(a) Each insurance company authorized or permitted to do business in this state and each residual market mechanism established pursuant to § 38a-329 shall report to the Insurance Commissioner (1) any failure on the part of an insurance producer or surplus lines broker to remit premiums for policies or endorsements issued to insureds directly or through the producer within thirty days following the due date of the account of the producer with the company, its state agent or managing general agent, or (2) whenever a check issued by such producer to the company or residual market mechanism is returned for insufficient funds or otherwise dishonored and remains outstanding fifteen days following receipt of such return.

(b) If, upon investigation of a report concerning a failure to remit premiums, the commissioner determines that a producer has received premiums directly or indirectly from insureds and has failed to remit them to the proper company, its state agent or managing general agent, he may, following a hearing as specified in § 38a-774, suspend or revoke the license of the producer. Upon receipt of a report concerning a dishonored check or upon dishonor of any check, draft or other remittance upon presentment of payment, from a producer to the Insurance Department, the commissioner shall notify the producer issuing such check, draft or other remittance of the report. If an arrangement for payment of such funds is not made to the satisfaction of the commissioner by the producer within fifteen days of receipt of such notice, the license of the producer shall be automatically suspended. Within sixty days of receipt of such notice the producer may make written demand upon the commissioner for a hearing to show cause why the suspension should be terminated. Such hearing shall be held within thirty days from the date of receipt of the written demand. If by the end of the sixty-day demand period no hearing has been demanded, the license of the producer shall be revoked. The commissioner may institute procedures for the restoration of the licensee’s insurance accounts to best protect the interests of all parties concerned.

(c) The commissioner may adopt such reasonable regulations as the commissioner deems necessary for the implementation of this section and specifically to provide procedures for continuing, terminating or restoring the licenses affected.