, including three Eastern League Playoff Series, a major league exhibition game with the Minnesota Twins, and the only two no-hitters in franchise history. He was the television play-by-play broadcaster for the 2013 Eastern League All-Star Game and called the 2003 EL All-Star game on radio. Additionally, Dooley was the master of ceremonies at the All-Star Luncheon at the ESPN headquarters in Bristol. Additionally, Dooley is the play-by-play voice of the University of Hartford Men's Basketball Team.

In 1990, Lovallo returned to his home state of Connecticut and eventually joined WDRC radio in Hartford to become news and sports director. He now joins Brad Davis on mornings on the Talk of Connecticut network. His assignments included broadcasting women's and men's professional basketball, college basketball for the University of Hartford.  In addition to Yard Goats broadcasts, Lovallo continues to serve as radio "Voice of the Manchester Road Race," and broadcasts high school football games on WAPJ radio. He is also the publisher and editor of two baseball-related websites, Your Baseball Buzz and Baseball on the Fly.

The team’s 70 home games broadcast in Spanish on 1120-AM WPRX in Hartford, will have the father-son duo of Danny and Derek Rodriguez at the microphone.

"We are extremely excited to partner with WPRX and bring Yard Goats Baseball to a new radio audience," said Yard Goats owner Josh Solomon.  "It is really important to our organization to have our broadcasts also available in Spanish, knowing how much the Hispanic community loves baseball, and we feel this is a wonderful way to reach the Latino community."

WPRX AM 1120 is a community based radio station with local programming such as news, traffic, and weather.  WPRX, which transmits 24 hours a day, 7 days a week, has live on air talent from its studio and also is very involved with local community events making it a natural fit with the Yard Goats.

"We are thrilled to be to partnering with the Hartford Yard Goats and having their home games broadcast in Spanish on our radio station," said WPRX owner Oscar Nieves.  "So many of our loyal listeners love the game of baseball and are excited about the new Yard Goats brand.  We know that this is going to be a home run."

Stamford Ranks #7 Among Small Cities of the Future in the Americas

Stamford is a "City of the Future," ranking seventh among small cities in the America’s for economic growth, according to a new report.  The city ranks behind Sunnyvale, Irvine and Fremont, CA; Bellevue, WA; Ann Arbor, MI, and Fort Lauderdale. Also ranking in the top 10 are Cary, NC; Plano, TX; and Guelph, Ontario.  It was one of three top-ten showings for Connecticut's third largest city. In addition to its overall position among just over 200 cities with populations between 100,000 and 350,000, Stamford placed second among small cities for connectivity, just behind Jersey (New Jersey) and ahead of Newark, Yonkers, Paterson, Elizabeth, and Sunnyvale, Hayward, Fremont and Vallejo in California.

The city also placed ninth for economic potential in the analysis and report released this week by a division of the Financial Times.  The top cities in that category included Sunnyvale, Bellevue, Fremont, Irvine, Cary, Ann Arbor, Waterloo (Ontario), Plano and Chattanooga.

The 2017-18 rankings for the American Cities of the Future were developed by the Financial Times’ FDI unit, which studies foreign direct investment.  In total, 421 locations were analyzed for the study. Data was then collected under five categories: Economic Potential, Business Friendliness, Human Capital and Lifestyle, Cost Effectiveness and Connectivity. ‘Small’ locations (209 locations) had immediate city populations of between 100,000 and 350,000, according to the study’s methodology.

“This is really good news for Stamford,” Joe McGee, vice president of public policy for The Business Council of Fairfield County, told the Stamford Advocate. “This index is closely watched by people who look at the hot places to invest, and clearly Stamford is one of those places. That connection to New York is really advantageous to Stamford.”

Among larger cities, the top 10 in the Americas are New York, San Francisco, Houston, Toronto, Montreal, Vancouver, Boston, Atlanta, and Sao Paulo.

A year ago, Stamford  launched the City’s new business portal,  Stamfordbusinessportal.org, created "to eliminate red tape and streamline the process for planning and starting a small business in Stamford," according to officials.  The multilingual website was designed and created by six interns during the summer of 2015, including four from the Mayor’s Youth Employment Program. The website includes links for permitting and licensing, starting a business and business incentives.

Stamford was the only Connecticut city to earn a spot on the lists.

Independent Analysis Sought for State's Economic Incentive Programs

Timing is everything.  Just days after the Yankee Institute for Public Policy reported that a federal grand jury has indicted a former Vernon resident for using a fake pita company to fraudulently obtain $3 million, including $400,000 from the State of Connecticut, the state legislature held a public hearing on a proposal designed to enhance Connecticut’s analysis of the efficiency and effectiveness of the state’s economic development investments. State Comptroller Kevin Lembo, joined by a broad coalition of open government advocates, testified in support of the legislation.  “Connecticut can and should be one of the most economically competitive states in the nation – but that can only happen if we adopt best practice in how we analyze the success and failures of our economic development programs,” Lembo said.

“The state provides hundreds of millions of dollars in economic incentive programs to Connecticut businesses every year for the purpose of advancing economic development and job creation,” Lembo said. “The state owes it to businesses and all taxpayers to fully analyze the return on investment that these sizable and important programs actually deliver in order to assess whether such resources are fulfilling their intended purpose or, if not, whether state funds would be better deployed to other economic development or infrastructure investments.

The proposal, House Bill 7316, would improve how Connecticut analyzes the success and failures of its economic development investments in several ways, according to the Comptroller’s Office. It will streamline the reporting requirements, while expanding the scope of reporting to include all business assistance and incentive programs. It will subject business assistance and incentive programs to performance reviews by the Auditors of Public Accounts and require the Auditors to review the analysis and reporting performed by DECD on such programs – providing necessary independent oversight.

Lembo pointed out that “Connecticut is now one of only two states in the nation where the success of economic development programs is analyzed by the same agency that administers the programs. An unbiased assessment of the performance and administration of these programs has in other states resulted in opportunities for savings.

The Comptroller noted that his office has worked with both the Auditors of Public Accounts and the Department of Economic and Community Development, to “come to mutual agreement on the bill’s language.” The legislation would also require specific legislative committees to hold public hearings to discuss the results of the evaluations and receive input from stakeholders.

The Yankee Institute report indicated that the state’s Small Business Express program, which offer grants and loans to small businesses, awarded the now-indicted former resident a $300,000 loan and a $100,000 grant in 2012.  The report said that the state funding was meant to retain 11 jobs and hire 25 more people.

A broad coalition of open government advocates and organizations submitted testimony in support of the legislation.

On behalf of The Pew Charitable Trusts, Robert Zahradnik, Director of Policy, State Fiscal Health, said, “In Connecticut, as in many other states, business incentives are both a primary economic development tool and a major budget commitment. For that reason, The Pew Charitable Trusts’ research shows that studying the results of incentives is a vital step for states to create jobs, raise wages, help businesses to grow, and to maintain a balanced budget.”

Derek Thomas, Fiscal Policy Fellow at Connecticut Voices for Children, said, “Unlike general fund spending on education, roads, and other spending on the building blocks to a healthy economy, business tax breaks lack transparency. Once on the books, they can remain for years, or even decades, without scrutiny. A more efficient, transparent, and fair budget process would include regular reviews of all economic development incentives to ensure that tax expenditures are yielding the promised economic development benefits. Just like spending, business tax breaks should undergo regular scrutiny to determine their effectiveness.”

The Small Business Express program, which gives grants and loans to smaller to medium sized businesses, has “assisted 1,687 companies — ranging from 'mom and pop' stores to advanced manufacturing firms — with $267 million in loans and grants to retain 18,671 and create 6,795 jobs,” according to the DECD 2016 Annual Report.  In 2016, there were 194 businesses receiving assistance in exchange for commitments to retain 2,912 jobs and create an additional 931.  Total funding commitments were $35,408, 428 in grants and loans.  A year ago, DECD celebrated the 1,500th company to take part in “the governor’s keystone small business development program, the Small Business Express program,” the DECD report indicated.

Joe Horvath, Assistant Policy Director at Yankee Institute for Public Policy, said, "Good economic policy is broad-based and does not favor single businesses, or even industries. This bill would help provide state officials with critical information in determining which economic development programs fail to provide the returns promised, an important step to ending waste and cronyism in Connecticut." Added Daniel J. Klau, President of the Connecticut Council of Freedom on Information (CCFOI):  “CCFOI is very pleased to support this legislation that enhances public confidence in the effectiveness of economic development investments.”

The streamlined report will focus on the most pertinent information, Lembo said, including economic impact of each program, the extent to which it is meeting statutory and programmatic goals, and the efficiency with which the program is being administered. “These incentive programs reduce tax revenue at both the state and local level, and increase state borrowing. It is essential that the legislature review their impact and make informed decisions about the continuation, expansion or elimination of each program. The changes proposed in this legislation will help our state make data-driven decisions about tax credit and abatement programs, ensuring that we are focusing state resources toward their highest and best use.

Insurance Department Recovers $7.5 Million for Policyholders, Taxpayers in 2016; Highest Total in 4 Years

Connecticut’s Insurance Department recovered $7.5 million for policyholders and taxpayers in 2016, helping individuals, families and employers with their claims and complaints.  That is the highest amount in four years and an increase from the $6 million that the department saved taxpayers and policyholders the previous year. “Connecticut consumers turn to us every year to help them with claims and coverage issues or to just answer questions about their insurance,” said Insurance Commissioner Katharine L. Wade. “Our intervention in 2016 helped thousands of policyholders get much-needed answers, resolution and the benefits to which they are entitled.”

Consumer recoveries and industry fines totaled approximately $6.3 million in 2014, $7.3 million in 2013 and approximately $8.7 million for policyholders and state taxpayers in 2012, the high water mark in recent years.

Commissioner Wade said among the many cases the Department worked on during 2016 was a dispute that involved nearly $170,000 in hospital bills for a victim of a car accident. The patient had health care coverage under two plans – through his employer and as a dependent on his parent’s health insurance. When a dispute arose over which plan was the primary payer, the Department stepped in and determined it was the employer’s plan, which then covered the claims.  Another case involved a motorist whose car was totaled in an accident. When motorist’s insurer initially denied her claim, the Department required that the insurer review the case further. The insurer subsequently paid 100 percent of the motorist’s claims.

The Department’s Consumer Affairs Unit (CAU) fielded more than 5,800 complaints and inquiries and helped policyholders recoup nearly $6 million from January 1 to December 31, 2016, according to officials. Also in 2016, the Department’s Market Conduct division levied approximately $1.6 million in fines against carriers and returned that money to the state’s General Fund. The fines resulted from a variety of violations and settlements ranging from untimely claim payments to improper licensing, the department said.

The majority of the funds recovered for policyholders stemmed from complaints over health, accident, homeowners and life and annuities policies. The  breakdown of funds recovered in 2016:

• Accident, Health - $3.63 million
• Auto - $432,000
• General Liability - $33,710
• Homeowners and Commercial Property - $874,250
• Life, Annuities - $820,000
• Miscellaneous - $160,000

The department announced this month that licensing renewal notices for casualty adjusters and motor vehicle property damage appraisers will now be handled online, with an anticipated savings of nearly $40,000 in processing and mailing costs.The renewals also are now processed online through the National Insurance Producer Registry (NIPR). The licenses expire on June 30, 2017 and are good for two years. The casualty adjuster renewals are expect to generate approximately $6 million for the General Fund.

“The Department is now emailing renewal notices to the 73,000 casualty adjusters and motor vehicle property damage appraisers in Connecticut improving efficiency by saving time and shedding thousands of dollars in mailing and postage costs,” Wade said.

The Department calculates its consumer recoveries based on what the policyholder received as a result of the Department’s intervention. The inquiries and complaints also help the Department identify industry trends that may adversely affect consumers and trigger investigation by the Market Conduct division.  Complaint data also help determine topics for consumer education and serve as tools to help the Department monitor the industry.  The Market Conduct enforcement actions are posted on the Department’s Web site at www.ct.gov/cid