Businesses pay $1.3 million in state penalties

The state collected more than $1.3 million in penalties during the last fiscal year from companies doing business in Connecticut illegally, two agencies that collaborated in investigating complaints reported today.

Secretary of State Denise Merrill and Attorney General George Jepsen announced that the penalties paid by 321 out-of-state firms represented the highest payout since 2007. It topped by almost $40,000 the amount in collected in the previous fiscal year.

“Out-of-state companies who fail to register and do not obtain a certificate of authority to do business here undercut consumers,” Merrill said in a statement.

“Registering with the state provides consumers with a layer of protection and helps ensure that all businesses are operating on a level playing field,” Jepsen added.

The top penalty collected in the last fiscal year was $18,435, from Intuitive Surgical Inc. of California. Others in the top five and the amounts paid were: Communications Test Design Inc. of Pennsylvania, 17,460; Trapeze Software Group Inc. of Arizona, $16,117; Clinical Computer Systems Inc. of Illinois, $15,645, and Ziff Brothers Investments LLC of New York, $15,480.

Companies that fail to obtain a certificate of authority to transact business in Connecticut from the Secretary of State’s office are liable to fines of $300 a month. Many businesses paying the penalities were unaware of the law and self-report the violations once they become aware of it.

In 2007, Connecticut collected a record $1.7 million in penalties from companies that failed to request permission to do business in the state.

The penalties come in addition to $2.4 million that the state Insurance Department late last week reported recovering on behalf of policyholders and state taxpayers during the second quarter of this year.

“The fines resulted from a variety of violations and settlements ranging from untimely claim payments to improper licensing,” the department said.

The total recovered so far this year has surpassed $4 million.

In the most recent quarter, recoveries in the accident and health insurance areas totaled more than $540,000, while homeowners and farmers insurance paybacks added up to more than $190,000.

Market conduct enforcement reports are available online at www.ct.gov/cid.